Crown Crafts' Net Drops 12 Percent in Second Quarter
November 16, 2011,
GONZALES, La.-Second-quarter net income for juvenile-products vendor Crown Crafts fell 12 percent to $1.1 million, with the soft retail economy and the continuing decline in the birth rate the prime culprits, according to E. Randall Chestnut, chairman, president and chief executive officer.
Chestnut noted that the birth rate decreased by approximately 7 percent from 2007 to 2010, thus playing a role in narrowing demand for Crown Crafts' products. In the second quarter, which ended on Oct. 2, these factors combined to drag net sales down by 10 percent to $21.3 million. Higher raw-materials and labor costs trimmed gross margin by 160 basis points to 22.2 percent.
In spite of Crown Crafts' laggard quarter, Chestnut said, "We remain confident...that the popularity of our products and strength of our business strategy will serve as the foundation for growth despite the headwinds that currently challenge our industry."