Unifi (UFI) Q2 2025 earnings summary

Executive summary

• Q2 FY25 net sales increased 1.4% year-over-year to $138.9 million, driven by higher volumes, with Brazil and Americas segments showing strength while Asia lagged due to pricing pressures.

• Gross profit declined to $0.5 million and gross margin to 0.4%, mainly due to weaker Asia performance and unfavorable sales mix.

• Net loss improved to $11.4 million from $19.8 million year-over-year, aided by a $4.3 million gain on asset sale and absence of restructuring costs.

• Adjusted EBITDA was $(5.5) million to $(5.8) million, nearly flat year-over-year.

• Manufacturing consolidation and efficiency initiatives are expected to enhance long-term profitability.

Financial highlights

• REPREVE Fiber represented 31% of sales, down from 33% year-over-year, mainly due to macroeconomic pressures in China.

• Americas segment net sales rose 3.2% to $83.1 million; Brazil segment net sales increased 5.5% to $27.5 million; Asia segment net sales declined 6.6% to $28.3 million.

• Gross profit was flat in Americas, improved in Brazil, and declined in Asia due to unfavorable mix and pricing.

• Net debt at Q2 FY25 was $116.5 million, up from $103.5 million at June 30, 2024.

• Capital expenditures for FY25 expected at $14–16 million, including manufacturing transition costs.

Outlook and guidance

• Q3 FY25 net sales and Adjusted EBITDA expected to improve sequentially, led by Americas segment.

• Full-year FY25 net sales projected to be flat with FY24, with second-half revenues and profitability improving sequentially.

• Gross profit, gross margin, and Adjusted EBITDA expected to rise year-over-year, though U.S. manufacturing transition costs will partially offset second-half profit.

• Liquidity remains sufficient for ongoing operations, with $49.9 million available as of December 29, 2024.