During the pandemic, we added over 2 million new eCommerce customers and with the support of our wholesale customers, the online sales of our brands exceeded $1 billion last year.
With respect to sales trends, the fourth quarter got off to a strong start with October sales at 95% of prior year sales, consistent with the very strong demand we saw in September.
November and December sales were 84% of prior year sales.
All of our U.S. stores remained open for the quarter though we did curtail hours 13% based on lower traffic.
Our border and tourist stores represent 10% of our U.S. stores that contributed over 20% of the decline in comparable sales.
Our store conversion rate grew 5% in the quarter.
The average transaction value grew 9%, driven by higher units per transaction and better price realization.
In the fourth quarter 94% of our comparable stores were cash flow positive.
90% of our stores are in open-air shopping centers and these stores outperformed the chain.
As we shared with you last year, we plan to close about 25% of our 2019 store portfolio upon lease expiration.
About 60% of those closures are planned this year, 80% of the closures are planned by the end of next year.
These stores collectively contributed over $140 million in sales in 2020 with an EBITDA margin of less than 3%.
By comparison, the balance of our stores had an EBITDA margin of nearly 18%.
Our store closure plan is expected to be accretive to earnings in 2021 and provide a $10 million cumulative earnings benefit by 2025.
ECommerce penetration grew to 45% of our retail sales, up from 38% in the third quarter.
Omni-channel sales grew to 24% of our eCommerce orders in the fourth quarter, up from 12% last year.
Last year, we leveraged our stores from Maine to Hawaii to ship online purchases from over 600 stores.
We expect the mix of omni-channel sales to grow to nearly 40% of online orders by 2025.
ECommerce sales of our brands through our wholesale customers grew over 30% in the fourth quarter and up over 50% for the year.
Our International segment contributed over 11% of our fourth quarter sales.
Canada and Mexico contributed nearly 90% of our international sales.
Our eCommerce sales in those markets grew over 60% in the fourth quarter and grew to 30% of our international retail sales from 18% last year.
Most challenging component of our International segment is with smaller retailers, representing our brands in over 90 countries.
Though individually small, collectively they contributed about 15% of our international sales in 2019 and were margin accretive.
Wholesale sales to these retailers were down over 50% in the fourth quarter.
Our suppliers were running on average 10 days late due to COVID-related challenges and precautions and transportation delays.
By 2025, we expect sales to grow to nearly $3.7 billion with an expansion of our operating margin to 13%.
Carter's is the number one brand in baby apparel with over 4 times this year of our nearest competitor.
We've seen births decline almost every year since the Great Recession began in 2007.
And since 2007, our sales and earnings have more than doubled.
The largest growth in our sales before the pandemic, both in percentage and absolute dollars, was driven by our product offerings focused on 10 -- 5 to 10-year-old children.
International sales contributed about 12% of our consolidated sales in 2020 and are expected to grow to 15% of sales by 2025.
Over the next five years, over 60% of our international sales growth is forecasted to be driven by our multichannel operations in Canada and Mexico.
I'll begin on Page 2 with our GAAP income statement for the fourth quarter.
Net sales in the quarter were $990 million, down 10% from the prior year.
This year's fiscal year included a 53rd week, so the fourth quarter consisted of 14 weeks versus 13 weeks last year.
This extra week represented $32 million in additional net sales in 2020 and contributed roughly $1 million of operating income.
Reported operating income was $134 million, a decrease of 18% and reported earnings per share for the fourth quarter was $2.26, down 20% compared to $2.82 a year ago.
On Page 3 is our GAAP income statement for the full year.
Net sales for the year were just over $3 billion, a decline of 14%.
Reported operating income was $190 million, down nearly 50% and reported earnings per share for the year was $2.50, down 57% from $5.85 in 2019.
Our fourth quarter and full year results for both 2020 and 2019 contained unusual items which are summarized on Page 4.
On Page 5, we've summarized some highlights of the fourth quarter.
ECommerce comparable sales were strong, up 16% in the U.S. and up 47% in Canada.
Turning to Page 6 for a summary of net sales for the fourth quarter; reported net sales declined 10% to $990 million.
On a comparable 13-week basis, net sales declined 13% year-over-year.
We've estimated that the impact of late arriving product negatively affected sales by about $30 million in the fourth quarter.
Turning to Page 7 and our adjusted P&L for the fourth quarter; while sales were down versus last year, as I mentioned, the profitability of our sales increased significantly with our gross margin increasing by 460 basis points to 47.1%.
So despite sales decreasing over $100 million, gross profit dollars were roughly comparable with a year ago.
Royalty income declined about $1 million versus last year, largely due to the timing of shipments of spring seasonal goods which shifted from the fourth quarter last year into first quarter 2021 and late arriving product.
Adjusted SG&A increased 5% to $327 million.
Adjusted operating income was $145 million compared to $162 million in the fourth quarter of 2019 and adjusted operating margin was 14.7%, comparable to last year.
Below the line, net interest expense was $15 million, up from $9 million in the prior period due to the $500 million in new senior notes we issued in the second quarter.
We had a $2 million foreign currency gain in the fourth quarter and our effective tax rate was approximately 18%, down from about 19% last year.
On the bottom line, adjusted earnings per share was $2.46, down 12% compared to $2.81 in 2019.
Moving to Page 8 with some balance sheet and cash flow highlights.
Total liquidity at the end of the fourth quarter was approximately $1.8 billion with $1.1 billion of cash on hand and virtually all of the borrowing capacity under our $750 million credit facility available to us.
Quarter-end net inventories were up 1% to $599 million.
Our Q4 accounts receivable balance declined 26% compared to the prior year, principally due to lower wholesale sales.
Accounts payable increased by $290 million to $472 million, which reflects the extension of payment terms and rent deferrals.
Long-term debt was nearly $1 billion, up from roughly $600 million at the end of last year.
Operating cash flow in 2020 increased by about $200 million to $590 million.
Moving to Page 9 with a summary of our adjusted full year performance; while 2020 sales and earnings were of course meaningfully affected by the pandemic, the combination of our strong product offering, marketing, inventory management and productivity initiatives enabled us to minimize the overall profit impact of lower sales.
The effectiveness of our initiatives is most evident and looking at the difference in our performance between the first and second halves of the year, which we've summarized on Page 10.
In the first half our gross margin declined by 350 basis points in part due to taking higher provisions for excess inventory.
Turning to Page 12 with a summary of our business segment performance in the fourth quarter.
Now, turning to Page 13 with some detail on U.S. retail performance in the fourth quarter.
Total segment sales declined 6% compared to last year.
Total comparable sales declined 9%, reflecting strong eCommerce growth and lower store sales.
The adjusted operating margin of our U.S. Retail segment improved by 280 basis points to 19.1%, driven by higher product margins as a result of improved price realization, lower product costs and lower inventory provisions.
Moving to Page 14 with an update on our omni-channel initiatives; our investments in recent years to build our omni-channel capabilities are clearly paying off.
Lastly, our ship-to-store and pickup in-store options have driven significant traffic to our stores accounting for 1.7 million store visits in 2020.
About 25% of the time customers picking up their online orders made incremental purchases while in the store.
Moving to Page 15 to some of our recent marketing; fourth quarter marked the arrival of the first babies conceived during COVID.
On Page 16 we continued to innovate in our marketing in the fourth quarter and lean into emotionally driven digital experiences for families such as our virtual visits with Santa and virtual PJ parties with Leslie Odom Jr., the star of Hamilton.
As Mike said, we added 1 million new online customers in 2020.
These brand's storytelling and customer engagement efforts resulted in a record 8 billion media impressions across the year, a significant increase over 2019.
Turning to Page 17; we continue our efforts to expand the reach of our brands to more diverse consumers, which reflects our company's broader focus on diversity and inclusion.
Moving to Page 18 and with a recap of the U.S. wholesale results for the fourth quarter; net sales were $290 million compared to $349 million a year ago.
Sales of the Carter's brand and sales in the off-price channel were each down about 40%, tracking with our reduced inventory positions in these parts of the business.
Online demand for our brands through our wholesale customers was strong in the fourth quarter with growth of 36% over the prior year.
U.S. wholesale adjusted segment income was $54 million in the fourth quarter compared to $67 million a year ago.
Adjusted segment margin declined 60 basis points, reflecting higher compensation and marketing expenses that were offset in part by lower inventory-related charges and lower bad debt expense.
On Page 19, we've included a photo from Kohl's, which is one of our largest and longest tenured wholesale customers.
On Pages 20 through 22, we've included a few slides that highlight our exclusive brands which are available at Target, Walmart and on Amazon.
These brands had a terrific 2020 and that momentum continued into the fourth quarter where collectively sales of the exclusive brands increased 13% over 2019.
On Page 21, we've depicted some of the beautiful Child of Mine product carried at Walmart.
Moving to Page 23 and our fourth quarter results for our International segment; international net sales declined 13% to $114 million.
Online demand in Canada was very strong with eCommerce comps up nearly 50%.
International adjusted operating margin was 13.3% compared to 16.2% a year ago.
On the next few pages, beginning on Page 25, we've summarized some of our thoughts on our strategic positioning in the industry and the growth we're targeting over the next few years.
On Page 26, we've summarized our mission and vision.
On Page 27, there are a number of elements which we believe will contribute to our planned growth in sales and earnings over the coming years.
Turning to Page 29 and our outlook for 2021; while there remains significant uncertainty regarding the ongoing impact of COVID-19, we believe we will have good growth in both sales and earnings in 2021.
We're expecting all of our business segments will deliver growth in net sales with our consolidated net sales growing about 5%.
Adjusted earnings per share is expected to grow about 10%, a bit less than what we are planning for operating income growth because of the higher interest costs from the senior notes we issued last year and an assumption of a higher tax rate with more of our income expected to be generated in the United States this year versus overseas.
We do expect first quarter profitability will increase significantly with operating income in the neighborhood of $30 million and adjusted earnings per share of approximately $0.25 compared to losses a year ago.

Summary:
Our border and tourist stores represent 10% of our U.S. stores that contributed over 20% of the decline in comparable sales.
Our store conversion rate grew 5% in the quarter.
Our store closure plan is expected to be accretive to earnings in 2021 and provide a $10 million cumulative earnings benefit by 2025.
Our suppliers were running on average 10 days late due to COVID-related challenges and precautions and transportation delays.
The largest growth in our sales before the pandemic, both in percentage and absolute dollars, was driven by our product offerings focused on 10 -- 5 to 10-year-old children.
Net sales in the quarter were $990 million, down 10% from the prior year.
Reported operating income was $134 million, a decrease of 18% and reported earnings per share for the fourth quarter was $2.26, down 20% compared to $2.82 a year ago.
On Page 5, we've summarized some highlights of the fourth quarter.
ECommerce comparable sales were strong, up 16% in the U.S. and up 47% in Canada.
Turning to Page 6 for a summary of net sales for the fourth quarter; reported net sales declined 10% to $990 million.
Adjusted SG&A increased 5% to $327 million.
On the bottom line, adjusted earnings per share was $2.46, down 12% compared to $2.81 in 2019.
The effectiveness of our initiatives is most evident and looking at the difference in our performance between the first and second halves of the year, which we've summarized on Page 10.
On Page 16 we continued to innovate in our marketing in the fourth quarter and lean into emotionally driven digital experiences for families such as our virtual visits with Santa and virtual PJ parties with Leslie Odom Jr., the star of Hamilton.
We're expecting all of our business segments will deliver growth in net sales with our consolidated net sales growing about 5%.
Adjusted earnings per share is expected to grow about 10%, a bit less than what we are planning for operating income growth because of the higher interest costs from the senior notes we issued last year and an assumption of a higher tax rate with more of our income expected to be generated in the United States this year versus overseas.
We do expect first quarter profitability will increase significantly with operating income in the neighborhood of $30 million and adjusted earnings per share of approximately $0.25 compared to losses a year ago.