Anthony Lebidzinski

Anthony Lebidzinski from Sidoti & Company asked about the contribution of pricing to quarterly revenue and specifics on the annualized cost savings from recent actions.

Answer

Crown Crafts President and CEO Olivia Elliott noted that all retail price increases were fully implemented by October, making the third quarter a transitional period for revenue impact. Regarding cost actions, Ms. Elliott indicated that the company is still quantifying annualized savings, which are expected from consolidating IT and other contracts, with full realization anticipated in the next fiscal year.

Anthony Lebidzinski asked about the specific financial impact of shipment timing in the hospitality division, the sustainability of sales gains in the core Hooker Branded and Domestic Upholstery segments, retail partner feedback on Black Friday sales, the revenue and operating income drag from discontinued operations (Pulaski Furniture and Samuel Lawrence Furniture), and the potential to return to historical high single-digit operating margins.

Answer

CFO Earl Armstrong stated that the hospitality business is project-based and last year benefited from two unusually large hotel projects, which are not typically repeatable, but did not disclose a specific financial impact. CEO Jeremy Hoff expressed confidence in the momentum from product introductions in Domestic Upholstery and Hooker Branded, particularly with the Margaritaville launch, believing the company can compete for market share despite macroeconomic challenges. Mr. Hoff noted hearing relative positivity from retailers during peak times like Black Friday but emphasized the need for more consistent demand. Mr. Armstrong indicated that the discontinued operations were a significant drag on operating income, with detailed pro forma financials to be provided in upcoming SEC filings. Mr. Hoff affirmed that returning to historical high single-digit operating margins is a reasonable expectation when market conditions improve.