Crown Crafts Q3 2025: Contradictions Rise in Manhattan Toy Sales, Warehouse Decisions, and Marketing Strategy

These are the key contradictions discussed in Crown Crafts' latest 2025 Q3 earnings call, specifically including: Manhattan Toy sales performance, warehouse location decision, and marketing expense:



Sales and Revenue Trends:
- Crown Crafts, Inc. reported net sales of $23.3 million for Q3 Fiscal 2025, a decrease from the previous year's $23.8 million.
- The decrease is primarily attributed to lower online toy sales and the loss of a bid program at a major retailer, partially offset by the addition of $3.8 million in sales from the Baby Boom acquisition.

Gross Profit and Margin:
- Gross profit for Q3 was 26.1%, down from 27% in the previous year's Q3.
- The margin decrease was due to slight changes in product mix and higher lease costs for the California warehouse.

Operating Cash Flow and Financial Stability:
- Year-to-date through the end of Q3, cash flow from operations was $7 million, up from $4.1 million in the same period last year.
- Despite a challenging economic environment, Crown Crafts maintained a strong financial position with $1.1 million in cash and cash equivalents and continued paying its regular quarterly dividend of $0.08 per share.

Tariff Impact and Strategy:
- Crown Crafts is monitoring announced 10% tariffs on Chinese imports, where virtually all of its products are made.
- The company plans to work with suppliers to absorb the increase and consider price increases, while minimizing the impact on customers and consumers.

Warehouse Relocation and Cost Optimization:
- Crown Crafts is evaluating potential locations to relocate its warehouse, with a focus on strategic consolidation in Fiscal 2026.
- The company is considering factors like lead times, costs, and technology capabilities to make an informed decision on the warehouse location.