Crown Crafts Q2 2024 Earnings Report

Crown Crafts EPS Results

• Actual EPS: $0.18
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Crown Crafts Revenue Results

• Actual Revenue: $24.13 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Crown Crafts Announcement Details

• Quarter: Q2 2024
• Date: 11/15/2023
• Time: N/A
• Conference Call Date: Wednesday, November 15, 2023
• Conference Call Time: 9:00AM ET

Crown Crafts (NASDAQ:CRWS), through its subsidiaries, operates in the consumer products industry in the United States and internationally. It provides infant, toddler, and juvenile products, including infant and toddler beddings; blankets and swaddle blankets; dolls and plush toys; nursery and toddler accessories; room décors; reusable and disposable bibs; burp cloths; hooded bath towels and washcloths; reusable and disposable placemats, and floor mats; disposable toilet seat covers and changing mats; developmental toys; feeding and care goods; and other infant, toddler, and juvenile soft goods. The company sells its products primarily to mass merchants, large chain stores, mid-tier retailers, juvenile specialty stores, value channel stores, grocery and drug stores, restaurants, internet accounts, wholesale clubs and internet-based retailers through a network of sales force and independent commissioned sales representatives. Crown Crafts, Inc. was incorporated in 1957 and is headquartered in Gonzales, Louisiana.

Crown Crafts Q2 2024 Earnings Call Transcript

[Operator]

Hello, and welcome to the Crown Crafts Inc. 2nd Quarter Fiscal Year 20 24 Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

[Operator]

I would now like to turn the conference over to John Beisler, 3 part advisors. Please go ahead.

[Speaker 1]

Thank you, MJ, and good morning, everyone. We appreciate you joining us for the Crown Craft's Q2 fiscal 2024 conference call. Joining me on the call today are Crown Craft's President and CEO, Olivia Elliott and the company's CFO, Craig Demericks. Earlier this morning, Crown Crafts filed its 10 Q and issued a press release regarding their Q2 fiscal 2024 results. A copy of this release is available on the company's website at crowncrafts.com.

[Speaker 1]

During today's call, the company will make Certain forward looking statements and actual results may differ materially from those expressed or implied. These statements are subject to risks and uncertainties That may be beyond Crown Crafts' control and the company is under no obligation to update these statements. For more information about the company's risk Factors and other uncertainties, please refer to the company's filings with the Securities and Exchange Commission. Finally, I would like to remind you today's call is being recorded and a replay will be available through the company's Investor Relations page. Now, I would like to turn the call over to the President and CEO, Olivia Elliott.

[Speaker 2]

Thank you, John, and good morning, everyone. Our second quarter results reflect the continued progress at Manhattan Toy and year over year sales growth within our 2 legacy categories. While encouraging, cost pressure facing consumers continue to constrain spending even though overall inflation has trended lower in recent months. The reopening of 11 Buy Buy Baby stores is a welcome addition to the marketplace, but this represents only a fraction of the brick and mortar stores that were closed as part of its bankruptcy earlier this year. Having a physical location to experience the difference between our products and others is a key differentiator, And we believe specialty retailers represent an opportunity going forward.

[Speaker 2]

We continue to work with our existing customers to maintain our strong relationships and look for additional cost reduction opportunities across the company. We are effectively managing our inventory. At the end of the quarter, inventory for our Sassy and No joke brands was $21,000,000 compared to almost $28,000,000 a year ago. With that, I would like to turn the call over to Craig to cover some financial information.

[Speaker 3]

Thank you, Olivia, and good morning, everyone. Net sales for the Q2 of fiscal 2024 increased 28.9 percent to $24,100,000 compared to 18,700,000 in the prior year quarter or an increase of $5,400,000 The increase is primarily attributable to the addition of Manhattan Toy, which added $4,800,000 in net sales to the current year quarter and due to slight increases in our Nojo and Sassy businesses. Gross profit for the Q2 was 27.3 percent compared to 29.1% in the Q2 of fiscal 2023. The profit decrease was primarily attributable to higher lease costs for our warehouse in California. Our 2nd quarter marketing and administrative expenses were $4,000,000 up $1,300,000 from $2,700,000 in the prior year quarter, And increased from 14.6 percent of net sales for the prior year quarter to 16.7% of net sales currently.

[Speaker 3]

The increase is primarily driven by expenses of Manhattan Toy. Net income for the quarter was $1,800,000 or 0.1 dollars 0.0 per diluted share compared to net income of $2,000,000 or $0.20 per diluted share in the prior year quarter. Now turning to our balance sheet. Cash and cash equivalents at the end of the quarter were $1,900,000 compared to $1,700,000 at the end Fiscal 'twenty three and borrowings on our revolver at the end of the quarter were $9,800,000 compared to $12,700,000 at the end of fiscal 'twenty And finally, we paid our regular quarterly dividend of $0.08 per share And declared our next dividend, which will be paid in January. On an annualized basis, our shares currently offer A 7.6% yield based on yesterday's closing price.

[Speaker 3]

And now, I'll turn the call back over to Olivia for additional comments.

[Speaker 2]

Thank you, Craig. Since we acquired Manhattan Toy in March, its sales have followed their historical trend with the September quarter outpacing June, And we expect the upcoming holiday quarter to be their largest sales quarter, representing between 35% to 40% of its annual sales. We continue to find ways to reduce cost, which should lead to better margins for Manhattan Toy. We're encouraged by the favorable response we at last month's New York Toy Fair, where we introduced new toy designs. We will continue to proactively manage our business in the current challenging economic environment, so that we remain in a position to capitalize on growth opportunities.

[Speaker 2]

We continue to be optimistic about the long term prospects of the company and look forward to updating you on our progress next quarter. With that, I'd like to open up the line for questions. MJ?

[Operator]

Thank you. We will now begin the question and answer session. At this time, we will pause momentarily to assemble our roster. This concludes our question and answer session. I would now like to hand the call back to Olivia Elliott for closing remarks.

[Speaker 2]

Thank you for your continued interest in our company. We will be participating in the 3 part Advisors' Ideas Conference in Dallas tomorrow, November 16. We look forward to speaking with you again when we report our Q3 results in February. Thank you.

[Operator]

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.