Introducing Updated Model; FY24 Estimates Unchanged
After inputting data from the Culp 2QFY24 Form 10Q filing, FY24 estimates are unchanged. We moderated FY25 and FY26 revenue and profit expectations. This note incorporates that filing and introduces our reformatted earnings model. We hope the revised model and reformatting will be easier to read and understand. As is our custom, our working excel models are available to our readers on request. Our revisions and reformatting will be easier to manage for anyone inclined to test assumptions different than ours. Candidly, the streamlined model will allow us to provide a quicker turnaround on future estimate updates. Given our longevity following Culp, we admit that the legacy model was initially crafted more than 20 years ago. After several revisions, and Culp’s restructuring and pivots to adapt to its changing industry, the legacy model needed streamlining. It didn’t function precisely as intended. We repeat our views stated in recent notes. We are confident that management is on track to restore profitability. We remain focused on progress in the Culp Home Fashions (mattress fabric) segment. We expect segment operating profitability in the fourth quarter of the current fiscal year. We point our readers to our just-released registration page for the Furniture/Furnishings Conference on January 17, 2024, which we will host, specifically directed to the residential commercial furniture industries. Culp management will participate in the conference and is scheduled to present at 1:45 pm ET. Click here to register.Culp operates three segments: mattress fabrics, which markets primarily knitted and woven fabrics, as well as sewn covers made from those fabrics, which are used in the production of bedding products; upholstery fabrics, which markets a variety of fabric products that are used principally in the production of residential and commercial upholstered furniture, as well as window treatment products and installation services for customers in the hospitality and commercial industries; and home accessories, which markets a variety of bedding accessories and home goods directly to consumers and businesses through global e-commerce and business-to-business sales channels.
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