You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: Carter's is making good progress, recovering from the market disruption caused by the pandemic.
We achieved a record gross profit margin in the quarter with improved price realization and fewer and better promotions.
We reduced our spending and inventories below prior year levels.
We also strengthened cash flow and liquidity in the quarter and gained market share.
With respect to business trends, we got off to a good start in July with sales running more than 90% of prior year sales.
We had substantially all of our stores opened heading into the 4th of July weekend and retail sales over that holiday shopping period comped up 7%.
In August, we saw sales trend to about 87% of prior year sales as schools delayed reopening.
With children starting their school year learning virtually at home, there was less of a need to shop for back-to-school outfits.
September was the largest month so far this year in sales and earnings contribution.
September sales ramped up to 95% of prior year sales.
That's the best performance we've seen since the pandemic began to impact us in March.
Our Labor Day holiday sales were the strongest in the past three years, with comparable retail sales up 15% during that shopping period.
And in October, sales are trending over 90% of prior year sales.
With respect to product performance, we continue to see good demand for our baby apparel and sleepwear product offerings.
Our baby apparel and sleepwear contributed about 70% of our total apparel sales.
We own five times the share of our nearest competitors in each of these product markets.
Our playwear sales improved in July as families prepared for the beginning of a new school year.
Sales dipped in August when it became clear that schools would not reopen and then rebounded in September as consumers shopped for cooler weather outfitting.
We launched our Little Baby Basics product offering in late June to coincide with the store reopenings.
This is the core of our baby product offerings and the best-selling newborn apparel in the United States.
It's a high-margin replenishment program and one of our strongest performing launches in recent years.
Replenishment trends since the launch are much better than last year.
In the third quarter, our retail sales improved to 97% of third quarter sales last year.
That's the strongest recovery in sales relative to our Wholesale and International segments.
Understandably, the pandemic has accelerated the shift to online purchases.
With fewer store visits, we reduced our hours of store operations by over 20% in the quarter.
On a per hour basis, our store sales were better than last year.
Though store traffic was lower, we saw higher conversion rates and higher units purchased per transaction.
We believe those better metrics reflect the strength of our product offerings, our compelling value proposition and a high service level provided by our store associates.
Our stores that historically benefited from tourism, including international guests, saw the largest decline in traffic.
These stores only represent about 11% of our U.S. stores, but drove about 40% of the decline in comparable sales in the quarter.
Until tourism and cross-border travel resume to pre-pandemic levels, these stores will likely underperform our other stores.
Given the mix and level of eCommerce inventories, we were less promotional than last year.
And as a result, we significantly improved price realization and eCommerce profitability in the quarter.
Similar to our store experience, online demand from international customers continues to trend lower than last year.
The biggest declines in demand were from Brazil, Argentina and Europe.
Historically, these were three of our best sources of international demand on our U.S. websites.
These markets were particularly hard hit by the pandemic and stronger dollar.
We continue to benefit from significant investments made in recent years in our online shopping experience.
In the third quarter, our stores fulfilled 24% of our eCommerce orders.
We've invested in technology that helps us optimize the profitability and speed of delivering those purchases.
To improve the convenience of shopping with us, we now offer same-day pickup and curbside pickup services in over 600 of our stores in the United States.
These new omni-channel services are margin accretive relative to shipping from our distribution center to the consumer's home.
Our omni-channel customers, those who enjoy both the online and in-store experience, are our highest value customers with annual spending more than twice that of our single-channel customer.
Going forward, we expect our stores will play an important role supporting our eCommerce customers.
Currently, about 85% of our stores in the United States are located in open air centers, which we believe gives us an advantage relative to our mall-based competitors.
Open Air centers provide a better, more convenient experience for same-day pickup and curbside pickup of online purchases.
We plan to continue opening stores located in more densely populated areas and plan to close stores in more remote and declining centers.
We currently plan to open less than 100 co-branded stores over the next five years.
We also plan to close about 25% of our stores as leases expire.
Nearly 60% of those closures may occur by the end of next year.
80% of those closures are planned by the end of 2022.
These are generally older, lower margin stores in declining centers and less likely to support our focus on high-value omni-channel customers.
Carter's is an attractive tenant.
Our brands are viewed as traffic drivers and bring families with young children into the shopping centers.
As other retailers struggle and downsize, new and more attractive real estate opportunities become available to us.
It's a buyer's market, and we plan to pursue those better opportunities in better centers that provide convenience for our consumers and a high-return on investment for our shareholders.
Our Wholesale business also showed good progress recovering from store closures earlier this year.
Sales in the third quarter were about 86% of prior year sales.
The operating margin on those sales was better than last year.
In the third quarter, we had growth with three of our top-five wholesale customers.
We continue to see good growth with our exclusive brands with sales collectively up 10%.
E-commerce demand for our brands through our wholesale customers was up over 40% in the third quarter, including triple-digit growth rates with some of our exclusive brands.
The trend in online demand improved each month in the quarter.
Together with our wholesale customers, the online purchases of our brands is up over 50% year-to-date.
Within the next few weeks, we expect to achieve a new milestone for our company with annual online purchases of our brands exceeding $1 billion this year.
Our Carter's brand wholesale sales were down about 25% in the quarter, driven by retailers cautiously planning for second half sales and our decision earlier this year to curtail fall and holiday inventory commitments.
Generally speaking, most of our wholesale customers are lean on inventories, seeing better sell-throughs, higher margins and in a chase mode, given better-than-expected demand for our brands.
Given the pandemic-related uncertainty in consumer demand, we believe operating with leaner inventories is a better strategy through the balance of this year, even if it comes at the expense of fewer sales.
Our decision to run lean around inventories may impact second half wholesale sales by as much as $50 million or less than 3% of our total second half sales.
One benefit of running leaner on inventories this year is fewer low-margin sales to off-price retailers.
Our sales to off-price retailers were down 18% in the quarter and down over 50% year-to-date.
We use our stores and websites in the United States and Canada to sell through excess inventories which were caused by store closures and related wholesale order cancellations earlier this year.
As a result, we offer consumers a compelling value through our stores and websites and avoided losses that would have been incurred, selling the excess inventory to off-price retailers.
International sales in the quarter were about 90% of last year's sales and contributed over 13% of our total company sales, which is comparable to last year.
The strength of our International segment is in our direct-to-consumer business, which represented over two-thirds of our international sales in the quarter.
We saw high single-digit growth in our retail sales, driven by a nearly 70% increase in eCommerce sales in Canada and Mexico.
Many of our international wholesale relationships are with several smaller retailers, representing our brands throughout the world.
These retailers have historically been a good source of sales and profitability.
They've been particularly hard hit by the pandemic, stronger dollar and other local market challenges.
We currently expect that sales to these wholesale customers will be the slowest to recover from the global pandemic.
Just for context, these customers contributed less than 2% of our company's annual sales in 2019.
We expect a better recovery with our multinational retailers, including Walmart, Costco and Amazon.
Amazon is seeing good performance from its expansion of our Simple Joys brand in Europe this past year.
That should be a good source of growth for us in the years ahead.
With respect to our supply chain, our team did an excellent job working with our suppliers to reduce our exposure to excess inventories.
Inventories at the end of September were down over 10% compared to last year.
As we shared with you in July, we're seeing delays in the receipt of products from Asia.
We believe those delays were caused by reduced capacity by carriers earlier this year when demand slowed due to store closures.
The delays also reflect inadequate capacity to support the surge in demand when stores reopened this summer and the precautions being taken to keep manufacturing and transportation workers protected from the coronavirus.
They have been very supportive and recognize that the delays are a function of the market disruption.
As we head into the holidays, the flow of products has improved, and we do not expect shipping delays to have a material impact on fourth quarter sales.
We're also managing the exposure to freight surcharges imposed by inbound and outbound carriers due to the surge in eCommerce sales and constrained capacity.
Our best analysis suggests these surcharges may impact fourth quarter earnings by about $2 million.
With lower input costs and excess manufacturing capacity in Asia, our supply chain team has negotiated lower product costs for spring 2021.
Demand for that product offering is planned comparable to last year, and the related shipments began later this quarter.
In summary, we're making good progress recovering from the disruption caused by the pandemic.
We've endured a historically challenging market this past year with the unprecedented scope and duration of store closures, record unemployment and a highly contagious and deadly virus.
We expect the road ahead will be bumpy.
That said, we believe we have a strong product offering and good marketing plans as we head into the final weeks of the year.
No one knows how long the market disruption will last.
What we do know is that the fundamental strength of our brands and business model should help us continue to weather the storm.
We own the largest share of the young children's apparel markets in the United States and Canada with twice the share of our nearest competitors.
Children's apparel is a less discretionary purchase.
We focus on essential core products bought in multiple quantities on a frequent basis in those early years of a child's life.
Our average price points are less than $10, providing a great value to consumers in a weaker economic environment.
We are the largest supplier of children's apparel to the largest retailers in the United States.
We are also the largest young children's apparel specialty retailer with one of the strongest and most profitable eCommerce platforms in children's apparel.
I'm grateful for their commitment to strengthen our brands and to serve the needs of families with young children.
Over the next few months, we will refresh our growth plans based on our experiences this year.
Based on our current estimates, we are planning good growth in sales and earnings next year.
I'll begin on Page 2 with our GAAP income statement for the third quarter.
As Mike noted, our third quarter results were meaningfully better than we had planned.
Net sales in the quarter were $865 million, down 8% from last year.
Reported operating income was $114 million, an increase of 35%.
And reported earnings per share was $1.85 compared to $1.34 a year ago, representing growth of 38%.
Our third quarter and year-to-date results for both 2020 and 2019 contained unusual items, which we've detailed on Page 3.
We've treated these items as non-GAAP adjustments to our reported results to enable greater comparability.
My remarks today will speak to our results on an adjusted basis, which excludes these unusual items.
Moving to Page 4 and our adjusted P&L for the third quarter.
Net sales declined 8% to $865 million, which is a meaningful improvement over the 30% decline we saw in the second quarter.
We continue to see strong demand online with our U.S. eCommerce business achieving a 17% comp and eCommerce comps in Canada up nearly 60%.
While gross profit dollars declined 5% due to lower sales, gross margin rate improved by 180 basis points versus last year to 44.4%.
This represented record quarterly gross margin and was driven by improved price realization and continued progress in reducing excess inventory.
Royalty income was roughly comparable to last year at $9 million.
Spending was very well managed during the quarter.
Adjusted SG&A declined to $24 million or 8% across a broad range of expense categories.
Adjusted operating income grew 4% to $120 million and adjusted operating margin expanded 160 basis points to 13.8%, driven by our strong gross margin performance and management of spending.
Below line, we had higher net interest expense than last year due to the $500 million in new senior notes which we issued earlier this year.
We had other income of approximately $3 million in the quarter, largely foreign currency gains.
And our effective tax rate was about 19% in the quarter, up from about 18% last year.
Average share count declined 2%, driven by share repurchases in 2019.
Recall that we suspended share repurchases earlier this year as part of our liquidity improvement initiatives.
So, on the bottom line, adjusted earnings per share grew 5% to $1.96, up from $1.87 last year.
Turning to Page 5 with some balance sheet and cash flow highlights.
Our balance sheet and liquidity remained very strong.
Total liquidity at the end of the third quarter was nearly $1.6 billion, with over $800 million of cash on hand and virtually all of the borrowing capacity under our $750 million credit facility available to us.
With all of the uncertainty of the current environment, we believe that having substantial liquidity, as we clearly do, is a strategic advantage for Carter's.
As Mike said, we ended the quarter with inventories 11% lower than the year ago.
We believe the quality of our inventory is high overall.
We've made good progress in reducing excess inventory, although we're still working through some excess spring product, particularly in our stores.
We're currently planning net inventories at the end of the year to be roughly comparable with a year ago.
Our Q3 accounts receivable balance declined 10% compared to last year, which reflects lower wholesale sales.
Accounts payable were $473 million at quarter-end compared to $206 million a year ago.
This increase reflects the successful extension of payment terms and rent deferrals.
We continue to receive strong support from our vendors and landlords as we collectively manage through the disruptions caused by the pandemic.
Long-term debt was $1 billion, up from $770 million in the third quarter of last year, which reflects our successful senior notes financing transaction in May and lower revolver borrowings.
In the third quarter, we repaid $244 million, which represented all of the outstanding borrowings under our credit facility.
When considering our meaningful cash position, net debt at the end of the third quarter was $158 million compared to over $600 million at the end of Q3 last years.
Based on our current outlook, we believe we will have ample liquidity for the foreseeable future as our business continues to recover from the pandemic.
Despite year-to-date net income, which is lower than last year, our operating cash flow was very strong at $320 million compared to $73 million last year.
This increase reflects improved working capital, including lower inventory and the successful extension of vendor payment terms, which I've described.
Turning to Page 7 with a summary of our business segment results for the third quarter.
While sales were down, profitability in each of our business segments improved in the third quarter, and our consolidated adjusted operating margin expanded by 160 basis points over last year.
Turning to Page 8, with third quarter results for our U.S. retail segment.
Total segment sales declined 3% compared to last year.
As Mike mentioned, we saw good demand over the Fourth of July and Labor Day holiday selling periods.
For the quarter, total retail comparable sales declined 3.5%, reflecting strong eCommerce growth of 17% and lower store sales.
September, which is the largest month of the year in our business, had particularly strong performance, with comparable store sales down only slightly versus last year.
Store traffic continued to be a challenge for us and the broader industry.
Consumers are understandably cautious, especially as we see virus counts rising again in many areas of the country.
Our store traffic in the third quarter exceeded the industry benchmark, which we follow.
While traffic was down, we saw improved conversion and higher transaction values in our stores in the third quarter.
The adjusted operating margin of our retail segment improved by 50 basis points to 11.4%, driven by improved price realization, especially online, and our improved inventory position and good control of spending.
Turning to Page 9.
Consumers continued to take advantage of our omni-channel capabilities in the third quarter.
We've worked to optimize our stores to make it convenient for customers to arrive and quickly pick up their online orders.
Many customers are also taking advantage of curbside pickup, which is a new capability for us.
Overall, the synergy and integration between our eCommerce business and our nationwide network of convenient and easy to shop stores continue to grow.
On Page 10, all of our recent marketing efforts continue to be highly integrated with our presence on social media.
In the third quarter, we built on our leadership position by adding more followers on Instagram and Facebook than our largest peers in children's apparel combined.
On Page 11, we had particularly high engagement in September with two specific promotional events.
With the pandemic, many families weren't able to take their usual end of summer vacation, around Labor Day.
Recognizing this, we held the promotion to give away staycation packages to families.
This promotion generated the highest ever social engagement for the Carter's brand.
We also held a special celebration of the 125th birthday of the OshKosh B'gosh brand, which included the release of Special Limited-edition vintage overalls, in sizes for the entire family.
This promotion proved very productive as we sold out of the kid sizes of these special overalls within a few weeks.
Turning to Page 12.
Another family tradition which has gone virtual, is the announcement that a new baby is on the way.
During our Baby Love event in September, we gave away 10,000 Carter's body suits with the message -- "2021, Looking Bright", to celebrate the happy news of a new baby set to arrive in 2021.
Moving to Page 13.
Since the pandemic began, we've been providing families with ideas for activities, while they spend more time at home.
We recently initiated a twice a week email series for parents with toddlers and babies, with new ideas and tips for fall.
These communications have continued to deepen our relationships with our customers and reinforce that no brand understands parenthood better than Carter's.
On the next page, it seems clear that we will all be living with the reality of social distancing for a while longer.
Like so many other things, the tradition of kids visiting Santa will be different this year, realizing that we've collaborated with the innovative and popular Cameo platform, in order to deliver personalized virtual messages from Santa to thousands of children for Christmas.
On the next several pages, we've included examples of some of our marketing for the holidays.
Maybe this year, more than most families are looking forward to being together and celebrating the holidays.
On Page 15, we've seen strong demand for our holiday products.
On Page 16, Carter's is known for our pajamas, especially Christmas PJs, with sizes for everyone in the family.
On Page 17, we also have extensive offerings for special outfitting, for dress applications for the holidays.
And this year, on Page 18, we have toys from Skip Hop and Carter's.
In the majority of our stores we will introduce special Santa's toy shops for the holiday season.
Moving to Page 19, with a recap of U.S. wholesale results for the third quarter.
While net sales were lower than last year, our sales were meaningfully better than we had expected.
The upside to our forecast was due to several factors.
We saw some earlier demand for fall product from several retailers, replenishment demand for Little Baby Basics was strong and the impact of the delay in the arrival of product, which we mentioned on our last call, was less severe than we had forecasted.
All of our wholesale customers are investing in and growing their online businesses, which has translated into strong demand for our brands.
Demand for our exclusive brands at Target, Walmart and Amazon was strong in the third quarter, with combined sales growing 10% over last year.
Our Skip Hop brand grew nicely in the wholesale channel this quarter.
With consumer spending more time at home, Skip Hop's Home Gear, Playtime and Bath Time products have proven very popular.
As Mike said, sales of the Carter's brand were down in the quarter, in part due to the fact that in the early days of the pandemic, we proactively canceled a good amount of fall and winter inventory commitments, and given that many customers have understandably chosen to run leaner on inventory in the current environment.
Shipments to the off-price channel declined meaningfully in the third quarter, as we're more effectively using our own retail channels to clear excess inventory.
U.S. Wholesale adjusted segment income was $67 million in the third quarter compared to $73 million a year ago.
Adjusted segment margin improved by 140 basis points to 22.3%, reflecting lower inventory-related charges which were partially offset by higher bad debt expense.
On Page 20, we launched our core Little Baby Basics collection annually.
This year, we did so in late June, which is somewhat later than normal.
These products are the everyday essentials that every parent of a newborn needs.
We're seeing very strong performance of Little Baby Basics this year.
We sell these signature products in multiple channels, including at some of our largest wholesale accounts, such as Kohl's and Macy's.
Performance in our own stores on carters.com and in our International business has also been strong.
Beginning on Page 21, we've included a few slides that highlight our exclusive brands, which are available at Target, Walmart and Amazon.
The Just One You brand continues to enjoy good momentum.
Target has invested in several digital campaigns highlighting Just One You.
These campaigns have increased awareness of the brand among new and existing guests at Target.
Sleepwear for infant and toddlers has been a particularly productive category with plans for continued momentum in the fourth quarter with Christmas pajamas and a broad assortment of sibling dressing products.
On Page 22, on the Child of Mine brand at Walmart.
In the third quarter, eCommerce sales of Child of Mine more than doubled over last year.
Here too, investments in brand marketing have driven good productivity and momentum in Child of Mine, which we expect will continue into the holiday selling period.
Finally, on Page 23, our Simple Joys brand continues to resonate with consumers.
We have a strong partnership with Amazon and Simple Joys and Simple Joys has grown to be one of our largest brands.
We participated in another successful Prime Day recently, where we posted a significant increase in sales.
The Simple Joys assortment has expanded over the past few years and now includes Baby, Toddler and Pajamas up to size-eight as well as shoes and accessories.
Moving to Page 24 and third quarter results for our International segment.
International net sales declined 10% to $114 million.
This decrease was principally driven by lower wholesale shipments to markets outside of North America due in part to the stronger U.S. dollar as well as the disruptions caused by the global pandemic.
Canada delivered a very good quarter overall, with retail comparable sales growing 7%.
Online demand continued to be strong with eCommerce comps up 58%.
Store comps in Canada were down a bit, but the arrival of colder weather and good back-to-school demand helped boost sales.
Net sales in our Mexico business were down year-over-year, reflecting a weaker peso and lower wholesale sales.
We're making good progress in the retail portion of the business in Mexico.
Our new larger co-branded stores are performing well; and eCommerce, which we launched late last year, continues to post strong growth.
International adjusted operating margin expanded 270 basis points to 15.8%, driven by strong performance in Canada that was partially offset by a lower contribution from our partners business.
On Page 25, we've included a photo of one of our newest stores in Mexico.
The store is our sixth larger format co-branded store.
Initial consumer reaction has been very positive.
In Q3, this store has quickly become one of our best-performing locations in Mexico.
On Page 26, we've included pictures from the first three stand-alone Carter's stores in Brazil, two in Sao Paulo and one in Rio de Janeiro.
These stores are operated by Riachuelo, our exclusive partner in Brazil.
As many of you know, we've had a strong following by Brazilian consumers shopping with us in the United States over the years, so establishing a direct presence in this important market is a good step forward.
Early reaction from consumers to these new stores has been very positive.
Turning to Page 27 with our outlook for the balance of the year.
As with last quarter and given the ongoing market disruption caused by the pandemic, we're not providing sales and earnings guidance today.
We expect that COVID-19 will continue to have a significant impact on our operations in the fourth quarter.
We're assuming that store traffic will continue to be lower than last year, and we're mindful of the risk of the resurgence of COVID-19 in key markets in North America.
We expect that online demand will continue to be strong in the fourth quarter, and we're planning for continued gross margin expansion.
We're tracking several other risks over the balance of the fourth quarter, including the broader macroeconomic environment, including unemployment and consumer confidence, as well as developments related to possible additional economic stimulus, and the upcoming elections.

user
compname reports q3 earnings per share of $1.85.
q3 adjusted non-gaap earnings per share $1.96.
q3 earnings per share $1.85.
q3 sales $865 million versus refinitiv ibes estimate of $878.5 million.
qtrly u.s. retail comparable sales down 3.5%.
not providing fiscal 2020 sales and earnings guidance at this time.
$1.6 billion in liquidity at quarter end.
continues to believe has sufficient liquidity for foreseeable future.

assistant