Culp 2025 Q4 Earnings Significant Loss Reduction Amid Revenue Decline

Culp (CULP) reported its fiscal 2025 Q4 earnings on July 11th, 2025. The company's performance showed a decline in total revenue, which decreased by 1.5% to $48.77 million, falling short of expectations. However, Culp managed to narrow its losses significantly, with earnings per share improving from a loss of $0.39 to $0.17, marking a 57.7% improvement. Looking ahead, Culp's guidance for Q1 2026 suggests expectations for revenue around $52.40 million and an EPS of -$0.14, indicating a cautiously optimistic outlook with potential for improvement.

Revenue

The total revenue for Culp in the fourth quarter of 2025 was $48.77 million, marking a 1.5% decrease from $49.53 million in the same quarter of 2024.

Earnings/Net Income

Culp significantly improved its earnings per share, reducing losses to $0.17 per share in 2025 Q4 from a loss of $0.39 per share in 2024 Q4, representing a 57.7% improvement. Despite ongoing challenges, this indicates a positive trend in the company's financial performance.

Price Action

The stock price of Culp dropped 3.59% during the latest trading day, edged up 1.56% over the most recent full trading week, and surged 17.78% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing CULP stocks when revenues miss expectations and holding for 30 days resulted in a complete loss, yielding a -100.00% return. This approach did not provide any excess return and experienced a maximum drawdown of 0.00%. The strategy's Sharpe ratio stood at -1.62, reflecting significant risk and underperformance when compared to the benchmark. This suggests that the strategy was not effective, highlighting the unpredictability and volatility associated with the stock's performance in the aftermath of earnings reports.

CEO Commentary

Culp Inc's CEO emphasized strategic initiatives aimed at enhancing operational efficiency and reducing costs. Despite challenges in the upholstery fabrics segment, the mattress fabrics business showed resilience, with a year-over-year sales increase driven by market share gains and innovative products. The completion of a restructuring plan is expected to yield annualized savings of $10 to $11 million, alongside Project Blaze's $3 million savings target, positioning the company favorably for potential market recovery. The CEO expressed cautious optimism about navigating macroeconomic pressures while committing to long-term growth.

Guidance

For Q1 2026, Culp Inc projects revenue of approximately $52.40 million with an EPS of -$0.14. The full-year revenue guidance for 2025 is set at $216.90 million, with anticipated losses of -$1.50 per share. The company expects ongoing cost-saving measures and strategic initiatives to improve operating performance and contribute to renewed consolidated operating income in fiscal 2026.

Additional News

Culp, Inc. recently announced a multi-year cooperation agreement with its largest shareholder, Seattle-based 22NW, LP. This agreement includes voting support from 22NW at Culp's 2025 and 2026 Annual Meetings of Shareholders. Additionally, new independent director candidates Doug Collier and Lynn Heatherton will be nominated for the company's board at these meetings, alongside Alexander B. Jones of 22NW. This move demonstrates Culp's commitment to working constructively with investors to generate positive outcomes for stakeholders. Furthermore, the company's restructuring plan, which included the sale of its Canadian manufacturing facility, is expected to yield significant annual savings, enhancing operational performance and positioning Culp for future growth opportunities.