Unifi, Inc., maker of Repreve recycled and synthetic yarn, released operating results for the second fiscal quarter ended December 29, 2024.

Second Quarter Fiscal 2025 Overview

  • Net sales were $138.9 million, an increase of 1.4 percent from the second quarter of fiscal 2024, primarily driven by higher sales volumes.
  • Revenues from Repreve products were $43.3 million and represented 31 percent of net sales, compared to $45.7 million or 33 percent of net sales for the second quarter of fiscal 2024.
  • Gross profit was $0.5 million and gross margin was 0.4 percent, compared to gross profit of $1.6 million and 1.2% for the second quarter of fiscal 2024.
  • Net loss was $11.4 million, or 62 cents per share, compared to a net loss of $19.8 million, or $1.10 per share, for the second quarter of fiscal 2024. Adjusted Net Loss was $15.7 million, which excludes a $4.3 million gain on a warehouse sale, compared to Adjusted Net Loss of $14.7 million, which excluded $5.1 million of restructuring costs.
  • Adjusted EBITDA*, excluding a $4.3 million gain on a warehouse sale, was $(5.8) million, compared to $(5.5) million for the second quarter of fiscal 2024, excluding $5.1 million of restructuring costs.
  • After the quarter’s end, Unifi announced the transition of certain manufacturing operations to enhance operating efficiency, lower fixed costs, improve profitability, and further strengthen the balance sheet.

Eddie Ingle, CEO of Unifi, Inc., stated, “While our results for the second quarter came in slightly below our expectations due to global and localized pressures, we’ve taken numerous proactive actions to position the business for more durable and profitable future growth. This is evident by the recent increase in customer orders and interest we are seeing for some of our Beyond Apparel initiatives and Repreve Fiber products. Further, to help support this expected growth and make Unifi a stronger operating company, we are taking steps to optimize our business by consolidating our U.S. manufacturing footprint, which will make us a leaner and more profitable organization without having to sacrifice our ability to service the market. As a result, we believe we are in a better position to drive long-term shareholder value.”

Second Quarter Fiscal 2025 Compared to Second Quarter Fiscal 2024
Net sales increased to $138.9 million from $136.9 million, primarily due to higher sales volumes, partially offset by a weaker sales mix for the Asia Segment.

Gross profit decreased to $0.5 million from $1.6 million. Asia Segment gross profit decreased by $1.9 million, primarily due to a less favorable sales mix and pricing dynamics in the region.

Americas Segment gross profit was flat, primarily as production and sales gains were offset by inflationary pressures.

Brazil Segment gross profit improved by $0.6 million, primarily due to pricing and market share gains.

Operating loss improved to $7.6 million from $17.6 million. Fiscal 2025 included a gain on a warehouse sale and fiscal 2024 included restructuring costs, representing the primary change in operating loss.

Net loss was $11.4 million compared to $19.8 million. Adjusted Net Loss was $15.7 million, which excluded $4.3 million for a gain on a warehouse sale, compared to Adjusted Net Loss of $14.7 million for the second quarter of fiscal 2025, which excluded $5.1 million of restructuring costs. Adjusted EBITDA* was $(5.8) million compared to $(5.5) million, and each excluded the same adjustments.

Fiscal 2025 Outlook
The outlook assumes no meaningful changes in business activities resulting from the evolving tariff and trade negotiations.

Third Quarter Fiscal 2025
Unifi expects the following third quarter fiscal 2025 results:

  • Net sales and Adjusted EBITDA** improving sequentially from the second quarter of fiscal 2025, primarily driven by higher revenues for the Americas Segment.
  • Capital expenditures between $5.0 million and $6.0 million increasing sequentially for the transition of production out of one North Carolina facility.
  • Continued volatility in the effective tax rate.

Full Year Fiscal 2025
Unifi updated its full-year outlook and now expects the following for fiscal 2025:

  • Net sales approximately equal to fiscal 2024, with second half fiscal 2025 revenues improving sequentially from the first half of fiscal 2025.
  • Gross profit, gross margin, and Adjusted EBITDA** to increase from fiscal 2024 to fiscal 2025, while second half fiscal 2025 underlying profit generation will be partially offset by U.S. manufacturing transition costs.
  • Capital expenditures between $14.0 million and $16.0 million, which includes amounts related to U.S. manufacturing transition activities.

Ingle concluded, “We are excited about the future and we are well-positioned to support our customers’ needs as the demand for sustainable and innovative solutions continues to grow. As we look ahead, our focus will continue to remain on optimizing our business, improving our profitability, and making strategic investments in innovation that will drive future growth and create value for all our stakeholders.”

* Adjusted Net Loss and Adjusted EBITDA are non-GAAP financial measures. The schedules included in this press release reconcile each non-GAAP financial measure to its most directly comparable GAAP financial measure.

** Guidance provided is a non-GAAP figure presented on an adjusted basis.

Image courtesy Unifi