Culp Narrows Q1 Loss On Restructuring Gains, Tariff Headwinds Persist
Culp Inc., a leading US supplier of bedding and upholstery fabrics, reported a narrower net loss of US$ 0.2 million for Q1 FY26, compared to a US$ 7.3 million loss a year earlier, as restructuring gains lifted margins despite soft demand and tariff pressures.
Revenue declined 10% YoY to US$ 50.7 million, hit by weakness in residential upholstery shipments from China. However, gross margin improved sharply to 14.3% from 9% on the back of cost cuts and efficiency measures in the bedding segment. Operating income came in at US$ 1.6 million, versus a US$ 6.9 million operating loss last year.
Excluding restructuring credits of US$ 3.5 million, including proceeds from the sale of a Canadian plant, Culp posted a non-GAAP operating loss of US$ 1.9 million. Adjusted EBITDA stood at negative US$ 1.1 million.
The company said ongoing integration of its bedding and upholstery units, cost synergies from facility consolidation in North Carolina and Tennessee, and recent price hikes are expected to generate US$ 6 million in annual savings. Management forecast sequential sales growth through FY26 and projected EBITDA moving near breakeven in Q2.
Culp ended the quarter with US$ 11.1 million in cash and US$ 18.1 million in debt, with liquidity of US$ 28.7 million.
