Crown Crafts Net Drops 30 Percent in Third Quarter
February 9, 2011,
GONZALES, La.-Higher costs for raw materials, labor, transportation and currency hurt Crown Crafts' bottom line in its fiscal third quarter, which ended on Dec. 26, 2010.
Third-quarter net income fell 30 percent to $775,000, despite a net sales gain of 6.3 percent to $21.9 million. The above-mentioned costs, along with what Crown Crafts described as "certain promotional activities," cut into the company's gross margin, reducing it by 240 basis points to 20.1 percent. Selling, general and administrative expense numbers were not included in the company's report, but income from operations fell 28 percent to $1.4 million.
E. Randall Chestnut, chairman, president and chief executive officer, said, "From a timing standpoint, we were limited in our ability to pass along these higher costs during the third quarter." As a positive, Chestnut cited net sales of Crown Crafts' NoJo branded infant bedding, blankets and accessories, which increased by 23 percent in the quarter.