Investing.com -- Shares of Carter’s, Inc. (NYSE: CRI ) tumbled 9.5% following the company’s announcement of a significant reduction in its quarterly dividend. The children’s apparel retailer decreased its dividend payout from $0.80 to $0.25 per share, a 68.8% decline, signaling a shift in capital allocation strategy amid a challenging market environment.

The Atlanta-based company disclosed the dividend cut in a recent press release, outlining a broader strategic plan under the new leadership of CEO Doug Palladini. Palladini, who joined Carter’s in early April, is focusing on returning the company to profitable growth and is expected to present his comprehensive plan during the second quarter earnings call.

Carter’s emphasized that while its cash position and liquidity remain robust, the lowered dividend aligns better with current profitability levels. The company is preparing for potential strategic investments and is cautious about the impact of proposed tariffs on imported products, which could significantly increase product costs.

The Board of Directors has declared the new dividend of $0.25 per share to be payable on June 20, 2025, to shareholders of record as of June 2, 2025. The press release also stated that future dividend declarations are subject to the Board’s discretion and will be based on various factors, including business conditions, financial performance, and investment priorities.

As the market reacts to Carter’s revised dividend policy, investors are likely weighing the implications of the company’s upcoming strategic initiatives and the potential challenges posed by the current economic landscape. With the promise of a detailed plan to be revealed later in the summer, stakeholders are anticipating clarity on how Carter’s intends to navigate through the present uncertainties and drive shareholder value.

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