Carter’s has survived world wars, recessions, financial crises, a global pandemic and dramatic changes in the way Americans shop. But after more than a century and a half of dressing American children, the company says its past isn’t enough to guarantee it has a future.
Founded in 1865, Carter’s is undertaking what the company describes as its most significant brand evolution in 26 years, an effort that includes a new logo, new messaging and a broader ambition to position itself as more than simply a place where parents buy pajamas, onesies and other children's clothing.
“Legacy or heritage can easily become a bad word, but only if it stays in the past,” Sarah Crockett, chief marketing officer of Carter’s, told Newsweek. “Our 161-year history gives us an incredible foundation, but longevity alone doesn’t guarantee relevance.”
The effort comes as Carter’s is simultaneously confronting significant business challenges. The company posted $2.898 billion in net sales in fiscal 2025, up 2 percent from the previous year, but its operating margin declined to 5 percent from 9 percent. While making adjustments to stabilize the business, like streamlining stores and improving merchandise, the company dealt with the impact of President Donald Trump’s tariffs that went into effect in 2025.
Its 2025 annual report acknowledged the challenges, but emphasized that the retailer has previously endured the Great Depression, inflationary periods, supply-chain disruptions and other upheavals. The company said they always “emerged a stronger company.”
But Crockett argues that the latest shift is not simply about economic pressures or a new marketing campaign. It is also about how profoundly the environment surrounding childhood has changed.
“Kids haven’t fundamentally changed,” Crockett said. “They still come into the world curious, imaginative and uniquely themselves. But milestones are more visible, comparison starts earlier, and parents are navigating more advice and more expectations than ever before.”
Carter’s expects updates to its stores, digital experiences, products and packaging to continue through 2027 in an effort to meet parents where they are now, not where they were 160 years ago.
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The Economics of Dressing Kids
The transformation is taking place when many American families remain financially stretched, a particularly significant consideration for a retailer selling something parents cannot just stop buying as their children grow.
Crockett acknowledged those pressures.
“Value has always been central to Carter’s, and we’re proud to be a brand that means value to families, especially when household budgets are under pressure,” she said. “Kids grow quickly, their needs change constantly, and parents need clothing they can count on without feeling like they have to compromise.”
The Federal Reserve's latest Survey of Consumer Finances found real median family income increased 7 percent from 2022 to 2025. But financial stress also became more widespread. Nearly 20 percent of families with loan debt reported being behind on payments, up from about 12 percent in 2022, while more than 8 percent said they were at least two months behind on payments.
Against that backdrop, keeping prices attractive presents a challenge for retailers dealing with their own rising costs.
Carter’s said it spent 2025 responding to significant new tariffs, and executives have pointed to higher realized pricing as one of the factors contributing to improved performance late in the year. [
Crockett framed the company's strategy around value rather than simply offering the cheapest product.
“We also know that value doesn’t just mean the lowest price,” she said. “Value is the combination of style, quality and price, and the confidence that what you’re buying will hold up wash after wash.”
Carter’s also has to persuade families to continue choosing a legacy brand in a crowded market. That tension between heritage and relevance appears central to the strategy.
“I see a future where Carter’s is as meaningful to the next generation of families as it has been to every generation before it,” Crockett said. “We have to keep listening to families, understanding how their lives are changing and translating those insights into better products, experiences and ways to connect with them.”
Parents Are Raising Their Kids Differently Than They Were Raised
For Carter’s, understanding the next generation of customers also means understanding a generational shift among the people raising them.
“Parents have always wanted the best for their children,” Crockett said. “What has changed is the environment in which they’re raising them.”
One of the clearest indicators of that change comes from the Pew Research Center. In a survey of 3,757 American parents with children under 18, 44 percent said they were trying to raise their children differently from the way they themselves were raised, compared with 43 percent who said they were taking a similar approach. Among parents taking a different approach, love and the parent-child relationship emerged as the most common theme.
Parents also appear deeply concerned about their children's emotional well-being. Pew found four in 10 parents were extremely or very worried their children might face anxiety or depression, making mental health the leading concern among parents. Another 35 percent were similarly concerned their children could experience bullying.
Crockett said Carter’s spent nearly a year listening to parents before developing its strategy.
“One theme came through incredibly clearly: today’s parents are embracing self-expression,” she said. “They want their children to feel confident, accepted and free to be themselves.”
At the same time, those parents are navigating a parenting-information environment almost unimaginable to earlier generations. Whereas previous generations went to experts for advice, in today’s world, many parents get their advice from social media, and it can be information overload that often conflicts.
A C.S. Mott Children's Hospital National Poll on Children's Health found 80 percent of parents of children ages 0 to 4 used social media to discuss parenting topics. Parents sought information on issues including toilet training, sleep, nutrition, discipline and behavioral problems.
But the apparent abundance of information has created a problem of its own. In the same poll, 40 percent of parents cited difficulty distinguishing good advice from bad advice as a concern.
Dr. Andrew Velic, a pediatrician with Aurora Health Care, has warned parents that social media can offer useful ideas while also exposing them to misinformation.
“Social media can be a wonderful tool for sharing what has worked for parents,” Velic told AHC Health News in 2024. “However, there is a great deal of misinformation on the internet.” He recommended turning to trained professionals and evidence-based resources, particularly when questions involve children's development.
A more recent KFF/Washington Post survey similarly found that 79 percent of parents encounter children's health information or advice on social media at least occasionally, while 38 percent said they find it difficult to tell whether health information encountered online is trustworthy.
Carter’s is trying to place itself within that changing parenting ecosystem through initiatives such as its Childhood Confidence Project, created with Dr. Becky Kennedy and Good Inside, along with expanded support for Boys & Girls Clubs of America and a partnership with Outward Bound.
There is an inherent balancing act in that strategy. Carter’s wants to become more involved in families' experience of childhood without presenting itself as another voice telling overwhelmed parents what they should do.
“Meeting parents where they are means listening closely, understanding how their needs evolve and making sure what we offer is relevant to their lives. It doesn’t mean telling them how to parent. Parents know their children better than anyone. Our role is to stand alongside them. That’s how we earn their trust, generation after generation,” Crockett said.
Ultimately, that may be the bigger challenge facing a company founded when Abraham Lincoln was president: convincing a generation of parents whose lives look radically different from those of their own parents that a 161-year-old brand still understands them.
“Ten years from now,” Crockett said, “a new parent chooses Carter’s not just because their own parents did, but because they feel we understand their family and are on their child’s side.”
Contact Newsweek editors on this story: Gray R. Thomas