Crown Crafts, Inc. (CRWS) has reported a 36.17 percent plunge in profit for the quarter ended Oct. 02, 2016. The company has earned $1 million, or $0.10 a share in the quarter, compared with $1.56 million, or $0.16 a share for the same period last year.
Revenue during the quarter dropped 23.69 percent to $15.81 million from $20.72 million in the previous year period. Gross margin for the quarter contracted 29 basis points over the previous year period to 27.26 percent. Total expenses were 90.21 percent of quarterly revenues, up from 87.46 percent for the same period last year. That has resulted in a contraction of 275 basis points in operating margin to 9.79 percent.
Operating income for the quarter was $1.55 million, compared with $2.60 million in the previous year period.
"Several factors affected our results in the second quarter, and we continue to adapt to changes in the marketplace," said E. Randall Chestnut, chairman, president and chief executive officer. "In the infant bedding business, today's millennial parents are favoring the 'naked crib' which does not include items such as bumpers and comforters. While this has reduced the demand for full bedding sets and lowered the average price point of our products in this business, we have partially offset this trend with our expanded offerings in separates and a wide range of popular new products in infant bedroom décor. Additionally, due to the strength of the U.S. dollar, we have received price reductions from our global suppliers, which we have partially passed on to our customers. We also have reduced product shipments to a customer that is experiencing credit problems, and it is important to note that the timing of shipments, for both initial sets and replenishment, can cause comparisons between quarters to be difficult."
Working capital increases
Crown Crafts, Inc. has recorded an increase in the working capital over the last year. It stood at $34.88 million as at Oct. 02, 2016, up 5.60 percent or $1.85 million from $33.04 million on Sep. 27, 2015. Current ratio was at 5.47 as on Oct. 02, 2016, up from 4.13 on Sep. 27, 2015.
Days sales outstanding went up to 49 days for the quarter compared with 7 days for the same period last year.
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