GONZALES, La.-Difficulties in the retail sector put a crimp on Crown Crafts’ net income in its fiscal first quarter, which ended on June 30.
Net income decreased by 8.4 percent to $822,000, as net sales declined by 4.8 percent to $16.6 million. E. Randall Chestnut, chairman, president and CEO, said the first quarter is traditionally the weakest of the year for the company. “Net sales continued to be impacted by the challenging retail environment and a lower birth rate,” Chestnut said.
Gross margin did pick up 170 basis points to finish the quarter at 27.1 percent. Crown Crafts’ earnings statement did not break out operating expenses, but income from operations declined 8.1 percent. The company also noted that the bottom line felt the impact of a pretax increase in legal fees related to its defense of a patent infringement lawsuit filed in Minnesota and a class-action complaint filed in California.
Chestnut said Crown Crafts is “seeing positive momentum as we begin the second quarter, largely driven by three new programs that are set to roll out. This reflects the success of our efforts to continually strengthen our offerings with innovative and popular new product lines.”