Crown Crafts Net Drops 27 Percent in First Quarter
GONZALES, La.-Higher-than-expected costs slashed Crown Crafts' bottom line in its fiscal first quarter, which ended on July 3.
The company's net income finished at $530,000, down 27 percent from last year's first quarter. While net sales rose 1.9 percent to $17.5 million, Crown Crafts' results were buffeted by rising costs for raw materials, labor, transportation and currency associated with its sourcing operations in China. As a result, gross margin plummeted by 340 basis points to 21.6 percent.
The gain in the top line resulted from increased sales of bedding, blankets, and accessories, which, taken together, rose 3.3 percent in the quarter. E. Randall Chestnut, Crown Crafts' chairman, president and CEO, said sales are improving thanks to new designs in these categories, combined with aggressive promotion and marketing activities. "We also continued our progress in growing sales of company-branded products," Chestnut said.