v3.26.1
Segment Information
 12 Months Ended
May 03, 2026
Segment Reporting [Abstract]  
Segment Information

19. SEGMENT INFORMATION

During the first quarter of fiscal 2026, we renamed our two reportable segments to better reflect our product offerings. Our former mattress fabrics segment is now known as the bedding segment and our former upholstery fabrics segment is now known as the upholstery segment. The bedding segment manufactures, sources, and sells fabrics and mattress covers primarily to bedding manufacturers. The upholstery segment develops, sources, manufactures, and sells fabrics primarily to residential, commercial, and hospitality furniture manufacturers.

In addition, the upholstery segment includes Read, a wholly-owned subsidiary that provides window treatments and sourcing of upholstery fabrics and other products, as well as related measuring and installation services to customers in the hospitality and commercial markets. Read also supplies soft goods such as decorative top sheets, coverlets, duvet covers, bed skirts, bolsters, and pillows. On April 24, 2025 (the fourth quarter of fiscal 2025), the company announced a strategic transformation of its operating model that combined certain activities within the bedding and upholstery business segments and created one integrated Culp-branded business. As part of this strategic transformation, we closed a leased facility in Burlington, North Carolina and a leased facility in Knoxville, Tennessee, each operated by our upholstery segment, and transitioned their production and distribution activities to a shared management model within our owned facility located in Stokesdale, North Carolina. See Note 10 to the consolidated financial statements for further details regarding this strategic transformation initiative.

Our Chief Operating Decision Maker ("CODM") is our Chief Executive Officer ("CEO"), who regularly reviews the financial results of the company on a consolidated and segment basis for the purpose of evaluating financial and operating performance and allocation of resources to the individual segments noted above. Beginning in the first quarter of fiscal 2026, the CODM decided to use net sales and gross profit, excluding items that are not expected to occur on a regular basis (e.g. restructuring activities), as the primary measure of segment profit or loss. Previously, segment performance was primarily evaluated based on net sales and income (loss) from operations before unallocated corporate expenses and other items that are not expected to occur on a regular basis (e.g., restructuring activities). This change was made to align with internal management reporting and the decision-making processes affected by the strategic transformation of the company's operating model announced on April 24, 2025, which combined certain activities within the bedding and upholstery segments and created one integrated Culp-branded business. The CODM evaluates segment performance based on: (i) net sales, (ii) cost of sales, (iii) gross profit excluding items that are not expected to occur on a regular basis (i.e., restructuring related charges and credits), (iv) assets used in operations, which generally include accounts receivable, inventory, property, plant, and equipment, right of use assets, and assets held for sale; and (v) capital spending.

Cost of sales for each segment includes costs to develop, manufacture, or source our products, including costs such as raw material and finished goods purchases, direct and indirect labor, overhead, and incoming freight charges. Intangible assets are not included in segment assets, as these assets are not used by the CODM to evaluate the respective segment’s operating performance and allocate resources to the individual segments.

Net Sales Geographic Concentration

Net sales denominated in U.S. dollars accounted for 94%, 92%, and 92% of total consolidated net sales in fiscal 2026, 2025, and 2024, respectively. International sales accounted for 31%, 33%, and 32% of net sales during fiscal 2026, 2025, and 2024, respectively, and are summarized by geographic area as follows:

 

(dollars in thousands)

 

2026

 

 

2025

 

 

2024

 

North America (excluding USA) (1)

 

$

31,544

 

 

$

32,912

 

 

$

29,357

 

Far East and Asia (2)

 

 

28,963

 

 

 

30,586

 

 

 

36,334

 

All Other Areas

 

 

3,039

 

 

 

6,026

 

 

 

6,011

 

 

 

$

63,546

 

 

$

69,524

 

 

$

71,702

 

 

(1)
Of this amount, $28.7 million, $28.8 million, and $25.1 million are attributable to shipments to Mexico in fiscal 2026, 2025, and 2024, respectively.
(2)
Of this amount $12.6 million, $16.0 million, and $18.3 million are attributable to shipments within China in fiscal 2026, 2025, and 2024, respectively.

Sales attributed to individual countries are based upon the location to which the company ships its products for delivery to customers.

Customer Concentration

One customer within the upholstery segment represented 12%, 11%, and 12% of consolidated net sales during fiscal 2026, 2025, and 2024, respectively. No customers within the upholstery segment accounted for greater than 10% of consolidated accounts receivable, net as of May 3, 2026, and April 27, 2025.

No customers within the bedding segment represented greater than 10% of consolidated net sales during fiscal 2026 or 2024. One customer within the bedding segment represented 11% of consolidated net sales during fiscal 2025. No customers within the bedding segment accounted for greater than 10% of consolidated accounts receivable, net as of May 3, 2026, and April 27, 2025.

 

Financial Information

Statements of operations for our segments follow:

 

(dollars in thousands)

 

2026

 

 

2025

 

 

2024

 

Net sales by segment:

 

 

 

 

 

 

 

 

 

Bedding

 

$

116,593

 

 

$

113,906

 

 

$

116,370

 

Upholstery

 

 

86,889

 

 

 

99,331

 

 

 

108,963

 

Net sales

 

$

203,482

 

 

$

213,237

 

 

$

225,333

 

Cost of sales by segment:

 

 

 

 

 

 

 

 

 

Bedding

 

$

105,889

 

 

$

105,970

 

 

$

110,081

 

Upholstery

 

 

71,502

 

 

 

80,579

 

 

 

87,273

 

Total segment cost of sales

 

 

177,391

 

 

 

186,549

 

 

 

197,354

 

      Restructuring related charge (1) (2) (3)

 

 

931

 

 

 

1,621

 

 

 

40

 

Cost of sales

 

$

178,322

 

 

$

188,170

 

 

$

197,394

 

Gross profit:

 

 

 

 

 

 

 

 

 

Bedding

 

$

10,704

 

 

$

7,936

 

 

$

6,289

 

Upholstery

 

 

15,387

 

 

 

18,752

 

 

 

21,690

 

Total segment gross profit

 

 

26,091

 

 

 

26,688

 

 

 

27,979

 

Restructuring related charge (1) (2) (3)

 

 

(931

)

 

 

(1,621

)

 

 

(40

)

Gross profit

 

$

25,160

 

 

$

25,067

 

 

$

27,939

 

Selling, general, and administrative expenses

 

 

(34,668

)

 

 

(35,705

)

 

 

(38,611

)

Restructuring credit (expense) (1) (2) (3)

 

 

2,323

 

 

 

(7,739

)

 

 

(636

)

Loss from operations

 

$

(7,185

)

 

$

(18,377

)

 

$

(11,308

)

Interest expense

 

 

(759

)

 

 

(231

)

 

 

(11

)

Interest income

 

 

1,073

 

 

 

915

 

 

 

1,174

 

Other expense

 

 

(1,414

)

 

 

(1,018

)

 

 

(625

)

Loss before income taxes

 

$

(8,285

)

 

$

(18,711

)

 

$

(10,770

)
(1)
During fiscal 2026, we incurred a restructuring related charge of $931,000, which represented losses on the disposal, valuation, and markdowns of inventory related to the consolidation of our North American bedding operations, as well as the consolidation of certain facilities related to transforming our operating model to one integrated Culp branded business to reduce fixed costs and enhance operating efficiency. During fiscal 2026, we recorded a restructuring credit of $2.3 million which includes a gain from the sale of the manufacturing facility located in Quebec, Canada totaling $4.0 million, partially offset by charges related to transforming our operating model and the consolidation of certain facilities to reduce fixed costs.
(2)
During fiscal 2025, we incurred a restructuring related charge and restructuring expense of $1.6 million and $7.7 million, respectively, which mostly related to the closure of the bedding manufacturing facility located in Quebec, Canada, and the consolidation of our North American bedding manufacturing operations, as well as initial costs related to transforming our operating model and the consolidation of certain facilities to further reduce fixed costs.
(3)
During fiscal 2024, we incurred a restructuring related charge and restructuring expense of $40,000 and $636,000, respectively, which related to the discontinuation of production of cut and sewn upholstery kits at the company's facility in Ouanaminthe, Haiti, and the closure of the upholstery finishing operation located in Shanghai, China during the fourth quarter.

See Note 10 to the consolidated financial statements for further details and a description of our restructuring activities.

Balance sheet information for our segments follow:

 

(dollars in thousands)

 

May 3,
2026

 

 

 

April 27,
2025

 

 

Segment assets

 

 

 

 

 

 

 

 

Bedding:

 

 

 

 

 

 

 

 

Accounts receivable

 

$

10,657

 

 

 

$

10,576

 

 

Inventory

 

 

31,757

 

 

 

 

33,293

 

 

Property, plant, and equipment (1) (2)

 

 

19,755

 

 

 

 

23,259

 

 

Assets held for sale (3)

 

 

—

 

 

 

 

2,177

 

 

Right of use assets (4)

 

 

—

 

 

 

 

125

 

 

Total bedding assets

 

 

62,169

 

 

 

 

69,430

 

 

 

 

 

 

 

 

 

 

Upholstery:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

9,712

 

 

 

 

11,268

 

 

Inventory

 

 

15,737

 

 

 

 

16,016

 

 

Property, plant, and equipment (5) (6)

 

 

708

 

 

 

 

1,010

 

 

Right of use assets (7) (8)

 

 

496

 

 

 

 

2,678

 

 

Total upholstery assets

 

 

26,653

 

 

 

 

30,972

 

 

Total segment assets

 

 

88,822

 

 

 

 

100,402

 

 

 

 

 

 

 

 

 

 

Non-segment assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

8,273

 

 

 

 

5,629

 

 

Short-term investments – rabbi trust

 

 

1,477

 

 

 

 

1,325

 

 

Short-term note receivable

 

 

297

 

 

 

 

280

 

 

Current income taxes receivable

 

 

142

 

 

 

 

—

 

 

Other current assets

 

 

2,645

 

 

 

 

2,970

 

 

Long-term note receivable

 

 

885

 

 

 

 

1,182

 

 

Deferred income taxes

 

 

503

 

 

 

 

637

 

 

Property, plant, and equipment (9)

 

 

550

 

 

 

 

567

 

 

Right of use assets (10)

 

 

2,488

 

 

 

 

3,105

 

 

Intangible assets

 

 

355

 

 

 

 

960

 

 

Long-term investments - rabbi trust

 

 

4,991

 

 

 

 

5,722

 

 

Other assets

 

 

562

 

 

 

 

591

 

 

Total assets

 

$

111,990

 

 

 

$

123,370

 

 

 

(1)
The $19.8 million as of May 3, 2026, represents property, plant, and equipment of $18.9 million, and $825,000 located in the U.S. and Haiti, respectively.
(2)
The $23.3 million as of April 27, 2025, represents property, plant, and equipment of $22.3 million and $955,000 located in the U.S. and Haiti, respectively.
(3)
The $2.2 million as of April 27, 2025, represents assets held for sale related to the Property located in Quebec, Canada. See Notes 7, 8, and 10 to the consolidated financial statements regarding the sale of the Property located in Quebec, Canada.
(4)
The $125,000 as of April 27, 2025, represents right of use assets located in Haiti.
(5)
The $708,000 as of May 3, 2026, represents property, plant, and equipment of $642,000, $37,000, and $29,000 located in the U.S., Vietnam, and Haiti, respectively.
(6)
The $1.0 million as of April 27, 2025, represents property, plant, and equipment of $940,000 and $70,000 located in the U.S. and China, respectively.
(7)
The $496,000 as of May 3, 2026, represents right of use assets of $421,000 and $75,000 located in China and the U.S., respectively.
(8)
The $2.7 million as of April 27, 2025, represents right of use assets of $1.7 million and $1.0 million located in China and the U.S., respectively.
(9)
The $550,000 as of May 3, 2026, and $567,000 as of April 27, 2025, represent property, plant, and equipment located in the U.S.
(10)
The $2.5 million as of May 3, 2026, and $3.1 million as of April 27, 2025, represent right of use assets located in the U.S.

Capital expenditures and depreciation expense information for our segments follow:

 

(dollars in thousands)

 

2026

 

 

2025

 

 

2024

 

Capital expenditures (1):

 

 

 

 

 

 

 

 

 

Bedding

 

$

539

 

 

$

1,550

 

 

$

3,474

 

Upholstery

 

 

132

 

 

 

285

 

 

 

271

 

Non-segment

 

 

138

 

 

 

792

 

 

 

255

 

Total capital expenditures

 

$

809

 

 

$

2,627

 

 

$

4,000

 

 

 

 

 

 

 

 

 

 

Depreciation expense

 

 

 

 

 

 

 

 

 

Bedding

 

$

3,292

 

 

$

4,361

 

 

$

5,241

 

Upholstery

 

 

155

 

 

 

174

 

 

 

187

 

Selling, general, and administrative

 

 

658

 

 

 

905

 

 

 

1,093

 

   Total depreciation expense

 

 

4,105

 

 

 

5,440

 

 

 

6,521

 

Accelerated depreciation expense (2) (3)

 

 

112

 

 

 

1,339

 

 

 

—

 

Total

 

$

4,217

 

 

$

6,779

 

 

$

6,521

 

 

(1)
Capital expenditure amounts are stated on an accrual basis. See Consolidated Statement of Cash Flows for capital expenditure amounts on a cash basis.

 

(2)
During fiscal 2026, accelerated depreciation expense totaling $112,000 related to the upholstery segment and was classified within restructuring credit in the fiscal 2026 Consolidated Statement of Net Loss. Accelerated depreciation expense pertained to the shortening of useful lives of equipment related to the consolidation of distribution activities from our Burlington, North Carolina facility to the manufacturing and distribution center located in Stokesdale, North Carolina.

 

(3)
During fiscal 2025, accelerated depreciation expense totaling $1.3 million related to the bedding segment and was classified within restructuring expense in the fiscal 2025 Consolidated Statement of Net Loss. Accelerated depreciation expense related to shortening of useful lives of equipment associated with the closure of our bedding operation located in Quebec, Canada.