The following is a summary of the Crown Crafts, Inc. (CRWS) Q2 2025 Earnings Call Transcript:

Financial Performance:

• Q2 net sales were $24.5 million, an increase from $24.1 million in the previous year, primarily due to the addition of Baby Boom.

• Gross profit margin improved to 28.4%, up from 27.3% last year, reflecting a slight change in product mix.

• Net income was $860,000 or $0.08 per diluted share, down from $1.8 million or $0.18 per diluted share in the prior year quarter.

• Increased operating expenses due to the Baby Boom acquisition led to higher marketing and administrative expenses of $5.4 million, up from $3.6 million.

Business Progress:

• Crown Crafts completed the acquisition of Baby Boom assets, enhancing the toddler segment product offerings.

• They have integrated Baby Boom into NoJo, with significant progress made in four months.

• Strategic evaluation of warehouse consolidation options is ongoing, with plans to achieve this in fiscal 2026.

Opportunities:

• The acquisition of Baby Boom at a potential positive inflection point is expected to boost customer demand especially heading into the major selling season.

• The reduction in interest rates and lower inflation could enhance consumer purchasing power.

Risks:

• Legacy businesses witnessed a decline in sales, offsetting the gains from the new acquisition.

• Higher operating expenses included costs related to the Baby Boom acquisition.

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