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Culp posts Q3 FY20 sales of $72 mn

Mar '20
Pic: Culp
Pic: Culp
Culp, one of the world's largest marketers of mattress fabrics, posted its net sales decreased 6.8 per cent to $72.0 million in third quarter (Q3) FY20 compared to $77.2 million in same period prior year. The company reported the sales of mattress fabrics fell 7.4 per cent, upholstery fabrics fell 5.7 per cent, and home accessories fell 11.0 per cent in Q3. 
“As previously announced, our results for the third quarter reflected lower than expected sales, particularly in our core business segments. While several external factors affected our results for the third quarter, we believe Culp is well positioned for the medium and long term. Our global platform is reactive and is a distinct competitive advantage for the company, providing the ability to quickly respond to changing market dynamics,” Iv Culp, chief executive officer of Culp, said in a release. 
Year-over-Year (YoY) sales decreased from $225.7 million in same period prior year to $219.4 million in the reported period. 
Mattress fabrics sales for the third quarter were $33.1 million compared to $35.7 million for same period prior year. “Our mattress fabrics sales were lower than anticipated for the third quarter of fiscal 2020, as we were pressured more than expected from holiday shutdowns and continued industry weakness for our legacy business customers,” Sandy Brown, president of Culp's mattress fabrics division, said.
Upholstery fabrics sales for the third quarter were $35.0 million compared to of $37.1 million in same period prior year. “Our upholstery fabrics business was affected by a slowdown in shipments heading into the Chinese New Year holiday, resulting in lower than expected sales for the quarter,” Boyd Chumbley, president of Culp's upholstery fabrics division, said.
Sales for Culp Home Accessories, which includes Culp's e-commerce and finished products business offering bedding accessories and home goods, totalled $3.9 million for the third quarter FY20, compared with $4.4 million in same period prior year. “We have worked hard to refine our strategy and drive improved results for our home accessories segment. While it is taking longer than we expected to reach our initial projections for this business, we are encouraged by recent opportunities with new online marketplaces and business-to-business sales channels,” Culp said in the release.
“Importantly, our expectations for the fourth quarter assume the coronavirus outbreak does not have a greater than anticipated impact on the company's operations, which may affect each of the company's divisions to varying levels. Currently, we have not experienced significant disruption in our China operations or supply chain due to the virus,” Ken Bowling, executive vice president and chief financial officer of Culp, said while speaking about company's future outlook.
“We expect mattress fabrics sales to be slightly down compared with the fourth quarter of last year due to continuing market pressure and softness in our legacy business during the fourth quarter, while operating income and margins are expected to increase slightly compared with the prior-year period,” Bowling said.
“In our upholstery fabrics segment, we expect fourth quarter sales and operating income and margins to be slightly higher than the prior-year period.
In our home accessories segment, we expect fourth quarter sales to be comparable to the fourth quarter of fiscal 2019,” Bowling said in the release.

Fibre2Fashion News Desk (JL)

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