Culp Inc has reported an increase in sales and net profit for its first quarter, helped by a stabilizing domestic mattress industry and a notable reduction of excess inventory of China mattress imports.
Net sales for the quarter were $74.8 mn, up 4.7 per cent over the prior year, with mattress fabric sales up 12.5 per cent and upholstery fabrics sales down 7.6 per cent.
Mattress fabric sales for the first quarter were $38.7 mn, up 12.5 per cent compared with $34.4 mn for the first quarter of fiscal 2019. Notably, this is the first quarter over quarter sales increase since the third quarter of fiscal 2018.
“We were energized by the return to a positive sales trend for mattress fabrics for the first quarter of fiscal 2020,” said Iv Culp, President and Chief Operating Officer of Culp. “In addition to an extra week of sales for the quarter, these results reflect a strong performance from CLASS, our sewn mattress cover business, as well as higher than expected sales of woven mattress fabrics.
“While we were pleased with our top-line growth, our operating performance was affected by several factors during the first quarter of fiscal 2020. We experienced temporary lower demand for our more profitable knitted products as customers absorbed existing excess inventory, resulting in reduced production schedules.
“We are enhancing our design capabilities with an expanded creative team to complement our innovation strategy. Culp has traditionally enjoyed a strong competitive advantage in the marketplace with our creative designs and innovative products, and our new initiatives will allow us to further leverage these capabilities and expand our market reach.
“Looking ahead, we are optimistic that the mattress industry is improving and is benefiting from the anti-dumping measures against the Chinese importers and the continued sell-through of excess inventory. We have a compelling business model supported by creative designs, innovative products, and an efficient global platform with the ability to provide the latest product offerings from fabric to sewn covers. We look forward to the opportunities ahead for our mattress fabrics business in fiscal 2020,” said Culp.