The company continued to benefit from its multi-phase restructuring program, which has strengthened gross margins and reduced costs across the business. Adjusted operating loss improved to USD –2.0 million (previous year: –2.6 million), while SG&A expenses decreased by around 7%. Culp expects to realize more than USD 20 million in annualized cost savings by fiscal 2027.

The restructured bedding division was a key driver of progress: gross profit in this segment rose 27% year-over-year as efficiency measures took hold and market share increased in knit fabrics and sewn covers. Management sees early signs of stabilization in the bedding market.

Upholstery fabrics remained under pressure due to weak housing demand and tariff volatility, though margins held steady in the U.S. market. Additional footprint reductions in China and integration initiatives are expected to support profitability in the second half of the year.

CEO Iv Culp highlighted the company’s focus on platform optimization, pricing actions in response to new tariffs, and disciplined liquidity management. “We are in the homestretch of a comprehensive transformation designed to generate sustained profitability across industry cycles,” he said.

For the remainder of fiscal 2026, Culp anticipates steady sales, improving margins and SG&A efficiency, and near breakeven to positive adjusted EBITDA in Q3.