Company: CRWS
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001437749-25-034222
Chunk: 3

Company: CROWN CRAFTS INC
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 1
Chunk 3
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 through copyright license agreements. The licensing agreements are generally for an initial term of one to three years and  may or  may not be subject to renewal or extension. Sales of licensed products represented 50% of the Company’s gross sales in fiscal year 2025, which included 21% of sales under the Company’s license agreements with affiliated companies of The Walt Disney Company, which expire as set forth below:   
                    License Agreement                            Expiration   
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Infant and Toddler Bedding and Diaper Bags (US and Canada)   December 31, 2027
Infant Feeding and Bath                                      December 31, 2025
STAR WARS - Lego Plush                                       December 31, 2025
   The Company expects to renew the licenses upon their expiration.   Customers: The Company’s customers consist principally of mass merchants, large chain stores, mid-tier retailers, juvenile specialty stores, value channel stores, grocery and drug stores, restaurants, internet accounts and wholesale clubs. The Company does not enter into long-term or other purchase agreements with its customers. The table below sets forth those customers that represented at least 10% of the Company’s gross sales:    
                                      Six-Month Periods Ended                 
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                     September 28, 2025                  September 29, 2024   
Walmart Inc.                           47%                                 45%
Amazon.com, Inc.                       17%                                 17%
Target Corporation                     10%                                 10%
 Note 5 – Inventories
   The basis of accounting for inventories is cost, which includes the direct supplier acquisition cost, duties, taxes and freight, and the indirect costs to design, develop, source and store the product until it is sold. Once cost has been determined, the Company’s inventory is then stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out method, which assumes that inventory quantities are sold in the order in which they are acquired. The determination of the indirect charges and their allocation to the Company’s finished goods inventories requires management judgment and estimates. If management made different judgments or utilized different estimates, then differences would result in the valuation of the Company’s inventories and in the amount and timing of the Company’s cost of products sold and the resulting net income for the reporting period. The Company’s inventory is nearly all finished goods.   On a periodic basis, management reviews its inventory quantities on hand for obsolescence, physical deterioration, changes in price levels and