# Culp, Inc. (CULP) Q1 2026 Financial Results Summary
**Release Date:** September 10, 2025
Culp, Inc. (NYSE: CULP) announced its financial results for the first quarter of fiscal 2026, which ended on August 3, 2025. The financial highlights and operational updates provided insights into the challenges faced and the measures being implemented by the company.
### Fiscal 2026 First Quarter Financial Highlights:
– **Net Sales**: $50.7 million, a decrease of **10.3%** from $56.5 million in the same quarter of the previous year.
– Driven by market softness and a tariff-induced pause in shipments from China.
– **Gross Profit**: $7.2 million, or **14.3%** of sales, compared to $5.1 million (or **9.0%** of sales) in the prior year, representing an improvement of **530 basis points**.
– Improvement attributed to cost and efficiency gains from last year’s restructuring initiatives.
– **Operating Income**: $1.6 million, a significant turnaround from a loss of $(6.9) million in the prior-year period.
– **Adjusted Operating Performance**:
– Non-GAAP operating loss of $(1.9) million, improved from $(4.1) million in the same quarter last year.
– Adjusted EBITDA was negative $(1.1) million, compared to negative $(2.7) million in the prior year.
– **Net Loss**: $(231) thousand, or $(0.02) per diluted share, compared to a net loss of $(7.3) million, or $(0.58) per diluted share in the prior year, marking a **96.8%** improvement in net loss.
### Cost and Efficiency Improvements:
– The company expects that ongoing cost and efficiency benefits from integration initiatives will yield approximately **$6 million** in additional savings annually once fully implemented.
– Specific initiatives include price increases to mitigate tariff costs and changes in operational management models to enhance efficiencies.
### Business Segment Highlights:
#### Bedding Segment:
– **Sales**: $28.0 million, roughly flat when compared to the previous year.
– **Gross Profit**: $2.9 million, or **10.5%** of sales, a considerable recovery from a gross loss of $(0.3) million (negative **1.2%**) in the prior year.
#### Upholstery Segment:
– **Sales**: $22.6 million, a decline of approximately **20%** compared to $28.5 million in the prior year.
– Sales decline attributed to overall market softness and high tariffs impacting order flow.
– **Gross Profit**: $4.3 million, or **18.9%** of sales, down slightly from $5.5 million, or **19.4%** of sales, in the prior-year period.
### Financial Position:
– **Cash and Cash Equivalents**: $11.1 million.
– **Outstanding Debt**: $18.1 million with $11.1 million in lines of credit and $7.0 million long-term.
### Cash Flow Summary:
– **Cash Flow from Operations**: Negative $(695) thousand, affected by operating losses but partially offset by favorable working capital.
– **Free Cash Flow**: Positive $311 thousand, improved from a negative $550 thousand in the prior year.
– **Capital Expenditures**: $179 thousand, down from $501 thousand in the same period last year, reflecting priorities on high-value and quick payback projects.
### Dividends and Share Repurchases:
– Culp did not declare any quarterly dividends during this period and there was no indication of any share repurchase program being active.
### Forward Outlook:
– The company anticipates continued improvements as restructuring efforts progress, forecasting sequential growth in sales throughout the year despite the ongoing low demand in the home furnishings market.
– Management remains focused on returning to profitability and managing liquidity responsibly, with expectations of slightly positive EBITDA results in the second quarter of fiscal 2026.
### Conclusion:
Culp, Inc.’s financial results for the first quarter of fiscal 2026 reflect a significant improvement in operational metrics, despite external challenges. The company’s integration and restructuring efforts appear to yield positive effects as it seeks to capitalize on market opportunities going forward.
### CULP, INC. CONSOLIDATED STATEMENTS OF NET LOSS Unaudited (Amounts in Thousands, Except for Per Share Data)
| THREE MONTHS ENDED | |||||
|---|---|---|---|---|---|
| August 3, 2025 | July 28, 2024 | % Over -Under | August 3, 2025 | July 28, 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-dilu… | 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, 2025 | July 28, 2024 | * April 27, 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.
