tiprankstipranks
Trending News
More News >
Culp (CULP)
NYSE:CULP

Culp (CULP) AI Stock Analysis

Compare
139 Followers

Top Page

CU

Culp

(NYSE:CULP)

Rating:53Neutral
Price Target:
$4.50
▼(-3.43%Downside)
Culp's overall stock score is primarily impacted by its financial challenges, including declining revenues and negative profitability. While technical analysis shows some potential, valuation concerns and ongoing operational issues weigh heavily. Strategic initiatives and restructuring efforts provide some optimism for future improvement.

Culp (CULP) vs. SPDR S&P 500 ETF (SPY)

Culp Business Overview & Revenue Model

Company DescriptionCulp, Inc. (CULP) is a leading provider of mattress fabrics and upholstery fabrics for furniture in the home furnishings industry. Operating in the textiles sector, the company designs, manufactures, and markets a wide range of fabric products. With a focus on innovation and quality, Culp serves a diverse customer base, including furniture manufacturers, retailers, and home decorators, offering products that enhance both aesthetic and functional aspects of home furnishings.
How the Company Makes MoneyCulp generates revenue primarily through the sale of its mattress and upholstery fabrics to furniture manufacturers and retailers. The company operates through two main segments: mattress fabrics and upholstery fabrics. In the mattress fabrics segment, Culp designs and markets knitted and woven fabrics for the bedding industry, while in the upholstery fabrics segment, it provides an array of fabric products used in the manufacture of residential and commercial upholstered furniture. Revenue is driven by the volume of fabric sales, with key partnerships and contracts with major furniture brands and retailers significantly contributing to its earnings. Additionally, the company invests in research and development to innovate new products and enhance its fabric offerings, which helps improve its competitive edge and market share.

Culp Earnings Call Summary

Earnings Call Date:Jun 25, 2025
(Q4-2025)
|
% Change Since: 17.68%|
Next Earnings Date:Aug 27, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a company in transition, with significant cost-saving measures and strategic restructuring efforts leading to improvements in operating performance despite ongoing industry challenges. While the mattress fabrics segment shows promising growth and the extension of the credit facility provides financial stability, the upholstery fabrics segment continues to face headwinds from tariffs and low demand in the residential market.
Q4-2025 Updates
Positive Updates
Successful Restructuring Plan Completion
The company completed its restructuring plan, reducing fixed costs in the mattress fabrics business and transitioning to an asset-light strategic sourcing model. Annualized savings from this restructuring are expected to be $10 to $11 million.
Growth in Mattress Fabrics Sales
Despite industry projections of an 11% decline in mattress sales, Culp achieved a year-over-year sales increase in its mattress fabrics business during the fourth quarter.
Positive Hospitality and Commercial Markets Performance
Demand in the upholstery fabrics business, specifically in hospitality and commercial markets, remained solid, with sales in these areas constituting approximately 42% of total upholstery sales during the quarter.
Credit Facility Extension
Culp extended its credit facility with Wells Fargo for an additional 3 years, providing liquidity and financing flexibility to support ongoing initiatives.
Negative Updates
Upholstery Fabrics Sales Decline
Sales in the upholstery fabrics segment declined by 8.9% in Q4 and 8.8% for the full year, primarily due to demand deterioration in the home furnishings industry and tariff-related challenges.
Tariff-related Challenges
Tariff changes affecting China-produced goods resulted in prohibitive costs, affecting shipments and demand, particularly in the upholstery fabrics segment.
Overall Operating Losses
The company reported a loss from operations of $2.2 million in Q4, though this was an improvement from the previous year's $4.2 million loss.
Continued Pressure on Residential Upholstery
The residential upholstery market remains challenging, with low demand and a slow recovery in sight.
Company Guidance
During the Culp, Inc. Fourth Quarter Fiscal 2025 Earnings Conference Call, the company provided guidance focused on strategic initiatives aimed at cost reduction and operational efficiency. Notably, Culp completed a restructuring plan announced in May 2024, resulting in $10 million to $11 million in annualized savings. The company also initiated Project Blaze to integrate its mattress and upholstery fabric divisions, targeting an additional $3 million in annual savings. Furthermore, Culp implemented price increases expected to yield $2.5 million annually, cumulatively contributing to $5 million to $6 million in benefits on top of previous savings. These actions are expected to improve operating performance despite a challenging demand environment, with the company emphasizing its strategic positioning for potential market improvements moving into fiscal 2026.

Culp Financial Statement Overview

Summary
Culp faces substantial financial challenges, with ongoing unprofitability and negative cash flows. Although the company maintains a low level of debt, its declining revenue and asset base, coupled with consistent losses, present significant risks. Improving operational efficiency and reversing revenue decline are critical for financial recovery.
Income Statement
45
Neutral
Culp's income statement reveals a challenging financial situation with consistent net losses over the past few years. The gross profit margin has been declining, and the company has struggled with negative net income, indicating persistent unprofitability. Revenue has been on a downward trend, further pressuring margins and profitability.
Balance Sheet
55
Neutral
The balance sheet shows a moderately stable financial position with a relatively low debt-to-equity ratio, suggesting conservative leverage. However, the declining equity and total assets over recent periods indicate a shrinking asset base, which could affect future financial flexibility. The equity ratio remains relatively strong, but continuous losses may erode this strength.
Cash Flow
40
Negative
Cash flow statements highlight significant challenges in cash generation, with negative operating cash flow and free cash flow in recent years. This trend indicates difficulty in sustaining operations through internally generated cash, which could lead to liquidity concerns if not addressed.
BreakdownJun 2025Jun 2024Jun 2023Jun 2022Jun 2021
Income Statement
Total Revenue213.24M225.33M234.93M294.84M299.72M
Gross Profit25.07M27.94M10.90M36.09M49.83M
EBITDA-18.38M-3.85M-21.11M7.25M19.42M
Net Income-19.10M-13.82M-31.52M-3.21M3.22M
Balance Sheet
Total Assets123.37M132.05M152.18M177.56M214.08M
Cash, Cash Equivalents and Short-Term Investments6.95M10.91M22.37M14.55M45.71M
Total Debt17.64M4.48M6.25M10.28M9.56M
Total Liabilities65.73M55.92M63.10M58.06M85.07M
Stockholders Equity57.64M76.13M89.08M119.50M129.01M
Cash Flow
Free Cash Flow-20.60M-11.94M5.70M-23.14M14.81M
Operating Cash Flow-17.65M-8.22M7.80M-17.44M21.48M
Investing Cash Flow598.00K-2.43M-752.00K2.50M-10.68M
Financing Cash Flow12.67M-126.00K-436.00K-7.42M-43.71M

Culp Technical Analysis

Technical Analysis Sentiment
Positive
Last Price4.66
Price Trends
50DMA
4.05
Positive
100DMA
4.42
Positive
200DMA
4.97
Negative
Market Momentum
MACD
0.10
Negative
RSI
72.11
Negative
STOCH
85.43
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CULP, the sentiment is Positive. The current price of 4.66 is above the 20-day moving average (MA) of 4.05, above the 50-day MA of 4.05, and below the 200-day MA of 4.97, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 72.11 is Negative, neither overbought nor oversold. The STOCH value of 85.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CULP.

Culp Risk Analysis

Culp disclosed 22 risk factors in its most recent earnings report. Culp reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Culp Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
66
Neutral
$41.66M-1.33%6.10%24.43%57.78%
63
Neutral
$16.67B10.96-6.97%3.00%1.72%-24.21%
UFUFI
55
Neutral
$90.89M-15.73%2.51%32.95%
53
Neutral
$56.77M-28.56%-5.37%-37.39%
51
Neutral
$136.06M-17.61%0.84%34.28%-495.11%
45
Neutral
$19.01M6.22-63.56%1.46%-191.66%
39
Underperform
$3.86M-51.41%-46.67%26.45%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CULP
Culp
4.66
-0.42
-8.27%
LAKE
Lakeland Industries
14.56
-7.45
-33.85%
UFI
Unifi
4.89
-0.83
-14.51%
VNCE
Vince Holding
1.54
0.15
10.79%
XELB
XCel Brands
1.64
-4.97
-75.19%
JRSH
Jerash Holdings (US)
3.29
0.53
19.20%

Culp Corporate Events

Business Operations and StrategyFinancial Disclosures
Culp Reports Q4 Results and Restructuring Impact
Positive
Jun 25, 2025

On June 25, 2025, Culp, Inc. announced its financial and operating results for the fourth quarter and fiscal year ending April 27, 2025. The company completed a restructuring plan that included the sale of a manufacturing facility in Canada and a transition to an asset-light model, resulting in improved operating performance despite a challenging revenue environment. The restructuring is expected to generate significant annual savings and has already contributed to better financial results. Culp also integrated its operating divisions into a unified business to enhance market responsiveness and optimize resources. The company reported consolidated net sales of $48.8 million for the fourth quarter, with a GAAP consolidated loss from operations of $2.2 million, showing improvement from the prior year. Culp extended its credit facility with Wells Fargo, providing additional liquidity to support future growth.

Private Placements and FinancingBusiness Operations and Strategy
Culp Extends Credit Facility with Wells Fargo
Neutral
Jun 16, 2025

On June 12, 2025, Culp, Inc. and its subsidiaries entered into a Third Amendment to their Credit Agreement with Wells Fargo Bank, extending the term of their asset-based revolving credit facility to June 12, 2028. This amendment allows for revolving credit loans and letters of credit up to $30 million, with potential increases, and includes specific borrowing base calculations and interest rates tied to the secured overnight financing rate. The changes aim to support Culp’s working capital and corporate purposes, potentially impacting its financial flexibility and operational strategy.

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Culp Enters Multi-Year Agreement with Largest Shareholder
Positive
Jun 10, 2025

On June 6, 2025, Culp, Inc. entered into a multi-year cooperation agreement with its largest shareholder, 22NW, LP. This agreement includes provisions for board nominations and voting support at the company’s 2025 and 2026 Annual Meetings of Shareholders. The agreement aims to support Culp’s management and stakeholders, positioning the company for future growth opportunities. The board will nominate new independent directors, Doug Collier and Lynn Heatherton, alongside Alexander B. Jones, who joined the board in 2024. The board size will remain unchanged, and the agreement includes standstill provisions limiting the investor group’s actions regarding the company.

Executive/Board ChangesBusiness Operations and Strategy
Culp Announces Strategic Transformation of Operating Model
Positive
Apr 24, 2025

On April 24, 2025, Culp, Inc. announced a strategic transformation of its operating model by integrating its two divisions, Culp Upholstery Fabrics and Culp Home Fashions, into a single business. This move aims to enhance operational agility, streamline costs, and improve responsiveness to market trends. The integration involves closing a facility in Burlington, North Carolina, and relocating operations to Stokesdale, North Carolina, with expected annual savings of $3 million. This follows a previous restructuring plan from May 2024, which anticipated savings of $10 to $11 million. The changes also include leadership appointments, with Mary Elizabeth Hunsberger as Chief Operating Officer and Thomas M. Bruno as Chief Commercial Officer. The transformation is expected to create synergies and strengthen Culp’s market position in the home furnishings industry.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025