Crown Crafts CRWS Q1 2026 Earnings Call Transcript

Quarterly Financial Results Discussion Transcript for Crown Crafts, dated Q1 2026

Crown Crafts, Inc. has announced its Q3 fiscal 2025 financial results, revealing a slight decrease in net sales and a decline in gross profit margin.

The company reported net sales of $23.3 million for Q3 2025, a dip from $23.8 million in the same quarter last year. Gross profit, meanwhile, stood at $6.1 million, with a gross margin of 26.1%, a decline from 27.0% in Q3 2024. Net income for the quarter decreased to $893,000 ($0.09 per diluted share), compared to $1.7 million ($0.17 per diluted share) in Q3 2024[1].

Operationally, Crown Crafts faced challenges including elevated tariffs and inventory shortages, which contributed to a 180 basis points decline in gross margin. Marketing and administrative expenses increased by 10.6% to $4.7 million, representing 30.5% of sales, driven by higher advertising costs and expenses related to the Baby Boom acquisition. Interest expense also rose sharply by 180.2% to $0.3 million[2].

Inventories increased to $31.6 million as of June 29, 2025, up from $27.8 million at fiscal year-end, consistent with seasonal patterns. Cash and equivalents declined to $227,000, but long-term debt decreased from $16.5 million to $11.9 million, and shareholders’ equity modestly decreased to $37.9 million[3][5].

For fiscal year 2025 to date, Crown Crafts reported net sales of $87.3 million, flat compared to 2024, with gross margin declining to 24.4%. Adjusted net income was approximately $1.0 million, excluding impairment charges. The company maintained a quarterly cash dividend of $0.08 per share, which was paid on July 3, 2025[1]. Inventory levels were reduced by 6.4% by the fiscal year-end, and cash on hand was reported at $521,000, indicating some improvement in liquidity earlier in the fiscal year before the seasonal inventory build-up[1].

One significant challenge faced by Crown Crafts was a key retailer reducing its on-hand supply from roughly ten weeks to one to two weeks, affecting order patterns and short-term sales visibility. CEO Olivia W. Elliott acknowledged the potential to expand Manhattan Toy and Sassy brand distribution by consolidating both under a distributor-led model for overseas markets[4].

The company reported a GAAP net loss of $1,100,000, or $0.10 per diluted share, due to increased tariffs and inventory-related sales declines[6]. Tariff, in this context, refers to a government-imposed duty on imported goods. Crown Crafts is hopeful that order patterns will return to normal as retailers replenish their stocks.

[1] - Crown Crafts, Inc. Press Release, August 13, 2025. [2] - Financial Statements of Crown Crafts, Inc., Q3 Fiscal 2025. [3] - Annual Report of Crown Crafts, Inc., Fiscal Year 2024. [4] - Conference Call Transcript, Crown Crafts, Inc., August 13, 2025. [5] - Quarterly Report of Crown Crafts, Inc., Q3 Fiscal 2025. [6] - Financial Statements of Crown Crafts, Inc., Q3 Fiscal 2025.