After restructuring, Culp turns a profit

High Point, N.C. -- Climbing back on track and helped by gains in its mattress ticking business, diversified fabrics producer Culp Inc. recorded a small second-quarter profit of $812,000 -- despite a continuing slide in sales. This reversed a year-before loss of $4.2 million stemming from a sweeping overhaul of operations.

Sales continued to decline, falling by 11.9%, to $59.0 million from $67.0 million last year. But paring costs and beefing up margins, Culp recorded a profit in both its mattress ticking and upholstery fabrics divisions. Sales of mattress fabrics trailed off by 2.1%, to $23.5 million, but helped by sales of higher-margin product, operating profit jumped up by 48.3% to $2.5 million from $1.7 million last year.

The core upholstery fabrics business continued to lose ground at the top line, sales falling off by 17.4%, to $35.5 million from $43.0 million last year, a shortfall of $7.5 million. But helped by cost cuts, layoffs and continued down-sizing, the business returned to profitability with a modest operating profit of $393,000, compared with a small year-before loss of $69,000.

Driving the second-quarter profit, the company slashed restructuring costs, putting up a $264,000 credit in this year's second quarter, compared with $4.4 million in restructuring costs a year ago. In another lift to the bottom line, average gross margin widened substantially, by 520 basis points, or 5.2 percentage points, to 13.5% from 8.3% last year. Costs were pared by 3.9% to $6.3 million, yielding a cash savings of $253,000.

Home & Textiles Today Staff | News & Commentary

 Home Textiles Today is the market-leading brand covering the home and textiles markets, offering a comprehensive package of print and online products. Home & Textiles Today provides industry news, product trends and introductions, exclusive industry research, consumer data, store operations solutions, trade show news and much more.

Featured Video

  • Live From New York: Fashion Comes Across the Pond

    Camera Icon More Videos

Subscribe to
Home & Textiles Today eDaily
Receive the news you need to know about the trends in the industry delivered right to your inbox.


HTT Current issue for September 2017

See the September 2017 issue of Home & Textiles Today. In this issue, we look at the Attack of the Killer Third Tier: Monster off-pricers are climbing to the top of the food chain, plus New Products: 40 pages of new products debuting at the New York Home Fashions Market; Home Stores: TJX unveils first U.S. HomeSense store; Clicks to Bricks: Boll & Branch moves from digital to physical retailing; and much more... See details!