HIGH POINT — Culp Inc. reported net sales of $74.6 million for the second quarter fiscal 2022 ended Oct. 31, down 3% from the same quarter in 2020. While mattress fabric sales were up 2.1%, upholstery fabric sales dipped 8.5% for the period.
Net income came in at $851,000 for the quarter, or 7 cents per diluted share, as compared with net income of $2.4 million, or 19 cents per share, for the year-ago period.
In the earnings release, Culp announced a 5% increase in its quarterly cash dividend, to 11.5 cents per share, beginning in the third quarter of fiscal 2022.
Culp cited ongoing uncertainty in the macroeconomic environment and said it expects current headwinds to continue to pressure results throughout the second half of fiscal 2022, especially during the third quarter. The company is withdrawing its previously issued annual guidance for fiscal 2022 and is providing a limited outlook for the third and fourth quarters.
The company’s net sales and consolidated operating income (income from operations) for the third quarter of fiscal 2022 are expected to be sequentially comparable to the second quarter of fiscal 2022. It expects a strong improvement in net sales and operating income for the fourth quarter of fiscal 2022, as compared with both the third quarter of fiscal 2022 and the fourth quarter of fiscal 2021.
“As previously announced, our results for the second quarter reflected lower than expected sales, primarily for our upholstery fabrics segment,” said Iv Culp, president and CEO. “Several external factors affected our sales results for the quarter, particularly COVID-related shutdowns in Vietnam and customer supply chain constraints for non-fabric components, while profitability remained pressured in both of our businesses by the continued rapid rise in freight, raw material, and labor costs.”
He added that the company expects to see a “meaningful rebound” in business beginning in the fourth quarter and continuing into the next fiscal year.
Culp expects to open its new Haiti facility during the third quarter, increasing its capacity for cut-and-sewn upholstery kits.