Culp, Inc. reported a net loss of $4.3 million, or $0.34 per diluted share, for its second quarter of fiscal 2026, a miss of $0.25 per share against the consensus estimate of $0.09. Revenue fell to $53.2 million, $1.1 million below the $54.32 million forecast, marking a 2.4% year‑over‑year decline and a 4.5% sequential increase from the $50.7 million reported in Q1 fiscal 2026.
The company’s two main revenue streams behaved in opposite directions. Bedding sales grew 10% sequentially and 2% year‑over‑year to $28.5 million, driven by a 15% rise in high‑margin specialty bedding lines and a modest price lift. Upholstery sales, however, slipped 12% year‑over‑year to $24.7 million, reflecting weaker demand in the home‑furnishings market and a 5% drop in wholesale orders. The mixed segment performance explains the overall revenue miss despite the sequential gain.
Gross profit for the quarter was $5.8 million, or 10.9% of sales, slightly higher than the 10.8% margin reported a year ago but lower than the 12.6% adjusted margin that excludes restructuring charges. The adjusted gross profit of $6.7 million, or 12.6% of sales, indicates that cost‑control initiatives in the bedding segment are beginning to pay off, even as upholstery costs remain elevated due to raw‑material price swings and higher logistics expenses.
CEO Iv Culp said the company is “in the final inning of a comprehensive multi‑phase transformation” and that aggressive cost cuts are “paying off in the bedding division.” CFO Ken Bowling added that the firm’s leverage “positions us to capitalize on any uptick in sales.” Both executives emphasized that the primary focus remains on returning to profitability and managing debt, underscoring the company’s cautious stance amid macro uncertainty.
Management provided limited forward guidance, citing continued macro‑economic uncertainty and tariff volatility as key headwinds. The company reiterated its commitment to the transformation plan, which is expected to deliver over $20 million in annualized cost savings by fiscal 2027, and signaled that it will maintain a conservative outlook for the next quarter while monitoring market conditions closely.
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