Company: CRWS
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001437749-25-026346
Chunk: 8

Company: CROWN CRAFTS INC
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 1
Chunk 8
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 personnel visit the third-party facilities regularly to monitor and audit product quality and to ensure compliance with labor requirements and social and environmental standards. In addition, the Company closely monitors the currency exchange rate. The impact of future fluctuations in the exchange rate or changes in safeguards cannot be predicted with certainty.   The U.S. government has tariffs on imports from certain countries, including China. During 2025, the U.S. government introduced increased tariffs which have increased the cost of the products the Company sources from China and affected shipments from the Company’s Chinese-based suppliers. The Company is evaluating the potential impact of the imposition of new tariffs on imports from China to the Company’s business and financial condition. The impact of the increased 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 mitigation actions that  may become available.   The Company maintains foreign representative offices located in Shanghai and Shenzhen, China, which are responsible for the coordination of production, purchases and shipments, seeking out new vendors and overseeing inspections for social compliance and quality. No supplier represented at least 10% of the Company’s total suppliers.   Licensed Products: Certain products are manufactured and sold pursuant to licensing agreements for trademarks. Also, many of the designs used by the Company are copyrighted by other parties, including trademark licensors, and are available to the Company 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.       10
  
  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