CRWS - Earnings call transcript Q1 2025

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Operator

Good day, and welcome to the Crown Crafts, Inc.

First Quarter fiscal year 2025 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

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

this are Demarest. crowncrafts.com. company's me their of and was a Joining this morning XX-Q release The first the Olivia and press filed available results. also company's company's Elliott, quarter CEO, release XXXX Form CFO, A afternoon is website, Craig yesterday Crown financial issued Crown Crafts yesterday. regarding Crafts' copy President the on

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

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

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

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

Olivia Elliott

you, everyone. Thank John. morning, Good

first Our limiting results income. the by discretionary their facing impacted inflationary were pressures prolonged consumers, fiscal quarter 'XX

rate quarter, to operations. reduction lower-income outlook closure bedding performance slightly -- confident most. We costs most the ahead. would our related inflation, debt interest about was through and business about see card potential consumer is the customers some prospects market with breakeven. The Fed lower in cash our a and the relief our levels in a of for the the and our encouraging year recession by feeling from There the of quarter developments did which generally XXXX, of provided subsidiary remainder our consumers the sentiment impact recent the provided the with some rates, bring into concerns survey of including the measure of and acquisition-related which with credit cuts Excluding potential consumers costs, mixed U.K. performance near-term about more the job growing

more Consumer Boom Craig call. With is I'd the assets opportunity financials in cover we more company, very of exciting the Finally, Products this to Baby for like it a speak This the last the detail. over to purchased about will later month. turn I to in that, and

Craig Demarest

the decrease for costs morning, Olivia, loss $XX.X with you, prior and the and year of XX.X% of reducing Net good levels retailer. Gross due another million at of a program major primarily The with unfavorable sales in primarily $X million were of gross quarter. of in prior the to change which year administrative for closing prior associated timing net Toys share the Manhattan the purchases, compared the per $XXX,XXX share $XXX,XXX income caused year. costs the and to were retailer in everyone. in increased $X.X quarter U.K. absorption related warehouse XX.X% for in inventory first loss expenses The current of is $XX.X inventory. Marketing The per year for major Boom million, into of XXXX quarter an the sales, quarter. to or compared first the in Net decrease was $XXX,XXX of in is compared the acquisition. a profit Thank and profit quarter XXXX. $X.XX or million quarter fiscal includes $XXX,XXX the net subsidiary, was compared and the Baby costs quarter $X.XX with with

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

fourth primarily fiscal of quarter. the end million, is 'XX purchases at collection related of million fiscal receivables, This end year inventory quarter the than with first planned the during of 'XX the 'XX. $X.X lower of at decrease coupled fiscal $X.X was compared current quarter to debt long-term the Our to

$XX assets Baby under the X transaction $XX we term years monthly of increased of borrowing term adjustments. revolving an and repayable line million. was XXXX, Regarding line of additional $XX through by Boom, acquisition capital paid and financed of capacity of a million to $X borrowings to year the credit the combination We million the our to July the of The credit. extended to customary X over loan, company, working its from we subject million

dividend X.X% on share per offers of price yield annualized yesterday's $X.XX based an Finally, quarterly of our share. closing per

to a returns our continue offering component shareholders. key is towards believe We our long-term to dividend

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

Olivia Elliott

you, Thank Craig.

Before let I Boom, update other provide an a get into Baby matters. our me purchase on few of

new continue to in channel receive which in XXXX distribution expanded development opportunities. feedback product cross-selling March on acquisition and Toy, positive Manhattan We our

subsidiary of As management of we structure, decided GK the at part of close continuous our end cost to XXXX. its June

expense. This of effort rest next the continue a and continue reduce will to options We location to fiscal evaluate likely lease future for into fiscal our year. through warehouse XXXX

storage product add very temporary opportunity some and Now accretive immediately are of but our Valley, about space turn a be is sold company products enhances acquisition adds bedding Boom inventory Eddie additional offering. both term warehouse brands Compton, in business The California bags toddler existing also licensed Ms. including under from a diaper XPL with and to expected acquisition There near earnings. Patrol. our to our Eden we me to popular the Ontario, warehouse, to our will Baby move Rachel excited let brands, facility, The the to under license in diaper as be some some Boom's expenses in Paw through Bauer. the inventory Bluey, and Boom. capacity It the and to our bags acquisition Baby rent move very from We're licenses from Minnesota to a Baby our in lineup. California

throughout overall and remainder I'd improves. will position thank like developing As structure to their the efforts year, like the for support. line and on the we open customers and We cost our our their thank for macroeconomic our the focus that our to I'd up we for picture calendar products you, our questions. to of work to through continued on brands to XXXX, and continuing XXXX that, team into our forward when your Dave? progress updating capitalize look continue support. With for shareholders, optimizing you

Operator

Instructions] [Operator Ruth comes Financial. Our first from with Doug Lenox question

Douglas Ruth

the details appreciate I provided. that you

of maybe With the which And bedding, Baby us Boom most toddler opportunity? think has could you brands the the why? you tell do

Olivia Elliott

licenses? the Meaning

Douglas Ruth

Yes.

with license bedding. the of So the

Olivia Elliott

of for signed Ms. licenses have think then time. is have a has And some license which which So has very one right they some about really the popular quite popular a acquisition. most Cocomelon opportunity. really, now. Bluey, before right some did the probably is really YouTube popular It's the had been now. good -- not we're They popular yet. We brands. that we right new excited in a Rachel inventory The been

but waiting to come in, to think a the on so going And inventory be we're we hit. that's

Douglas Ruth

And Bluey popular? what makes

Olivia Elliott

He's little It's a dog. television show that excited today's a kids very cute are puppy about. just

Douglas Ruth

And then talk opportunity you how you bag could Very about might and diaper the think big be? Okay. good. it of an

Olivia Elliott

-- right we take an to do grow acquisition an we stores that think about bags opportunity we and across in of some to to internationally. And Target. right the other it's also an that specialty now, diaper think retailers. that in have XX% So bags, other grow maybe diaper we mainly probably opportunity opportunity have think and We sales. and We have Walmart now, they're that

Douglas Ruth

with detail Okay. Manhattan Manhattan development us Toys? the little And feedback receiving more with a about the give then product that -- Toy could you bit about you're Yes. the the

Olivia Elliott

during So summer. the of the product happened the some primarily big happen shows launches that at gift

really so infant of we And showed to X at [indiscernible], to kind baby, in of in products. X- those. stores XX-month and gift just line the the are true to it. get one really of that so start shows, introduced that can the purchasing And new the ahead excited the us And we they specialty were is inventory which June, they go major and pushing about

new are Stella the collection. -- doll on a also We updating working

the very feedback on that so is initial And good.

Douglas Ruth

happened how and more then And Manhattan subsidiary in good. the -- little bit there? the to Kingdom United decision a the Toy explain Very you close about can what about

Olivia Elliott

had kind and Toy I mean the retailers direct. international whereas primarily distributors, already so those through Sassy -- handle Manhattan Baby do of distribution, they

as two the so the feels distributorship model it look we best. works like models, at And those

had were so we that employees employees X able there, we And with we're it to X and close replacing U.S. and those down office, the expenses, cut in

Douglas Ruth

-- thinking that in Or would are warehouse, Okay. that, do in made made And you would for possible the would be is in think XXXX? you about still you that that fiscal think it the -- made that sometime be XXXX? then fiscal be final decision do

Olivia Elliott

think the locations we'll narrowed narrowed fiscal I down by of think city 'XX. to the necessarily at or not I have two exact to least, locations down address, we or but will one have end the

Operator

And the from with Josh Peters next comes question Dempsey. Morgan

Joshua Peters

about promising in And start I questions. was the That's thing, I what item. to have acquisition. sales the light the Boom Yes. obviously, of talked am line years was exposure. And young drive quarter. One, house, I quarter relatively quarter Super compared some always Toy not able about point. I Bluey items I, entertainment, there. very important growth get very pitted too, happy just Baby curious some give absolutely you've soft see Toy. less am very was? contribution some seen Manhattan and feedback sense potential me what since small kind for the over XX the for of its last couple in an of still to in what audience to the about parents Bluey you're child children I Manhattan a much the if on to the the to to I've is of Because that have around target bedding turn likely -- I insane. we're realize pretty excited the

Olivia Elliott

that that the program sales I side that right to Actually, I the that was business. the program mentioned number was was now. bibs decided loss of a tell direct the can have program it Target at soft that out in where source. broken entire there that was and because impacted take We bibs don't you Target

sourcing themselves. that they're So

Joshua Peters

Okay.

affects fair pre-existing that So -- characterization? than more Is that Manhattan business a but your Toy.

Olivia Elliott

Correct.

Craig Demarest

Yes.

Joshua Peters

Okay.

customer been I'm just mentioned you trying parts sold the Yes, their the like a you for of retailer that's registers? inventory, at now benefit of feel story Okay. from going sense inventory, of what's reducing here actually is the discrete least at get different a to the a And contributions some of comfortable business. of we're also level and while. Do to major cash with a get being the

Olivia Elliott

the Well, POS. Yes. registers customer what's we inventory being see that is this sold isn't to mean, this -- and know the particular particular cash I at buying we can not

and are are the think wheels we levels the to when normal, on Just happens. back bus the this inventory

that -- they're are. right POS, purchasing we're so that and the not It sure very to back seems to I'm they're they're that the purchasing not. And week, week, like One next they would I to say but POS erratic now.

Joshua Peters

with just I trying get suppose margin, the way on better of X, Well, volatility the everybody little is there I still is pressure see and through. dealing the interesting how X the working associated things Okay. years gross bit that handle its here. On last to a with

you high-cost referred a of piece purchases, timing facility. And obviously, when really were the when to So of is X the perhaps inventory rent Compton the had disproportionate a we've year increase shipping ago in costs or from, high? in this

here? sense we from P&L, and those margin a costs get to can see some trying through now the -- are we finally improvement absorbing Just of

Craig Demarest

like warehousing margins absorption is purchases run between all are cost unfavorable quarter, a The P&L. and said, the on overhead than sales. the And kind lower-than-expected into a mostly purchases, first that lower of with sheet during of an which the based the of additional and we the has of to wound balance planned or had the Yes. we we that and cost by allocation through up impacted inventory costs of

So fluctuate quarter-to-quarter. from that can

look prior first quarter, at a margin. you impact If it favorable the year to was

two combination it a more really year prior maybe little the from it So the is. year of than made look pronounced and current the

Joshua Peters

forma of X-K some perspective -- suppose and that's in really statements, the Boom in of, a I question Last some that. acquisition, pro you relating are process associated accounting questions, Well, will to good file for relating the understand Okay. Boom pardon? the Baby well, Baby couple financial there's to have that a with history financial expecting just here to

Craig Demarest

financial Yes, pro financial We'll historical information. forma we accompanied their one-year by file will. statements

Joshua Peters

filed? be accounting... Okay. when with Do delays of I a to have you there's associated likely sense that's suppose actual

Craig Demarest

look forward to I October. first around the would of

Joshua Peters

break very intangibles? Okay. rough with for opposed from physical that to certainly And you're able down forward In to assets for filing, I'll paid paying the actually business terms, what that, but goodwill you look between and getting to associated business. are $XX the we the as million net

Craig Demarest

press capital mean the the release Yes. in the adjusted equity it's And going company. the we to disclosed to differs not working that buying I from of million. the that we're the underlying extent be $X.X

and we're plant that. a buying or of PP&E anything -- lot So like not a facility whole or

will be the difference that next it what working So paid we allocated the And over will be the and between months. capital.

We the intangibles like. evaluation have does the licenses of brands who a party third and and

Joshua Peters

Okay.

subject So continues as asset to tangible $X.X is to here, adjustments so business million net operate the to speak? bogey, the

Craig Demarest

in acquisition an date, the seller date. next before I should has -- provide -- to We close another the don't so. as close acquisition that with know, That coming have maybe the actual X was the or close be still week but estimate accounting a the us -- week at of or

Joshua Peters

right. All over picture optimistic. getting me to things really acquisition, you've but given business for education business be growth of there, the seeing very sorry bore big years some on forward the quite Well, with into to good latest the already the I'm and small Okay. a the pretty the looking

Operator

from next Doug Financial. Lenox question comes the with And Ruth

Douglas Ruth

a question. sort I Josh's wanted of to follow-up ask to

growth from earnings fiscal X.X% this grow the I year? sales Manhattan it from update? perhaps Toy, Manhattan might XX% this seemed year. when you projection far wondering, Do an kind Toy in fiscal that as last you indicated the get a like have might what the do With as did was have you you revenue to you of call,

Olivia Elliott

We And don't We I provide I -- not. typically forecast. recall. do guess don't

to trying where figure from. I'm X% XX% came out So the to

Douglas Ruth

for the operation. And had as year how as projection. what -- you original While take initially, it to long said revenue first that you back that get in made the be to some the then might thought of higher you far would you the projections

So...

Olivia Elliott

forecasted. the think frame what to that years we time X to do -- out before initially I is X you get

Douglas Ruth

Yes.

that I to year be like to the appeared calculated So just took X took years. it what it I your out and be, for per then and that's number, -- growth to next X.X% XX%

this was in do there'll from Manhattan So revenue Toy just fiscal think growth be I -- year? you

Olivia Elliott

hate We to really I don't make those do that. forecasts.

Douglas Ruth

I it question No, asked, I I thought and I a considering should understand. just -- be was you it. appreciate

Operator

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

Olivia Elliott

for your our Thanks, company. Dave. interest Thank you in continued

look when Advisers Ideas Conference will August you presentation on to We available the report speaking quarter and on participate again in our X-part be XX, in our will forward our we results second website. with We November.

Operator

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

disconnect. now may You

Crown Crafts (CRWS) 15 Aug 242025 Q1 Earnings call transcript