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Culp (CULP) to Report Q2 Earnings: Here's What to Expect

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Culp, Inc. (CULP - Free Report) is scheduled to report second-quarter fiscal 2024 results on Dec 4, after market close.

In the last reported quarter, the company’s earnings topped the Zacks Consensus Estimate by 31.4% and surged 42.6% year over year. Net sales missed the consensus mark by 5.1% and declined by 9.5% year over year.

CULP’s earnings topped the consensus mark in all of the trailing four quarters, the positive average surprise being 16.3%.

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 20 cents in the past seven days. The estimated figure indicates an improvement of 79.8% from the year-ago quarter’s level of negative 99 cents.

Culp, Inc. Price and EPS Surprise


Culp, Inc. Price and EPS Surprise

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


The consensus mark for net sales is pegged at $57.8 million, suggesting a 1% fall from the year-ago reported figure.

Key Factors to Note

Culp’s fiscal second-quarter net sales are expected to have declined year over year due to persistent challenges in the domestic mattress and residential home furnishings industries. The ongoing impact of current macroeconomic conditions, influencing consumer spending and demand trends, are added concerns. This is likely to impact the upholstery fabrics segment in the to-be-reported quarter.

The company is well-positioned for the long term. The transformation strategy in its mattress fabrics division, new programs and improved operations are expected to partially offset the adverse effects of the headwinds. The company anticipates consolidated net sales for the second quarter to be in line with the prior-year period’s levels.

Despite top-line woes, the company expects consolidated operating loss to be in the range of $2.2-$2.6 million. This marks a significant improvement compared with the $11.9 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.

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 #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Recent Consumer Discretionary Releases

SeaWorld Entertainment, Inc. reported mixed third-quarter 2023 results, with earnings meeting the Zacks Consensus Estimate and revenues topping the same. On the other hand, the metrics declined on a year-over-year basis.

The company’s results were affected by adverse weather impacts during its peak operating season across most of its markets, reflecting lower guest attendance. That said, the company intends to focus on its strategic growth initiatives related to hotels, international expansion and digital activities accompanied by increasing its in-park product offerings and cost management plans. These initiatives are likely to aid it in boosting revenues and profitability in the upcoming period.

Choice Hotels International, Inc. (CHH - Free Report) delivered mixed third-quarter 2023 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. Also, the top and the bottom line increased on a year-over-year basis.

The year-over-year upside can be attributed to the company’s top-tier business delivery engine, synergies through the successful integration of Radisson Americas and organic growth of its brand portfolio, focused on hotels that generate higher royalties per unit. The company aims to remain focused on its robust organic earnings growth strategy and pursues inorganic growth to boost long-term shareholders’ value.

Wynn Resorts, Limited (WYNN - Free Report) reported impressive third-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Also, the top and the bottom line rose year over year.

The company’s results reflect solid performance growth in its Macau and North American properties. The consistent growth trend in mass gaming, luxury retail and hotel businesses in Macau portrayed exceptional post-Covid recovery during the quarter. It is also optimistic about its new opening in the UAE, Wynn Al Marjan Island, which is currently under construction.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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