Unifi, Inc. lowered its losses year-over-year in the fiscal third quarter, ended March 31, as sales for its recycled and synthetic yarns improved 9 percent.

Third Quarter Fiscal 2024 Overview

  • Net sales were $149.0 million, an increase of 9 percent from the second quarter of fiscal 2024, driven by higher sales volumes.
  • Revenues from Repreve fiber products were $46.8 million and represented 31 percent of net sales.
  • Gross profit was $4.8 million, and gross margin was 3.2 percent, representing a sequential-quarter improvement through existing cost-saving initiatives and increased productivity.
  • Net loss was $10.3 million, or $0.57 per share, compared to a net loss of $19.8 million, or $1.10 per share, for the previous quarter.
  • Adjusted EBITDA was ($0.8) million, compared to ($5.5) million for the previous quarter, and Adjusted Net Loss was $10.3 million, compared to $14.7 million.
  • Published sustainability snapshot and related goals, which included new initiatives to transform the equivalent of 1.5 billion t-shirts in textile and yarn waste by fiscal 2030.

Eddie Ingle, CEO of Unifi, Inc., stated, “Our top-line results exhibit substantial improvement over the previous quarter, and we delivered our second consecutive quarter of sequential gross profit improvement, giving us confidence that the apparel inventory destocking period reached a bottom and demand is beginning to return to more normalized levels. To help sustain this momentum, we continue to execute our recently implemented Profitability Improvement Plan, which has helped lower our expenses and improve operational efficiencies. We are encouraged by the initial successes of our Plan, such as our ability to gain additional market share from our competitors in many of the key markets that we currently operate, which will help drive meaningful increases in volume for Unifi over the next several quarters. We remain focused on diligently managing our operations, maintaining a healthy balance sheet, supporting future growth and the opportunity to expand our beyond apparel initiatives, and increasing our Repreve Fiber business.”

Third Quarter Fiscal 2024 Compared to Third Quarter Fiscal 2023
Net sales decreased to $149.0 million from $156.7 million, primarily due to lower average selling prices associated with sales mix changes and lower raw material costs, particularly in the Americas Segment, which offset higher sales volumes for each segment. Competitive market share gains helped secure additional sales volumes in the Americas and Brazil segments.

Gross profit was $4.8 million compared to $9.7 million. Americas segment profitability decreased by $6.7 million, primarily due to the timing and extent of comparable holiday shutdown periods. Brazil segment gross profit improved by $1.5 million, primarily due to pricing and volume gains. Asia Segment gross profit improved slightly.

Operating loss was $6.9 million compared to $2.7 million, following the decrease in gross profit. Net loss was $10.3 million compared to $5.2 million. Adjusted EPS was ($0.57) and Adjusted EBITDA was ($0.8) million, compared to ($0.25) and $5.0 million, respectively.

Fourth Quarter Fiscal 2024 Outlook
Unifi expects the following fourth-quarter fiscal 2024 results:

  • Net sales between $160.0 million and $165.0 million;
  • Adjusted EBITDA between $4.0 million and $6.0 million;
  • Capital expenditures between $4.0 million and $5.0 million; and
  • Continued volatility in the effective tax rate.

Ingle concluded, “As the benefits from our cost reset and commercial improvements continue to materialize, we anticipate that we will see improved quarterly net sales and earnings results on a sequential basis. We remain confident in our position as the partner of choice to brands and customers across the globe. As we look ahead to the fourth quarter and fiscal 2025, we will continue to implement cost-saving measures and invest in areas of our business that we believe will not only drive growth for Unifi but also deliver value for our stakeholders.”

Image courtesy Unifi/Forbes