Culp Announces First Quarter Fiscal 2026 Results
HIGH POINT, N.C.--( BUSINESS WIRE)--Culp, Inc. (NYSE: CULP), a leading provider of fabrics for bedding and upholstery fabrics for residential, commercial, and hospitality furniture and other applications, today reported financial and operating results for its first fiscal quarter ended August 3, 2025.
Fiscal 2026 First Quarter Financial Highlights
Management Commentary
Iv Culp, President and Chief Executive Officer, commented, “Despite the continued low-demand environment across the home furnishings industry and tariff volatility, our improving operating performance further confirms the effectiveness of the restructuring initiatives we completed last year. Thanks to the hard work of our team, we made substantial, double-digit improvement at both the gross profit and operating levels during the quarter.
"We have several other initiatives underway related to the integration of our two former divisions that should strengthen our operating profile further as we progress through fiscal 2026. During our second quarter, we expect to start seeing the benefits from the transition of upholstery operations at our leased facility in Burlington, North Carolina, to a shared management model within our owned Stokesdale, North Carolina, location. We also recently initiated the transition of our Read Window operations from a leased facility in Tennessee to a more cost-effective platform within the same owned U.S. location, which should begin to positively impact our results in the third quarter. In addition, we recently increased prices to mitigate tariff costs and right-size margins in certain areas. Once fully implemented this year, we expect these integration and price actions to generate approximately $6 million of additional cost and efficiency enhancements annually.
"While the macroeconomic and global trade landscapes continue to present challenges for CULP and everyone in our industry, we’ve been able to leverage our size and scale advantages to win market share in key segments, particularly in bedding. In the current tariff environment, our strategy to supplement a strong U.S. manufacturing platform with a foreign footprint spread across nearshore and offshore jurisdictions gives customers increasingly attractive supply chain alternatives and provides us with better pricing flexibility.
Culp concluded, “Our highest priorities are to return CULP to profitability and reduce our current net debt position, regardless of any rebound in demand and improved market conditions. We believe that our efforts to reinvent our company and go to market with a leaner and more unified operating model, along with the additional integration initiatives now in motion, position us to not only meet that objective in the near term but also accelerate profitability as market conditions improve.”
Financial Outlook
Due to macro-economic uncertainty and the fluid global trade and tariff environment, the Company is providing only limited forward guidance. The Company’s expectations are based on information available at the time of this press release and reflect certain assumptions by management regarding the Company’s business and industry trends, the projected impact of restructuring and integration initiatives, and ongoing market headwinds. The Company's expectations also assume no further meaningful impacts from tariffs and trade negotiations.
Fiscal 2026 First Quarter Business Segment Highlights
Following the integration of the Company’s two formerly separate divisions, Culp Home Fashions and Culp Upholstery Fabrics, the Company now refers to its mattress fabric and upholstery fabric businesses as its Bedding and Upholstery segments, respectively. Moreover, the Company now manages selling, general and administrative (“SG&A”) expenses on a consolidated basis following the division integration and, as a result, will no longer report operating performance at the segment level.
Bedding
Upholstery
Balance Sheet, Cash Flow, and Liquidity
Conference Call
Culp, Inc. will hold a conference call to discuss financial results for the first quarter of its fiscal year 2026 on Thursday, September 11, 2025, at 9:00 a.m. Eastern Time. A live webcast of this call can be accessed on the “Upcoming Events” section on the “Investor Relations” page of the Company’s website, www.culp.com. A replay of the webcast will be available for 30 days under the “Past Events” section on the “Investor Relations” page of the Company’s website.
About the Company
Culp, Inc. is one of the largest marketers of mattress fabrics for bedding and upholstery fabrics for residential, commercial, and hospitality furniture and other applications in North America. The Company markets a variety of fabrics to its global customer base of leading bedding and furniture companies, including fabrics produced at Culp’s manufacturing facilities and fabrics sourced through other suppliers. Culp has manufacturing and sourcing capabilities located in the United States, China, Haiti, Turkey, and Vietnam.
Forward Looking Statements
This release contains “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934). Such statements are inherently subject to risks and uncertainties that may cause actual events and results to differ materially from such statements. Forward-looking statements are statements that include projections, expectations, or beliefs about future events or results or otherwise are not statements of historical fact. Such statements are often but not always characterized by qualifying words such as “expect,” “believe,” “will,” “may,” “should,” “could,” “potential,” “continue,” “target,” “predict,” “seek,” “anticipate,” “estimate,” “intend,” “plan,” “project,” and their derivatives, and include but are not limited to statements about expectations, projections, or trends for our future operations, strategic initiatives and plans, restructuring and integration actions, production levels, new product launches, sales, profit margins, profitability, operating (loss) income, capital expenditures, working capital levels, cost savings (including, without limitation, anticipated cost savings from restructuring and integration actions), income taxes, SG&A or other expenses, pre-tax (loss) income, earnings, cash flow, and other performance or liquidity measures, as well as any statements regarding dividends, share repurchases, liquidity, use of cash and cash requirements, ending cash balances and cash positions, borrowing capacity, investments, potential acquisitions, cash and non-cash restructuring and restructuring-related charges, expenses, and/or credits, net proceeds from restructuring related asset dispositions, future economic or industry trends, public health epidemics, or other future developments. There can be no assurance that we will realize these expectations or meet our guidance, or that these beliefs will prove correct.
Factors that could influence the matters discussed in such statements include the level of housing starts and sales of existing homes, demand for home furnishings products, consumer confidence, trends in disposable income, and general economic conditions. Decreases in these economic indicators could have a negative effect on our business and prospects. Likewise, increases in interest rates, particularly home mortgage rates, and increases in consumer debt or the general rate of inflation, could affect us adversely. Changes in consumer tastes or preferences toward products not produced by us could erode demand for our products. Changes in tariffs or trade policy, including changes in U.S. trade enforcement priorities, or changes in the value of the U.S. dollar versus other currencies, could affect our financial results because a significant portion of our operations are located outside the United States. Also, economic or political instability in international areas could affect our operations or sources of goods in those areas, as well as demand for our products in international markets. The future performance of our business depends in part on our success in conducting and finalizing acquisition negotiations and integrating acquired businesses into our existing operations. The impact of public health epidemics on employees, customers, suppliers, and the global economy, such as the coronavirus pandemic, could also adversely affect our operations and financial performance. In addition, the impact of potential asset impairments, including impairments of property, plant, and equipment, inventory, or intangible assets, as well as the impact of valuation allowances applied against our net deferred income tax assets, could affect our financial results. Increases in freight costs, labor costs, and raw material prices, including increases in market prices for petrochemical products, can also significantly affect the prices we pay for shipping, labor, and raw materials, respectively, and in turn, increase our operating costs and decrease our profitability. Also, our success in diversifying our supply chain with reliable partners to effectively service our global platform could affect our operations and adversely affect our financial results. Finally, the future performance of our business also depends on our ability to successfully restructure our bedding operations and return the segment to profitability as well as successfully integrate our bedding and upholstery segments and realize the expected benefits of that integration effort, which may not meet our expectations. Further information about these factors, as well as other factors that could affect our future operations or financial results and the matters discussed in forward-looking statements, is included in Item 1A “Risk Factors” in our most recent Form 10-K and Form 10-Q reports filed with the Securities and Exchange Commission.
Many of these factors are macroeconomic in nature and are, therefore, beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from those described in this release as anticipated, believed, estimated, expected, intended, planned or projected. The forward-looking statements included in this release are made only as of the date of this report. Unless required by United States federal securities laws, we neither intend nor assume any obligation to update these forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in our expectations. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. Additional risks and uncertainties that we do not presently know about or that we currently consider to be immaterial may also affect our business operations or financial results.
CULP, INC.
CONSOLIDATED STATEMENTS OF NET LOSS
Unaudited
(Amounts in Thousands, Except for Per Share Data)
THREE MONTHS ENDED
Amount
Percent of Sales
August 3,
July 28,
% Over
August 3,
July 28,
2025
2024
(Under)
2025
2024
Net sales
$
50,691
$
56,537
(10.3
)%
100.0
%
100.0
%
Cost of sales
(43,463
)
(51,461
)
(15.5
)%
85.7
%
91.0
%
Gross profit
7,228
5,076
42.4
%
14.3
%
9.0
%
Selling, general and administrative expenses
(9,119
)
(9,296
)
(1.9
)%
18.0
%
16.4
%
Restructuring credit (expense)
3,508
(2,631
)
N.M
6.9
%
(4.7
)%
Income (loss) from operations
1,617
(6,851
)
(123.6
)%
3.2
%
(12.1
)%
Interest expense
(183
)
(28
)
553.6
%
0.4
%
0.0
%
Interest income
235
262
(10.3
)%
0.5
%
0.5
%
Other expense
(531
)
(404
)
31.4
%
1.0
%
0.7
%
Income (loss) before income taxes
1,138
(7,021
)
(116.2
)%
2.2
%
(12.4
)%
Income tax expense (1)
(1,369
)
(240
)
470.4
%
120.3
%
(3.4
)%
Net loss
$
(231
)
$
(7,261
)
(96.8
)%
(0.5
)%
(12.8
)%
Net loss per share - basic
$
(0.02
)
$
(0.58
)
(96.6
)%
Net loss per share - diluted
$
(0.02
)
$
(0.58
)
(96.6
)%
Average shares outstanding-basic
12,570
12,470
0.8
%
Average shares outstanding-diluted
12,570
12,470
0.8
%
Notes
(1)
Percent of sales column for income tax expense is calculated as a percent of income (loss) before income taxes.
CULP, INC.
CONSOLIDATED BALANCE SHEETS
Unaudited
(Amounts in Thousands)
Amounts
(Condensed)
(Condensed)
(Condensed)
August 3,
July 28,
* April 27,
2025
2024
2025
Current assets
Cash and cash equivalents
$
11,094
$
13,472
$
5,629
Short-term investments - rabbi trust
1,395
954
1,325
Accounts receivable, net
18,382
21,587
21,844
Inventories
50,109
41,668
49,309
Short-term notes receivable
5,104
268
280
Current income taxes receivable
—
532
—
Assets held for sale
40
607
2,177
Other current assets
2,767
3,590
2,970
Total current assets
88,891
82,678
83,534
Property, plant & equipment, net
23,552
30,476
24,836
Right of use assets
5,162
4,483
5,908
Intangible assets
865
1,782
960
Long-term investments - rabbi trust
5,715
7,089
5,722
Long-term notes receivable
1,078
1,394
1,182
Deferred income taxes
475
528
637
Other assets
676
709
591
Total assets
$
126,414
$
129,139
$
123,370
Current liabilities
Lines of credit - current
11,120
4,017
8,114
Accounts payable - trade
24,319
26,540
27,323
Accounts payable - capital expenditures
8
56
23
Operating lease liability - current
2,209
1,565
2,394
Deferred compensation - current
1,395
954
1,325
Deferred revenue
485
1,600
422
Accrued expenses
5,850
6,097
5,333
Accrued restructuring
105
633
610
Income taxes payable - current
2,412
759
1,420
Total current liabilities
47,903
42,221
46,964
Lines of credit - long-term
7,025
—
4,600
Operating lease liability - long-term
1,995
2,219
2,535
Income taxes payable - long-term
841
2,180
790
Deferred income taxes
5,302
6,449
5,155
Deferred compensation - long-term
5,701
6,946
5,686
Total liabilities
68,767
60,015
65,730
Shareholders' equity
57,647
69,124
57,640
Total liabilities and shareholders' equity
$
126,414
$
129,139
$
123,370
Shares outstanding
12,605
12,470
12,559
* Derived from audited financial statements.
CULP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(Amounts in Thousands)
THREE MONTHS ENDED
Amounts
August 3,
July 28,
2025
2024
Cash flows from operating activities:
Net loss
$
(231
)
$
(7,261
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation
1,111
1,581
Non-cash inventory credit
(67
)
(268
)
Amortization
95
99
Stock-based compensation
156
176
Deferred income taxes
309
60
Gain on sale of equipment
(9
)
(4
)
Non-cash restructuring (credit) expense
(3,664
)
1,643
Foreign currency exchange loss
122
45
Changes in assets and liabilities:
Accounts receivable
3,482
(445
)
Inventories
(683
)
3,458
Other current assets
212
(221
)
Other assets
13
90
Accounts payable - trade
(3,126
)
884
Deferred revenue
63
105
Accrued restructuring
(506
)
640
Accrued expenses and deferred compensation
1,016
(478
)
Income taxes
1,012
(310
)
Net cash used in operating activities
(695
)
(206
)
Cash flows from investing activities:
Capital expenditures
(179
)
(501
)
Proceeds from the sale of property, plant and equipment
966
37
Proceeds from notes receivable
120
90
Proceeds from the sale of investments (rabbi trust)
237
229
Purchase of investments (rabbi trust)
(158
)
(187
)
Net cash provided by (used in) investing activities
986
(332
)
Cash flows from financing activities:
Proceeds from lines of credit
5,886
4,010
Payments on lines of credit
(552
)
—
Payment of debt issuance costs
(120
)
—
Common stock surrendered for withholding taxes payable
(60
)
—
Net cash provided by financing activities
5,154
4,010
Effect of foreign currency exchange rate changes on cash and cash equivalents
20
(12
)
Increase in cash and cash equivalents
5,465
3,460
Cash and cash equivalents at beginning of year
5,629
10,012
Cash and cash equivalents at end of period
$
11,094
$
13,472
CULP, INC.
STATEMENTS OF NET SALES AND GROSS PROFIT BY SEGMENT
Unaudited
(Amounts in Thousands)
THREE MONTHS ENDED
Amounts
Percent of Total Sales
August 3,
July 28,
% Over
August 3,
July 28,
Net Sales by Segment
2025
2024
(Under)
2025
2024
Bedding
$
28,046
$
28,076
(0.1
)%
55.3
%
49.7
%
Upholstery
22,645
28,461
(20.4
)%
44.7
%
50.3
%
Net Sales
$
50,691
$
56,537
(10.3
)%
100.0
%
100.0
%
Gross Profit (Loss) by Segment
Gross Margin
Bedding
$
2,942
$
(326
)
N.M.
10.5
%
(1.2
)%
Upholstery
4,286
5,518
(22.3
)%
18.9
%
19.4
%
Total Segment Gross Profit
7,228
5,192
39.2
%
14.3
%
9.2
%
Restructuring Related Charge (1)
—
(116
)
(100.0
)%
0.0
%
(0.2
)%
Gross Profit
$
7,228
$
5,076
42.4
%
14.3
%
9.0
%
Notes
(1)
See page 11 for a Reconciliation of Selected Income Statement Information to Adjusted Results for the three months ending August 3, 2025, and July 28, 2024.
CULP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
Unaudited
(Amounts in Thousands)
RECONCILIATION OF NET DEBT
Amounts
August 3,
July 28,
April 27,
2025
2024
2025*
Cash:
Cash and cash equivalents
$
11,094
$
13,472
$
5,629
Debt:
Lines of credit - current
(11,120
)
(4,017
)
(8,114
)
Lines of credit - long-term
(7,025
)
—
(4,600
)
Total debt
$
(18,145
)
$
(4,017
)
$
(12,714
)
Net (debt) cash position
$
(7,051
)
$
9,455
$
(7,085
)
* Derived from audited financial statements
RECONCILIATION OF ADJUSTED FREE CASH FLOW
THREE MONTHS ENDED
Amounts
August 3,
July 28,
2025
2024
Net cash used in operating activities
$
(695
)
$
(206
)
Minus: Capital expenditures
(179
)
(501
)
Free Cash Flow
(874
)
(707
)
Plus: Proceeds from the sale of buildings and equipment
966
37
Plus: Proceeds from notes receivable
120
90
Plus: Proceeds from the sale of investments (rabbi trust)
237
229
Minus: Purchase of investments (rabbi trust)
(158
)
(187
)
Effects of foreign currency exchange rate changes on cash and cash equivalents
20
(12
)
Adjusted Free Cash Flow
$
311
$
(550
)
CULP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (CONTINUED)
Unaudited
(Amounts in Thousands)
RECONCILIATION OF SELECTED INCOME STATEMENT INFORMATION TO ADJUSTED RESULTS
Three months ended August 3, 2025
As Reported
Adjusted Results
August 3,
August 3,
2025
Adjustments
2025
Net sales
$
50,691
—
$
50,691
Cost of sales
(43,463
)
—
(43,463
)
Gross profit
7,228
—
7,228
Selling, general and administrative expenses
(9,119
)
—
(9,119
)
Restructuring credit (1)
3,508
(3,508
)
—
Income (loss) from operations
$
1,617
(3,508
)
$
(1,891
)
Notes
(1)
During the three-month period ending August 3, 2025, restructuring credit mostly represented a gain from the sale of the manufacturing facility located in Quebec, Canada totaling $4.0 million, partially offset by charges related to our activities to transform our operating model and reduce fixed costs.
Three months ended July 28, 2024
As Reported
Adjusted Results
July 28,
July 28,
2024
Adjustments
2024
Net sales
$
56,537
—
$
56,537
Cost of sales (1)
(51,461
)
116
(51,345
)
Gross profit
5,076
116
5,192
Selling, general and administrative expenses
(9,296
)
—
(9,296
)
Restructuring expense (1)
(2,631
)
2,631
—
Loss from operations
$
(6,851
)
2,747
$
(4,104
)
(1)
During the three-month period ending July 28, 2024, the restructuring related expenses recorded in cost of sales and restructuring expense represented costs that were mostly associated with consolidating the company's North American mattress fabrics operations and two leased facilities related to the sewn mattress cover operation located in Ouanaminthe, Haiti.
CULP, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (CONTINUED)
Unaudited
(Amounts in Thousands)
RECONCILIATION OF ADJUSTED EBITDA
Quarter
Ended
Quarter
Ended
Quarter
Ended
Quarter
Ended
Trailing
12 Months
October 27,
January 26,
April 27,
August 3,
August 3,
2024
2025
2025
2025
2025
Net loss
$
(5,644
)
$
(4,126
)
$
(2,073
)
$
(231
)
$
(12,074
)
Interest income, net
(214
)
(192
)
(44
)
(52
)
(502
)
Income tax (benefit) expense
(50
)
446
(243
)
1,369
1,522
Depreciation expense
1,496
1,211
1,152
1,111
4,970
Amortization expense
101
101
104
95
401
EBITDA
(4,311
)
(2,560
)
(1,104
)
2,292
(5,683
)
Restructuring expense (credit)
2,031
1,655
1,422
(3,508
)
1,600
Restructuring related expense
769
624
113
—
1,506
Stock based compensation
188
158
128
156
630
Adjusted EBITDA
$
(1,323
)
$
(123
)
$
559
$
(1,060
)
$
(1,947
)
% Net Sales
(2.4
)%
(0.2
)%
1.1
%
(2.1
)%
(0.9
)%
Quarter
Ended
Quarter
Ended
Quarter
Ended
Quarter
Ended
Trailing
12 Months
October 29,
January 28,
April 28,
July 28,
July 28,
2023
2024
2024
2024
2024
Net loss
$
(2,424
)
$
(3,188
)
$
(4,865
)
$
(7,261
)
$
(17,738
)
Interest income, net
(282
)
(284
)
(252
)
(234
)
(1,052
)
Income tax expense
516
1,027
805
240
2,588
Depreciation expense
1,617
1,646
1,623
1,581
6,467
Amortization expense
97
98
99
99
393
EBITDA
(476
)
(701
)
(2,590
)
(5,575
)
(9,342
)
Restructuring expense (credit)
144
(50
)
204
2,631
2,929
Restructuring related (credit) expense
(78
)
(61
)
—
116
(23
)
Stock based compensation
163
262
168
176
769
Adjusted EBITDA
$
(247
)
$
(550
)
$
(2,218
)
$
(2,652
)
$
(5,667
)
% Net Sales
(0.4
)%
(0.9
)%
(4.5
)%
(4.7
)%
(2.5
)%
% Over (Under)
435.6
%
(77.6
)%
(125.2
)%
(60.0
)%
(65.6
)%