Crown Crafts (CRWS) AI Stock Analysis

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Crown Crafts

(NASDAQ:CRWS)

65Neutral

Crown Crafts' solid financial health is a key strength, supported by strong cash flow management and conservative leverage. However, technical indicators highlight bearish momentum, and the earnings call indicates challenges with sales and margins. Fair valuation and high dividend yield add a positive aspect, but ongoing strategic and market challenges temper the overall outlook.

Crown Crafts (CRWS) vs. S&P 500 (SPY)

Market Cap

$32.22M

Dividend Yield10.67%

Average Volume (3M)21.20K

Price to Earnings (P/E)13.2

Beta (1Y)0.56

Revenue Growth-0.07%

EPS Growth-49.06%

CountryUS

Employees162

SectorConsumer Cyclical

Sector Strength55

IndustryFurnishings, Fixtures & Appliances

Share Statistics

EPS (TTM)0.23

Shares Outstanding10,393,741

10 Day Avg. Volume30,500

30 Day Avg. Volume21,197

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.46

Price to Cash Flow (P/CF)-278.60

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Crown Crafts Business Overview & Revenue Model

Company DescriptionCrown Crafts, Inc. (CRWS) is a prominent player in the consumer products industry, specializing in the design, marketing, and distribution of infant, toddler, and juvenile consumer products. The company's core product offerings include infant bedding, bibs, bath items, disposable products, and other accessories. Crown Crafts operates under various well-known brand names and licenses, catering to a wide range of consumers through major retailers across the United States.

How the Company Makes MoneyCrown Crafts generates revenue primarily through the sale of its diverse range of infant and toddler products to large retailers and specialty stores. The company leverages its strong brand portfolio and licensing agreements to expand its market reach and enhance product offerings. Key revenue streams include direct sales to retailers, which are predominantly brick-and-mortar stores, as well as sales through online platforms, both directly and through third-party e-commerce sites. Strategic partnerships with popular brands and licensing agreements allow Crown Crafts to offer exclusive designs and products, contributing significantly to its earnings. Additionally, the company's focus on innovation and quality ensures a steady demand for its products, maintaining its competitive edge in the market.

Crown Crafts Financial Statement Overview

Summary

Crown Crafts demonstrates solid financial health with stable profitability, conservative leverage, and strong cash flow management. Challenges include inconsistent revenue growth, but strong margins and efficient cash utilization ensure resilience.

Income Statement

Positive

Crown Crafts exhibits strong profitability with a healthy gross profit margin of 25.5% and a net profit margin of 2.81% in TTM. However, the revenue growth has been inconsistent, showing a decline of 1.17% in the latest TTM period compared to the previous year. The EBIT and EBITDA margins remain stable at 4.98% and 10.13%, respectively.

Balance Sheet

Positive

The balance sheet reflects financial stability with a low debt-to-equity ratio of 0.68, indicating conservative leverage. The equity ratio is robust at 51.72%, signaling strong asset-based equity. Return on equity is modest at 4.77%, suggesting room for improvement in utilizing equity efficiently.

Cash Flow

Very Positive

Cash flow management is a strong point for Crown Crafts, with a significant increase in free cash flow by 46.0% in the TTM period. The operating cash flow to net income ratio stands at 4.10, indicating healthy cash generation relative to net income. Free cash flow to net income is 3.78, underscoring efficient cash utilization.

TTM	Mar 2024	Jun 2023	Jun 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
86.60M	87.63M	75.05M	87.36M	79.16M	73.40M
	Gross Profit
22.10M	22.40M	19.83M	23.31M	24.10M	21.59M
	EBIT
4.31M	6.89M	3.88M	7.38M	4.22M	4.57M
	EBITDA
8.78M	13.10M	8.63M	10.31M	13.30M	10.90M
	Net Income Common Stockholders
2.44M	4.89M	5.65M	9.92M	6.08M	6.56M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
580.00K	829.00K	1.74M	1.60M	613.00K	282.00K
	Total Assets
41.39M	82.71M	90.97M	60.16M	58.08M	57.17M
	Total Debt
5.19M	23.84M	12.67M	2.64M	2.64M	4.96M
	Net Debt
5.12M	23.01M	10.93M	1.04M	2.03M	4.68M
	Total Liabilities
13.89M	31.11M	41.76M	14.35M	16.22M	14.74M
	Stockholders Equity
27.50M	51.60M	49.21M	45.80M	41.87M	42.44M
Cash Flow		Free Cash Flow
9.19M	6.30M	6.92M	7.73M	8.01M	7.83M
	Operating Cash Flow
9.98M	7.08M	7.74M	8.26M	8.74M	8.53M
	Investing Cash Flow
-17.14M	-193.00K	-16.91M	-490.00K	-733.00K	-678.00K
	Financing Cash Flow
7.53M	-7.80M	9.32M	-6.79M	-7.67M	-7.71M

Crown Crafts Technical Analysis

Technical Analysis Sentiment

Negative

Last Price3.10

Price Trends

50DMA

3.94

Negative

100DMA

4.17

Negative

200DMA

4.37

Negative

Market Momentum

MACD

-0.10

Positive

RSI

27.68

Positive

STOCH

5.13

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CRWS, the sentiment is Negative. The current price of 3.1 is below the 20-day moving average (MA) of 3.63, below the 50-day MA of 3.94, and below the 200-day MA of 4.37, indicating a bearish trend. The MACD of -0.10 indicates Positive momentum. The RSI at 27.68 is Positive, neither overbought nor oversold. The STOCH value of 5.13 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CRWS.

Crown Crafts Risk Analysis

Crown Crafts disclosed 21 risk factors in its most recent earnings report. Crown Crafts reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Crown Crafts Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RAVE	69 Neutral	$32.07M	12.03	21.44%	―	2.83%	37.01%
CRWS	65 Neutral	$32.22M	13.16	4.76%	10.67%	-0.07%	-49.06%
JRSH	61 Neutral	$37.50M	―	-5.77%	6.81%	15.70%	-337.22%
Sector *	59 Neutral	$11.74B	10.16	-1.06%	4.15%	1.27%	-16.61%
ARKR	43 Neutral	$32.44M	―	-4.24%	8.52%	-2.05%	66.57%
WW	41 Neutral	$39.56M	―	31.02%	―	-11.65%	-174.54%

* Consumer Cyclical Sector Average

Performance Comparison

CRWS

Crown Crafts

3.10

-1.79

-36.61%

ARKR

Ark Restaurants

9.00

-4.54

-33.53%

RAVE

Rave Restaurant Group

2.18

0.05

2.35%

WW International

0.19

-1.57

-89.20%

JRSH

Jerash Holdings (US)

3.05

0.19

6.64%

Crown Crafts Earnings Call Summary

Earnings Call Date: Feb 12, 2025 | % Change Since: -29.22% | Next Earnings Date: Jun 12, 2025

Earnings Call Sentiment Neutral

The earnings call highlights successful integration of acquisitions and strong cash flow, but these are tempered by declines in sales, reduced profit margins, and increased borrowings. Challenges in key product categories like Manhattan Toy and potential tariff impacts also pose concerns.

Highlights

Successful Integration of Baby Boom Acquisition

The integration of Baby Boom added $3.8 million in sales this quarter, marking a successful addition to the company's portfolio.

Strong Cash Flow from Operations

Year-to-date cash flow from operations was $7 million, up from $4.1 million in the same period last year, indicating strong cash flow management.

Increased Cash and Cash Equivalents

Cash and cash equivalents rose to $1.1 million at the end of the third quarter, up from $829,000 at the end of fiscal 2024.

Continued Dividend Payments

The company paid its regular quarterly dividend of $0.08 per share and declared the next dividend.

Positive Developments in Diaper Bag Business

There is optimism about future growth in the diaper bag category with positive meetings with licensors and retailers.

Improved Inventory Management

Inventory balance declined from $34.9 million in December 2023 to $32.4 million in December 2024, showing effective inventory management.

Lowlights

Decline in Net Sales

Net sales for the third quarter were $23.3 million, down from $23.8 million in the prior year, largely due to lower online toy sales.

Reduced Gross Profit Margin

Gross profit margin decreased to 26.1% from 27% in the prior year quarter, influenced by changes in product mix and higher lease costs.

Increased Borrowings and Interest Expenses

Borrowings increased to $20.9 million from $8.1 million at the end of fiscal 2024, leading to a rise in interest expense by $183,000.

Decrease in Net Income

Net income dropped to $893,000 from $1.7 million in the previous year, reflecting challenges in profitability.

Challenges with Manhattan Toy Sales

Holiday sales for Manhattan Toy were disappointing, with significant declines attributed to consumer trade-downs.

Potential Impact of Tariffs on Chinese Imports

The company is concerned about the 10% tariff on Chinese imports, which could affect product costs and pricing strategies.

Company Guidance

During the third quarter of fiscal 2025, the company reported net sales of $23.3 million, a slight decline from $23.8 million in the previous year, primarily due to reduced online toy sales. However, the integration of Baby Boom contributed an additional $3.8 million in sales. Gross profit decreased to 26.1% from 27% a year earlier, influenced by changes in product mix and higher lease costs. Marketing and administrative expenses rose to $4.4 million, partly due to $186,000 in acquisition-related costs. Despite these challenges, net income was reported at $893,000, or $0.09 per diluted share, down from $1.7 million, or $0.17 per diluted share, a year prior. The company's cash and cash equivalents increased to $1.1 million, while borrowings rose to $20.9 million, reflecting the Baby Boom acquisition. Year-to-date cash flow from operations improved significantly to $7 million from $4.1 million in the previous year, supporting ongoing debt repayment and dividend payments. The company remains focused on strategic initiatives, including new product development and warehouse relocation, to navigate economic uncertainties and drive future growth.

Crown Crafts Corporate Events

Executive/Board ChangesDividendsFinancial Disclosures

Crown Crafts CFO to Retire in 2025

Neutral

Feb 12, 2025

Crown Crafts announced that its CFO, Craig J. Demarest, will retire effective June 30, 2025, with a transition plan in place. The company reported net sales of $23.3 million for the third quarter of fiscal 2025, a slight decrease from the previous year, but maintained strong cash flow and a quarterly dividend, highlighting its focus on long-term growth amid economic challenges.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.