Culp Inc. (NYSE: CULP) reported first-quarter fiscal 2027 results that topped consensus estimates, driven by a sharp expansion in gross margins and a return to profitability compared with a loss a year earlier.
The textiles maker posted earnings per share of $0.47 on net income of $6 million, beating the Thomson Reuters consensus forecast of $0.44 by 6.8%. Revenue was $53.97 million, slightly above estimates of $53.20 million and up 6.5% from $50.7 million in the year-ago period. The company noted the growth occurred despite having one fewer selling week than the prior-year quarter.
Gross profit surged to $15.4 million, or 28.5% of sales, from $7.2 million, or 14.3% of sales, in the same period last year. Even after excluding approximately $7 million in International Emergency Economic Powers Act tariff recoveries, adjusted gross profit came in at $8.4 million, or 15.6% of sales. Operating income rose to $6.7 million, or 12.4% of sales, from $1.6 million, or 3.2% of sales, a year earlier. Selling, general and administrative expenses declined to $8.7 million, or 16.1% of sales, from $9.1 million, or 18.0% of sales.
Free cash flow reached $7.8 million, a dramatic improvement over a $934,000 use in the prior year. Operating cash flow was $8.1 million versus a $695,000 outflow a year ago. Capital expenditures totaled $314,000 for the quarter. The company guided full-year capex at roughly $2.5 million.
On the balance sheet, total cash stood at $10.2 million and outstanding debt at $13.3 million, all owed in China after U.S. balances were paid down. Net debt came to $3.1 million, representing about a 70% reduction from $10.9 million at the end of fiscal 2026. Total liquidity was $29.4 million, combining cash with $19.2 million in borrowing availability.
Segment results showed bedding sales growing 13.2% year-over-year to $31.8 million, with gross profit expanding to $4.3 million from $2.9 million. The upholstery segment posted flat sales of $22.2 million after adjusting for the shorter selling period, with gross profit of $4.1 million. Hospitality and commercial upholstery verticals grew year-over-year.
Shares rose 4.87% in after-hours trading to $3.66 after previously closing at $3.49. The stock remains below its 52-week high of $4.80 but about 24% above its low of $2.70.
Culp also announced a leadership change. Chief Financial Officer Ken Bowling, who has served in the role for nearly three decades, will retire and remain on in a consulting capacity through December 2026. Mary Beth Hunsberger, currently chief operating officer and president of the upholstery division, succeeded him as CFO effective September 14, 2026, retaining her operational duties.
CEO Iv Culp said the quarter demonstrated the company’s ability to deliver top- and bottom-line growth even amid challenging conditions in home furnishings. New cooling technologies and a broader branded performance product line are slated to launch from fall 2026 into early 2027.
