Culp Stock: Insider Buying Amid Financial Challenges

In a notable display of internal confidence, Culp Inc. has recently witnessed significant insider purchases despite facing market headwinds. The 22NW Fund acquired 86,589 shares between March 10-12, 2025, at prices ranging from €4.65 to €5.05 per share, representing approximately €428,164 in total investment and increasing their holdings to 1,711,304 shares. Simultaneously, the company's President and CEO purchased 14,001 shares at roughly €4.94 each, totaling about €69,164 and boosting his direct ownership to 92,030 shares. These substantial insider acquisitions occur while Culp stock trades at approximately €5.23, giving the textile manufacturer a market capitalization of around €64 million. The timing is particularly noteworthy considering Culp's recent performance struggles, including a 9.8% revenue decline over the past twelve months, suggesting leadership maintains positive long-term outlook despite current difficulties.

Recovery Strategy Emerges

Culp's first quarter 2025 results fell significantly below expectations, posting a €0.33 per share loss against forecasts of €0.04, with revenue reaching only €52.3 million versus projected €62 million. This represents a 13.5% year-over-year revenue decrease and a €4.1 million net loss. However, the company has implemented a €1 million cost-cutting initiative targeting personnel and consulting expenses, expected to take effect in the fourth quarter. Additionally, the potential sale of its Canadian facility could generate between €6-8 million, substantially improving liquidity. Management projects consolidated revenue growth beginning in the current fiscal year's fourth quarter, with full profitability anticipated in fiscal year 2026, focusing efforts on operational efficiency and market share expansion in hospitality and mattress manufacturing sectors.

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Source StockWorld