Culp (CULP) Q2 2026 earnings summary

Executive summary

• Second quarter FY26 net sales were $53.2M, up sequentially but down 4.4% year-over-year, with bedding segment sales increasing and upholstery declining internationally.

• Ongoing restructuring and integration initiatives, including Project Blaze and facility consolidations, are expected to yield over $20M in annualized cost savings by FY27.

• Bedding segment delivered sequential and year-over-year sales growth, benefiting from restructuring and market share gains, while upholstery faced international declines and tariff pressures.

• The company operates globally with manufacturing in the U.S., China, Haiti, Vietnam, and sourcing from Turkey, serving both mattress and upholstery markets.

• Restructuring and integration are positioning the company for profitability as market conditions improve.

Financial highlights

• Consolidated net sales were $53.2M in Q2 FY26, up from $50.7M in Q1 but down from $55.7M year-over-year.

• Adjusted gross profit was $6.7M (12.6% of sales), slightly up from 12.1% last year; reported gross profit was $5.8M (10.9%).

• SG&A expense improved by 7% year-over-year to $8.7M (16.4% of sales).

• Adjusted operating loss was $2M, improved from $2.6M loss year-over-year; net loss for Q2 was $(4.3)M, a 23.7% improvement.

• Adjusted EBITDA was negative $1M, a slight improvement from negative $1.1M year-over-year.

Outlook and guidance

• Management expects steady consolidated sales for the remainder of FY26, with higher expectations for bedding and near break-even to positive adjusted EBITDA in Q3.

• Additional cost reduction and efficiency actions in FY26 are expected to yield $8M in annualized benefits.

• $4.7M in cash from the sale of the Canada facility is expected in Q4.

• Industry forecasts call for 4% growth in 2026 and 8% in 2027 for mattress sales.