Culp Inc. provided Tuesday an earnings warning for its second quarter of fiscal 2023. It expects to issue the second-quarter report in early December.
The High Point fabrics manufacturer projected second-quarter net sales of $58 million.
It estimated an operating loss in the range of $11.7 million to $12.2 million. Contributing to the loss would be: a $5 million inventory impairment charges and loss on the sale of raw material and finished goods inventory associated with the company’s mattress fabrics segment; $1 million in higher-than-normal inventory markdowns associated with the company’s residential upholstery fabrics business; $700,000 in restructuring charges related to its upholstery fabric segment’s cut and sew platform in China.
In September, Culp reported that a 24.4% decline in sales led to a $5.7 million loss in its first quarter. Sales were at $62.6 million, with mattress fabrics down 31.8% to $29.4 million and upholstery fabrics down 18.9% to $33.2 million.
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Iv Culp, the manufacturer’s president and chief executive, said in a statement that the revised expectations “reflect continued demand weakness, particularly for our mattress fabrics segment, along with inventory impacts within both segments.”
“While these decisions will result in a higher operating loss for the second quarter, we believe having the financial impact behind us will position us for improvement during the second half of fiscal 2023.”