Q1 FY2027
Filed Aug 12, 2026First-quarter fiscal 2027 net sales rose to $16.8 million and net income was $2.1 million, aided by $3.7 million of tariff refunds recorded to cost of products sold.
Net sales increased, gross margin expanded, and the company returned to net income, although reported profitability was materially aided by tariff refunds and management said industry conditions remain soft.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $16,766 | – | – |
| Cost of products soldGAAP | $8,735 | – | – |
| Gross profitGAAP | $8,031 | – | – |
| Gross profit marginGAAP | 47.9% | – | – |
| Gross profit margin without tariff refundsother | 25.6% | – | up 290 basis points year over year |
| Marketing and administrative expensesGAAP | $5,232 | – | – |
| Income (loss) from operationsGAAP | $2,799 | – | – |
| Interest expense - net of interest incomeGAAP | $(190) | – | – |
| Other income - netGAAP | $165 | – | – |
| Income (loss) before income tax expenseGAAP | $2,774 | – | – |
| Income tax expense (benefit)GAAP | $714 | – | – |
| Net income (loss)GAAP | $2,060 | – | – |
| Weighted average shares outstanding - basicGAAP | 10,760 | – | – |
| Effect of dilutive securitiesGAAP | - | – | – |
| Weighted average shares outstanding - dilutedGAAP | 10,760 | – | – |
| Earnings (loss) per share - basic and dilutedGAAP | $0.19 | – | – |
Capital returns
- Declared a quarterly cash dividend on Series A common stock of $0.03 per share.
- The dividend will be paid on October 2, 2026 to stockholders of record at the close of business on September 11, 2026.
What drove it
- Net sales increased to $16.8 million from $15.5 million in the prior-year quarter.
- Gross profit benefitted from $3.7 million in tariff refunds recorded to cost of products sold during the current period.
- Without tariff refunds, gross margin on net sales was 25.6%, improving by 290 basis points year over year.
- Management cited a strong international reception for Groovy Girls, with sales exceeding expectations.
- Management is focused on strategic pricing, a favorable mix of higher-margin products, and continued spending discipline.
Concerns
- Management said industry conditions remain soft.
- Reported gross profit and net income benefitted from $3.7 million in tariff refunds.
- Marketing and administrative expenses reflected an increase in accrued incentive compensation associated with tariff refunds of $529 thousand compared with the prior year.
- The company identified risks from increased U.S. tariffs and retaliatory measures, consumer spending, raw-material prices, customer concentration, suppliers, transportation disruptions, and third-party licenses.
What to watch
- Sustainability of gross margin excluding tariff refunds.
- Sales performance of Groovy Girls and other new products.
- Progress on strategic pricing, higher-margin product mix, and spending discipline.
- Debt reduction and warehouse consolidation over the next two years.
- Whether industry conditions normalize and support future sales growth.
Balance sheet and cash flow
- Cash and cash equivalents: $194 at June 28, 2026; $200 at March 29, 2026.
- Due from factor: $11,557 at June 28, 2026; $16,280 at March 29, 2026.
- Other accounts receivable: $2,152 at June 28, 2026; $2,579 at March 29, 2026.
- Inventories: $26,792 at June 28, 2026; $28,365 at March 29, 2026.
- Other current assets: $4,512 at June 28, 2026; - at March 29, 2026.
- Prepaid expenses: $2,300 at June 28, 2026; $2,176 at March 29, 2026.
- Total current assets: $47,507 at June 28, 2026; $49,600 at March 29, 2026.
- Operating lease right of use assets: $9,054 at June 28, 2026; $8,956 at March 29, 2026.
- Property, plant and equipment - net: $2,008 at June 28, 2026; $2,011 at March 29, 2026.
- Intangible assets - net: $6,088 at June 28, 2026; $6,275 at March 29, 2026.
- Deferred income taxes: $3,737 at June 28, 2026; $3,657 at March 29, 2026.
- Other assets: $147 at June 28, 2026; $154 at March 29, 2026.
- Total Assets: $68,541 at June 28, 2026; $70,653 at March 29, 2026.
- Accounts payable: $5,177 at June 28, 2026; $4,913 at March 29, 2026.
- Accrued royalties: $347 at June 28, 2026; $532 at March 29, 2026.
- Dividends payable: $987 at June 28, 2026; $952 at March 29, 2026.
- Operating lease liabilities, current: $4,250 at June 28, 2026; $4,198 at March 29, 2026.
- Accrued liabilities: $2,093 at June 28, 2026; $1,283 at March 29, 2026.
- Current maturities of long-term debt: $1,991 at June 28, 2026; $1,991 at March 29, 2026.
- Total current liabilities: $14,845 at June 28, 2026; $13,869 at March 29, 2026.
- Long-term debt: $7,599 at June 28, 2026; $12,132 at March 29, 2026.
- Operating lease liabilities, noncurrent: $5,548 at June 28, 2026; $5,529 at March 29, 2026.
- Reserve for unrecognized tax liabilities: $334 at June 28, 2026; $310 at March 29, 2026.
- Total non-current liabilities: $13,481 at June 28, 2026; $17,971 at March 29, 2026.
- Common stock: $137 at June 28, 2026; $137 at March 29, 2026.
- Additional paid-in capital: $59,605 at June 28, 2026; $59,402 at March 29, 2026.
- Treasury stock - at cost: $(15,889) at June 28, 2026; $(15,889) at March 29, 2026.
- Accumulated deficit: $(3,638) at June 28, 2026; $(4,837) at March 29, 2026.
- Total shareholders' equity: $40,215 at June 28, 2026; $38,813 at March 29, 2026.
- Total Liabilities and Shareholders' Equity: $68,541 at June 28, 2026; $70,653 at March 29, 2026.
- No operating cash flow, investing cash flow, financing cash flow, or free cash flow was reported.
Analysis
Crown Crafts opened fiscal 2027 with higher sales and a return to profitability. Net sales were $16,766 for the three-month period ended June 28, 2026, compared with $15,478 in the prior-year period. Gross profit was $8,031 versus $3,518, income from operations was $2,799 versus a loss of $(1,199), and net income was $2,060, or $0.19 per basic and diluted share, compared with a net loss of $(1,104), or $(0.10) per share.
The principal swing factor in the period was $3.7 million in tariff refunds recorded to cost of products sold. This supported reported gross margin of 47.9%, compared with 22.7% in the prior-year quarter. Management also reported that gross margin without tariff refunds was 25.6%, up 290 basis points year over year. This underlying margin figure is important because it separates the stated improvement in pricing and product mix from the tariff-refund benefit.
Operating costs increased as marketing and administrative expenses reached $5,232 from $4,717. The company attributed the increase to accrued incentive compensation associated with tariff refunds of $529 thousand compared with the prior year. Net interest expense was $(190), compared with $(283), while other income was $165, compared with $99. Management highlighted international demand for Groovy Girls, with sales exceeding expectations, while also stating that industry conditions remain soft.
Capital allocation is being redirected toward execution priorities. The board declared a quarterly cash dividend of $0.03 per share, payable October 2, 2026, and management said the dividend was right-sized to support growth opportunities, debt reduction, and warehouse consolidation over the next two years. Long-term debt was $7,599 at June 28, 2026, compared with $12,132 at March 29, 2026, while current maturities of long-term debt were $1,991 at both dates. Cash and cash equivalents were $194 at June 28, 2026.
The filing provided no numerical forward guidance. The reported period establishes positive sales and underlying gross-margin progress, but the durability of earnings will depend on product demand, strategic pricing, higher-margin mix, spending discipline, and results after the tariff-refund benefit is excluded.
Management, verbatim
Our new fiscal year is off to a solid start with year-over-year growth, expansion of our gross margin, and positive net income, even when adjusting for tariff refunds net of related expenses.
Olivia Elliott, President and Chief Executive Officer
Until conditions normalize, we’re focused on strategic pricing, driving a favorable mix of higher-margin products, and continued spending discipline.
Olivia Elliott, President and Chief Executive Officer
To help us execute on our growth opportunities, debt reduction and warehouse consolidation over the next two years, our Board right-sized our quarterly dividend to $0.03 per share which will free up meaningful funding for these initiatives that will drive future profitability.
Olivia Elliott, President and Chief Executive Officer
Not in the filing
stated, not guessed- Numerical forward guidance for revenue, gross margin, operating expenses, tax rate, or other metrics was not provided.
- Previous-release outlook was not provided.
- Segment revenue and segment profitability were not reported.
- Non-GAAP revenue, operating income, net income, EPS, or cash-flow measures were not reported.
- Operating cash flow, capital expenditures, free cash flow, and share repurchases were not reported.
- A reported income tax rate was not provided.
- Prior-quarter comparisons were not provided for the reported operating metrics.
- Percentage changes were not printed for net sales, gross profit, operating income, net income, or EPS.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.