Company: CRWS
Filing Date: 2025-02-12
Form Type: 10-Q
Source: 0001437749-25-003486
Chunk: 12

Company: CROWN CRAFTS INC
Filing Date: 2025-02-12
Form: 10-Q
Item: Part II, Item 1A
Chunk 12
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ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors disclosed in Item 1A of Part 1 of the Company’s Annual Report on Form 10-K for the year ended March 31, 2024, except as set forth below.

The imposition of tariffs on imports from China could adversely affect the cost and sourcing of the Company's products, among other things.

The Company sources its products primarily from foreign contract manufacturers, with the largest concentration being in China. On February 1, 2025, President Trump issued executive orders directing the United States to impose new tariffs on imports from several nations, including China, effective February 4, 2025. The new tariffs likely will increase the cost of the products the Company sources from China and affect future shipments from the Company’s Chinese-based suppliers. The Company may not be able to pass along increases in tariffs and freight charges to its customers, and any alterations the Company may make to its business strategy or operations to adapt to the foregoing, including sourcing products from suppliers in other countries, would be time consuming and expensive.

The Company is currently evaluating the potential impact of the imposition of the new tariffs on imports from China to the Company’s business and financial condition. The actual impact of the new tariffs is uncertain because it is subject to a number of factors, including the duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that China may take and any mitigating actions that may become available. The actual impact of the new tariffs may have a material adverse effect on the Company’s business, cash flow, results of operations and financial condition.