Culp Records Profit Hike Despite Sales Decline

March 1, 2017  by Larry Thomas in Financial Reports, Industry   

The company said mattress fabric sales rose 3.7%, but upholstery fabric sales tumbled 11.5% due to the Chinese New Year holiday and soft consumer demand for home furnishings.

Companywide sales totaled $76.2 million, down from $78.5 million in the same quarter the previous year.

The most recent quarterly profit, which was aided by a favorable tax situation, was up from $4.9 million on 39 cents per share in the prior year quarter.

Pre-tax income was $7 million, down from $7.2 million in the comparable quarter.

“As expected, our overall sales for the third quarter of fiscal 2017 were slightly lower than a year ago, reflecting an uncertain economic environment and soft consumer demand trends for home furnishings,” said Frank Saxon, president and CEO. “We are pleased that our mattress fabric sales showed year-over-year improvement, in spite of a more challenging marketplace. However, our upholstery fabric sales were affected by the timing of the Chinese New Year holiday that started in January as opposed to February last year.”

The company said about 92% of its upholstery fabric sales are generated by its facilities in China.

Mattress fabrics, on the other hand, are produced in the U.S. and Canada, and the company recently began construction on a mattress cover production facility in Haiti.

For the nine months ended Jan. 31, sales were down 1.4% to $232.2 million, and net income was $16.1 million or $1.29 per share. That was up from $13.3 million or $1.07 per share in the first nine months of the previous fiscal year.

Saxon said he expects sales for the fiscal year to be flat to slightly lower than the previous fiscal year. Pre-tax income is projected at $29.2 million to $29.8 million, which would top the record $27.9 million achieved in the previous year.