Gonzales-based Crown Crafts’ earnings for the first quarter of fiscal year 2018 fell to $518,000, or 5 cents per diluted share, from $1.1 million, or 11 cents per diluted share, for the same quarter in fiscal year 2017.
Sales for the baby products maker dropped to $13.6 million, from $15.6 million one year ago.
Randall Chestnut, Crown Crafts chairman, president and chief executive, says the company is not satisfied with the results, which reflect the softening in the retail market and a change in customer preferences for baby bedding products.
“Approximately half of the first quarter sales decline can be attributed to reduced shipments to two major customers—due to credit difficulties at one customer and a shift in timing of a modular program at the other customer to the second quarter of the current fiscal year from the first quarter of last year,” Chestnut says in a prepared statement.
Despite the disappointing earnings report, Crown Crafts remains optimistic about long-term prospects—given the development of new product lines combined with the acquisition of Carousel Designs, a Georgia-based baby bedding company. .
The acquisition—valued at $8.8 million in cash plus the assumption of certain liabilities—closed on Aug. 4. “While we are not satisfied with our first quarter results, we believe we have reached a turning point,” Chestnut says.
