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CROWN CRAFTS INC (CRWS)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 net sales declined 4.5% YoY to $15.5M; gross margin compressed to 22.7% from 24.5% YoY, and diluted EPS was a loss of $0.10, primarily due to tariff impacts and inventory shortages tied to tariff management .
  • Category mix: bedding and diaper bags grew +$0.54M, offset by declines in bibs, toys and disposables (-$1.3M); Baby Boom contributed $2.1M to net sales .
  • Management cited tariff-driven strategy shifts and retail inventory drawdowns; noted “encouraging” July sales and an expanded Disney license (Canada, diaper bags), while maintaining the quarterly dividend at $0.08 per share .
  • Consensus estimates from S&P Global were not available for EPS or revenue, limiting beat/miss analysis for this microcap; actuals shown where available (values retrieved from S&P Global)*.
  • Near-term catalysts: tariff mitigation via price increases flowing through by September, expanded Disney licensing, and stabilization in Manhattan Toy redesign pipeline; dividend continuity reinforces capital return strategy .

What Went Well and What Went Wrong

What Went Well

  • Expanded Disney license to Canada and diaper bags; management emphasized strategic partner relationships and optimism from July sales: “we have extended our license agreement with Disney… very encouraged by the numbers we’ve seen for sales in July” .
  • Baby Boom acquisition added $2.1M to Q1 sales and supported category growth in bedding and diaper bags (+$0.54M) .
  • Dividend of $0.08 per share maintained, underscoring balance sheet confidence despite macro headwinds .

What Went Wrong

  • Gross margin fell to 22.7% (vs. 24.5% YoY) and OpEx rose to 30.5% of sales, driven by increased tariff costs and acquisition/advertising spending; net loss widened to ($1.10M) vs. ($0.32M) YoY .
  • Inventory shortages from tariff management strategy constrained sell-through; retailers reduced weeks of supply from ~10 to 1–2, depressing orders and causing lost sales .
  • The tariff backdrop intensified; management acknowledged necessity of executing price increases across customers and further mitigation actions through September .

Financial Results

MetricQ1 FY25 (Jun 30, 2024)Q4 FY25 (Mar 30, 2025)Q1 FY26 (Jun 29, 2025)
Revenue ($USD Millions)$16.212 $23.227 $15.478
Gross Profit ($USD Millions)$3.966 $4.244 $3.518
Gross Margin %24.5% 18.3% 22.7%
Loss from Operations ($USD Millions)($0.297) ($14.104) ($1.199)
Net (Loss) Income ($USD Millions)($0.322) ($10.787) ($1.104)
Diluted EPS ($USD)($0.03) ($1.04) ($0.10)
Adjusted Diluted EPS ($USD)N/A($0.04) N/A
Category Mix (YoY, Q1 FY26)Change ($USD Millions)
Bedding & Diaper Bags+$0.540
Bibs, Toys & Disposables($1.300)
Baby Boom Contribution+$2.100
KPIsQ4 FY25 (Mar 30, 2025)Q1 FY26 (Jun 29, 2025)
Cash & Equivalents ($USD ‘000s)$521 $227
Accounts Receivable ($USD ‘000s)$24,508 $17,204
Inventories ($USD ‘000s)$27,800 $31,572
Total Assets ($USD ‘000s)$81,154 $76,023
Current Liabilities ($USD ‘000s)$15,505 $17,797
Long-Term Debt ($USD ‘000s)$16,512 $11,890
Shareholders’ Equity ($USD ‘000s)$39,619 $37,869
Total Debt ($USD ‘000s, LT+Current)$18,502 $13,880
Revolver Availability ($USD ‘000s)N/A$12,200
Actuals vs. ConsensusQ1 FY26 ConsensusQ1 FY26 Actual
Revenue ($USD Millions)N/A*$15.478
Primary EPS ($USD)N/A*($0.10)
EBITDA ($USD Millions)N/A*(approx. GAAP EBITDA not disclosed in PR; actual EBITDA for Q1 FY26 reported as ($0.717) in S&P Global actuals)*

Values retrieved from S&P Global*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY26/Q2+No formal numeric guidance providedNo formal numeric guidance; management “cautiously optimistic” on sales trajectory, with July encouraging Maintained “no formal guidance”
Gross MarginFY26No formal numeric guidanceNo formal numeric guidance; tariff mitigation via supplier price rollbacks and customer price increases through September Maintained; mitigation actions underway
OpExFY26No formal numeric guidanceHigher marketing/admin spend due to acquisitions and advertising; no numeric guide Maintained qualitative
DividendQuarterly$0.08 per share $0.08 per share declared for October 3, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY25)Previous Mentions (Q4 FY25)Current Period (Q1 FY26)Trend
Tariffs/MacroMonitoring 10% China import tariff; supplier negotiations to offset; price increases considered “Goods we order will incur an additional 30% tariff”; working with suppliers/retail partners to absorb/mitigate 30% tariff “new normal” discussed; price increases implemented late June–September to mitigate Worsened, with active mitigation
Retailer Inventory & Supply ChainLowering inventories; warehouse consolidation exploration Close-out sales to reduce inventory; consolidation plans; Q4 margins hit by tariffs/close-outs Retailers cut weeks of supply to 1–2; CRWS must hold inventory to fulfill demand; July order patterns encouraging Tight retailer inventories; CRWS adjusting
Product/Brand PerformanceBaby Boom integration; diaper bag pipeline; Manhattan Toy holiday softness; Walmart placement retained Manhattan Toy redesigns; Stella line refresh; channel expansion; Legoland plush supply Disney license extended; Manhattan Toy/Stella redesigns progressing; Legoland Shanghai reorder above expectations Improving brand momentum despite tariffs
Warehouse Footprint/LeasesEvaluating relocation; lease expirations; possible West Coast preference Consolidation plan; inventory reduction ahead of warehouse changes No new decisions; focus shifted to tariffs; still exploring options Timeline extended; decision pending
Capital AllocationDividend continuity; operating cash flow supports dividends Dividend paid; 15th consecutive year; plans to repay borrowings via cash flow Dividend maintained; Board confident; no intent to reduce at present Stable dividend policy

Management Commentary

  • Strategy and licensing: “we… extended our license agreement with Disney. The Disney license now extends our reach to sales in Canada and will include diaper bags…” .
  • Demand and retail dynamics: “we are very encouraged by the numbers we’ve seen for sales in July… retailers [reduced] in stock levels… from about ten weeks… to one to two weeks” .
  • Tariff mitigation: “we started getting our price increases with our customers… all the way through September… we’re hopeful that we’ve done enough to mitigate the cost” .
  • Balance sheet and capital return: Cash stable, dividend declared; “at this point in time [re: dividend] we’re not concerned” .

Q&A Highlights

  • Retail sourcing opportunity: Potential upside if Target reduces direct sourcing; management “hopeful” this opens opportunities .
  • Profitability under 30% tariff: Management implementing price increases and supplier negotiations; expresses confidence in mitigation by September .
  • Manhattan Toy stabilization and redesigns: Operations stabilized; Stella lines redesigned and released; further plush expansion underway .
  • Legoland Shanghai: Initial set supplied; received reorder bigger than expected—positive indicator .
  • Retail inventory behavior: Major retailer cut weeks of supply from ~10 to 1–2; CRWS adjusting inventory to meet demand volatility .
  • Dividend sustainability: Board and management confident; no current concern about reduction .

Estimates Context

  • S&P Global consensus estimates for Q1 FY26 revenue and EPS were not available; therefore, formal beat/miss vs. Street cannot be assessed for CRWS this quarter (values retrieved from S&P Global)*.
  • Actuals: Revenue $15.478M and diluted EPS ($0.10); EBITDA actuals in S&P reflect ($0.717M), but lack of consensus means no surprise calculation (values retrieved from S&P Global)* .

Key Takeaways for Investors

  • Tariffs are the principal earnings headwind; price actions and supplier negotiations are underway, expected to mitigate by September, but margin risk persists until mitigation fully flows through .
  • Category momentum is mixed: bedding/diaper bags up (+$0.54M), but toys/bibs/disposables down (−$1.3M); Baby Boom contribution ($2.1M) supports revenue diversification .
  • Retailer inventory drawdowns (1–2 weeks of supply) create near-term order volatility; management reports encouraging July sales—watch Q2 sell-through and replenishment cadence .
  • Brand/licensing tailwinds: Disney license expansion and Manhattan Toy/Stella refresh should aid product appeal; Legoland reorder in Shanghai is a positive datapoint .
  • Balance sheet/liquidity: Inventories seasonally increased into Q1 ahead of programs; total debt declined sequentially, revolver availability $12.2M provides flexibility .
  • Dividend maintained at $0.08; management/Board express confidence in sustaining payouts, a key element of capital return strategy .
  • With limited sell-side coverage and unavailable consensus, focus shifts to operational execution, tariff mitigation, and licensing-driven growth as near-term stock narrative catalysts .
Notes: 
- Consensus estimates and EBITDA actuals where noted are values retrieved from S&P Global*.