Culp, Inc. CULP is scheduled to report third-quarter fiscal 2024 results on Mar 6, after market close.

In the last reported quarter, the company’s earnings and net sales topped the Zacks Consensus Estimate by 5% and 1.6%, respectively. The metrics increased 80.4% and 0.6% year over year, respectively.

CULP’s earnings topped the consensus mark in all of the trailing four quarters, the positive surprise being 15%, on average.

The Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share remained stable at a loss of 16 cents in the past 30 days. The estimated figure indicates an improvement of 76.5% from the year-ago quarter’s loss of 68 cents.

Culp, Inc. Price and EPS Surprise

 

Culp, Inc. price-eps-surprise | Culp, Inc. Quote

 

The consensus mark for net sales is pegged at $59 million, suggesting a 12.3% rise from the year-ago reported figure.

Key Factors to Note

Culp’s fiscal third-quarter net sales are expected to increase year over year, propelled by its strong market position, innovative product offerings and creative designs. Also, a resilient global manufacturing and sourcing platform, strong leadership teams and focused financial management are likely to have aided the company’s performance in the to-be-reported quarter.

The company anticipates consolidated net sales for the third quarter to be in line with the second quarter and moderately higher compared with the prior-year period’s levels.

Despite the current demand backdrop, Culp expects to continue on a path of sequential and year-over-year operating improvement, including a return to positive adjusted EBITDA in the third quarter. For the to-be-reported quarter, the company expects consolidated operating loss to be in the range of $1.2-$1.6 million. This marks a significant improvement compared with the $7.8 million operating loss in the prior-year period.

The bottom line is likely to have benefited from enhanced operating efficiencies, a positive product mix and reduced costs resulting from restructuring and rationalization in specific units.

However, persistent challenges in the domestic mattress and residential home furnishings industries are likely to have impacted the upholstery fabrics segment in the to-be-reported quarter. The ongoing impact of current macroeconomic conditions, influencing consumer spending and demand trends, is another concern.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Culp this time. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as elaborated below.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CULP carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.