Financial Data and Key Metrics Changes - First quarter net sales were $15.5 million, a 4.5% decrease compared to the previous year, driven by declines in sales of bibs, toys, and disposable products, partially offset by increases in bedding and diaper bags due to the Baby Boom acquisition [6][7] - Gross profit decreased by $448,000 from the prior year, with gross profit margin declining from 24.5% to 22.7% of net sales, primarily due to increased tariff costs on imports from China [7][8] - GAAP net loss for the first quarter was $1.1 million, or a $0.10 loss per diluted share, attributed to increased tariffs and inventory shortages [8][9] - Cash and cash equivalents totaled $227,000, down from $521,000 at the end of the previous fiscal year, while inventories increased by 13.6% to $31.6 million [9][10] Business Line Data and Key Metrics Changes - Sales of bibs, toys, and disposable products saw a decline, while sales of bedding and diaper bags increased due to the Baby Boom acquisition [6][7] - Marketing and administrative expenses rose from 26.3% to 30.5% of net sales, reflecting increased costs associated with the Baby Boom acquisition and higher advertising expenses [7][8] Market Data and Key Metrics Changes - The company noted a significant reduction in inventory levels at major retailers, with one retailer's supply dropping from ten weeks to one to two weeks, indicating potential pent-up demand [31][32] Company Strategy and Development Direction - The company is focused on navigating the challenges posed by tariffs and inflation while executing its long-term strategic plan, including expanding its product portfolio and renewing its license agreement with Disney [4][11] - The acquisition of Baby Boom is expected to drive growth, and the company is optimistic about sales trends observed in July [4][11] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the fiscal year, despite ongoing challenges from tariffs and inflation impacting consumer spending [4][11] - The company is hopeful that price increases implemented in response to tariffs will help restore profitability [17][36] Other Important Information - The company declared an $0.08 per share cash dividend, maintaining its commitment to returning value to shareholders [10] Q&A Session Summary Question: Target's Direct Sourcing Strategy - Management hopes that Target's potential reduction in direct sourcing could create opportunities for Crown Crafts to regain programs previously taken over by Target [16] Question: Profitability with 30% Tariff - Management is optimistic about mitigating tariff impacts through price increases and believes profitability can be achieved in the future [17] Question: Expanding Manhattan Toy Sales Overseas - Management sees opportunities for expanding Manhattan Toy sales overseas, especially after consolidating distribution channels [19] Question: Promotion of Products Featured on Netflix - Management confirmed that they are promoting products featured in popular shows and leveraging social media for marketing [20][21] Question: Stabilization of Manhattan Toy Operations - Management believes that operations at Manhattan Toy have stabilized and are seeing improvements in product lines [22][23] Question: Sales Feedback from LEGOLAND Shanghai - Initial sales for plush figures at LEGOLAND Shanghai exceeded expectations, indicating strong demand [24] Question: Sales Performance of Stella Dolls - Management reported that sales of redesigned Stella dolls are performing well, despite previous inventory challenges [25][26] Question: Dividend Sustainability - Management expressed confidence in the company's cash flow and balance sheet, indicating no immediate concerns regarding the dividend [36]