Crown Crafts Reports 8.3% Revenue Growth and Net Income Turnaround in Latest Quarter

Crown Crafts, Inc. reported a significant improvement in its financial performance for the three-month period ending June 28, 2026, with net sales reaching $16.8 million, an increase of 8.3% from $15.5 million in the same period last year. The company achieved a gross profit of $8.0 million, reflecting a gross margin of 47.9%, compared to 22.7% in the prior year, largely due to a $3.7 million tariff refund that was recorded as a reduction in cost of products sold. This resulted in a net income of $2.1 million, a turnaround from a net loss of $1.1 million in the previous year, marking a substantial increase of $3.2 million.

The increase in sales was primarily driven by a $2.0 million rise in sales of bibs, toys, and disposable products, while sales of bedding and diaper bags decreased by $758,000. The company attributed the overall sales growth to improved inventory availability, as previous shortages related to tariff mitigation strategies were no longer a significant issue. Marketing and administrative expenses rose to $5.2 million, or 31.2% of net sales, up from 30.5% in the prior year, due to increased accrued incentive compensation linked to tariff refunds.

Crown Crafts continues to navigate a complex market environment, particularly concerning tariffs on imports from China, which have fluctuated significantly. The company incurred approximately $5.3 million in IEEPA tariffs during fiscal year 2026, a substantial increase from $267,000 in the previous year. However, the U.S. Supreme Court's ruling in February 2026 deemed some of these tariffs illegal, allowing Crown Crafts to submit refund requests. As of June 28, 2026, the company had $4.7 million in accepted claims for tariff refunds, which have been recorded as receivables.

Operationally, the company reported a decrease in accounts receivable and inventories, with net cash provided by operating activities increasing to $5.5 million from $5.2 million in the prior year. The balance on the revolving line of credit was $5.4 million, with $11.9 million available based on eligible accounts receivable and inventory. Crown Crafts remains focused on maintaining compliance with its financing agreements and managing its liquidity effectively.

Looking ahead, Crown Crafts anticipates that its cash flow from operations and available funds under its revolving line of credit will be sufficient to meet its liquidity needs. The company continues to monitor the impact of tariffs and market conditions on its operations, with a commitment to adapting its strategies as necessary to navigate these challenges.