CRWS - Earnings call transcript Q4 2024

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Operator

Good day, and welcome to the Crown Crafts, Inc. Fourth Quarter Fiscal Year 2024 Conference Call. [Operator Instructions] Please note this event is being recorded.

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

John Beisler

good and Betsy, you, morning, everyone. Thank you Quarter and appreciate joining us Fourth Crafts Crown the Fiscal for We XXXX Call. Conference

Olivia on me President CFO, the today Demarest. Elliott; CEO, Craig are company's and Joining the Crown call and Crafts

XX-K is Earlier press issued company's available and XXXX on release filed copy A crowncrafts.com. quarter a financial fourth the and results. this the of Crafts morning, fiscal Crown its regarding this website, release

those may expressed make will implied. certain statements, differ company materially the results from call, today's During or and forward-looking actual

These company statements risks to these and uncertainties Crown Crafts that on are subject no update may control is to be and obligation the statements. under

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

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

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

Olivia Elliott

Fiscal the opportunities across good enthusiastic as you, the addition Toy by transitional started the We integrating cross-selling as and everyone. John, as We acquisition. offerings the Toy year possible and of about company. the Manhattan well grow. XXXX our exploring toy Thank year continue category of to Manhattan was acquiring the the a made morning, heels remain on for

long-standing for growth. future Additionally, specialty we our space brands our plan to retailers relationships and major shelf with position leverage stores to and gain

a facing impact our reducing raising consumers, our lower-income continued also more has and cost impact and and to of We operations materials on income the labor proactively headwinds manage Inflationary meaningful of households. economic to for pressures the which customers. discretionary continue linger the

the see costs sales expect the Despite manage remain these challenges, minimize managing our will our positioned were of proactively lessen remainder macro We we current We process. the pressure to margin the balance of across by to the well sheet throughout on business. to cost able structure impact year. with gross strategically and and some continue

another year the we reduced reported XXXX. debt million we result, by of and our a As fiscal from $X.X of profitability, end

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

Craig Demarest

Net the prior a Thank you, Olivia, the The Toy million quarter and not the year and increase in fourth of fiscal compared morning, to XXXX including of quarter's our orders fourth $XX.X year. a $XX.X impact this reduced quarter. to adjusted good a contribution more million conditions year the the from X reflects to current of from This offset levels. feature in was macroeconomic were than compared full customers, sales inventory quarter repeated 'XX. And prior current major customer year weeks Manhattan the for from in response consumers' everyone. that

fourth the Gross reserves year profit margin prior bankruptcy. XX.X% for of of fiscal XX.X% with associated primarily The in effect quarter was is compared the to the related quarter to the customer in recorded the increase 'XX. declared who

'XX in for historical of income Manhattan to was or both Net businesses. the million per reduce $XXX,XXX administrative 'XX, costs quarter quarter. fiscal and to were of marketing $X.X the the to million despite $X and cost $X.XX $X.XX compared net in expenses diluted for income the of addition diluted Manhattan quarter and legacy Marketing We worked year prior relatively share Toys of our administrative prior full unchanged per Toy a or the share year. quarter fourth throughout fiscal the

of the for the compared compared were year. year primarily last 'XX, million generated business. during The at our reflecting year. Net sales $XX.X Gross to impact to the rent bedding which XX.X% of 'XX our offset mix. by for profit California the of by Toy, for offset addition XX.X% fiscal warehouse $XX.X was driven $XX.X product increase the fiscal our partially increase by blankets sales fiscal prior 'XX in to million accessories the a in in now million decline February, and Manhattan Turning was results full net partially

administrative and for expenses Manhattan the of 'XX. versus reflects $XX.X at fiscal in diluted the to share 'XX. Toy $XX.X was share primarily million Net million of $X.XX addition or Marketing end year. $X.X per million year or $X.X were the of the in compared million, The net increase income per diluted prior fiscal income $X.XX

end sheet. Turning equivalents Inventories prior the year. $XXX,XXX now of fiscal million of cash to at million fiscal totaled the the at to to million and 'XX were our 'XX fiscal at of end 'XX. Cash $XX.X end end the as of of $X.X balance $XX.X compared compared the

to the million share $XX.X we on our per dividend in $X.X Our shareholders to long-term 'XX our a end at long-term XXXX, based yield dividends offering returns fiscal X.X% was at close, of believe the XXXX. end paid component $X.XX shareholders. fiscal cash a to of of towards to debt finally, in key yesterday's million with we continue compared on And is

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

Olivia Elliott

brand's the We Thank you, Toy. nearly successfully Craig. and finished. X-year we In passed completed since our Sassy, into IT have of the acquisition integration the time, mark that is Manhattan recently conversion

to we brand's On spending improve pre-acquisition periods. advertising side, adjusted substantially and to worked the profitability the the inventory of excess brand the through operations the compared

they items Customers made Manhattan events, given viewed product feedback on We the have on products forward recent having strides Toy encouraged on the are very their front. development and these look at shelf. to by the has positive

designs of which expand portion toy now As across portfolio. the represents the these offerings our largest new across category, our sales stated earlier,

Looking progress can and our throughout on We believe continued We for the like us to and when licensors We their the expand their past to the that for our offering brands. well support. we sheet our balance and product facing year, allow XXXX, acquisition strengthen you, will ahead favorable year customers our for across look categories. are team our positioned strong will shareholders, opportunities business and updating over improves continuing our for and we would to continue manage economy to the your efforts existing thank consider fiscal to macroeconomic the challenges consumers thank and forward support. you our our

line the questions. up open Betsy? to like for I'd that, With

Operator

question first Instructions] [Operator Ruth Doug Services. Financial with Lenox today from The comes

Douglas Ruth

a Olivia congratulations. and, expansion, It revenue of and was the report. debt the very dividend. all boxes, solid cash course, strong reduction margin growth, It Craig, checks flow,

So thank for you did what you for the shareholders.

Olivia Elliott

Thank you much. support. very We appreciate your

Douglas Ruth

you Toy. had Could bit fiscal us -- we be about to you more Okay. XXXX. tell a there an you million know a of might of little projection the be the Would Toy -- what are $XX.X make for so goal able sales Manhattan for Manhattan

Olivia Elliott

give don't stay of projections. away really kind We We from forecasting.

said go and Toy, what in 'XX. won't to acquired we term. thing the Manhattan think It probably happen when I we back the to best is that's goal fiscal long do in the

to grow million. those It's years. going years or take we steadily be to I few think said we that X going get there, but over X are it will $XX to the was projections

Douglas Ruth

do would Walmart, -- that? placement be possible maybe Okay. to XXXX? take it a is in get maybe fiscal Is it longer -- some Toy like Or get time you than it to in for Manhattan period

Olivia Elliott

shipping Walmart between No, first already, we had 'XX. quarter placement the fiscal second some and and sometime that will of in be

start. in Just it's of limited a but number a and of handful a it's items, stores,

Douglas Ruth

on great the the X and warehouse. congratulations. warehouse possibly combining And warehouses, also Compton talked that? any the then Toy Is Very had then progress Manhattan about you there

Olivia Elliott

exploring that opportunity. still We're

kind those place party have of figure We to to third to place impact to the anybody are the as that us out help a our those where well best that's working warehouses customers in as engaged minimize warehouses.

Douglas Ruth

beyond be that? looking in maybe to fiscal would Would XXXX? happen you we Or something expect

Olivia Elliott

Think be you'll looking that. beyond

a I but think fiscal changes plan, -- have XXXX, will I of will think any we happen fiscal the in think by we 'XX. end I

Douglas Ruth

Okay. stated with possibly hoping on And the progress in lease. do Is something office development to about any you product had what that? and the previously we're sales there that Minneapolis,

Olivia Elliott

is one process. to more That a long-term going be

Minneapolis the think And lease to way space much of beginning office able I open Downtown, to ends that be it. too has sublease XXXX. in unfortunately,

going a term that's to So be longer issue.

Douglas Ruth

like about And do direct-to-consumer? feel progress that? -- making with Okay. any the you're what you How

Olivia Elliott

we direct-to-consumer website and now working NoJo's up to and own running. not Manhattan to gotten have for anybody getting the Sassy's is website right have running We sell on our are we complete And except website, now for Toy consumer. up but through direct and able

so do fiscal subsidiaries XXXX, of of the sell believe we end these in will by have all direct-to-consumer. And I

Douglas Ruth

about how us told are previously what things Buy there Baby had any that initiative the you Baby, And Buy going opened Okay. -- Buy up, for that progress had at company stores. Buy Is with all? with some reopened

Olivia Elliott

to and any They think, the by I all XX but XX any believe, new had openings. did stores, slower, be shipping initial opened and since I those of they I grand expansion would hoped it haven't is than are them we we believe up stores reopen, stores,

Douglas Ruth

the How recently that was I There with And that LEGOLAND. I that things know guess about one was more. is going couple a expansion company? Okay. article Manhattan the of of Toy the acquisition. And for then came business an

Olivia Elliott

business very And X will those of new believe opened actually we I parks, there That will believe, -- this which is China, be we and going be X summer are be will in of well. in, XXXX.

continuing to that to we're and grow so the forward new opening And them parks. business, look we

China the be one largest world. the in in ones will the of One

Douglas Ruth

Wow.

So that would really sales. expand potentially international the

Olivia Elliott

Correct.

Douglas Ruth

it's objective I that? Are question, reducing then with for there at? is the just was you you inventory. a as did happy last an have job where the level And tremendous the did inventory Or

Olivia Elliott

I something number, do a made need a work think always huge say, think out I have too always still to bit that it's to rid inventory we we of. but inventory. get great close we I'm little have think much We more, I going don't to we have not but strides. through,

Douglas Ruth

questions. Okay. for team the my there. to Thank Congratulations you answering

job core just operation? integrating your You've good really into Toy done Manhattan the business a

Olivia Elliott

Thank you.

Operator

with comes Pinnacle. John question next from The Instructions] Deysher [Operator

John Deysher

Manhattan year. Toy, this in think fiscal was you it I $XX.X said, million

that going a you significant Toy I a and think Manhattan about indicated fiscal accounts that some let like should XX.X% go. last about think basis. how drop, was on it case, to decline year-over-year? know the you're pro seems If But we in year, I that's forma pretty

Olivia Elliott

original -- sales decline that to bankrupt. the were was was the of There Buy there Baby planned. Some in business legacy some a the Buy

that of have had We So bit that they didn't little good some we decline. customers to the shipping because a stopped credit. was

direct-to-consumer little was business. much I So for spending had example, that into bigger than bit, it that, on it sales. was as realized the we as drop, Once line the got a advertising planned were because top They initially a planned guess, well. we as we

sales at a when loss. you're that, at looking like obviously, were So something the XX%

costings out bottom that better some as of we've we move So China. time line get can the better new back improve But we sales -- up. are top pick throughout get sales the we where goes our to think see those factories prices by, I sacrificed working to to year line. to And products been you'll

John Deysher

Okay.

year fiscal the trough? this So do was million you think the $XX.X

Olivia Elliott

do I think that.

John Deysher

right. All Okay.

should So big about versus if the from $XX that side, go sales million. Obviously, million back a it that? legacy And out jump like the we Toy legacy looks Manhattan the flip were up. on attribute you business, do what year $XX

Olivia Elliott

this That versus was you last that? year? looking year further Are

John Deysher

$XX.X we the And sorry. $XX.X I'm No, I'm $XX we subtract I'm $XX.X making -- million I'm just the from that's million about apples, million the looking if subtract million. sorry, if

right. You're

right, You're sorry. error. my Delete I'm was that That last question.

Craig Demarest

be slight yes. would It a decline,

John Deysher

decline. Yes, Legacy, slight okay.

That's Okay. for it me.

Operator

question from Dennis Capital. Scannell with next The comes Rutabaga

Dennis Scannell

Craig. Yes. Olivia and

me. quarter. Just gross of for things the margins A a couple fourth on quick in quick question

around like margins up were were X looks just decline issue margins but first the kind commentary we're doing mix? Is were the in kind any relative down sorry, nicely, the gross Or a sequentially quarters, quarters. we of gross X to on what or of -- previous that it just seasonal So I'm XX%. down year-over-year

Olivia Elliott

timing of That's a issue. more

New we're hate a talk a You negative bit year. to get I et QX in you bringing inventory cetera. when a during less you mean, variance see see into so variances, of bit burden because Chinese But of pullback of little about I when burden that a little Year,

a it's So a or more of thing. timing seasonal

Dennis Scannell

Got it.

Great. Okay.

XX%, the at consumer and before when like notes XX%. margins is the it not is took inflation margins sorry, the Is seen XX%, the the going the saw certainly changed around 'XX -- off looks for for gross So forward? business of side, for acquisition realistic? looking really of gross softness XX% we full then with kind pastures, fiscal had that business looking even we Toys. Or potential my mix In of has somewhat, year that on -- around a maybe particularly XX%, recognizing Manhattan

Olivia Elliott

the at in us I that's mean biggest I is The right think potential a thing now it's the longer-term the in in increase California. the future. warehouse impacting rent

be solution, long-term get So going And big that's at it's on had to a not that XX%, I us. there's until think. impact -- we don't

Dennis Scannell

okay. Yes,

looking Okay. that? rents not that cost the maybe the you're Or And on question. It's is looking out facility. to exit curiosity that guess, a I another in in are California. you just there Is to so for solution of lower -- -- a my for rent,

Olivia Elliott

that working are solution. We on

And so a least we're move you're warehouse engaged for to XX we the going party that there forward-looking third been you've if that in to have XX because to years plan XX -- help for we've XX, us move to be at side. with need to the a on years,

So to it we that do make right. sure want we

So it X to years the take solution. get is going to long-term something us months that's to XX

Dennis Scannell

Got it. Interesting.

Okay.

opportunity And Great. so there. an

Operator

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

Olivia Elliott

to for be much. mid-August. on updating to just you thank the look very you earnings, like which will your and years, over forward Thank QX our in you support We'd we

Craig Demarest

you. Thank

Operator

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

You may disconnect. now

Crown Crafts (CRWS) 28 Jun 242024 Q4 Earnings call transcript