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]

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].

Core Insights - Crown Crafts, Inc. is reintroducing its Manhattan Toy® brand's Groovy Girls collection, featuring new designs and diverse characters aimed at children and parents who fondly remember the original dolls [1][2] Product Overview - The Groovy Girls collection includes five unique dolls: Rose, Saige, Poppy, Iris, and Daisy, each designed with distinct personalities and styles, priced at $29.99 each, targeting children aged 3 to 6 [3][5] - The dolls maintain their original soft, huggable form while incorporating modern elements such as vibrant hairstyles and fashionable outfits [2][3] - The collection will also feature a range of outfits and accessories designed for interactive play, including pets, camping gear, and furniture, with magnetic features compatible with the dolls [6] Marketing and Launch - The new collection will debut at the North American International Toy Fair from February 14-17, 2026, at the Javits Center in New York [7] - The marketing strategy emphasizes diversity, creativity, and the playful essence that made Groovy Girls popular, appealing to both children and Millennial and Gen Z parents [3][2] 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]