Good morning and welcome to the Crown Crafts Second Quarter Fiscal Year 2023 Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Craig Demarest, Vice President and Chief Financial Officer. Please go ahead, sir.

Thank you, Joe. Welcome to the Crown Crafts investor conference call for the second quarter of fiscal year 2023. With me today is Olivia Elliott, the company's President and Chief Executive Officer. A telephone replay of this call will be available 1 hour after the end of the call through 4:00 p.m. Central Time on February 16. Also, a web replay of this call will be available for 90 days and can be accessed by visiting our website at www.crowncrafts.com. Before we begin, I would like to remind listeners of the cautionary language regarding forward-looking statements contained in the press release. That same language applies to comments made in today's conference call. I will now turn the call over to Olivia.

Thank you, Craig. Good morning and thank you for joining us for our second quarter fiscal year 2023 conference call. As expected, the current macroeconomic challenges related to inflation and excess inventories at our retailers continued to impact us in the second quarter. However, our balance sheet remains strong and we believe that we are well positioned to withstand the current headwinds and take advantage of future growth opportunities when the markets return to more normal conditions. Looking at the second quarter results at a high level. Second quarter net sales were $18.7 million, down from $20.2 million last year. Year-to-date net sales were $34.4 million, down from $38.9 million last year. Multiple forces in the marketplace have contributed to the sales decline. After experiencing empty shelves during the 2021 holiday season due to port congestion, retailers responded by building up their inventory levels during the first calendar quarter of 2022, resulting in an over-inventory situation by late spring. This situation has been exacerbated by a change in consumer buying patterns whereby many consumers are now trading down to lower-priced items, buying fewer items or foregoing some items altogether due to the inflationary concerns. It's important to note that we have maintained our overall shelf space at our retailers and our partnerships with them remain strong. Second quarter net income was $2 million or $0.20 per diluted share compared with $2.4 million or $0.24 per diluted share last year. Year-to-date net income was $3.5 million or $0.34 per diluted share compared with $5.1 million or $0.50 per diluted share last year. Prior year-to-date net income included an almost $2 million gain of forgiveness of our Paycheck Protection Program loan and a $795,000 net loss related to Carousel Designs. Excluding the impact of the loan forgiveness and Carousel Designs, prior year-to-date…

Thanks, Olivia. I'm only going to give financial highlights. For a more detailed analysis, please refer to the company's Form 10-Q filed with the SEC this morning. As Olivia mentioned, net sales were $18.7 million for the second quarter of fiscal '23 compared with $20.2 million for the second quarter of the prior year, a decrease of $1.5 million or 7.4%. Sales of bedding, blankets and accessories decreased by $1.6 million which was offset by an increase in sales of bibs, toys and disposable products of $104,000. Sales decreased to $34.4 million for the first 6 months of fiscal '23 compared with $38.9 million for the same period in the prior year, a decrease of $4.5 million or 11.5%. Sales of bedding, blankets and accessories decreased by $4.1 million and sales of bibs, toys and disposable products decreased by $439,000. The decreases in sales were primarily due to lower replenishment orders at retailers as the company's customers began to reduce their purchases because their inventories increased which we believe resulted from customers' excessive inventory purchases during the first quarter of calendar 2022 and consumers' response to macroeconomic conditions. Gross profit decreased by $622,000 and decreased from 30% of net sales for the prior year quarter to 29.1% of net sales for the current year quarter. Gross profit decreased by $125,000 but increased from 27.5% of net sales for the prior year 6-month period to 30.8% of net sales for the same period in the current year. The decrease in the gross profit amount is net of the positive impact of the closure of Carousel which in the prior year recognized losses from the sale of inventory below cost and the recognition of charges of $334,000 associated with the settlement with a supplier of a commitment to purchase fabric and $265,000…

Thank you, Craig. Joe, we'll now open up the line for questions.

Thank you, Joe. Thank you to everyone for your continued support and interest in our company and special thanks to all of our employees, suppliers and customers. We look forward to talking with you again in mid-February when we release our third quarter earnings.

The conference has now concluded. Thank you very much for attending today's presentation. You may now disconnect your lines.