Culp (CULP) Fiscal Q1 2027 Earnings Call: Bedding Growth, Debt Reduction
Source Tradingkey
Key Takeaways
- Culp, Inc. reported fiscal Q1 2027 net sales of $54.0 million, up from $50.7 million despite one fewer selling week. Bedding sales increased 13.2% to $31.8 million.
- Reported gross profit rose to $15.4 million, or 28.5% of sales, including approximately $7 million of IEPA tariff recoveries. Excluding those recoveries, gross profit was $8.4 million, or 15.6% of sales, approximately 17% above the prior-year period.
- Net income was $6.0 million, or $0.47 per diluted share, compared with a net loss of $231,000, or $0.02 per diluted share, a year earlier.
- Adjusted EBITDA excluding the tariff recovery and other specified items improved to $566,000 from negative $938,000, reflecting higher bedding sales and restructuring-related efficiencies.
- Net debt declined approximately 70% from the end of fiscal 2026 to $3.1 million. Management’s priority is to reach a net cash position during fiscal 2027.
- For fiscal Q2 2027, management expects sequentially consistent sales volumes, year-over-year sales growth, break-even operating income and accelerating adjusted EBITDA.
Key Financial Data
| Metric | Fiscal Q1 2027 | Prior-year period | Commentary |
|---|---|---|---|
| Net sales | $54.0 million | $50.7 million | Growth despite one fewer selling week |
| Reported gross profit | $15.4 million | $7.2 million | Included approximately $7 million of tariff recoveries |
| Reported gross margin | 28.5% | 14.3% | Benefited materially from tariff recoveries |
| Gross profit excluding tariff recoveries | $8.4 million | $7.2 million | Approximately 17% year-over-year growth |
| Gross margin excluding tariff recoveries | 15.6% | 14.3% | Supported by higher sales and operating efficiencies |
| SG&A expenses | $8.7 million | $9.1 million | Fell to 16.1% of sales from 18.0% |
| Operating income | $6.7 million | $1.6 million | Reported margin increased to 12.4% |
| Non-GAAP operating result excluding tariff recoveries | Loss of $271,000 | Loss of $1.9 million | Significant year-over-year improvement |
| Net income (loss) | $6.0 million | $(231,000) | — |
| Diluted EPS | $0.47 | $(0.02) | — |
| Adjusted EBITDA | $566,000 | $(938,000) | Excludes tariff recovery and other specified items |
| Operating cash flow | $8.1 million | $(695,000) | Helped by tariff recovery, efficiencies and working capital |
| Free cash flow | $7.8 million | $(874,000) | — |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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