Shares of Crown Crafts, Inc. CRWS have gained 3.2% since the company reported its earnings for the quarter ended June 29, 2025. This compares to the S&P 500 Index’s 0.1% gain over the same time frame. Over the past month, the stock gained 1.7% compared with the S&P 500’s 2.5% rise.
CRWS’ Revenue and Earnings Performance
Crown Crafts posted net sales of $15.5 million in the first quarter of fiscal 2026, down 4.5% from $16.2 million in the prior-year period. Gross profit fell 11.3% to $3.5 million from $3.9 million, representing 22.7% of sales compared with 24.5% a year ago. CRWS reported a net loss of $1.1 million, or $0.10 per share, compared with $0.3 million, or $0.03 per share, in the year-ago quarter.
Segment results showed mixed trends. The sales of bedding and diaper bags increased 8.6% year over year to $6.8 million from $6.3 million, while sales of bibs, toys, and disposable products declined 12.8% to $8.7 million from $9.9 million.
Crown Crafts’ Other Key Business Metrics
The quarter’s results were weighed down by elevated tariffs and related inventory shortages. Gross margin slipped by 180 basis points year over year, reflecting higher costs of imported goods from China. Marketing and administrative expenses rose 10.6% to $4.7 million from $4.3 million, increasing to 30.5% of sales from 26.3% a year earlier, driven by higher advertising costs and expenses tied to the Baby Boom acquisition. Interest expense surged 180.2% to $0.3 million from $0.1 million in the prior-year period, further pressuring the bottom line.
On the balance sheet, inventories stood at $31.6 million as of June 29, 2025, up from $27.8 million at fiscal year-end, consistent with seasonal patterns ahead of the fiscal second-quarter retail programs. Cash and equivalents declined to $0.2 million as of June 29, 2025, from $0.5 million at fiscal year-end, while long-term debt fell to $11.9 million from $16.5 million at fiscal year-end. Shareholders’ equity slipped modestly to $37.9 million from $39.6 million at fiscal year-end.
Crown Crafts, Inc. Price, Consensus and EPS Surprise
Crown Crafts, Inc. price-consensus-eps-surprise-chart | Crown Crafts, Inc. Quote
CRWS’ Management Commentary
Management emphasized that tariffs remained the key challenge in the quarter. CEO Olivia Elliott acknowledged consumer uncertainty and supplier disruption stemming from tariff volatility, but highlighted that the Baby Boom acquisition contributed $2.1 million in sales during the quarter. Elliott noted that Crown Crafts has started implementing price increases with customers to offset the impact of tariffs, with full effects expected by the end of September.
She also expressed optimism about July sales trends and announced the renewal and expansion of CRWS’ Disney licensing agreement, which now extends to diaper bags and includes distribution in Canada. CFO Claire Spencer stressed that the company’s financial flexibility remains intact, with $12.2 million available under its revolving line of credit.
Factors Influencing Crown Crafts’ Headline Numbers
Several factors weighed on performance. The decline in net sales reflected a 12.8% drop in bibs, toys, and disposables, only partially offset by gains in bedding and diaper bags. Tariff-driven inventory management strategies further constrained revenue, as Crown Crafts deliberately curtailed imports early in the quarter to mitigate high tariff costs.
The gross margin decline was tied almost entirely to tariff pressures on China-sourced products. Meanwhile, higher marketing outlays—including a $268,000 increase in advertising—and costs tied to integrating Baby Boom weighed on operating income.
CRWS’ Guidance
While Crown Crafts did not provide formal numerical guidance, management signaled cautious optimism. Elliott pointed to stronger July sales and noted that restocking by retailers with depleted inventories should aid demand in upcoming quarters. She reiterated that tariff mitigation through price adjustments and cost controls is expected to restore profitability if current tariff rates persist.
Crown Crafts’ Other Developments
Crown Crafts continued its long history of shareholder returns by declaring a quarterly dividend of $0.08 per share, payable Oct. 3, 2025. The company also announced the extension of its key Disney licensing agreement, expanding both product categories and geographic reach. Additionally, management noted progress in stabilizing the Manhattan Toy brand following redesigns and integration issues, with new product lines now gaining traction at major retailers.
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Crown Crafts, Inc. (CRWS): Free Stock Analysis Report
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