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Culp, Inc. (CULP - Free Report) reported mixed results for the fourth-quarter fiscal 2024 (ended Apr 28). Its adjusted loss was narrower than the Zacks Consensus Estimate while the net sales marginally missed the same. On a year-over-year basis, net sales declined and the adjusted loss widened.
The quarterly results reflect softness in industry demand for both the company’s reportable businesses due to ongoing macroeconomic headwinds and the timing of orders, due to many larger customers experiencing prolonged conditions beginning in January. That said, its initiatives to bring down manufacturing costs and execute operational excellence aided the bottom line to some extent.
Going forward, Culp intends to work on its restructuring plan, primarily focusing on its mattress fabrics segment. The company also believes that the full-blown implementation of these plans will enable it to grow more efficiently and profitably, with a lower level of fixed costs. Also, it will be able to optimize its global mix of manufacturing capabilities and long-term sourcing partners.
Inside the Numbers
In the fiscal fourth quarter, the company incurred an adjusted loss of 39 cents per share, narrower than the Zacks Consensus Estimate of a loss of 44 cents per share. It had reported an adjusted loss of 38 cents per share in the prior-year quarter.
Net sales of $49.5 million marginally missed the consensus estimate of $49.8 million by 0.5% and declined 19.4% from the year-ago quarter’s figure.
The gross margin was down 70 basis points (bps) year over year to 10.5%. Selling, general, and administrative expenses, as a percentage of net sales, increased 100 bps to 18.7% from the prior-year quarter’s figure.
Total operating loss was $4.2 million compared with $4 million reported in the prior-year quarter. Operating loss — as a percentage of net sales — widened to 8.6% from 6.6% in the year-ago period.
Segment Details
Mattress Fabrics: Sales in the segment totaled $25.8 million, down 16.1% year over year. The sales were pressured by weakness in the domestic mattress industry due to a challenging macroeconomic environment that is affecting consumer discretionary spending and housing markets.
Operating loss widened to $2.9 million from $2.5 million a year ago. The loss widened primarily because of lower sales and operating inefficiencies. The segment’s operating margin was (11.4)% compared with (8.2)% in the prior-year period.
Upholstery Fabrics: Sales in the segment amounted to $23.8 million, down 22.6% year over year. The sales declined due to further deterioration in residential home furnishing sales as well as the timing of the Chinese New Year holiday (which fell primarily in the fourth quarter this year rather than the usual third quarter).
The segment registered an operating profit of $1 million, down 39.5% from $1.6 million reported in the prior-year period. Operating margin was down 110 bps to 4.1% on a year-over-year basis. The margin contraction was primarily due to lower sales and the non-recurrence of the one-time customer payment.
Fiscal 2024 at a Glance
In fiscal 2024, Culp’s net sales declined 4.1% year over year to $225.3 million. It reported an adjusted loss per share of $1.11, which was narrower than the adjusted loss of $2.57 per share reported in fiscal 2023.
The gross margin was 12.4%, up 780 bps year over year. Selling, general and administrative expenses – as a percentage of net sales – increased 90 bps to 17.1% from the prior-year quarter’s figure.
Total operating loss improved to $11.3 million from $28.5 million reported in the prior-year quarter. Operating loss – as a percentage of net sales – narrowed to 5% from 12.1% in the year-ago period.
Financial Highlights
As of Apr 28, 2024, Culp had cash and cash equivalents of $10 million compared with $21 million at the fiscal 2023-end. As of the fiscal fourth quarter end, the company had no outstanding long-term debt. Total liquidity, as of Apr 28, was $32.5 million, including $22.5 million in borrowing availability under the company's domestic and foreign credit facilities, and cash and cash equivalents.
At the end of fiscal 2024, net cash used in operating activities was $8.2 million against net cash provided by operating activities of $7.8 million in the comparable period a year ago. The company generated a negative free cash flow of $10.8 million against a positive free cash flow of $6.9 million a year ago.
Q1 Fiscal 2025 Outlook
For the first quarter of fiscal 2025, Culp expects total net sales to be moderately higher sequentially, even if macro demand remains challenged.
MillerKnoll, Inc. (MLKN - Free Report) reported mixed fourth-quarter fiscal 2024 (ended Jun 1, 2024) results, with earnings surpassing the Zacks Consensus Estimate but net sales missing the same. On a year-over-year basis, the top line declined while the bottom line grew.
The quarter’s results reflect the company’s ability to leverage the advantage and scale of its portfolio of brands, diversified business channels, and global operations to drive substantial margin expansion while protecting strategic investments for growth. However, soft contributions from MLKN’s Americas Contract and Global Retail segments marred the top-line growth, which was partially offset by notable contributions from its International Contract and Specialty segment.
Carnival Corporation & plc (CCL - Free Report) reported impressive second-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
The upside was primarily backed by sustained demand strength and increased booking volumes. The company reported strong booking momentum for 2025, with record volumes surpassing 2024 levels in both price and occupancy. It reported strength in pricing for the North America and Australia, and Europe segments for the third and fourth quarters of 2024 on a year-over-year basis. The management expects net yields to exceed 10% and drive double-digit returns on invested capital.
La-Z-Boy Incorporated (LZB - Free Report) reported better than expected fiscal fourth quarter (ended Apr 27, 2024) results, with earnings and sales surpassing the Zacks Consensus Estimate.
The metrics decreased on a year-over-year basis due to reduced spending on furniture and home furnishings, with overall store visits declining. Housing market activity slowed due to higher interest rates. LZB reported its strongest execution to date, with record-high conversion rates and increasing average sales per customer. The company expects industry conditions to remain volatile in the near term but is confident in its ability to outperform competitors and expand its market share over time.
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CULP Posts Narrower-Than-Expected Q4 Loss, Lags Sales Estimates
Culp, Inc. (CULP - Free Report) reported mixed results for the fourth-quarter fiscal 2024 (ended Apr 28). Its adjusted loss was narrower than the Zacks Consensus Estimate while the net sales marginally missed the same. On a year-over-year basis, net sales declined and the adjusted loss widened.
The quarterly results reflect softness in industry demand for both the company’s reportable businesses due to ongoing macroeconomic headwinds and the timing of orders, due to many larger customers experiencing prolonged conditions beginning in January. That said, its initiatives to bring down manufacturing costs and execute operational excellence aided the bottom line to some extent.
Going forward, Culp intends to work on its restructuring plan, primarily focusing on its mattress fabrics segment. The company also believes that the full-blown implementation of these plans will enable it to grow more efficiently and profitably, with a lower level of fixed costs. Also, it will be able to optimize its global mix of manufacturing capabilities and long-term sourcing partners.
Inside the Numbers
In the fiscal fourth quarter, the company incurred an adjusted loss of 39 cents per share, narrower than the Zacks Consensus Estimate of a loss of 44 cents per share. It had reported an adjusted loss of 38 cents per share in the prior-year quarter.
Net sales of $49.5 million marginally missed the consensus estimate of $49.8 million by 0.5% and declined 19.4% from the year-ago quarter’s figure.
Culp, Inc. Price, Consensus and EPS Surprise
Culp, Inc. price-consensus-eps-surprise-chart | Culp, Inc. Quote
The gross margin was down 70 basis points (bps) year over year to 10.5%. Selling, general, and administrative expenses, as a percentage of net sales, increased 100 bps to 18.7% from the prior-year quarter’s figure.
Total operating loss was $4.2 million compared with $4 million reported in the prior-year quarter. Operating loss — as a percentage of net sales — widened to 8.6% from 6.6% in the year-ago period.
Segment Details
Mattress Fabrics: Sales in the segment totaled $25.8 million, down 16.1% year over year. The sales were pressured by weakness in the domestic mattress industry due to a challenging macroeconomic environment that is affecting consumer discretionary spending and housing markets.
Operating loss widened to $2.9 million from $2.5 million a year ago. The loss widened primarily because of lower sales and operating inefficiencies. The segment’s operating margin was (11.4)% compared with (8.2)% in the prior-year period.
Upholstery Fabrics: Sales in the segment amounted to $23.8 million, down 22.6% year over year. The sales declined due to further deterioration in residential home furnishing sales as well as the timing of the Chinese New Year holiday (which fell primarily in the fourth quarter this year rather than the usual third quarter).
The segment registered an operating profit of $1 million, down 39.5% from $1.6 million reported in the prior-year period. Operating margin was down 110 bps to 4.1% on a year-over-year basis. The margin contraction was primarily due to lower sales and the non-recurrence of the one-time customer payment.
Fiscal 2024 at a Glance
In fiscal 2024, Culp’s net sales declined 4.1% year over year to $225.3 million. It reported an adjusted loss per share of $1.11, which was narrower than the adjusted loss of $2.57 per share reported in fiscal 2023.
The gross margin was 12.4%, up 780 bps year over year. Selling, general and administrative expenses – as a percentage of net sales – increased 90 bps to 17.1% from the prior-year quarter’s figure.
Total operating loss improved to $11.3 million from $28.5 million reported in the prior-year quarter. Operating loss – as a percentage of net sales – narrowed to 5% from 12.1% in the year-ago period.
Financial Highlights
As of Apr 28, 2024, Culp had cash and cash equivalents of $10 million compared with $21 million at the fiscal 2023-end. As of the fiscal fourth quarter end, the company had no outstanding long-term debt. Total liquidity, as of Apr 28, was $32.5 million, including $22.5 million in borrowing availability under the company's domestic and foreign credit facilities, and cash and cash equivalents.
At the end of fiscal 2024, net cash used in operating activities was $8.2 million against net cash provided by operating activities of $7.8 million in the comparable period a year ago. The company generated a negative free cash flow of $10.8 million against a positive free cash flow of $6.9 million a year ago.
Q1 Fiscal 2025 Outlook
For the first quarter of fiscal 2025, Culp expects total net sales to be moderately higher sequentially, even if macro demand remains challenged.
Zacks Rank & Recent Consumer Discretionary Releases
Culp currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MillerKnoll, Inc. (MLKN - Free Report) reported mixed fourth-quarter fiscal 2024 (ended Jun 1, 2024) results, with earnings surpassing the Zacks Consensus Estimate but net sales missing the same. On a year-over-year basis, the top line declined while the bottom line grew.
The quarter’s results reflect the company’s ability to leverage the advantage and scale of its portfolio of brands, diversified business channels, and global operations to drive substantial margin expansion while protecting strategic investments for growth. However, soft contributions from MLKN’s Americas Contract and Global Retail segments marred the top-line growth, which was partially offset by notable contributions from its International Contract and Specialty segment.
Carnival Corporation & plc (CCL - Free Report) reported impressive second-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis.
The upside was primarily backed by sustained demand strength and increased booking volumes. The company reported strong booking momentum for 2025, with record volumes surpassing 2024 levels in both price and occupancy. It reported strength in pricing for the North America and Australia, and Europe segments for the third and fourth quarters of 2024 on a year-over-year basis. The management expects net yields to exceed 10% and drive double-digit returns on invested capital.
La-Z-Boy Incorporated (LZB - Free Report) reported better than expected fiscal fourth quarter (ended Apr 27, 2024) results, with earnings and sales surpassing the Zacks Consensus Estimate.
The metrics decreased on a year-over-year basis due to reduced spending on furniture and home furnishings, with overall store visits declining. Housing market activity slowed due to higher interest rates. LZB reported its strongest execution to date, with record-high conversion rates and increasing average sales per customer. The company expects industry conditions to remain volatile in the near term but is confident in its ability to outperform competitors and expand its market share over time.