Crown Crafts, Inc. (CRWS) | Investment Case

1. Company Snapshot

1.a. Company Description

Crown Crafts, Inc., through its subsidiaries, operates in the consumer products industry in the United States and internationally.It provides infant, toddler, and juvenile products, including infant and toddler beddings; blankets and swaddle blankets; nursery and toddler accessories; room décors; reusable and disposable bibs; burp cloths; hooded bath towels and washcloths; reusable and disposable placemats, and floor mats; disposable toilet seat covers and changing mats; developmental toys; feeding and care goods; and other infant, toddler, and juvenile soft goods.The company sells its products primarily to mass merchants, large chain stores, mid-tier retailers, juvenile specialty stores, value channel stores, grocery and drug stores, restaurants, internet accounts, wholesale clubs and internet-based retailers through a network of sales force and independent commissioned sales representatives.

Crown Crafts, Inc.was incorporated in 1957 and is headquartered in Gonzales, Louisiana.

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1.b. Last Insights on CRWS

Crown Crafts, Inc. faced challenges due to widening losses in Q1 fiscal 2026, primarily attributed to increased costs. Despite a surge in Baby Boom sales and expansion of its Disney deal, the company's losses deepened. Furthermore, the upcoming Q2 fiscal 2026 earnings announcement on November 12, 2025, may draw attention to potential operational challenges. According to recent news, no information on share buyback or rating changes was disclosed. The company's ability to recover from these losses remains uncertain.

1.c. Company Highlights

Last Price	2.75
Change Percentage	0.73%
Open	2.75
Previous Close	2.73
Market Cap ( Millions)	29
Volume	65090
Year High	4.68
Year Low	2.35
M A 50	2.83
M A 200	3.09

FCF Yield	22.10%
Dividend Yield	11.64%
ROE	-22.60%
Debt / Equity	68.70%
Net Debt / EBIDTA	-466.28%
Price To Book	0.77
Price Earnings Ratio	-2.87
Price To FCF	4.52
Price To sales	0.33
EV / EBITDA	-9.88

2. Crown Crafts' Earnings Report: Navigating Tariff Challenges

Crown Crafts reported a mixed second-quarter performance, with net sales declining by $1.6 million to $23.7 million, driven by the ongoing tariff landscape. Despite the revenue decline, the company achieved a gross profit of $6.6 million, reflecting a margin of 27.7% compared to 28.4% in the year-earlier period. GAAP net income for the second quarter was $1.2 million or $0.11 per diluted share, up from $0.08 in the year-ago quarter, driven by a reduction in marketing and administrative expenses. The actual EPS came out at $0.11, beating the estimate is not available but the next year revenues growth estimate is not available.

Publication Date: Nov -24

                                    📋 Highlights
                                    Net Income Growth:
                                                GAAP net income rose to $1.2 million ($0.11/share) from $0.08/share, driven by expense cuts.
Expense Reduction:
                                                Marketing/admin expenses fell $740,000 to 19.9% of sales, down from 22.3% YoY.
Sales Decline:
                                                Net sales dropped $1.6 million to $23.7 million YoY, though bibs/toys/disposables grew $800,000.
Gross Margin Pressure:
                                                Gross margin slipped to 27.7% from 28.4% due to higher China tariff costs.
Cash Position:
                                                Cash reserves increased to $810,000 from $521,000, reflecting improved liquidity despite challenges.

                                

Operational Highlights

The company is navigating the challenges posed by the elevated tariff environment, which is affecting profitability. However, they are managing the business prudently and adapting their strategies to offset the impact of tariffs. As Olivia Elliott, President and CEO, mentioned, "We're managing the business prudently and adapting our strategies as needed to help offset the impact of tariffs." The company is also focusing on opportunities to drive stronger growth and profitability as market conditions evolve.

Segment Performance

The company saw an increase in sales of bibs, toys, and disposable products by $800,000. Manhattan Toy sales are doing well internationally, particularly in Europe, with the ring stacker being the single best-selling toy item. The company is also seeing opportunities for growth in international markets and is signing up new distributors and countries.

Cost Savings and Restructuring

Crown Crafts is consolidating its internal operations by merging the two subsidiaries, Sassy and NoJo, into one. This is expected to result in cost savings by eliminating duplicate positions, IT costs, and redundant contracts. The company anticipates providing an update on the potential savings by the end of February.

Valuation and Outlook

With a P/E Ratio of -2.85 and a P/S Ratio of 0.33, the market is pricing in the challenges faced by the company. The Dividend Yield is 11.72%, indicating a relatively attractive yield for investors. The company's ROE is -22.6%, and ROIC is 4.2%, indicating room for improvement in profitability. As the company navigates the ongoing challenges, investors will be watching for progress in the coming quarters.

3. NewsRoom

CRWS Upgraded to Outperform on Cost Reset, Valuation & Dividend Yield

Dec -03

Source: zacks.com

2 Tariffic Microcaps To Check Out

Dec -02

Source: zacks.com

Crown Crafts Stock Up Post Q2 Earnings as Profit Rises Despite Tariffs

Nov -17

Source: zacks.com

Crown Crafts, Inc. (CRWS) Q2 2026 Earnings Call Transcript

Nov -12

Source: seekingalpha.com

Crown Crafts Announces Financial Results for Second Quarter Fiscal 2026

Nov -12

Source: globenewswire.com

Crown Crafts to Announce Second Quarter Fiscal Year 2026 Results on November 12, 2025

Nov -05

Source: globenewswire.com

Crown Crafts Stock Gains Despite Q1 Earnings Showing Wider Losses

Aug -19

Source: zacks.com

Crown Crafts, Inc. (CRWS) Q1 2026 Earnings Call Transcript

Aug -13

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Bibs, Bath, Development Toy, Feeding, Baby Care and Disposable Products

Expected Growth: 4.5%

Growing demand for baby care products, increasing birth rates, and rising disposable income are driving the market growth. The baby care market is expected to grow at a CAGR of 4.5% from 2023 to 2028, driven by the increasing adoption of eco-friendly and sustainable products, and the growing popularity of online shopping.

Bedding, Blanket and Accessories

Expected Growth: 4.5%

Growing demand for home decor and increasing consumer spending on bedding and accessories, driven by rising disposable incomes and a focus on comfort and style, are expected to drive Crown Crafts' growth.

7. Detailed Products

Infant and Toddler Products

Soft goods, such as blankets, bibs, and burp cloths, designed for infants and toddlers

Kids' Bedding and Decor

Bedding, curtains, and wall decor designed for kids' bedrooms

Layette and Nursery Accessories

Essential items for newborns, such as layette sets, nursery decor, and accessories

Feeding and Bath Time Accessories

Bibs, burp cloths, and bath time accessories designed for mealtime and bath time

Home Decor and Accessories

Decorative items, such as throw pillows, wall art, and vases, designed for the home

8. Crown Crafts, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Crown Crafts, Inc. is moderate due to the availability of alternative products in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of buyers in the market, giving them significant negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the availability of multiple suppliers in the market, reducing their negotiating power.

Threat Of New Entrants

The threat of new entrants is moderate due to the moderate barriers to entry in the market, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the market, leading to intense competition.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	23.48%
Debt Cost	3.95%
Equity Weight	76.52%
Equity Cost	7.83%
WACC	6.92%
Leverage	30.68%

11. Quality Control: Crown Crafts, Inc. passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Ethan Allen

A-Score: 6.2/10

Value: 6.1

Growth: 3.8

Quality: 6.4

Yield: 10.0

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

Flexsteel

A-Score: 5.8/10

Value: 8.4

Growth: 7.1

Quality: 6.0

Yield: 4.0

Momentum: 6.5

Volatility: 2.7

1-Year Total Return ->

Crown Crafts

A-Score: 5.7/10

Value: 9.1

Growth: 2.8

Quality: 3.6

Yield: 10.0

Momentum: 1.0

Volatility: 8.0

1-Year Total Return ->

La-Z-Boy

A-Score: 5.3/10

Value: 6.8

Growth: 5.2

Quality: 5.4

Yield: 5.0

Momentum: 3.0

Volatility: 6.3

1-Year Total Return ->

Virco Mfg

A-Score: 4.2/10

Value: 6.7

Growth: 8.3

Quality: 5.5

Yield: 1.0

Momentum: 0.0

Volatility: 3.7

1-Year Total Return ->

Hamilton Beach Brands

A-Score: 4.2/10

Value: 6.2

Growth: 5.6

Quality: 5.0

Yield: 6.0

Momentum: 0.0

Volatility: 2.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-8.79%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.92%

Crown Crafts, Inc. - US2283091005

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CRWS

1.c. Company Highlights

Higher Yield

Less Volatile

Average Growth

Fairly Valued

Stable Momentum

Weak Momentum

Cheaper

Lower Growth

2. Crown Crafts' Earnings Report: Navigating Tariff Challenges

Operational Highlights

Segment Performance

Cost Savings and Restructuring

Valuation and Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Bibs, Bath, Development Toy, Feeding, Baby Care and Disposable Products

Expected Growth: 4.5%

Bedding, Blanket and Accessories

Expected Growth: 4.5%

7. Detailed Products

Infant and Toddler Products

Kids' Bedding and Decor

Layette and Nursery Accessories

Feeding and Bath Time Accessories

Home Decor and Accessories

8. Crown Crafts, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Crown Crafts, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.75$

Current Price

2.75$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA