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Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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Equity Bottom-Up

<ul><li>CULP posted 4QFY25 adjusted EPS of ($0.07), beating our estimate by $0.03, on strong gross margin gains in mattress fabrics on the back of management’s restructuring gains despite softer-than-expected revenue.</li><li>Upholstery fabrics revenue was down 8.9%, even as management noted strength (and potentially market share gains) in the contract/hospitality side of the upholstery business.</li><li>On the residential side of upholstery, it was continued weak industry-wide demand (slow housing, mortgage rates, consumers pulling back from discretionary durable spend) and the continued hangover from one large customer’s order timing that pulled sales forward in early FY25. </li></ul>

CULP posted 4QFY25 adjusted EPS of ($0.07), beating our estimate by $0.03, on strong gross margin gains in mattress fabrics on the back of management’s restructuring gains despite softer-than-expected revenue.Upholstery fabrics revenue was down 8.9%, even as management noted strength (and potentially market share gains) in the contract/hospitality side of the upholstery business.On the residential side of upholstery, it was continued weak industry-wide demand (slow housing, mortgage rates, consumers pulling back from discretionary durable spend) and the continued hangover from one large customer’s order timing that pulled sales forward in early FY25. 

Culp, Inc: 4Q25 Adj EPS ($0.07); FY26 to Benefit from Restructuring & Price Cost

Culp Inc

Culp, Inc: 4Q25 Adj EPS ($0.07); FY26 to Benefit from Restructuring & Price Cost