Q2 fiscal 2027
Filed Nov 12, 2026Crown Crafts Q2 fiscal 2027: net sales fell to $19.0 million from $23.7 million, while net income rose to $1.3 million on tariff refunds
Net sales declined from $23,695 thousand to $19,028 thousand and gross profit fell from $6,571 thousand to $6,083 thousand. Net income rose from $1,157 thousand to $1,317 thousand, and the company states that cost of products sold benefited from $0.4 million in tariff refunds, partly offset by $0.2 million of severance expense. Operating income declined from $1,863 thousand to $1,564 thousand. Adjusted gross margin of 30.9% is a non-GAAP measure.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, Q2 fiscal 2027 (three months ended September 27, 2026)GAAP | $19.03M | – | – |
| Cost of products sold, Q2 fiscal 2027GAAP | $12.95M | – | – |
| Gross profit, Q2 fiscal 2027GAAP | $6.08M | – | – |
| Gross margin, Q2 fiscal 2027GAAP | 32.0% | – | – |
| Adjusted gross profit, Q2 fiscal 2027 (excludes tariff refunds and severance)non-GAAP | $5.87M | – | – |
| Adjusted gross margin, Q2 fiscal 2027non-GAAP | 30.9% | – | 320 basis points |
| Marketing and administrative expenses, Q2 fiscal 2027GAAP | $4.52M | – | – |
| Income from operations, Q2 fiscal 2027GAAP | $1.56M | – | – |
| Interest expense, net of interest income, Q2 fiscal 2027 (as printed)GAAP | 72 thousand (printed without parentheses) | – | – |
| Other income, net, Q2 fiscal 2027GAAP | $150K | – | – |
| Income before income tax expense, Q2 fiscal 2027GAAP | $1.79M | – | – |
| Income tax expense, Q2 fiscal 2027GAAP | $469K | – | – |
| Net income, Q2 fiscal 2027GAAP | $1.32M | – | – |
| Earnings per share, basic and diluted, Q2 fiscal 2027GAAP | $0.12 | – | – |
| Net sales, six months ended September 27, 2026GAAP | $35.79M | – | – |
| Cost of products sold, six months ended September 27, 2026GAAP | $21.68M | – | – |
| Gross profit, six months ended September 27, 2026GAAP | $14.11M | – | – |
| Gross margin, six months ended September 27, 2026GAAP | 39.4% | – | – |
| Adjusted gross profit, six months ended September 27, 2026non-GAAP | $10.13M | – | – |
| Adjusted gross margin, six months ended September 27, 2026non-GAAP | 28.3% | – | – |
| Marketing and administrative expenses, six months ended September 27, 2026GAAP | $9.75M | – | – |
| Income from operations, six months ended September 27, 2026GAAP | $4.36M | – | – |
| Interest expense, net of interest income, six months ended September 27, 2026 (as printed)GAAP | (118) thousand (printed in parentheses) | – | – |
| Other income, net, six months ended September 27, 2026GAAP | $315K | – | – |
| Income before income tax expense, six months ended September 27, 2026GAAP | $4.56M | – | – |
| Income tax expense, six months ended September 27, 2026GAAP | $1.18M | – | – |
| Net income, six months ended September 27, 2026GAAP | $3.38M | – | – |
| Earnings per share, basic and diluted, six months ended September 27, 2026GAAP | $0.31 | – | – |
| Tariff refunds recorded in cost of products sold, Q2 fiscal 2027 (non-GAAP adjustment line)non-GAAP | −$449K | – | – |
| Severance expense, Q2 fiscal 2027 (non-GAAP adjustment line)non-GAAP | $236K | – | – |
Capital returns
- Quarterly cash dividend of $0.03 per share declared on the Series A common stock, payable January 4, 2027 to stockholders of record at the close of business on December 11, 2026.
- Balance sheet shows dividends payable of 434 thousand at September 27, 2026 and 952 thousand at March 29, 2026, as printed.
- No share repurchase amount is printed in the release. Treasury stock is shown at (15,906) thousand at September 27, 2026 and (15,889) thousand at March 29, 2026.
What drove it
- Company states that cost of products sold benefited from $0.4 million in tariff refunds and was offset by $0.2 million in severance expense in the current period. Refunds relate to International Emergency Economic Powers Act tariffs that the release says were deemed illegal by the U.S. Supreme Court ruling of February 20, 2026.
- Company states that gross margin of 32.0% reflects the tariff refunds and severance expense recorded in the second quarter of fiscal 2027. Adjusted for these two items, gross margin would have been 30.9%, up 320 basis points year over year.
- CEO attributes strong sales in large part to the warm reception for Groovy Girls in Canada.
- CEO cites reduced marketing and administrative expenses, to $4.5 million from $4.7 million in the year-earlier period, as part of meaningful improvement this quarter.
- CEO states that the company continues to make progress on longer-term initiatives including warehouse consolidation. No timing or financial effect of this initiative is printed.
Concerns
- Net sales declined to $19,028 thousand from $23,695 thousand in the prior-year quarter, and to $35,794 thousand from $39,173 thousand for the six months.
- Gross profit fell to $6,083 thousand from $6,571 thousand in the quarter. Adjusted gross profit of $5,870 thousand is also below the prior-year quarter figure of $6,571 thousand.
- Operating income for the quarter was $1,564 thousand against $1,863 thousand a year earlier. Six-month net income of $3,377 thousand includes the $4,224 thousand tariff refund adjustment, as printed in the non-GAAP reconciliation.
- Accounts payable rose to $7,368 thousand from $4,913 thousand since March 29, 2026, as printed.
- The release contains no guidance for future periods, so forward-looking expectations cannot be read from the filing.
What to watch
- Whether net sales recover from the decline to $19,028 thousand, given the CEO's reference to Groovy Girls in Canada.
- Whether gross margin excluding the tariff refund and severance items holds near the 30.9% adjusted level reported for the quarter.
- Progress on the warehouse consolidation initiative, which the CEO describes as a longer-term initiative.
- Operating cash flow and debt reduction in the next filing, since the release refers to these qualitatively but prints no cash flow figure.
- Development of higher-margin products and sales channels, which the CEO describes as a focus in the quarters ahead.
Balance sheet and cash flow
- Cash and cash equivalents: $426 thousand at September 27, 2026 versus $200 thousand at March 29, 2026 (fiscal year end comparison, as printed).
- Total assets: $65,977 thousand at September 27, 2026 versus $70,653 thousand at March 29, 2026.
- Total shareholders' equity: $41,364 thousand at September 27, 2026 versus $38,813 thousand at March 29, 2026.
- Long-term debt, non-current: $3,314 thousand at September 27, 2026 versus $12,132 thousand at March 29, 2026. Current maturities of long-term debt: $1,991 thousand at both dates.
- Accounts payable rose to $7,368 thousand from $4,913 thousand. Due from factor declined to $12,754 thousand from $16,280 thousand. Inventories were $28,387 thousand versus $28,365 thousand.
- The CEO states that year-to-date operating cash flow improved and that stronger cash flow has helped significantly reduce debt and the associated interest expense. No operating cash flow or free cash flow figure is printed in the release.
Analysis
Crown Crafts reported second quarter fiscal 2027 net sales of $19,028 thousand, down from $23,695 thousand in the prior-year quarter, and six-month net sales of $35,794 thousand against $39,173 thousand. The CEO attributes strong sales in large part to Groovy Girls in Canada, while the printed figures show a lower revenue base than a year earlier. Cost of products sold fell to $12,945 thousand from $17,124 thousand, which lifted reported gross margin to 32.0% from 27.7%. The release states that this margin includes $0.4 million of tariff refunds and $0.2 million of severance expense, and that adjusted for these items gross margin was 30.9%, a 320 basis point improvement year over year. Gross profit in dollars declined to $6,083 thousand from $6,571 thousand, so the margin gain did not translate into higher gross profit dollars in the quarter.
Below gross profit, marketing and administrative expenses declined to $4,519 thousand from $4,708 thousand, and income from operations was $1,564 thousand against $1,863 thousand. Net income rose to $1,317 thousand, or $0.12 per diluted share, from $1,157 thousand, or $0.11. Income tax expense was $469 thousand. The release does not print a reconciliation of net income to a non-GAAP measure, so the quarterly profit increase should be read alongside the tariff refund that the company itself identifies as a benefit to cost of products sold.
On a six-month basis, net income was $3,377 thousand, compared with $53 thousand a year earlier, and gross margin was 39.4% against 25.8%. The non-GAAP reconciliation shows six-month tariff refunds of $4,224 thousand and severance of $236 thousand, and adjusted six-month gross margin of 28.3%. The six-month prior-year adjusted gross margin is not printed. Interest expense on the printed basis was 118 thousand for the six months against 570 thousand a year earlier, and the CEO states that stronger cash flow has helped significantly reduce debt and the associated interest expense.
Balance sheet figures show long-term debt of $3,314 thousand at September 27, 2026, down from $12,132 thousand at March 29, 2026, and cash of $426 thousand against $200 thousand. Total assets fell to $65,977 thousand from $70,653 thousand, and shareholders' equity rose to $41,364 thousand from $38,813 thousand. Accounts payable increased to $7,368 thousand from $4,913 thousand, and the release gives no operating or free cash flow figure, so the CEO's reference to improved year-to-date operating cash flow cannot be quantified from the filing. The company declared a $0.03 per share quarterly dividend, payable January 4, 2027.
The release contains no forward guidance, no segment breakdown and no prior-period outlook, so there is no basis in the filing for judging delivery against expectations. The reader should weigh the sharp fall in sales and the non-recurring tariff refund against the improvement in margin, operating expense and debt. Management's own description of the quarter emphasizes profitability and cash flow, while the printed top-line decline is the most visible change in the period.
Management, verbatim
We continue to execute well on our profitability initiatives with meaningful improvement this quarter in our gross profit, marketing and administrative expenses, and year-to-date operating cash flow
Olivia Elliott, President and Chief Executive Officer
In addition, we generated strong sales due in large part to the warm reception for Groovy Girls in Canada.
Olivia Elliott, President and Chief Executive Officer
Not in the filing
stated, not guessed- Forward guidance for revenue, gross margin, operating expenses or tax rate: not provided in the filing.
- Prior-year and prior-quarter percentage changes for net sales, gross profit, operating income, net income and EPS: the release prints the dollar figures but no percentage changes.
- Prior-year GAAP gross margin change in basis points for the quarter: not printed.
- Prior-year adjusted gross margin for the three-month period: shown as a dash in the reconciliation table.
- Prior-year adjusted gross margin for the six-month period: shown as a dash in the reconciliation table.
- Prior-quarter (first quarter fiscal 2027) figures: not printed in the release.
- Operating cash flow and free cash flow figures for the six months: described qualitatively but not printed.
- Share repurchase amounts for the period: not printed.
- Segment or product line revenue breakdown: not printed.
- Debt repayment amount in the period: not printed. Only the balance sheet debt figures are given.
- Sign convention for interest expense in the income statement: the 72 and (118) figures are printed without an explicit label, and the release does not state whether positive values represent net income.
- Adjusted or GAAP basis for the six-month period's non-GAAP operating and net income: not printed.
- Warehouse consolidation timing, cost and expected benefit: described qualitatively only.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.