CULP INC Segments Disclosure
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 ("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 |
|
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 |
) |
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, |
|
|
|
April 27, |
|
|
||
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 |
|
|
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 |
|
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Jul 17, 2026 | Showing above |
| 2025 | Jul 11, 2025 | |
| 2024 | Jul 12, 2024 | |
| 2023 | Jul 14, 2023 | |
| 2022 | Jul 15, 2022 | |
| 2021 | Jul 16, 2021 | |
| 2020 | Jul 17, 2020 | |
| 2019 | Jul 12, 2019 | |
| 2018 | Jul 13, 2018 | |
| 2017 | Jul 14, 2017 | |
| 2016 | Jul 15, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.