• Q2 profit falls 33.7% to $12.7m from $19.1m
  • Net sales up 21% to $394.5m
  • Completes acquisition of Canadian retailer 

Children's wear retailer Carter's Inc has seen its second-quarter profit fall by more than one-third as higher cotton prices offset a rise in sales across its business.

"As expected, earnings have been affected by higher cotton prices, but our outlook for product costs is improving," said chairman and CEO Michael Casey.

That said, he warned product costs for spring 2012 merchandise will be higher than the previous year, due to continued elevated cotton, labour, and other product-related costs.

The company, whose brands include Carter's and OshKosh B'gosh, also said it had completed the acquisition of Bonnie Togs, a Toronto-based children's apparel retailer, which offers a new opportunity for growth outside the US.