Crown Crafts Q4 2025 Earnings Report

Crown Crafts EPS Results

• Actual EPS: -$0.04
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Crown Crafts Revenue Results

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

Crown Crafts Announcement Details

• Quarter: Q4 2025
• Date: 6/25/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, June 25, 2025
• Conference Call Time: 9:00AM ET

Crown Crafts (NASDAQ:CRWS), through its subsidiaries, operates in the consumer products industry in the United States and internationally. It provides infant, toddler, and juvenile products, including infant and toddler beddings; blankets and swaddle blankets; dolls and plush toys; nursery and toddler accessories; room décors; reusable and disposable bibs; burp cloths; hooded bath towels and washcloths; reusable and disposable placemats, and floor mats; disposable toilet seat covers and changing mats; developmental toys; feeding and care goods; and other infant, toddler, and juvenile soft goods. The company sells its products primarily to mass merchants, large chain stores, mid-tier retailers, juvenile specialty stores, value channel stores, grocery and drug stores, restaurants, internet accounts, wholesale clubs and internet-based retailers through a network of sales force and independent commissioned sales representatives. Crown Crafts, Inc. was incorporated in 1957 and is headquartered in Gonzales, Louisiana.

Crown Crafts Q4 2025 Earnings Call Transcript

Key Takeaways

• We acquired the assets of Baby Boom Consumer Products, adding diaper bags and popular licenses like Bluey and Miss Rachel to our portfolio.
• Fourth quarter net sales rose 2.9% year-over-year to $23.2 million, driven by strong Baby Boom product performance despite declines in Bibs, Toys and Disposables.
• Fourth quarter gross margin fell to 18.3% from 23.2%, reflecting higher tariffs, increased Compton facility rent, elevated royalty expenses from the Baby Boom acquisition and lower-margin closeout sales.
• We recorded a GAAP net loss of $10.8 million in Q4 (including a $13.8 million goodwill impairment) and a fiscal-year GAAP net loss of $9.4 million, though adjusted net income was $1.0 million.
• New 30% tariffs on U.S. imports have become our most pressing challenge, and we are working with manufacturers and retail partners to absorb or mitigate additional costs.

Presentation

[Operator]

Good day, and welcome to the Crown Crafts Inc. Fourth Quarter Fiscal Year twenty twenty five Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note today's event is being recorded.

[Operator]

I would now like to turn the conference over to Matt Hodges with Investor Relations. Please go ahead.

[Matt Hodges, Managing Director at Three Part Advisors, LLC]

Good morning, everyone, and thank you for joining the Crowncrest fourth quarter and fiscal twenty twenty five conference call. Joining me on the call today are Crowncrest's President and CEO, Olivia Elliott CFO, Craig Demeris and Vice President, Claire Spencer, who will be CFO upon Craig's retirement next week. 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 Craft's 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.

[Matt Hodges, Managing Director at Three Part Advisors, LLC]

Now, I'd like to turn the call over to President and CEO, Olivia Elliott.

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

Thank you, Matt. Good morning, everyone. Fiscal twenty twenty five turned out to be a transitional year for the company, much like 2024, but for different reasons. Persistent inflation caused consumers to pull back on discretionary spending throughout the year, resulting in total sales for the fiscal year being slightly below last year. We, along with others who import from China, also experienced a slowdown in sales due to uncertainty around The United States tariff policy.

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

However, as part of our long term strategic plan, we continued looking for innovative ways to strengthen our market position. This led us to acquire the assets of Baby Boom Consumer Products, which added diaper bags for our portfolio of products as well as several popular brand licenses such as Bluey and Miss Rachel. This was our second major acquisition over the last two years as we continue to expand our product offerings to drive future growth both domestically and internationally. From an operations perspective, we have worked diligently to take out unnecessary costs to maintain acceptable margins and profits. Overall, we remain financially healthy with adequate cash at year end and total inventories less than last year.

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

Our cash flow for the year was 9,800,000 providing us the ability to pay regular dividends and service debt. Finally, I would like to introduce the newest member of our team, Claire Spencer. Claire joined Crown Crafts on June 16, and as Matt mentioned, will become CFO on June 30.

[Claire Spencer, Vice President at Crown Crafts Inc]

Thank you, Olivia. I'm very excited to join Crown Crafts and have the opportunity to lead the finance and accounting team to support the company's financial and strategic goals and drive shareholder value.

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

Welcome, Claire. We're excited to have you join our team. Before I turn it over to Craig to walk through the financials in more detail, I would like to thank him for his leadership, hard work and dedication to helping us achieve our goals. The entire Crown Craft team wishes him a very happy retirement.

[Craig Demarest, CFO at Crown Crafts Inc]

Thank you, Olivia. It's been a pleasure working with you, the Crown Craft's team, the Board of Directors and all of our shareholders over the last four years. I'll begin with a look at the fourth quarter results and then provide some color on the full year results. Fourth quarter net sales were $23,200,000 a 2.9% increase compared to the prior year quarter. Increase was driven by strong sales of Baby Boom products, partially offset by a decline in sales of Bibs, Toys and Disposable products.

[Craig Demarest, CFO at Crown Crafts Inc]

Gross profit for the quarter was 18.3% compared to 23.2% in the fourth quarter of fiscal twenty twenty four. The margin decrease is primarily related to the impact of higher tariffs, increased rent at our Compton facility, an increase in royalty expense resulting from the Baby Boom acquisition and higher closeout sales at lower margins as we continue to lower our inventory levels. Marketing and administrative expenses during the quarter increased 17% year over year, driven by increased advertising costs and the expenses associated with the Baby Boom business. GAAP net loss for the fourth quarter was $10,800,000 or $1.04 loss per diluted share. GAAP net loss was the result of a $13,800,000 goodwill impairment charge resulting from the prolonged decline in our market capitalization, indicating a decline in the fair value of our goodwill reporting units.

[Craig Demarest, CFO at Crown Crafts Inc]

Following the impairment charge, we have no goodwill in our balance sheet at 03/30/2025. Adjusted net loss was $429,000 or adjusted diluted loss per share of $04 Turning now to our results for the full year. Net sales for fiscal twenty twenty five were $87,300,000 compared to $87,600,000 in the prior year. As Olivia mentioned earlier, sales were impacted by consumers pulling back due to economic conditions. However, we did see the addition of $11,900,000 in net sales from the Baby Boom acquisition, but that was more than offset by declines in the legacy business.

[Craig Demarest, CFO at Crown Crafts Inc]

Gross profit for the year was 24.4% compared to 26.4% in fiscal twenty twenty four, primarily reflecting increased tariffs, rent and royalty expense as as higher closeout sales mentioned earlier. Marketing and administrative expenses included 1,100,000 in acquisition costs associated with the Baby Boom acquisition and $244,000 related to the closure of the company's subsidiary in The UK. GAAP net loss for fiscal twenty twenty five was $9,400,000 or $0.90 loss per diluted share. GAAP net loss was impacted by the goodwill impairment charge discussed earlier. Adjusted net income for the year was $1,000,000 or adjusted diluted earnings per share of $0.10 Turning now to our balance sheet.

[Craig Demarest, CFO at Crown Crafts Inc]

As of the end of fiscal twenty twenty five, cash and cash equivalents totaled $521,000 compared to $830,000 at the end of fiscal twenty twenty four. Inventories were $27,800,000 a decrease of 6.4% compared to twenty nine point seven million dollars at the end of the last fiscal year. The decline was driven by higher closeout sales to prepare for our upcoming warehouse consolidation. Borrowings under our credit facility at the end of fiscal twenty twenty five were $18,500,000 compared to $8,100,000 at the end of fiscal twenty twenty four, reflecting amounts borrowed in the second quarter to fund the Baby Boom acquisition. 2025 cash flow from operations was $9,800,000 compared to $7,100,000 in the prior year.

[Craig Demarest, CFO at Crown Crafts Inc]

We expect to use our cash flow to repay borrowings. However, as always, our debt balance may fluctuate from quarter to quarter due to the timing of inventory purchases and other working capital needs. And finally, we paid $0.32 per share in cash dividends to shareholders in fiscal twenty twenty five with a yield of 10% based on yesterday's close. This marks the fifteenth consecutive year paying out dividends to our shareholders. Our dividend is a key component of our capital allocation strategy of creating and returning value to our shareholders.

[Craig Demarest, CFO at Crown Crafts Inc]

And now I'll turn the call back over to Olivia for additional comments.

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

Thank you, Craig. Over the last couple of years, the economy has been a headwind for consumers and ultimately Crown Crafts. During this time, we have taken several steps forward to position the company for long term success when the economy starts to improve. We've added more products to our portfolio through acquisition and our own internal product development. We've added more of the most popular and trending brands through acquisition or by expanding the depth of our product catalog.

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

We continue to have good working relationships with our major retail partners and we have expanded our e commerce capabilities. I would like to thank our team for their resilience and all the hard work they have put into integrating our acquisitions, finding opportunities to cut cost and for their commitment to making Crown Crafts one of the leading producers of infant, toddler and juvenile consumer products. As we begin fiscal twenty twenty six, our most pressing challenge is navigating the impact of tariffs. As of now, the goods we order will incur an additional 30% tariff. We are working with our manufacturers and our retail partners to absorb a portion of this amount and we are also looking at other ways to mitigate additional tariff expenses.

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

We will continue to explore ways to increase sales and gain market share. This includes product and channel expansions. In closing, I would like to thank our shareholders for your support and we look forward to updating you on our progress throughout the year. With that, I'd like to open the line for questions.

[Operator]

Thank Today's first question comes from Doug Ruth, Atlantic Financial Services. Please go ahead.

[Douglas Ruth, President at Lenox Financial Services]

First, I would like to thank Craig for what he has done for the shareholders. I thought you did a really nice job with the reporting. And I want to wish you well in your retirement. And I also wanted to welcome Claire to the team. Looking forward to seeing what how you're able to increase shareholder value.

[Craig Demarest, CFO at Crown Crafts Inc]

Thank you, Doug. Appreciate it.

[Douglas Ruth, President at Lenox Financial Services]

You're welcome. Can you give us Olivia, can you give us an update on where things are with the warehouse at this point?

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

So we're still exploring pretty much every option that we can think of. But with tariffs, we've kind of put that on the for the last few months, we've been focused on tariffs and not really on the warehouse. But we're still exploring those options.

[Douglas Ruth, President at Lenox Financial Services]

Do you think you'll you still think you'll make a decision sometime here in fiscal twenty twenty six?

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

I hope so. We're probably slowing down on the time line for actual moving, but I think we will make some decisions in the near future.

[Douglas Ruth, President at Lenox Financial Services]

Okay. I understand that you went to the New York Toy Show that was held in March. I was wondering how did the show go for the company?

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

So yes, we had a lot of our sales and product development team that attended Toy Fair. I think they had a lot of really good traffic and some good feedback on the new products that we showed. And they actually wrote some orders, but it's not really common to write orders at the show anymore with just the EDI capabilities, etcetera. So from what I understand, everything went well and the products that we intend to the new products showed very well.

[Douglas Ruth, President at Lenox Financial Services]

And then I know that one thing that is featured on the website is the Stella doll and a new Stella doll and then I understand that Meghan Markle had purchased a doll for her daughter. Are you able to comment on how the what's happening with the Stella doll and the redesign and any kind of sell through?

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

Yes. And so we redesigned what was called Stella and We Baby Stella and now we have a new Love Stella line that includes a newborn doll before the product started more at maybe the toddler age range. And so now we've got a newborn doll, we've redesigned the toddler doll so that it sits up better. And yes, Meghan Markle did include our Stella doll on one of her shows and, it certainly helped with a lot of the marketing and the advertising and the social media.

[Douglas Ruth, President at Lenox Financial Services]

Okay. Then I understand that the world's largest LEGOLAND is going to open in Shanghai on July 5. And I was wondering if that creates some opportunity for will Crown Craft be providing some of the Star Wars plush animals for that plush figurines for that location?

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

Yes. So they had a soft opening I believe, I can't remember if it was in late May or early June. And from what I understand the soft opening went very well and we are supplying the plush for that park.

[Douglas Ruth, President at Lenox Financial Services]

And then were the sales to were Crown Craft sales to LEGOLAND, did they increase in fiscal twenty twenty five versus fiscal twenty twenty four?

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

2025 versus 2024, yes. I think that the changeover, so I don't know if you recall that, they were only going to allow the LEGO branded plush into the parks. It used to be us and then a couple of other competitors. And so we had some form of a transition throughout this year, but it has gone slower than we expected. But we expect that in the near future, we'll be the only plush in the park.

[Douglas Ruth, President at Lenox Financial Services]

Okay. And then, you had also talked in the past about the diaper bags that there might be opportunities with possibly some new brands. Is there any development there?

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

Yes. We're still working on that. We've got a lot of excitement from some of our licensing partners that want us to do some licensed diaper bags. To be frank, the tariffs are hitting the diaper bags harder than anything. So we're trying to look at opportunities to keep those costs within reason so that we can expand that further.

[Douglas Ruth, President at Lenox Financial Services]

At one time, they had talked about a potential tax credit for importing products for children or for babies. Is there any update on that at all?

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

I think are you talking about the tax credit for parents maybe, not really for us for Not us, for

[Douglas Ruth, President at Lenox Financial Services]

For yes, for like for babies and

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

have not really heard of that haven't heard if that went through or if that's part of the final plan, there was some talk at some point about giving parents new parents a tax credit, yes.

[Douglas Ruth, President at Lenox Financial Services]

Okay. And then how about the distribution in Europe using the distributor instead of the direct sales force? Is that helping the company?

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

Yes. It takes some time to get all of the new products flowing through the distributors. But I think at the end of the day, we're anticipating our international sales to continue to go up.

[Douglas Ruth, President at Lenox Financial Services]

And my last question is, how about the Manhattan Toy website, the redesign there? Are you is that has that made a difference for the company?

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

Oh, I think so. I mean it's much easier to, shop on the website. I think we've got a much better visual. It's updated. And I think that, we're doing a good job of driving more people to the website through our social media posts, etcetera.

[Douglas Ruth, President at Lenox Financial Services]

Very good. That's nice to hear that. Okay. I'm going to thank you for answering my questions, and all the best to you, Craig.

[Craig Demarest, CFO at Crown Crafts Inc]

Thanks so much, Doug. Thanks, Doug.

[Operator]

Thank you. Our next question comes from David Woodiet, a Private Investor. Please go ahead.

[Analyst]

Yes. My questions have been answered. Thank you.

[Operator]

Thank you, And this does conclude our question and answer session. I'd like to turn the conference back over to the management team for any closing remarks.

[Olivia Elliott, CEO, President & Director at Crown Crafts Inc]

Thank you. We'd like to thank you for your continued support of Crown Craft and we look forward to updating you on our Q1 earnings, which will be in mid August. Thank you very much.

[Operator]

Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Participants

Executives

• Olivia Elliott, CEO, President & Director
• Claire Spencer, Vice President
• Craig Demarest, CFO

Analysts

• Matt Hodges, Managing Director at Three Part Advisors, LLC
• Douglas Ruth, President at Lenox Financial Services
• Analyst