Culp Announces Second Quarter Fiscal 2026 Results

Core Insights - Culp, Inc. reported financial results for its second fiscal quarter, highlighting ongoing challenges in the housing and home furnishings markets due to macroeconomic factors and tariffs [1][3][7]. Financial Highlights - Consolidated net sales were $53.2 million, a decrease of 4.4% from $55.7 million in the prior year, with bedding segment sales increasing by approximately 10% sequentially and over 2% year-over-year [10][28]. - Gross profit was $5.8 million, or 10.9% of sales, compared to $6.0 million, or 10.8% of sales in the prior year [10][28]. - The company reported a net loss of $4.3 million, or $(0.34) per diluted share, an improvement from a net loss of $5.6 million, or $(0.45) per diluted share in the prior year [10][21]. Business Segment Performance Bedding Segment - Sales in the bedding segment were $30.8 million, up approximately 10% sequentially and over 2% year-over-year [9][28]. - Gross profit in this segment was $3.1 million, or 10.1% of sales, a 27% improvement from the prior year [12][28]. Upholstery Segment - Sales in the upholstery segment were $22.4 million, flat sequentially but down approximately 12% year-over-year [19][28]. - Gross profit was $3.6 million, or 16.1% of sales, down from $4.3 million, or 16.9% of sales in the prior year [19][28]. Strategic Initiatives - The company is implementing aggressive cost structure adjustments and optimizing its platform to prepare for future growth without additional capacity or investment [3][4]. - Ongoing restructuring initiatives are expected to yield over $20 million in annualized cost savings by fiscal 2027 [4][11]. Market Conditions - The housing market's weakness and consumer uncertainty continue to pressure demand for home furnishings, particularly in the upholstery segment [6][11]. - Despite these challenges, the company anticipates steady sales performance in the bedding segment, with signs of market stabilization [5][11]. Financial Outlook - The company is providing limited forward guidance due to macroeconomic uncertainty and the fluid global trade environment [7]. - Expectations include improving gross profit and lower SG&A expenses, leading to a potential near break-even to positive adjusted EBITDA for the third quarter [11].