Earnings call transcript Q4 2023

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Operator

Good morning and welcome to the Crown Crafts Financial Results for the Fourth Quarter and Full-Year Fiscal 2023. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to John Beisler, Investor Relations. ahead. go Please

John Beisler

and us operator fiscal everyone. appreciate We conference Thank the good Crown joining for and Crafts’ you call. you, morning fourth XXXX quarter

CEO, are Joining A Demarest. Craig copy XXXX is their morning, a release Crafts’ call fourth on issued this and available today of Crafts company's release me President company's this the Earlier website, and in results. press Olivia Crown CFO, quarter Elliott; the fiscal crowncrafts.com. Crown the regarding and

filed be to the expected is XX-K Form company's days. few within The next

During actual no the Crown statements beyond uncertainties company to obligation or from statements today's and will call, statements. be under These make results those Crafts update these forward-looking control certain are implied. materially risks may and subject and to may the differ that is expressed company

the please For the with and and risk company's the to more company's factors information refer filings other about Exchange Commission. Securities uncertainties,

call replay company's Finally, page. you like recorded today's remind the through being available a I to investor be is and would relation will

Now, and CEO, I over to Elliott. turn President to would Olivia call the like

Olivia Elliott

a John, presented everyone. acquire fallout year causing excess impacted the the in the you, and that challenges to winter The delays of of occurred Fiscal port good fiscal was by the XXXX spring and the of of morning, start retailers across Thank business. number XXXX, inventories.

almost adjust experienced NoJo’s toddler the Consumer historically fiscal in spending to the slowed positions business. their category, has within inventory this experienced country to inflation second XX of represented into particularly our in in which year. the highest thanks of reorder the retailers has their which summer, subsequently the half half years, caused We bedding part levels reducing

year. their higher shelf needs peaked and indicate still discretionary maintained overall inflation on income. near-term, space multiple for our we the relationships these limit and focused may our strengthening such core Although prices the challenges, with housing, are in for which our customers food recent Despite headlines have consumers as experiencing

The sales in exception financial before being problems impacted for obvious parent bankruptcy its April. year company's the filed throughout BuyBuyBaby as they

implemented our marketing and certain the to when cost On that XXXX, We compared a even savings business. including also shortly. across speak will administrative Craig decreased, fiscal to one-time expenses full-year items basis,

XXXX, Most our quarterly completely importantly, believe Group, dividend in and Toy the we sector call. acquisition and opportunities within Manhattan companies consumer their forced or in either provides were remained we Toy maintained in when XXXX In time dividend. a which later the including payment Manhattan purchased Europe. March reduce to profitable many retail I'll Manhattan this and fiscal and beyond, We detail suspend many

Overall, the weathered multiple entering and we XXXX fiscal fiscal well-positioned headwinds XXXX. remain throughout

like more in Craig With the to detail. to call that, turn cover I over would the to financials

Craig Demarest

Thank you, Olivia, good everyone. and morning

quarter that to fourth quarter. of was XX-week Before please prior were of XXXX I XX-weeks in period results, And fourth a year our discussion note this the year XX.X XX-week XX.X XX-weeks begin fiscal of XXXX the Net year quarter sales versus XXXX a year. million for versus year. million, was compared the this the fiscal

macroeconomic of of our the the in chain BuyBuyBaby to high unusually the year in adjusted from result year. the as supply as following orders reduced delays included to overstocking customers of week and the by driven primarily was XXXX. of sales calendar impact extra in consumers' quarter reduction retailers' sales conditions fourth prior also late fourth result quarter prior The as inventory fiscal decline levels, a response current the as The a well inventory and

quarter. BuyBuyBaby year reserves inventory versus related at acquisition. increase expenses X.X Manhattan increase The administrative in was is million and here the the in quarter, quarter to related the impact by to prior XX% X.X Group higher to for private of were year expenses quarter fourth in margin Marketing margin XX.X%, decrease rent reflected California. compared the driven fiscal and primarily The current label the our Gross warehouse XXXX. a the inventory million of in

compared or factors income the diluted earlier. income by to in was net $X.XX Net per share, million, were prior was or XX in quarter. to the XX.X per sales primarily The of compared diluted fiscal for X.X million quarter share XXX,XXX Net mentioned prior the $X.XX year XXXX million decline driven for year. the

current Gross at year compared many products. Gross our negatively and XXXX our XXXX. impacted to fiscal the in in warehouse increases stabilization XX.X% fiscal in margin in benefit margin a the in year seen of February input from of selling was in XX.X%, costs for We've by California. was certain some the increase price the rent

to Marketing and costs the in Manhattan the reserve year. BuyBuyBaby The current versus by decrease the lower Designs closure XX million subsidiary administrative the of prior and first expenses of driven and primarily our expenses Group debt fiscal acquisition which quarter compensation by related million in in partially expenses. was bad Carousel XXXX offset were were the XX.X year,

income year's the was being in in per for on in primary the diluted $X.XX X.X or share, million extinguishment was $X.XX to compared million X.X of million prior or last gain year, driver XXXX debt. income Other of XXX,XXX, compared the the year year. share to prior net fiscal per X income diluted the Net

Turning now balance sheet. to the

price hand. through we Manhattan funded earlier, was The XX. Group and million revolver March purchase our $XX and cash acquired mentioned was Olivia on As on

financials Our reflect of Group. year-end Manhattan acquisition the

compared increase and historical as at inventories in-line XX.X to acquisition the million of million, the The the at cash compared of third end XXXX the XXXX. at XX.X XXXX X.X prior of fiscal Sassy to Manhattan at quarter is at to million in inventories fiscal of equivalents year. totaled NoJo levels. million Group related fiscal end were primarily XX.X of year-end end of X.X end the and Inventories the the end were the with and million, Cash fiscal

XXXX] by to million extended million [ph]. credit agreement XX the conjunction Manhattan from and [July increased we line XX with the our In through years Group purchase, of three

of an at million with XXXX fiscal XX.X was end rate Our long-term the X.X%. of interest debt

Finally, currently yield in provides is which to in believe shareholders key shareholders. we our X.X% the to based long-term cash share price dividend per paid yesterday's dividends a closing a component offering fiscal $X.XX We to returns XXXX.

Now, turn back to call will comments. the additional I for over Olivia

Olivia Elliott

to This Craig. first we've acquisition you, opportunity the discuss of is Thank our had Manhattan Group.

complementary let little and channels. The they existing currently income in me overlap dolls, into and product discuss higher] and Crown So, offerings line toys opportunities a fit [ph] take Manhattan few of distribution of are higher targets minutes how Sassy to the Toys Crafts [eight product they a our very plush, company range grades highly There's toys. to wooden consumer. provide.

Manhattan and as Stores, no Walmart. is Target, have sold Amazon, as into penetration in Toy well they Specialty Legoland and

sides. So, there expand are our sales channels on opportunities to both

the opportunity international to an through sales front have Roughly of also Europe. Manhattan Manhattan XX% are international. We on

We importation. also and believe from there sourcing are meaningful savings opportunities cost available

mentioned consolidated add of largest that toy approximately we through in net by acquisition XX% to December. It are business, company's which representing XX% will this release, the of to fiscal from in become should and XX% approximately $XX sales be net we will quarter, the March be to the of the Manhattan accretive expect million As approximately noted The the end is year. category earnings in fiscal sales. across product our XXXX fiscal our category sales October third

in fiscal by an which Overall, would be macroeconomic XXXX, further are the helped entering we improvement believe we picture. well-positioned

Manhattan addition look that progress us on coming to about forward We reporting quarters. are opportunities in excited the to brings the our of Toy the and

With that, line for up I’d to like open the questions. Drew?

Operator

ahead. John first comes Deysher Please [Operator with from Instructions] go Pinnacle. question The

John Deysher

morning. good Hi,

quick of couple a Just questions.

reserve the how Regarding was for BuyBuyBaby exactly? the that bankruptcy, much

Craig Demarest

something] [XX receivables? [ph] on the

Olivia Elliott

I think XXX.

Craig Demarest

sounds That XXX. Yes. right. Yes.

John Deysher

XXX,XXX?

Olivia Elliott

Right.

John Deysher

exposure additional no forward is going There client? that okay. Okay, with

Craig Demarest

got no, we've quarter we there. any about we We've don't go believe also label got some exposure in $XXX,XXX. on out standpoint, No. for from reserves And inventory forward a private that took the

John Deysher

Okay.

So, XXX,XXX label private for for and XXX,XXX BuyBuyBaby? the

Craig Demarest

For the receivables, yes.

John Deysher

receivables, For the right.

fourth the regarding Okay. Good. quarter? were what costs the And acquisition-related non-recurring the acquisition, in

Olivia Elliott

costs, So of of primarily little bit due due diligence announcement, thing. that the just was that some diligence and fees do the type the and to accounting make travel a

truly type – just due it's So, diligence acquisition it's costs.

John Deysher

those would what And in Okay. total? be

Olivia Elliott

They were …

Craig Demarest

XXX,XXX, roughly.

John Deysher

XXX,XXX.

Okay.

Is in you right? the like fourth looks quarter. it of XXX,XXX non-recurring had Total? about costs that So,

Olivia Elliott

yes. fair, That's

Craig Demarest

That’s fair enough. Yes.

John Deysher

And kind the a – give forward go can get want to what kind what to you be where cost going you savings a might for, us basis? Toy of you when to on forward, feel of it Manhattan be,

Olivia Elliott

given I not don't we've we're publicly. think really That's really discuss that. something ready to yet

John Deysher

a you'll do handle that? have you better think When on Okay.

Olivia Elliott

mean, I in all savings cost included also think through highest year. least probably the into help, this the when getting of it's lot months with few of a and the I time, mid-year, we're negotiating but calendar maybe maybe suppliers, sales get year and better prices realize last a their we're just etcetera. freight to some six to easy savings. We'd cost at of already realizing months like

really it to out a our before So, belt put would on nice months in world. be the few that have behind we

John Deysher

Okay.

or So, another six so? months

Olivia Elliott

Yes, that would be good.

John Deysher

and luck. right. All very much Good. good Thanks

Olivia Elliott

you. Thank

Craig Demarest

Thanks.

Operator

this our to question-and-answer concludes I Elliott over like closing This At conference remarks. any turn the session. for to back Olivia would time,

Olivia Elliott

to Thank company. again you, when in interest with results for forward quarter Thank Drew. speaking first continued look report you in We you your we the our August.

Operator

now you concluded. has attending Thank conference The for presentation. today's

disconnect. You now may

Crown Crafts (CRWS) 22 Jun 232023 Q4 Earnings call transcript