Crown Crafts Q2 2026 Earnings Report

Crown Crafts EPS Results

• Actual EPS: $0.11
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Crown Crafts Revenue Results

• Actual Revenue: $23.70 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Crown Crafts Announcement Details

• Quarter: Q2 2026
• Date: 11/12/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, November 12, 2025
• Conference Call Time: 9:00AM ET

Crown Crafts (NASDAQ:CRWS) (NASDAQ: CRWS) is a U.S.-based designer, marketer and distributor of infant, toddler and juvenile consumer products. The company develops a wide range of softlines and related accessories, including crib and toddler bedding, blankets, decorative pillows, bath towels and washcloths. Since its founding in 1957, Crown Crafts has focused on combining creative design with functional quality to meet the shifting preferences of young families and caregivers.

The company operates two primary business segments. Its Domestic Products segment encompasses the design, sourcing and marketing of finished goods under proprietary and private labels for major mass merchants, online retailers and specialty stores in North America. Key product lines include crib and toddler bedding sets, nursery décor items and infant bath linens. The International Sourcing segment manages relationships with offshore manufacturers—primarily in Asia—to procure fabrics and finished products that are then sold into the domestic market. This dual‐segment structure allows Crown Crafts to balance creative control with global cost efficiencies.

Crown Crafts markets its products under a variety of brand names, including Crown Crafts Baby, NoJo and Lambs & Ivy, and supplies a broad retail network that includes department stores, warehouse clubs and e-commerce platforms. The company’s headquarters is located in Gonzales, Louisiana, and it maintains a field sales organization to support key customers in the United States and Canada. Crown Crafts also collaborates with international retail partners, leveraging its sourcing capabilities to serve markets beyond North America.

Over more than six decades of operations, Crown Crafts has evolved from a regional textile concern into a specialized juvenile-products provider. The company’s senior leadership team is focused on product innovation, supply‐chain management and strategic partnerships to drive long‐term growth. By blending creative design with sourcing expertise, Crown Crafts aims to deliver durable, attractive and affordable nursery and infant care essentials to families worldwide.

Crown Crafts Q2 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Second-quarter net sales fell to $23.7 million (from $24.5M) and gross margin compressed to 27.7% primarily due to increased tariffs on China imports, creating ongoing cost pressure on profitability.
• Positive Sentiment: The company cut marketing and administrative expenses by $740,000, delivering GAAP net income of $1.2 million ($0.11 per diluted share), and is consolidating subsidiaries to capture expected IT and payroll synergies through fiscal 2026.
• Positive Sentiment: Balance sheet/liquidity remain adequate with $810,000 cash, $16.3M indebtedness and $13.7M available on the revolver, and management declared a $0.08 per share quarterly dividend.
• Negative Sentiment: The diaper bag category continues to struggle due to tariff-driven cost increases; management is working to shift sourcing out of China and lower costs but expects this to take time before retail placements recover.
• Positive Sentiment: Bibs, toys and disposables rose (helping offset declines), and international momentum—especially for Manhattan Toy in Europe and the Amazon top-selling ring stacker—is a notable growth bright spot.

Presentation

[Operator]

Good day, and welcome to the Crown Crafts Fiscal 2026 Second Quarter Conference Call and Webcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to John McNamara of Three Part Advisors. Please go ahead.

[John McNamara, Head of Investor Relations at Crown Crafts]

Thank you, Michael. Good morning, everyone, and thank you again for joining the Crown Crafts Fiscal Year 2026 Second Quarter Conference Call. With us on the call this morning are Crown Crafts President and Chief Executive Officer Olivia Elliott and Vice President and Chief Financial Officer Claire Spencer. During today's call, the company may make certain forward-looking statements, and actual results may differ materially from those expressed or implied. These statements are subject to risks and uncertainties that may be beyond Crown Crafts' control, and the company is under no obligation to update these statements. For more information about the company's risk factors and other uncertainties, please refer to the company's filings with the Securities and Exchange Commission. With that, I would now like to turn the call over to President and Chief Executive Officer Olivia Elliott. Go ahead, Olivia.

[Olivia Elliott, President and CEO at Crown Crafts]

Thank you, John, and good morning, everyone. As we noted in the press release we issued this morning, we reported stronger second quarter net income, which we believe reflects positively on our ability to navigate the current environment. The ongoing tariff landscape, particularly on goods sourced from China, continues to drive costs and pressure margins. These tariff policies affect many products in our sector, and many brands are being forced to pass on price increases. Complicating this is the volatility in global supply chains and raw material costs. We are encouraged by recent trade talks between the U.S. and China and will continue to navigate persistent uncertainty in a challenging macro environment. We will seek opportunities when growth potential presents itself and prudently manage cost, including capitalizing on synergies following last year's acquisition.

[Olivia Elliott, President and CEO at Crown Crafts]

To that end, as previously reported, after quarter end, we began consolidating some internal operations, which will not only result in reduced payroll expenses but will eliminate some redundant costs as well. Our relationships with our suppliers, customers, and licensors remain strong, and we expect to continue renewing our licensing agreements while our product development team is hard at work on exciting future launches. Our balance sheet and cash flow remain solid as we manage the business, and we are positioning the company to respond quickly to any change in the overall environment. With that, I'll turn the call over to our Chief Financial Officer, Claire Spencer, who will walk us through the financial details.

[Claire Spencer, VP and CFO at Crown Crafts]

Thank you, Olivia. I will begin with an overview of the quarterly results along with additional color on our financial performance. Second quarter net sales were $23.7 million compared to $24.5 million in the second quarter of fiscal year 2025, due to a $1.6 million decline in the sales of bedding and diaper bags, partially offset by an $800,000 increase in the sales of bibs, toys, and disposable products. The decrease in bedding and diaper bags was primarily due to a decrease in the number of items included in the program at a major retailer. This was partially offset by increased sales in bibs, toys, and disposable products across various distribution channels. Gross profit was $6.6 million, reflecting a margin of 27.7% in the second quarter as compared to 28.4% in the year earlier period, primarily a result of increased tariff costs associated with products imported from China.

[Claire Spencer, VP and CFO at Crown Crafts]

We reduced marketing and administrative expenses by $740,000 to 19.9% of net sales for the quarter, relative to 22.3% in the prior year period. This reduction was due to acquisition-related costs in the prior period, which was partially offset by increased advertising costs. GAAP net income for the second quarter was $1.2 million, or $0.11 per diluted share, up from $0.08 in the year-ago quarter, which was driven primarily by the reduction in marketing and administrative expenses from the prior year period, as previously mentioned. Turning now to our balance sheet. As of the end of the second quarter, cash and cash equivalents totaled $810,000, up from $521,000 at the end of fiscal 2025. The inventory balance of $32.6 million is in line with our prior quarter and prior year quarter.

[Claire Spencer, VP and CFO at Crown Crafts]

The balance is higher than at the end of fiscal 2025, as fiscal year end is typically our lowest inventory levels, followed by increases throughout the year ahead of new program sets and Chinese New Year. As of September 29th, 2025, the company had $16.3 million in indebtedness, and $13.7 million remains available under our revolving line of credit. Finally, we declared a $0.08 per share cash quarterly dividend to shareholders as we continue our long history of returning value to our shareholders. Now I'll turn the call back to Olivia for additional commentary.

[Olivia Elliott, President and CEO at Crown Crafts]

Thank you, Claire. We entered the second quarter fully aware of the macro challenges, especially the elevated tariff environment and its effect on profitability. Yet we managed to achieve a slight increase in net income, a testament to our resilience and prudent management. While tariffs continue to weigh on our gross margins and overall profitability, we will adapt and adjust our strategies as needed to help offset its impact, ensuring we remain well-positioned to capitalize on opportunities and drive stronger growth and profitability as market conditions evolve. In closing, I would like to thank our shareholders for your support, and we look forward to updating you on our progress in the coming quarters. With that, we'd like to open the line up for questions. Michael.

[Operator]

We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Your first question comes from Doug Ruth with Lenox Financial Services. Please go ahead.

[Doug Ruth, President at Lenox Financial Services]

Olivia and Claire, I want to offer my congratulations. The report was really fantastic. You really exceeded my expectations.

[Olivia Elliott, President and CEO at Crown Crafts]

Thank you, Doug.

[Doug Ruth, President at Lenox Financial Services]

Could you explain where did the increase from the bibs, toys, and disposable products, where did that increase come from?

[Olivia Elliott, President and CEO at Crown Crafts]

You know, it's kind of across the board. It's in all of the different product lines, and it's at several retailers. So we really just saw an increase there pretty much everywhere.

[Doug Ruth, President at Lenox Financial Services]

Wonderful. And then how do you feel about the company's inventory? I noted that it's a little bit lower than it was in the second quarter of fiscal 2025.

[Olivia Elliott, President and CEO at Crown Crafts]

I'm comfortable with the inventory levels. We've had some shifts throughout this year in the timing of when some of the retailers are going to reset new programs. For the most part, you know, I think we're in a good place.

[Doug Ruth, President at Lenox Financial Services]

I had looked at the Manhattan Toy website. It looks really very inviting, really professional. I was curious if you're getting any kind of feedback on how that's been going.

[Olivia Elliott, President and CEO at Crown Crafts]

Yes, I think that overall, most people like the look of it, but more importantly, I think they like the ability to navigate and to purchase from the website. I think we've gotten a lot of good response.

[Doug Ruth, President at Lenox Financial Services]

Okay. I know that that large Legoland opened up in China, and I was curious to hear how Manhattan Toy sales are going at Legoland at this point.

[Olivia Elliott, President and CEO at Crown Crafts]

I think the sales are good at Legoland. I think the park opened a little bit later than planned, so that did impact, I guess, according to what we budgeted. For the most part, I think it's going well.

[Doug Ruth, President at Lenox Financial Services]

Okay. In the past, you had talked some about that there was a trial and error period with the Manhattan Toy advertising budget, and I noted that in the second quarter, there was a fairly large increase. I was curious how you feel, how you're doing with the budget and the kind of results that you thought were generated from the increased spend.

[Olivia Elliott, President and CEO at Crown Crafts]

You know, I think the sales are coming slower than we had hoped, but at the end of the day, I think it's important for us to invest in the advertising and the marketing in order to begin driving those sales.

[Doug Ruth, President at Lenox Financial Services]

Okay. I know you had previously talked about the redesigned Stella Doll, and then I saw there was this article in The New York Times noting that Meghan Markle had bought a Stella Doll for herself. I was curious to hear if all the hype and stuff, if that's helping sell some of the Stella Dolls and maybe anything you could share about that.

[Olivia Elliott, President and CEO at Crown Crafts]

I mean, I think the Stella Dolls have been well received. I mean, for the most part, it's a specialty store item. It's not placed at any of the major brick-and-mortar retailers. Obviously, any kind of marketing we can get from it, especially from somebody such as Meghan Markle, it's got to help.

[Doug Ruth, President at Lenox Financial Services]

Okay. I have a few more questions, but perhaps I'll let somebody else ask some questions and maybe I can come back on the line.

[Olivia Elliott, President and CEO at Crown Crafts]

Okay. Thanks.

[Operator]

Again, if you have a question, please press star then one. Your next question comes from John Deysher with Pinnacle. Please go ahead.

[John Deysher, Portfolio Manager at Pinnacle]

Hi. Good morning. I was just wondering if you could elaborate on the consolidation of internal operations and what that involves and what the anticipated savings might be, as well as a timetable.

[Olivia Elliott, President and CEO at Crown Crafts]

I can elaborate a little bit on the process of it, but right now, we're not really giving a lot of information on the potential savings as we're still gathering that information. What we'll be doing is consolidating the two subsidiaries into one, which should help us eliminate some duplicate positions, but also, you know, in particular, a lot of IT costs. And so almost everything, whether it's a website, whether it's your EDI contracts, you know, pretty much any IT contract, you have to have one for every single subsidiary. And so we believe we have a lot of opportunities to get rid of some of those redundant costs by only having to have one contract for everything.

[Olivia Elliott, President and CEO at Crown Crafts]

You know, we're still going through the process of everything that we can eliminate, but we do anticipate that throughout the year, it will be a little bit more, you know, with each quarter. You have contracts, you can't get out of them early. We'll obviously try, but for the most part, we're not able to get out of too many of them early. As the year goes on and these contracts expire, then we'll be able to consolidate them.

[John Deysher, Portfolio Manager at Pinnacle]

Okay. And when you say the two subsidiaries, you're talking Sassy and NoJo?

[Olivia Elliott, President and CEO at Crown Crafts]

Yes.

[John Deysher, Portfolio Manager at Pinnacle]

Okay. But you're keeping the brands?

[Olivia Elliott, President and CEO at Crown Crafts]

The brands will stay. Absolutely.

[John Deysher, Portfolio Manager at Pinnacle]

You're just kind of consolidating the back offices for both of those?

[Olivia Elliott, President and CEO at Crown Crafts]

Correct. You know, we'll see our sales team, which to date, our sales and design teams have been very separated, and we'll merge those departments as well. We may see people who did not sell Sassy now start selling Sassy and vice versa.

[John Deysher, Portfolio Manager at Pinnacle]

Okay. I realize the contracts mature over, you know, a period of months, but when will you have an idea as to what the savings might be, just on a rough basis, as a result of the consolidation?

[Olivia Elliott, President and CEO at Crown Crafts]

We'll begin our budgeting process for fiscal 2027 when we come back from the Christmas holidays. I think by, you know, the end of February, March, we'll have a better idea of the impact, though I'm not sure, you know, we don't forecast earnings, so I don't know how much information we'll give publicly, but internally, we'll have a better idea.

[John Deysher, Portfolio Manager at Pinnacle]

By the end of February or so.

[Olivia Elliott, President and CEO at Crown Crafts]

Yeah.

[John Deysher, Portfolio Manager at Pinnacle]

Okay. All right. Good. Thank you very much.

[Olivia Elliott, President and CEO at Crown Crafts]

Thank you.

[Operator]

Your next question is a follow-up from Doug Ruth with Lenox Financial Services. Please go ahead.

[Doug Ruth, President at Lenox Financial Services]

Olivia and Claire, I know that the diaper bag situation has been somewhat fluid. I was wondering if you could maybe offer a little bit of commentary, what your thoughts are with that business.

[Olivia Elliott, President and CEO at Crown Crafts]

We've been struggling with the diaper bags, as you're aware. The tariffs really, really hurt the diaper bag category in total, and we've been struggling to find new sources and to keep those costs down. We are still working on moving from China to other countries and finding new sources to be able to bring the cost of those down.

[Doug Ruth, President at Lenox Financial Services]

Fundamentally, though, you still feel that there's opportunities with diaper bags, but possibly the country of production might have to change. Is that what you're thinking, or?

[Olivia Elliott, President and CEO at Crown Crafts]

That's true. Our design team has really done a great job of refreshing the look, making them more modern. We have some great designs. We just need to get the cost down in order to get them to retail.

[Doug Ruth, President at Lenox Financial Services]

Okay. Would that be true both in America and also outside of America, or?

[Olivia Elliott, President and CEO at Crown Crafts]

Right now, we're really focusing on the U.S., U.S. and Canada. But, you know, I think there is an opportunity, particularly on company-branded designs, that we can go internationally. We just haven't explored that yet, as we need to focus on the U.S. first.

[Doug Ruth, President at Lenox Financial Services]

Okay. I know there was a learning curve with the Manhattan Toy, and I was just curious if you could offer any kind of commentary on how Manhattan Toy might be doing at Walmart at this point.

[Olivia Elliott, President and CEO at Crown Crafts]

Manhattan Toy at Walmart has been a mixed bag. I mean, we've got a few SKUs that are continuing on, and then we've had some that are dropped, and then they're going to be replaced with some other products. Manhattan Toy was always a higher-end product, and so it wasn't placed in all stores for Walmart. It was kind of in what was considered their better departments at some of their stores.

[Doug Ruth, President at Lenox Financial Services]

Okay. How about international sales? I know you had reworked how you were distributing the products outside of America. Maybe you could just give us a little bit of update as far as how those sales are going now.

[Olivia Elliott, President and CEO at Crown Crafts]

That was a big part of the increase at Sassy in the bibs and toy area, particularly toys. That's what's really sold internationally. That was a big part of the increase there. We've had a lot of good opportunities that have come internationally. We were at the K+J show in Germany at the beginning of September. We're signing up some new distributors at some countries we are not currently in. That's probably one of the brighter spots in the business right now.

[Doug Ruth, President at Lenox Financial Services]

The bright spot is international Manhattan Toy sales.

[Olivia Elliott, President and CEO at Crown Crafts]

Manhattan Toy and Sassy.

[Doug Ruth, President at Lenox Financial Services]

Manhattan. Okay. Is there any particular country that seems to be doing especially well?

[Olivia Elliott, President and CEO at Crown Crafts]

There may be a few. I mean, I know that really, I'm going to say Europe in general.

[Doug Ruth, President at Lenox Financial Services]

Okay. Are you encouraged that that trend could maybe continue, you know, looking through the balance of fiscal 2026?

[Olivia Elliott, President and CEO at Crown Crafts]

I do think so, yes.

[Doug Ruth, President at Lenox Financial Services]

Okay. Is there any particular SKU that people seem to like, or?

[Olivia Elliott, President and CEO at Crown Crafts]

Oh, internationally? I mean, I know domestically, our ring stacker is the number one best-selling item. I think that does pretty well internationally as well. Other than that, I can't tell you if there's a specific SKU internationally. We do limit the.

[Doug Ruth, President at Lenox Financial Services]

The ring stacker on the Amazon website shows that 20,000 of those are sold per month. I mean, that's a phenomenal sale.

[Olivia Elliott, President and CEO at Crown Crafts]

Yeah. It's our single best-selling toy item.

[Doug Ruth, President at Lenox Financial Services]

Yeah.

[Olivia Elliott, President and CEO at Crown Crafts]

Has been for years.

[Doug Ruth, President at Lenox Financial Services]

When was that toy?

[Olivia Elliott, President and CEO at Crown Crafts]

Oh. It's been around for quite some time. I think they had that toy when we acquired Sassy Baby, so I don't really know when it was invented, but it's been a number one best-seller for many years.

[Doug Ruth, President at Lenox Financial Services]

Every child in the world should have that particular toy. That is a.

[Olivia Elliott, President and CEO at Crown Crafts]

We agree.

[Doug Ruth, President at Lenox Financial Services]

Yeah. That is a fabulous toy.

[Olivia Elliott, President and CEO at Crown Crafts]

We agree.

[Doug Ruth, President at Lenox Financial Services]

Yeah. Thank you very much for answering my questions. I am just really thrilled with how great that report was. Thank you for doing what you did.

[Olivia Elliott, President and CEO at Crown Crafts]

Thank you, Doug. We appreciate your support.

[Doug Ruth, President at Lenox Financial Services]

You're welcome.

[Operator]

This concludes our question-and-answer session. I would like to turn the conference back over to Olivia Elliott for any closing remarks.

[Olivia Elliott, President and CEO at Crown Crafts]

Thank you for your interest in our company. We look forward to speaking with you again when we report our third quarter results in February.

[Operator]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Claire Spencer, VP and CFO
• Olivia Elliott, President and CEO
• John McNamara, Head of Investor Relations

Analysts

• John Deysher, Portfolio Manager at Pinnacle
• Doug Ruth, President at Lenox Financial Services