Fabric supplier Culp Inc. trimmed its losses in the fourth fiscal quarter that ended April 27 as the company began to benefit financially from a year-long restructuring effort that was largely completed during the quarter.
The company said its fourth-quarter net loss of $2.1 million, or 17 cents per share, included $1.5 million in restructuring expenses. That was well below the loss of $4.9 million or 39 cents per share, in the final quarter of the previous year.
Fourth quarter sales fell 1.5% to $48.8 million. Mattress fabric sales were up 5.3% during the quarter, but upholstery fabric sales tumbled 8.9%.
For the fiscal year, sales fell 5.4% to $213.2 million. The company said mattress fabric sales were down 2.1% and upholstery fabric sales fell 8.8%.
The full-year net loss totaled $19.1 million (including $9.4 million in restructuring expenses), or $1.53 per share. That compared with a loss of $13.8 million, or $1.11 per share, in the previous fiscal year.
“Given the challenging revenue environment and tariff-related uncertainty that is evident and continues across the industry, we concentrated on what we can control and successfully executed on a variety of aggressive initiatives that should drive better operating leverage, particularly as market conditions improve,” said Iv Culp, president and CEO.
During a conference call with securities analysts, Culp said the restructuring, which primarily involved closures and consolidation of production facilities in the mattress fabrics division, will reduce fixed costs by $10 million to $11 million annually.
Since the fiscal year ended, he said the company has embarked on an additional restructuring effort that will feature the integration of its two operating divisions into a unified Culp-branded business.
While the mattress fabric and upholstery fabrics businesses will maintain separate sales forces, many “back-office” functions will be combined, Culp explained. In addition, a leased warehouse and production facility in Burlington, N.C., will be closed. Those operations will be moved to the company-owned factory and warehouse in Stokesdale, N.C.
“We expect this more centralized approach to improve scale efficiencies throughout Culp and to generate additional savings as we progress through fiscal 2026,” Iv Culp said. “In addition, the related facility consolidation activity should elevate the operating profile of our upholstery fabrics business, which continues to achieve profitability in the face of historically low demand for home furnishings and challenges from high tariff rates on China-produced goods.”
Due to economic uncertainty and what the company described as a “fluid tariff environment,” Culp did not issue specific financial projections for the fiscal year. However, the company said it expects year-over-year sales growth in mattress fabrics but will continue to see sales pressure on the residential side of its upholstery fabrics business.
The company said upholstery fabric demand from contract and hospitality customers was “relatively solid” in the fourth quarter and accounted for about 42% of upholstery fabric sales.
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