Company: CULP
Filing Date: 2025-03-07
Form Type: 10-Q
Source: 0000950170-25-035191
Chunk: 93

Company: CULP INC
Filing Date: 2025-03-07
Form: 10-Q
Item: Item 2
Chunk 93
---
 segment during the quarter, the continued sluggish demand in our residential business driven by what remains a weakened home furnishings industry drove these year-over-year declines in overall sales in the segment. The impacts of this market dynamic were particularly acute in our residential business due to resulting lower ordering activity from a significant customer as it managed its inventory levels to better align with the soft industry demand. We were able to achieve sales increases in other areas of our residential business during the quarter and we saw growth trends in the luxury and value residential product channels. Moreover, market conditions and customer demand in our hospitality/contract business are more robust and we saw growth across all channels in that business, including Read, during the quarter.

The potential ongoing geopolitical disruptions related to conflicts in Ukraine and the Middle East, as well as the potential impact of future tariffs, depend on factors beyond our control and we cannot reasonably estimate the impact of these items on our upholstery fabrics segment.  Moreover, we note that if these situations worsen and shipping disruptions occur or new tariffs are imposed on our products, the impact on our operations and/or on our suppliers, customers, consumers, and the global economy could adversely affect our financial performance.

I-39

Gross Profit, Selling, General & Administrative Expenses, and Income from Operations

    Three Months Ended

    (dollars in thousands)
     
    January 26,2025

    January 28,2024

    Change

    Gross profit
     
    $
    4,228

    $
    6,122

    (30.9)%

    Gross margin

    17.9
    %

    20.1
    %
     
    (220)bp

    Selling, general, and administrative expenses

    3,549

    4,030

    (11.9)%

    Restructuring expense (credit)

    8

    (50
    )
     
    N.M.

    Income from operations

    679

    2,092

    (67.5)%

    Operating margin

    2.9
    %

    6.9
    %
     
    (400)bp

    Nine Months Ended

    (dollars in thousands)
     
    January 26,2025

    January 28,2024

    Change

    Gross profit
     
    $
    14,061

    $
    16,780

    (16.2)%

    Gross margin