Crown Crafts Inc. (CRWS) experienced a decline in revenue and gross profit margin in Q3 2025 compared to the previous quarter, while marketing and administrative expenses increased.
- Revenue Shift:
- Crown Crafts reported a revenue of $23.3 million for Q3 2025, which is a decrease from the $23.8 million recorded in the same period of the previous year12.
- The decline in revenue is primarily attributed to lower online toy sales and the loss of a major retailer bid program12.
- Expenses Shift:
- Marketing and Administrative Expenses increased to $4.4 million in Q3 2025, up from $4.1 million in the prior year quarter12.
- The company's borrowings also increased, with $20.9 million under the credit facility at the end of Q3 2025, up from $8.1 million at the end of fiscal 202412.
- Profitability Impact:
- Despite the revenue decline, the company's gross profit margin decreased to 26.1% in Q3 2025, down from 27% in the previous year quarter1.
- Net income for the quarter was $893,000, or $0.09 per diluted share, compared to $1.7 million, or $0.17 per diluted share, in the prior year quarter12.
- Cash Flow and Financial Position:
- Cash and cash equivalents increased to $1.1 million at the end of Q3 2025, up from $829,000 at the end of fiscal 202412.
- Year-to-date cash flow from operations was $7 million through Q3 2025, an increase from $4.1 million in the same period last year12.
- Inventory balance declined to $32.4 million from $34.9 million in December 202312.
In conclusion, Crown Crafts faced challenges in Q3 2025 with a decline in revenue and gross profit margin, but managed to increase cash and cash equivalents, and cash flow from operations. The company's strategic initiatives, including the integration of the Baby Boom acquisition and product innovation, are crucial for navigating the current economic landscape and positioning itself for future growth.
4/14/2025 11:11am
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