Fabric supplier Culp Inc. eked out a 0.6% sales gain in the quarter ended Oct. 29 as the High Point, North Carolina-based company slashed its net loss by more than 80% compared with the same period last year.
The sales gain was driven by a 19.6% jump in mattress fabric sales — an increase achieved in the midst of a weak mattress market. The company’s upholstery fabric sales, meanwhile, tumbled 14.9%.
Companywide sales totaled $58.73 million for the quarter, up from $58.38 million in the same quarter last year. The net loss came to $2.42 million or 19 cents per share, down from $12.18 million or 99 cents per share in the comparable quarter.
Mattress fabric sales totaled $31.38 million, up from $26.23 million in the same period last year, while upholstery fabric sales were $27.35 million, down from $32.15 million in the comparable period.
Iv Culp, president and CEO, said he was especially pleased with the turnaround in the mattress fabrics business, which is occurring in spite of a mattress market that has seen double-digit declines in unit sales for more than a year.
“We’re not celebrating yet, but we’re definitely headed in the right direction,” he said of the company’s recent financial performance. “Our mattress fabric business is undergoing a major transformation, and all the hard work is starting to pay off.”
Culp said the segment’s operating loss was reduced by more than 80% in the most recent quarter, driven by balanced inventory management, higher sales, better pricing and margins, and an ongoing focus on operational efficiencies.
He said the company should achieve positive adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in the current quarter, which ends in late January, and return to operating profitability by the end of the fiscal year in late April.
“We acknowledge that the various external headwinds and pressures on consumer spending for furniture and bedding products may remain for some time,” Culp said. “However, our market position is strong and growing, and we are diligently focused on internal improvement initiatives that will enable us to withstand these industry conditions and position our business for renewed growth and profitability.”
For the six months ended Oct. 29, companywide sales were $115.4 million, down 4.6% from $121 million in the comparable period last year. The six-month net loss was $5.77 million or 47 cents per share, down more than 67% from $17.9 million or $1.46 per share in the comparable period.
Mattress fabric sales were up 9% to $60.6 million in the six-month period, while upholstery fabric sales fell 16.2% to $54.8 million.
