Crown Crafts Announces Fourth Quarter and Fiscal 2025 Financial Results

Core Viewpoint - Crown Crafts, Inc. reported a mixed financial performance for the fourth quarter and fiscal year 2025, with increased sales but significant net losses due to various challenges including tariffs and goodwill impairment charges [5][11]. Fourth Quarter Summary - Net sales for the fourth quarter of fiscal 2025 increased by 2.9% to $23.2 million compared to the prior year quarter, driven by the Baby Boom acquisition [6][8]. - Gross margin decreased to 18.3%, a decline of 4.9% from the prior year quarter, attributed to a higher mix of close-out sales and $324,000 in increased tariffs on imports from China [6][8]. - Marketing and administrative expenses rose by 17.0% to $4.6 million, including $77,000 in acquisition costs related to Baby Boom [7][8]. - The company recorded a GAAP net loss of $(10.8) million, or $(1.04) per diluted share, and an adjusted net loss of $(429,000), or $(0.04) per adjusted diluted share, which excludes a goodwill impairment charge of $13.8 million [10][12]. Fiscal 2025 Summary - Total net sales for fiscal 2025 were $87.3 million, essentially flat compared to fiscal 2024 [11][12]. - Gross margin for the year was 24.4%, down 1.8% from fiscal 2024, primarily due to higher rent and increased tariffs [11][12]. - Marketing and administrative expenses increased by 16% to $18.7 million, which included costs associated with the Baby Boom acquisition and the closure of a subsidiary in the UK [12]. - The company reported a GAAP net loss of $(9.4) million, or $(0.90) per diluted share, while adjusted net income was $1.0 million, or $0.10 per adjusted diluted share [12][11]. Goodwill Impairment - A goodwill impairment charge of $13.8 million was recorded due to a decline in the company's market capitalization and the fair values of its reporting units being lower than their carrying values [9][10]. Cash and Inventory Position - At the end of fiscal 2025, the company had $521,000 in cash and cash equivalents, with total inventory at $27.8 million, reflecting a 6.4% decrease compared to the end of fiscal 2024 [13]. Dividend Declaration - The company declared a quarterly cash dividend of $0.08 per share of Series A common stock, to be paid on July 3, 2025 [14]. Company Overview - Crown Crafts, Inc. designs, markets, and distributes a variety of infant, toddler, and juvenile consumer products, and is one of America's largest producers in this sector [16].