Unifi, Inc., the owner of the Repreve fiber brand, reduced its adjusted loss before special items in the fiscal second quarter ended December 28, driven by an aggressive cost-savings program. Sales fell 12.6 percent as U.S. tariffs continue to weigh on order activity.

Second Quarter Fiscal 2026 Overview

  • Cost and footprint reductions have been completed and allow for an improved profitability profile at lower revenue levels going forward.
  • Cash provided by operating activities was $25.3 million during the second quarter of fiscal 2026 and $16.4 million during the six months ended December 28, 2025.
  • Debt principal was $105.4 million and Net Debt was $75.2 million at December 28, 2025, compared to $108.0 million of debt principal and Net Debt of $85.3 million at June 29, 2025.
  • SG&A expenses were $9.7 million, a 25 percent decrease from the second quarter of fiscal 2025, primarily driven by cost alignment efforts.
  • Net sales were $121.4 million, a 12.6 percent decrease from the second quarter of fiscal 2025, primarily driven by trade and tariff-related uncertainty and by demand volatility across each business segment.
  • Revenues from Repreve Fiber products were $34.3 million, representing 28 percent of net sales, compared to $43.3 million, or 31 percent of net sales, in the second quarter of fiscal 2025.
  • Gross profit was $3.6 million and gross margin was 3.0 percent, compared to gross profit of $0.5 million and gross margin of 0.4 percent for the second quarter of fiscal 2025.
  • Net loss was $9.7 million, or 53 cents per diluted share, which includes $0.8 million in net restructuring costs, compared to a net loss of $11.4 million, or 62 cents per share, for the second quarter of fiscal 2025. Adjusted net loss was $8.9 million, which excludes $0.8 million in net restructuring costs, compared to adjusted net loss of $15.7 million for the prior year period, which excluded a $4.3 million gain on a warehouse sale.
  • Adjusted EBITDA was $(0.7) million, compared to $(5.8) million for the second quarter of fiscal 2025.

Eddie Ingle, chief executive officer of Unifi, Inc., stated, “Our results for the second quarter were in line with our expectations. Over the last two years, we have executed numerous strategic initiatives to realign our cost structure and operations. The combination of these actions has positioned Unifi to generate profits on a meaningfully lower revenue base. As our markets and the tariff situation continue to normalize, we will be able to leverage this more streamlined business model to drive stronger profitability and free cash flow.”

Second Quarter Fiscal 2026 Compared to Second Quarter Fiscal 2025
Net sales decreased to $121.4 million from $138.9 million, primarily due to lower customer ordering patterns stemming from trade and tariff-related uncertainty.

Gross profit increased to $3.6 million from $0.5 million. Americas Segment gross profit increased by $6.1 million, primarily from the multi-year cost alignment efforts, partially offset by lower demand and production. Brazil Segment gross profit decreased by $2.7 million, primarily due to import pricing pressures and lower sales volumes. Asia Segment gross profit decreased by $0.3 million, primarily due to lower sales volumes.

Operating loss improved to $7.3 million from $7.6 million. The change was primarily due to higher gross profit and lower SG&A, partially offset by net restructuring costs. Net loss was $9.7 million compared to a net loss of $11.4 million. Adjusted Net Loss was $8.9 million, which excludes $0.8 million in net restructuring costs, compared to adjusted net loss of $15.7 million for the second quarter of fiscal 2025. Adjusted EBITDA was $(0.7) million, which excludes the net restructuring costs adjustments, compared to $(5.8) million.

Fiscal 2026 Profit Improvement Plan
During October 2025, Unifi implemented additional cost savings initiatives that included reducing variable manufacturing costs across labor, spend and support functions, while also eliminating many salaried positions in the U.S. Along with a renewed focus on optimizing commercial execution, increasing margin accretive activities, and scrutinizing working capital, management expects this improvement plan to aid in generating positive operating cash flow in the quarters ahead.

Ingle concluded, “While we are only a few weeks into our third fiscal quarter, we are starting to see some initial signs of a return to a more normalized operating environment, with improving customer engagements. Additionally, our investments in innovation and the beyond apparel portfolio are gaining traction across key focus areas. As our customers begin to rebuild their depleted inventory levels in calendar 2026, we expect to increase our working capital levels modestly in support of increased sales levels. As a result, we expect the third quarter to exhibit lower operating cash flows compared to the most recent quarter. While we recognize that there is still a lot of work to be done to achieve our goals, we are proud of the progress that we have made. As we look towards the second half of fiscal 2026, our focus will remain on converting our improved operational progress into sustained financial momentum, which in turn will create value for our shareholders.”

Image courtesy Repreve