Culp, Inc. Reports 5.4% Decrease in Net Sales for Fiscal Year Ending April 2025

Culp, Inc. reported a consolidated net sales of $213.2 million for the fiscal year ending April 27, 2025, reflecting a decrease of 5.4% compared to $225.3 million in the previous fiscal year. The decline was attributed to a 2.1% drop in mattress fabric sales, which totaled $113.9 million, and an 8.8% decrease in upholstery fabric sales, which amounted to $99.3 million. The company experienced challenges due to muted demand in the bedding industry and a downturn in consumer spending, particularly in the home furnishings market, which was exacerbated by inflationary pressures and a shift in consumer preferences post-COVID-19.

Culp's gross profit for the fiscal year was $25.1 million, down 10.3% from $27.9 million in fiscal 2024, resulting in a gross profit margin of 11.8%. The company reported a loss from operations of $18.4 million, significantly higher than the loss of $11.3 million in the prior year. This increase in losses was largely driven by restructuring expenses totaling approximately $9.4 million, which included costs associated with the consolidation of operations and the transition to a strategic sourcing model for its mattress fabrics segment.

In terms of strategic developments, Culp initiated a significant restructuring plan in May 2024, which included the closure of its manufacturing facility in Quebec, Canada, and the consolidation of operations in North Carolina and Haiti. This restructuring aimed to optimize operational efficiency and reduce costs. The company also announced a strategic transformation on April 24, 2025, to integrate its mattress and upholstery fabrics segments into a unified business model, which is expected to enhance responsiveness to market trends and customer needs.

Operationally, Culp employed 829 individuals at the end of fiscal 2025, a reduction of 171 employees from the previous year, primarily due to the restructuring efforts. The company reported an increase in inventory levels to $49.3 million, reflecting a strategic decision to maintain adequate stock during the transition period. Culp's cash and cash equivalents decreased to $5.6 million, down from $10.0 million in the prior year, largely due to net cash used in operating activities totaling $17.7 million.

Looking ahead, Culp anticipates continued challenges in the macroeconomic environment, which may impact consumer spending and housing market trends. The company plans to implement price increases in its mattress fabrics segment to mitigate the effects of recent tariff actions and is focused on leveraging its operational efficiencies to navigate the ongoing market uncertainties.