Culp, Inc. Reports Decline in Net Sales and Improved Net Loss for Q2 Fiscal 2026

Culp, Inc. reported its financial results for the second quarter and first half of fiscal 2026, revealing a decline in net sales and a reduction in net loss compared to the previous year. For the three months ended November 2, 2025, the company recorded net sales of $53.2 million, a decrease of 4.4% from $55.7 million in the same period last year. The net loss for the quarter was $4.3 million, or $0.34 per share, compared to a net loss of $5.6 million, or $0.45 per share, in the prior year. For the six-month period, net sales totaled $103.9 million, down 7.4% from $112.2 million, while the net loss improved to $4.5 million from $12.9 million in the same period last year.

The company attributed the decline in sales primarily to challenges in the upholstery segment, which saw a 12.3% decrease in sales year-over-year. In contrast, the bedding segment experienced a slight increase in sales of 2.3% during the same period. Culp's gross profit for the second quarter was $5.8 million, down 3.5% from the previous year, but gross profit for the first half increased by 17.6% to $13.0 million, driven by improved efficiencies in the bedding segment following restructuring initiatives.

Culp, Inc. has been undergoing significant strategic changes, including the consolidation of its North American bedding operations and the integration of its bedding and upholstery segments into a single Culp-branded business. This transformation is expected to enhance operational efficiencies and reduce costs. The company has also closed facilities in Burlington, North Carolina, and Knoxville, Tennessee, transitioning production to its Stokesdale, North Carolina facility. As part of these restructuring efforts, Culp recorded a restructuring credit of $3.0 million for the first half of fiscal 2026, primarily from the sale of a manufacturing facility in Quebec, Canada.

Operationally, Culp's accounts receivable decreased to $20.6 million as of November 2, 2025, reflecting a 7.6% decline from the previous year, while inventory increased to $49.9 million, up 10.7% year-over-year. The company reported a cash balance of $10.7 million, an increase from $5.6 million at the end of the previous fiscal year, supported by net borrowings of $5.3 million on its lines of credit. Looking ahead, Culp anticipates continued challenges in the home furnishings market but expects to leverage its restructuring efforts to capture market share and improve profitability as conditions stabilize.