Crown Crafts, Inc.

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Thank you. Good morning, everyone, and thank you again for joining the Crown Crafts Fiscal Year 2026 Third Quarter Conference Call. With us on the call this morning are Crown Crafts President and Chief Executive Officer Olivia Elliott and Vice President and Chief Financial Officer Claire Spencer. During today's call, the company may 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 Crown Craft'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. including its annual report on Form 10-K and the Form 10-Q for the quarter ended December 28, 2025. With that, I would now like to turn the call over to President and Chief Executive Officer Olivia Elliott. Olivia?

Thank you, John, and good morning, everyone. As we noted in the press release issued earlier today, We believe our third quarter results demonstrate the resilience of our business model and the diligent efforts of our team as we work to overcome the challenging demand environment and the ongoing effects of higher tariffs. Net sales for the third quarter were $20.7 million compared with $23.4 million in the prior year quarter, while net income increased to $1.5 million from $900,000 a year ago. We are committed to driving profitability as we continue to execute on pricing and cost actions to offset the sales environment. While we are encouraged by the positive performance in our bibs, toys, and disposable categories during the holiday season, the macro backdrop remains difficult for our category. Elevated U.S. tariff rates have raised product costs and contributed to uncertainty from certain China-based suppliers, while consumer spending remains uneven and price sensitive. Third quarter gross margin was 23.5% compared with 26.1% in the prior year quarter, despite our ongoing mitigation efforts. Also impacting gross margin were certain one-time costs that Claire will speak to in a moment. Within this environment, we are staying focused on what we can control. For starters, we are very excited about our product pipeline. Earlier this week, we announced Manhattan Toys' relaunch of Groovy Girls. an iconic line of soft fashion dolls that will be available starting in May of 2026. This relaunch reflects the strength of Manhattan Toys portfolio and our commitment to internal product development. We believe Groovy Girls will create opportunities with specialty customers and indirect to consumer as we broaden our reach in the juvenile space. Operationally, our supply chain team continues to work closely with our sourcing partners in China and other regions to manage through tariffs, freight, and capacity constraints. The majority of our products are produced by foreign contract manufacturers with the largest concentration in China, and we remain focused on quality, compliance, and reliability while also continuing to evaluate alternative sources of supply where appropriate. Our inventory strategy has been deliberately conservative as we aim to minimize exposure to excess inventory in a volatile pricing and tariff environment. We also continue to execute on-cost initiatives with further plans to consolidate certain internal operations, and during the quarter we incurred $600,000 in severance expenses in connection with these consolidation efforts. These actions are designed to eliminate redundant activities, reduce payroll and administrative expenses over time, and create a leaner operating structure that can better absorb external factors such as tariffs and raw material volatility. Shifting gears, we ended the third quarter with a solid balance sheet and liquidity position. We continue to view cash flow generation, debt reduction, and disciplined capital allocation, including our regular quarterly dividend, as key pillars of our shareholder value proposition. And we believe our brands, customer relationships, and category positions have us well prepared to enhance long-term shareholder value as conditions normalize. With that, I will now turn the call over to Claire, who will walk you through the financial details for the quarter. Claire?