Core Viewpoint - Crown Crafts, Inc. reported a mixed performance for the third quarter of fiscal 2026, with significant declines in net sales and gross profit, but a notable increase in net income and earnings per share, driven by nonrecurring insurance proceeds [2][5]. Financial Performance - Net sales decreased by 11.3% year over year to $20.7 million from $23.4 million [2] - Gross profit fell by 20.3% to $4.9 million from $6.1 million, with gross margin compressing to 23.5% from 26.1% [2] - Net income increased by 69.1% to $1.5 million from $0.9 million, while diluted earnings per share rose by 55.6% to $0.14 from $0.09 [2] Product Category Performance - Sales of bedding and diaper bags dropped by 29.8% to $7.8 million from $11.2 million [3] - Sales of bibs, toys, and disposable products increased by 5.8% to $12.9 million from $12.2 million, indicating a divergence in product performance [3] Operating Metrics - Operating income swung to a loss of $0.1 million from income of $1.7 million a year earlier [4] - Marketing and administrative expenses increased by 12.9% year over year to $4.9 million from $4.4 million, rising to 24% of sales from 18.8% [4] Other Income and Expenses - Other income rose sharply to $2.5 million from a $33,000 expense in the prior-year period, primarily due to insurance proceeds [5] - The net impact of these proceeds added $2.1 million to income before taxes [5] Balance Sheet Overview - Inventories stood at $31.2 million at quarter-end, up from $27.8 million at fiscal year-end [6] - Total debt was approximately $16.4 million, including $11.3 million under the revolving line of credit [6] - Net cash provided by operating activities for the nine-month period was $7.1 million, slightly above the prior year's $6.9 million [6] Management Commentary - Management noted a challenging demand backdrop and elevated tariffs affecting products sourced from China, contributing to gross margin contraction [7] - Uneven consumer spending and retailer program changes were cited as headwinds, particularly in bedding and diaper bags [7] Strategic Focus - Management emphasized ongoing pricing actions, cost controls, and operational consolidation to drive profitability in a difficult macro environment [8] - The company did not provide formal financial guidance but expressed confidence in meeting liquidity needs through operational cash flow and available credit [12] Recent Developments - Crown Crafts announced the relaunch of the "Groovy Girls" line of soft fashion dolls by Manhattan Toy, available starting May 2026, reflecting a focus on internal product development [13]

GONZALES, La., Feb. 11, 2026 (GLOBE NEWSWIRE) -- Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the “Company”) today announced that Olivia Elliott, President and Chief Executive Officer, will ring the Nasdaq Stock Market Closing Bell on Friday, February 13, 2026, as the Company kicks off its attendance at the North American International Toy Fair in New York City and celebrates the relaunch of Manhattan Toy’s iconic collection of Groovy Girls® dolls announced earlier this week. The ceremony will be held at the Nasda ...

Core Insights - The company is focused on maintaining quality and compliance while exploring alternative supply sources, primarily due to the concentration of production in China and the impact of tariffs on costs [1][3][21] - The relaunch of the Groovy Girls product line is expected to enhance the company's market presence and direct-to-consumer sales starting in May 2026 [2] - Despite a decline in net sales to $20.7 million from $23.4 million year-over-year, net income increased to $1.5 million, indicating resilience in the business model [4][7] Financial Performance - Third quarter gross margin decreased to 23.5% from 26.1% due to elevated U.S. tariff rates and one-time costs [3][6] - Marketing and administrative expenses rose to $5 million, influenced by $600,000 in severance expenses related to operational consolidation [5][6] - The company reported a net cash flow from operating activities of $7.1 million for the nine-month period, slightly up from $7 million in the previous year [9] Inventory and Supply Chain - The company maintains a conservative inventory strategy to minimize excess inventory exposure amid volatile pricing and tariffs, with inventories at $31.2 million at quarter-end [1][8] - The majority of products are sourced from China, with over 90% of production concentrated there, although the company is exploring alternative sourcing options [12][21] Strategic Initiatives - Cost initiatives are being executed to streamline operations and reduce payroll and administrative expenses, aiming for a leaner structure to better absorb external factors [5][9] - The company is committed to disciplined capital allocation, including regular dividends, to enhance long-term shareholder value [5][9] Market Environment - The macroeconomic environment remains challenging, with uneven consumer spending and price sensitivity affecting sales, particularly in the bedding category [3][4][11] - The company is optimistic about the long-term fundamentals of the infant, toddler, and juvenile category, despite current market pressures [10]

Crown Crafts (NasdaqCM:CRWS) Q3 2026 Earnings call February 11, 2026 09:00 AM ET Company ParticipantsClaire Spencer - VP and CFODoug Ruth - PresidentIgor Novgorodtsev - Portfolio ManagerJohn Deysher - President and Portfolio ManagerJohn McNamara - Managing DirectorOlivia Elliott - President, CEO, and DirectorConference Call ParticipantsAnthony Lebiedzinski - Senior Equity AnalystNone - AnalystOperatorPlease note this event is being recorded. I would now like to turn the conference over to John McNamara with ...

Financial Data and Key Metrics Changes - Net sales for the third quarter were $20.7 million, down from $23.4 million in the prior year quarter, while net income increased to $1.5 million from $900,000 a year ago [3][8] - Gross margin decreased to 23.5% from 26.1% in the prior year quarter, primarily due to higher tariffs and one-time costs [4][8] - Marketing and administrative expenses increased by $600,000 to $5 million, with expenses as a percentage of net sales rising to 24% from 18.8% [8][10] - Basic and diluted earnings per share were $0.14, up from $0.09 in the prior year quarter [9] Business Line Data and Key Metrics Changes - The softness in revenue was primarily attributed to the bedding category, where consumers are opting for lower-cost items like blankets instead of higher-priced bedding sets [14][15] - Positive performance was noted in bibs, toys, and disposable categories during the holiday season [3] Market Data and Key Metrics Changes - The majority of products are sourced from China, with over 90% of products coming from there, which poses risks due to ongoing trade tensions [16][32] - Consumer spending remains uneven and price-sensitive, impacting sales [4][35] Company Strategy and Development Direction - The company is focused on driving profitability through pricing and cost actions to offset the challenging sales environment [3] - A conservative inventory strategy is in place to minimize exposure to excess inventory amid volatile pricing and tariff environments [6] - The relaunch of the Groovy Girls product line is expected to create opportunities with specialty customers and expand reach in the juvenile space [4] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the difficult operating backdrop, including elevated tariffs and shifting retailer behavior, but remains confident in the long-term fundamentals of the infant, toddler, and juvenile category [11] - The company is committed to cash flow generation, debt reduction, and disciplined capital allocation as key pillars of shareholder value [7] Other Important Information - The company incurred $600,000 in severance expenses related to operational consolidation efforts [6] - Insurance proceeds of $2.5 million were received during the quarter, positively impacting income before tax [9] Q&A Session Summary Question: Where was the softness on the revenue line? - The softness was primarily in the bedding category, with consumers opting for lower-cost alternatives [14][15] Question: What percentage of the product comes from China? - Almost all products, in the high 90% range, are sourced from China [16] Question: Can you provide details on the $2.5 million insurance claims benefit? - The claims relate to a product category dropped at retail shortly after acquisition, leading to a successful claim under the representations and warranties insurance [17][20] Question: How much did retail price increases contribute to quarterly revenue? - Price increases were implemented across retailers by October, impacting the sales mix during the quarter [24][26] Question: What is the contingency plan if tariffs increase again? - The company is exploring alternative sourcing options but is currently focused on maintaining quality and safety standards [32] Question: Will Groovy Girls be sold internationally? - Yes, the product will be sold internationally through distributors [42] Question: How is the Disney license in Canada performing? - The license started in January, and the company is in the process of introducing its products to larger retailers [44] Question: What is the status of international sales? - Specific numbers were not disclosed, but the company is actively working to expand its international distributor network [48]

Financial Data and Key Metrics Changes - Net sales for Q3 2026 were $20.7 million, down from $23.4 million in the prior year quarter, while net income increased to $1.5 million from $900,000 a year ago [3][7] - Gross margin decreased to 23.5% from 26.1% in the prior year quarter, primarily due to higher tariffs and one-time costs [4][7] - Marketing and administrative expenses rose by $600,000 to $5 million, with expenses as a percentage of net sales increasing to 24% from 18.8% [7][9] - Basic and diluted earnings per share were $0.14, up from $0.09 in the same quarter last year [8] Business Line Data and Key Metrics Changes - The softness in revenue was primarily attributed to the bedding category, where consumers are opting for lower-cost items like blankets instead of higher-priced bedding sets [14][15] - The company is excited about the relaunch of the Groovy Girls product line, which is expected to broaden its reach in the juvenile space [4] Market Data and Key Metrics Changes - The majority of products are produced in China, with almost all (high 90%) sourced from there, which poses risks due to ongoing trade tensions [16][31] - The company is exploring alternative sourcing options in countries like Cambodia, Pakistan, and India, but is cautious due to quality and safety concerns [31] Company Strategy and Development Direction - The company is focused on driving profitability through pricing and cost actions to offset the challenging sales environment [3] - A disciplined approach to capital allocation, including regular dividends and growth-oriented investments, is emphasized as a key pillar for enhancing shareholder value [6][10] - The company remains confident in the long-term fundamentals of the infant, toddler, and juvenile category [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the difficult macroeconomic backdrop, including elevated tariffs and uneven consumer spending, but expressed confidence in the company's strategy [10] - The company is committed to managing costs and maintaining a conservative inventory strategy to minimize exposure to excess inventory [5][9] Other Important Information - The company received $2.5 million in insurance proceeds related to claims made under a representation and warranties insurance policy, which positively impacted income before tax [8][18] - The company incurred $600,000 in severance expenses related to operational consolidation efforts during the quarter [5][7] Q&A Session Summary Question: Where was the softness on the revenue line? - The softness was primarily in the bedding category, with consumers opting for lower-cost alternatives [14][15] Question: What percentage of the product comes from China? - Almost all products, in the high 90%, are sourced from China [16] Question: Can you provide details on the $2.5 million insurance claims benefit? - The claims were related to a product category dropped at retail shortly after acquisition, leading to a successful claim under the insurance policy [18][19] Question: How much did pricing contribute to quarterly revenue? - Price increases were implemented across retailers by October, impacting the sales mix during the quarter [26] Question: What is the contingency plan if tariffs increase again? - The company is exploring alternative sourcing options but is cautious due to quality and safety standards [31] Question: Will Groovy Girls be sold internationally? - Yes, the product will be sold internationally through distributors [42] Question: How is the Disney license in Canada performing? - The Disney license started in January, and the company is in the process of introducing its products to larger retailers [44] Question: What is the status of international distributors? - The company has over 30 distributors in more than 50 countries and is focused on expanding this network [47] Question: What is the company's approach to advertising? - The company is increasing its marketing budget and focusing on digital platforms like Facebook and Instagram to reach consumers [49]

Exhibit 99.1 Crown Crafts Announces Financial Results for Third Quarter Fiscal 2026 Gonzales, Louisiana – February 11, 2026, Crown Crafts, Inc. (NASDAQ-CM: CRWS) (the "Company") a producer designer, and distributor of infant, toddler, and juvenile consumer products, today reported results for the third quarter fiscal year 2026, which ended December 28, 2025. Third Quarter Summary Quarterly Cash Dividend "We believe our third quarter results demonstrate the diligent efforts of our team and resilience of our ...

Financial Performance - Net sales for the three months ended December 28, 2025, were $20.7 million, a decrease of $2.6 million or 11.3% compared to $23.4 million for the same period in 2024[60] - Gross profit margin for the three-month period ended December 28, 2025, was 23.5%, down from 26.1% for the same period in 2024, reflecting a decrease in gross profit of $1.2 million[61] - Net income for the three months ended December 28, 2025, was $1.5 million, an increase of $0.6 million or 69.1% compared to $0.9 million for the same period in 2024[60] Sales and Product Performance - Sales of bedding and diaper bags decreased by $3.3 million, while sales of bibs, toys, and disposable products increased by $0.7 million for the three-month period[60] - Approximately 66% of the Company's gross sales in fiscal year 2025 were generated from its top two customers, indicating a high market concentration risk[77] - 50% of the Company's gross sales in fiscal year 2025 were from licensed products, with 21% of those sales linked to license agreements with affiliated companies of the Walt Disney Company[77] Expenses and Cash Flow - Marketing and administrative expenses increased to 24.0% of net sales for the three-month period ended December 28, 2025, from 18.8% for the same period in 2024, due to severance expenses[62] - Net cash provided by operating activities increased from $7.0 million for the nine-month period ended December 29, 2024, to $7.1 million for the nine-month period ended December 28, 2025[66] - Net cash used in investing activities decreased from $17.0 million in the prior year to $616 thousand in the current year, primarily due to capital expenditures[67] Debt and Liquidity - As of December 28, 2025, the balance on the revolving line of credit was $11.3 million, with $10.6 million available based on eligible accounts receivable and inventory[69] - The Company must maintain Excess Availability of at least $4.0 million or the sum of the term loan balance plus $1.0 million until the term loan is paid in full, and it has complied with this requirement as of December 28, 2025[72] - The Company believes its cash flow from operations and available funds under the revolving line of credit will be sufficient to meet liquidity needs[73] Market and Operational Risks - The Company sources products primarily from foreign manufacturers, with significant exposure to commodity price risks related to cotton, oil, and labor costs in China[76] - The Company faces risks from changes in the Chinese currency exchange rate, which could increase the cost of finished goods despite payments being made in U.S. dollars[76] - The Company’s financial performance is influenced by various external factors, including economic and regulatory conditions beyond its control[73] - The Company has disclosed market risks in its Annual Report on Form 10-K for the year ended March 30, 2025[74] Other Income and Charges - Other income increased by $2.5 million for the three-month period ended December 28, 2025, primarily due to $2.5 million in insurance proceeds related to claims filed under a representation and warranties insurance policy[63] - Factoring fees included in marketing and administrative expenses amounted to $74 thousand for the three-month period ended December 28, 2025[71] - As of December 28, 2025, the Company had $16.4 million of indebtedness with variable interest rates, and a 1% increase in interest rates would decrease annual net income by approximately $124 thousand[75] - The fixed charge coverage ratio has been reinstated but will not be tested if the Company complies with the Availability Covenant in the preceding fiscal quarter[72]

Core Viewpoint - Crown Crafts, Inc. reported its third quarter fiscal year 2026 results, highlighting resilience in its business model despite challenging demand and higher tariffs [3][4]. Financial Performance - Net sales for the third quarter were $20.7 million, a decrease from $23.4 million in the same period last year, reflecting a decline of approximately 11.5% [4][10]. - Gross profit was $4.9 million, down from $6.1 million year-over-year, resulting in a gross margin of 23.5%, compared to 26.1% in the prior-year quarter [4][10]. - Net income increased to $1.5 million from $0.9 million in the prior-year quarter, indicating a growth of approximately 68% [10][14]. Expenses and Income - Marketing and administrative expenses rose by $0.6 million to $5.0 million due to severance expenses related to operational consolidation [5][10]. - Other income increased by $2.5 million from insurance proceeds related to a recent acquisition, contributing a net impact of $2.1 million to income before income tax [5][10]. Dividend Announcement - The Board of Directors declared a quarterly cash dividend of $0.08 per share, scheduled for payment on April 3, 2026 [6][10]. Future Outlook - The company plans to relaunch Manhattan Toy's Groovy Girls line and is focused on internal product development and managing expenses to enhance long-term shareholder value [3][10].

Core Viewpoint - Crown Crafts, Inc. is reintroducing its Manhattan Toy® brand's Groovy Girls collection, featuring new designs and diverse characters aimed at promoting confidence, creativity, and inclusive play for children [1][2]. Product Overview - The Groovy Girls collection includes five unique dolls: Rose, Saige, Poppy, Iris, and Daisy, each designed with distinct styles and personalities, priced at $29.99 each, targeting children aged 3 to 6 [3][5]. - The dolls are designed to reflect modern diversity and creativity while maintaining the original brand's playful essence [2][3]. Marketing and Launch - The new collection will debut at the North American International Toy Fair from February 14-17, 2026, at Javits Center, with media appointments available through the Vice President of Marketing [7]. - The collection will also feature a range of outfits and accessories that encourage creative play, including pets, camping gear, and furniture, all designed to be compatible with the dolls [6]. Company Background - Crown Crafts, Inc. is a significant player in the infant and juvenile consumer products market, with a history dating back to 1957, and operates through subsidiaries like NoJo Baby & Kids, Inc. and Sassy Baby, Inc. [9]. - The company focuses on designing, marketing, and distributing a variety of products, including toys and bedding, and sells directly to various retail channels [9].