Crown Crafts reported its fiscal 2026 second‑quarter results for the three months ended September 28 2025, showing net sales of $23.7 million, a 3.3 % decline from $24.5 million a year earlier. The decline is largely attributable to a reduction in the number of diaper‑bag items carried by a major retailer and inventory shortages linked to tariff‑related supply‑chain adjustments.
Gross profit margin contracted to 27.7 % from 28.4 % in the prior year, reflecting higher tariff costs on imports from China and a shift toward lower‑margin product lines. Despite the margin squeeze, net income rose to $1.2 million ($0.11 per share) from $0.9 million ($0.08 per share) a year earlier, driven by disciplined cost management and a modest increase in higher‑margin bibs, toys and disposable product sales.
Segment analysis shows bedding and diaper‑bag sales fell by $1.6 million, while sales of bibs, toys and disposable products increased by $0.8 million. The decline in the diaper‑bag segment is linked to the ongoing integration of the Baby Boom acquisition, which added approximately $20 million in annual net sales but also introduced integration costs and supply‑chain adjustments.
Marketing and administrative expenses fell by $0.7 million, representing 19.9 % of net sales versus 22.3 % a year earlier. The reduction reflects the company’s continued focus on cost control and operational efficiency, which helped offset the impact of tariff‑related cost increases.
The Board declared a quarterly cash dividend of $0.08 per share of Series A common stock, payable January 2 2026 to shareholders of record on December 12 2025. The dividend maintenance signals Crown Crafts’ confidence in its cash‑flow position despite the revenue decline and margin compression.
Management highlighted the challenges of integrating the Baby Boom acquisition and managing tariff exposure. CEO Olivia Elliott said the company “continues to leverage its prior acquisitions, expand product lines as appropriate, and utilize pricing actions to position the company for success as consumer demand normalizes.” She also noted the company’s success in “navigating the industry’s challenges by managing costs and integrating past acquisitions.”
Crown Crafts disclosed a material weakness in its internal controls over financial reporting, specifically in manual journal entry review. The company also reported high customer concentration, with Walmart accounting for 47 % of sales, Amazon 17 %, and Target 10 %. These factors underscore the importance of supply‑chain resilience and customer diversification for future growth.
No analyst estimates or forward guidance were provided in the release, and no market‑reaction data were available. As a result, the results cannot be evaluated against consensus expectations, but the company’s ability to maintain profitability and a dividend amid tariff headwinds suggests a cautious but steady outlook.
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