Children's wear company Carter's is cutting 10% of its workforce and expects a weaker second quarter, despite posting a 41.6% hike in first quarter net profit.

Sales for the owner of the Carter's and OshKosh brands were up 8.1% to US$356.8m.

Carter's revenues were up 6.1% to $283.6m, while OshKosh rose 16.6% to $73.2m.

Retail sales increased 17.6% to $153.8m, boosted by comparable store sales rises of 5.2% and 11.1% for Carter's and OshKosh respectively.

Carter's wholesale revenues were up 4.3% to $122.9m, while OshKosh leapt 15.9% to $21.4m.

However, the company's mass channel sales - consisting of the Child of Mine brand in Wal-Mart and Just One Year in Target - fell 6.6% to $58.7m.

Operating profit was up 39% to $28.6m, while net profit jumped 41.6% to $16.4m - but rose 89.2% on an adjusted basis.

"The trends in our business continue to be favourable, despite a very difficult retail market," said Michael D Casey, Carter's CEO.

Carter's also announced the cutting of 10% of its corporate workforce, plus the closure of the OshKosh facility in Wisconsin and the shuttering of one of its three distribution centres.

The company warned that second quarter sales were expected to be flat to down low single digits, thanks to earlier demand from wholesale and mass channel customers.

Adjusted earnings per share are expected to be down $0.07-0.10.

For the second half, Carter's expects flat net sales due to a reduction in mass channel sales, offsetting growth in other areas. Low single digit percentage growth in EPS is predicted.