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: $23.23 million
• 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) (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 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 2025 Conference Call. 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, and to withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Matt Hodges with Investor Relations. Please go ahead.

[Matt Hodges, Managing Director of Investor Relations at Crown Crafts]

Good morning, everyone, and thank you for joining the Crown Crafts Fourth Quarter Fiscal 2025 Conference Call. Joining me on the call today are Crown Crafts' President and CEO Olivia Elliott, CFO Craig Demarest, 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 risk 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. Now I'd like to turn the call over to President and CEO Olivia Elliott.

[Olivia Elliott, President and CEO at Crown Crafts]

Thank you, Matt. Good morning, everyone. Fiscal 2025 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. 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 to our portfolio of products, as well as several popular brand licenses such as Bluey and Miss Rachel.

[Olivia Elliott, President and CEO at Crown Crafts]

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. Our cash flow for the year was $9.8 million, 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, VP at Crown Crafts]

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, President and CEO at Crown Crafts]

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 Crafts team wishes him a very happy retirement.

[Craig Demarest, CFO at Crown Crafts]

Thank you, Olivia. It's been a pleasure working with you, the Crown Crafts 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 $23.2 million, a 2.9% increase compared to the prior year quarter. The increase was driven by strong sales of Baby Boom products, partially offset by a decline in sales of bibs, toys, and disposable products. Gross profit for the quarter was 18.3% compared to 23.2% in the fourth quarter of fiscal 2024. 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.

[Craig Demarest, CFO at Crown Crafts]

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 $10.8 million, or $1.04 loss per diluted share. GAAP net loss was the result of a $13.8 million goodwill impairment charge resulting from the prolonged decline in our market capitalization, indicating a decline in the fair value of our goodwill reporting units. Following the impairment charge, we have no goodwill in our balance sheet at March 30th, 2025. Adjusted net loss was $429,000, or adjusted diluted loss per share of $0.04. Turning now to our results for the full year, net sales for fiscal 2025 were $87.3 million compared to $87.6 million in the prior year. As Olivia mentioned earlier, sales were impacted by consumers pulling back due to economic conditions.

[Craig Demarest, CFO at Crown Crafts]

However, we did see the addition of $11.9 million in net sales from the Baby Boom acquisition, but that was more than offset by declines in the legacy business. Gross profit for the year was 24.4% compared to 26.4% in fiscal 2024, primarily reflecting increased tariffs, rent, and royalty expense, as well as higher closeout sales mentioned earlier. Marketing and administrative expenses included $1.1 million in acquisition costs associated with the Baby Boom acquisition and $244,000 related to the closure of the company's subsidiary in the U.K. GAAP net loss for fiscal 2025 was $9.4 million, 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 million, or adjusted diluted earnings per share of $0.10.

[Craig Demarest, CFO at Crown Crafts]

Turning now to our balance sheet, as of the end of fiscal 2025, cash and cash equivalents totaled $521,000 compared to $830,000 at the end of fiscal 2024. Inventories were $27.8 million, a decrease of 6.4% compared to $29.7 million 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 2025 were $18.5 million compared to $8.1 million at the end of fiscal 2024, reflecting amounts borrowed in the second quarter to fund the Baby Boom acquisition. 2025 cash flow from operations was $9.8 million compared to $7.1 million in the prior year. 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.

[Craig Demarest, CFO at Crown Crafts]

We paid $0.32 per share in cash dividends to shareholders in fiscal 2025, with a yield of 10% based on yesterday's close. This marks the 15th 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. I will turn the call back over to Olivia for additional comments.

[Olivia Elliott, President and CEO at Crown Crafts]

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 have added more products to our portfolio through acquisition and our own internal product development. We have added more of the most popular and trending brands through acquisition or by expanding the depth of our product catalog. 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 costs, and for their commitment to making Crown Crafts one of the leading producers of infant, toddler, and juvenile consumer products.

[Olivia Elliott, President and CEO at Crown Crafts]

As we begin fiscal 2026, 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. 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 you. If you'd like to ask a question, please press star then one on your telephone keypad. If you're using a speakerphone, we ask that you please pick up your handset before pressing the keys. If at any point your question has been addressed and you'd like to remove yourself from queue, please press star then two. Today's first question comes from Doug Ruth at Lenox Financial Services. Please go ahead.

[Doug 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 retirement. I also wanted to welcome Claire to the team. Looking forward to seeing how you're able to increase shareholder value.

[Craig Demarest, CFO at Crown Crafts]

Thank you, Doug. Appreciate it.

[Doug 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, President and CEO at Crown Crafts]

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.

[Doug Ruth, President at Lenox Financial Services]

Do you still think you'll, do you still think you'll make a decision sometime here in fiscal 2026?

[Olivia Elliott, President and CEO at Crown Crafts]

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

[Doug 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, President and CEO at Crown Crafts]

Yeah, 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. They actually wrote some orders, but it's not really common to write orders at the show anymore with just the EDI capabilities, etc. From what I understand, everything went well, and the products that we intend to, the new products showed very well.

[Doug Ruth, President at Lenox Financial Services]

I know that one thing that is featured on the website is the Stella doll, a new Stella doll. 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, President and CEO at Crown Crafts]

Yes. We redesigned what was called Stella and Wee 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 now we have a newborn doll. We have redesigned the toddler doll so that it sits up better. 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.

[Doug 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 Crafts be providing some of the Star Wars plush animals for that, plush figurines for that location?

[Olivia Elliott, President and CEO at Crown Crafts]

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

[Doug Ruth, President at Lenox Financial Services]

Were Crown Crafts' sales to LEGOLAND, did they increase in fiscal 2025 versus fiscal 2024?

[Olivia Elliott, President and CEO at Crown Crafts]

2025 versus 2024, yes. I think that the changeovers, 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. We expect that in the near future, we'll be the only plush in the park.

[Doug Ruth, President at Lenox Financial Services]

Okay. 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, President and CEO at Crown Crafts]

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.

[Doug Ruth, President at Lenox Financial Services]

At one time, you 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, President and CEO at Crown Crafts]

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

[Doug Ruth, President at Lenox Financial Services]

Not really for parents. Yeah, for babies and.

[Olivia Elliott, President and CEO at Crown Crafts]

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

[Doug 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, President and CEO at Crown Crafts]

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.

[Doug Ruth, President at Lenox Financial Services]

My last question is, how about the Manhattan Toy website, the redesign there? Has that made a difference for the company?

[Olivia Elliott, President and CEO at Crown Crafts]

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. I think that we're doing a good job of driving more people to the website through our social media posts, etc.

[Doug Ruth, President at Lenox Financial Services]

Oh, 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]

Thanks so much, Doug.

[Olivia Elliott, President and CEO at Crown Crafts]

Thanks, Doug.

[Operator]

Thank you. As a reminder, if you'd like to ask a question, please press star then one at this time. Our next question comes from David Woodyatt, a private investor. Please go ahead.

Yes. My questions have been answered. Thank you.

[Operator]

Thank you, sir. 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, President and CEO at Crown Crafts]

Thank you. We'd like to thank you for your continued support of Crown Crafts, 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

• Claire Spencer, VP
• Craig Demarest, CFO
• Matt Hodges, Managing Director of Investor Relations
• Olivia Elliott, President and CEO

Analysts

• Doug Ruth, President at Lenox Financial Services