From what babies wear to who they are: Carter's big shift

A well-dressed baby never goes unnoticed. Strangers gush… and offer unsolicited advice.

Of course, your nugget is the cutest little one around — yes, I mean you — but let’s be honest, those compliments are also thanks to the outfits you choose.

And there’s a good chance one of those outfits came from Carter’s — the brand held a 21% share of the US baby apparel market, ages 0-2, as of 2025.

Shopper Erin Kay Van Pay told The Hustle that the reasonable prices helped with other expenses. “Affordability for my children is priceless.”

So, why is this 161-year-old company with 20k+ brick-and-mortar stores and wholesale locations shifting its message?

The big shift

Carter’s cites a 2023 Pew survey to help explain what’s going on — 44% of US parents are trying to raise their kids differently than they were raised, 43% say similarly — shaping Carter’s rebrand beyond clothes to celebrating the child's individuality.

The rebrand also includes a logo change, changing the apostrophe to a star, and a 60-second film called ‘Watch Them Glow’ on Disney+, Roku, and Hulu through the end of 2026.

Why now?

• Growth in Gen Z customer demographic
  
• Decrease in toddler share, per CFO, offsetting gains in baby and kid
  
• Adjusted operating income fell ~39% in 2025, to $176m

Market trends

• Researchers project US childrenswear growing 1% to 4% a year
  
• Carter's CFO saw price resistance from shoppers last quarter
  
• In a Mintel survey, 42% of shoppers named comfort a top factor when buying kids' clothing, 36% price, and 28% style or self-expression.

What Carter’s expects

CEO Sharon Price John said its heritage and market command bring “both an opportunity and a responsibility.”

• Q3 2026 adjusted operating income expected near $50m, up from $39m
  
• Sales are expected to grow 2% to 3% in 2026, with a decrease in adjusted earnings per share
  
• Store, product and packaging changes arrive in 2027
  

"Our role isn't to create that light for them,” CMO Sarah Crockett said in a press release. “It's to recognize it, encourage it and give it room to shine."