Crown Crafts Reports Decline in Sales and Gross Profit for Recent Periods

Crown Crafts, Inc. reported a decline in financial performance for the three and six-month periods ending September 28, 2025, compared to the same periods in the previous fiscal year. The company recorded net sales of $23.7 million for the three months, down 3.1% from $24.5 million in the prior year. For the six-month period, sales decreased by 3.7% to $39.2 million from $40.7 million. The decrease in sales was primarily attributed to a reduction in bedding and diaper bag items at a major retailer, despite a slight increase in sales of bibs, toys, and disposable products.

Gross profit also saw a decline, falling to $6.6 million for the three-month period, a decrease of 5.5% from the previous year, resulting in a gross margin of 27.7%. For the six-month period, gross profit decreased by 7.6% to $10.1 million, with a margin of 25.8%. The decline in gross profit was largely due to increased tariff costs associated with products imported from China, which have impacted the company's cost structure.

In terms of operational changes, Crown Crafts made strategic moves including the acquisition of Baby Boom Consumer Products, Inc. in July 2024 for $18 million, which has been integrated into its operations. The company also reported a decrease in marketing and administrative expenses, which fell to $4.7 million for the three-month period, down 13.6% from the previous year, and to $9.4 million for the six-month period, a decrease of 2.9%. This reduction was partly due to lower acquisition costs compared to the prior year.

Crown Crafts' net income for the three months ended September 28, 2025, was $1.2 million, a 34.5% increase from $860,000 in the prior year. However, for the six-month period, net income dropped to $53,000 from $538,000, reflecting a significant decline of 90.1%. The company attributed the fluctuations in net income to changes in sales volume, cost management, and tax expenses, which increased in the most recent quarter.

Looking ahead, Crown Crafts anticipates continued challenges due to market conditions, including the impact of tariffs and competition in the consumer products sector. The company is focused on improving its operational efficiencies and exploring opportunities for growth, particularly in its licensed product lines, which accounted for 50% of gross sales in fiscal year 2025. The management remains committed to enhancing its internal controls and addressing any material weaknesses identified in its financial reporting processes.