Culp, Inc. Reports Decline in Financial Performance for Q3 and Nine Months of Fiscal 2025

Culp, Inc. reported a decline in financial performance for the third quarter and first nine months of fiscal 2025, as detailed in its latest 10-Q filing. For the three months ended January 26, 2025, the company recorded net sales of $52.3 million, a decrease of 13.5% from $60.4 million in the same period last year. The gross profit also fell to $6.3 million, down 17.6% from $7.7 million, resulting in a gross margin of 12.1%. The net loss for the quarter was $4.1 million, compared to a loss of $3.2 million in the prior year, leading to a net loss per share of $0.33, up from $0.26.

For the nine-month period, Culp's net sales decreased by 6.5% to $164.5 million from $175.8 million, with gross profit dropping 23.4% to $17.4 million. The net loss for the nine months was $17.0 million, nearly double the loss of $9.0 million reported in the same period last year. The company attributed these declines to ongoing challenges in the home furnishings and bedding industries, exacerbated by macroeconomic conditions such as inflation and reduced consumer spending.

Strategically, Culp has been undergoing significant restructuring efforts, including the consolidation of its North American mattress fabrics operations and the closure of its manufacturing facility in Quebec, Canada. This restructuring is expected to incur approximately $8.5 million in charges, with $5.3 million anticipated as cash expenditures. The company has also initiated a transition to a strategic sourcing model for its mattress fabrics segment, which is expected to enhance operational efficiency.

Operationally, Culp's inventory levels increased to $48.6 million as of January 26, 2025, reflecting a 12.4% rise compared to the previous year, as the company prepared for customer demand during its restructuring activities. Accounts receivable decreased slightly, indicating longer payment trends from customers. The company reported a total of 12,559,129 shares outstanding, with no share repurchases made during the reporting period. Looking ahead, Culp remains cautious about the economic environment but is optimistic that its restructuring efforts will position the company for improved performance as market conditions stabilize.