Crown Crafts, Inc. (CRWS Quick QuoteCRWS - Free Report) delivered earnings per share (EPS) of 10 cents in the fourth quarter of fiscal 2024, up 25% compared with 8 cents in the year-ago period.

Full-year fiscal 2024 EPS was 48 cents, down 14.3% compared with the fiscal 2023-end.

Revenues in Detail

Crown Crafts registered revenues of $22.6 million in the fiscal fourth quarter, up 4.5% year over year.

Full-year fiscal 2024 revenues were $87.6 million, indicating a 16.8% uptick from the comparable fiscal 2023 period.

Segment Details

Crown Crafts’ operations consist of two business segments — Bedding, blankets and accessories, and Bibs, toys and disposable products.

In fiscal 2024, Bedding, blankets and accessories reported revenues of $32 million, down 12.8% from the fiscal 2023-end. This primarily resulted from the continued overall softness of that market, the impact of retailers that have been managing inventory levels and consumers who have lowered their spending due to inflationary pressures.

Revenues in the Bibs, toys and disposable products segment totaled $55.6 million in fiscal 2024, up 45.1% from fiscal 2023. The segment was partly aided by revenues from Manhattan Toy, which generated net sales of $18.5 million for developmental toy, feeding and baby care products.

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Crown Crafts’ Gross Margin

For the fourth quarter of fiscal 2024, Crown Crafts’ gross profit was $5.2 million, up 10.7% year over year. The gross margin for the quarter was 23.2%, up 130 basis points (bps) from the prior-year quarter’s 21.9%.

For fiscal 2024, Crown Crafts’ gross profit was $23 million, up 15.9% from the comparable fiscal 2023 period. The gross margin for fiscal 2024 was 26.2%, down 20 bps from 26.4% in the comparable fiscal 2023 period.

Crown Crafts’ Operating Expenses Analysis

The marketing and administrative expenses in the quarter under review were $3.9 million, up 4% year over year.

The marketing and administrative expenses during fiscal 2024 were $16.1 million, up 27.3% from the comparable fiscal 2023 period. The increase was primarily attributed to costs incurred by Manhattan and Manhattan Toy Europe Limited, which were $3.9 million higher than the prior fiscal year and included credit losses and advertising costs that were $360,000 and $213,000 higher than the prior fiscal year, respectively.

Profitability

Income from operations in the fiscal fourth quarter was $1.3 million, up 36.8% year over year. In fiscal 2024, income from operations was $6.9 million, down 3.9% from the comparable fiscal 2023 period.

Net income in the fiscal fourth quarter was $1 million, up 21.3% year over year. In fiscal 2024, the net income was $4.9 million, down 13.4% from the comparable fiscal 2023 period.

Liquidity & Debt Management

Crown Crafts exited fiscal 2024 with cash and cash equivalents of $0.8 million compared with $1.7 million at the fiscal 2023-end.

Total long-term debt at the end of fiscal 2024 was $8.1 million compared with $12.7 million at the fiscal 2023-end.

Cumulative net cash provided by operating activities at the end of fiscal 2024 was $7.1 million compared with $7.7 million a year ago.

Our Take

Crown Crafts exited fourth-quarter fiscal 2024 with encouraging top-line and bottom-line results. Robust performance by its Bibs, toys and disposable products segment was impressive. Gross margin expansion bodes well. Robust net income during the reported quarter is also encouraging. Continued benefits from the integration of Manhattan Toy are also promising.

However, the decline in the Bedding, blankets and accessories segment’s revenues was disappointing. The company continuing to navigate through the ongoing effects of the inflationary environment and its negative impact on consumers’ discretionary spending raises apprehension.