Crown Crafts, Inc.

Good morning and welcome to the Crown Crafts Incorporated third quarter fiscal year 2024 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to John Beisler with three-part advisors. Please go ahead.

Thank you, operator, and good morning, everyone. We appreciate you joining us for the Crown Crafts third quarter fiscal 2024 conference call. Joining me today are Crown Crafts President and CEO, Olivia Elliott, and the company's CFO, Craig Demarest. Earlier this morning, Crown Crafts filed its 10-Q and issued a press release regarding their third quarter fiscal 2024 results. A copy of this release is available on the company's website, crowncrafts.com. During today's call, the company will make certain forward-looking statements, and actual results may differ materially from those expressed or implied. These statements are subject to risks and uncertainties that may be beyond Crowncraft's control, and the company is under no obligation to update these statements. For more information about the company's risk factors and other uncertainties, please refer to the company's filings with the Securities and Exchange Commission. Finally, I would like to remind you today's call is being recorded, and a replay will be available through the company's investor relations page. Now, I would like to turn the call over to the President and CEO, Olivia Elliott.

Thank you, John, and good morning, everyone. Our third quarter results reflect meaningful top and bottom line improvement. We saw our gross margin return to more historical levels, and we continue to see a nice contribution from Manhattan Toy, which contributed $6 million in net sales during the quarter. As we continue to monitor the macro environment, we are encouraged to see that recent economic reports indicate a more favorable outlook as the year progresses. However, the overall impact from the higher inflationary environment that has transpired over the past couple of years continues to be a prolonged strain on our consumers, as reflected in yesterday's CPI report. This is particularly evident at the lower end of the income scale, where those consumers have experienced a longer-term effect to their discretionary income due to higher interest rates for mortgages and credit cards, as well as the resumption of student loan repayments. Another encouraging update is the reopening of 11 Bye-Bye Baby stores, which started during the quarter. Although we did ship product to these locations, we expect this to be a more gradual benefit as they slowly roll out the opening of more stores. Bye-Bye Baby's goal to open 100 additional stores over the next few years would equal the number of stores that were closed as part of last year's bankruptcy. These openings would be a great benefit, giving us additional physical locations for consumers to get a firsthand look and feel for our products, particularly our higher-end infant bedding offerings. We also continue to work with other specialty retailers to add our products to their shelves. We've made good controls on our inventory throughout the year as major retailers continue to carry lower levels of goods within their systems. At the end of the quarter, total inventory was 34.9 million compared to 34.2 million at the end of fiscal 23. Compared to the same period last year, NOJO and SASE inventory levels have declined from 25.8 million