Unifi (UFI) Q4 2025 earnings summary

Executive summary

• Q4 net sales declined 12% year-over-year to $138.5 million, mainly due to trade and tariff uncertainty causing demand disruption and order pauses, especially in Asia and the Americas.

• Manufacturing consolidation included the sale of the Madison, NC facility for $45 million, with proceeds used to pay down debt and fund transition, eliminating a major source of past profit misses.

• Transitioned Madison's volume to Yadkinville, NC (40% capacity increase) and El Salvador, requiring new hires and equipment.

• Adjusted EBITDA was $(4.1) million, down from $5.9 million in the prior year quarter; adjusted net loss was $10.6 million.

• Positive customer feedback on circularity innovations (REPREVE Takeback, Thermaloop), with expected activation by large customers in the second half of fiscal 2026.

Financial highlights

• Q4 consolidated net sales: $138.5 million, down from $157.5 million in Q4 FY24.

• Gross loss of ($1.1) million and negative gross margin of (0.8)% compared to a gross profit of $10.8 million and 6.9% margin last year.

• Americas, Asia, and Brazil segments all saw lower sales and gross profit due to weaker sales mix, lower volumes, and unfavorable currency effects.

• REPREVE fiber represented 30% of Q4 sales, down 4 percentage points year-over-year.

• Transition costs in the Americas totaled $10.6 million in Q4.

Outlook and guidance

• Q1 fiscal 2026 net sales and adjusted EBITDA expected to improve sequentially, driven by cost savings and demand normalization.

• Nominal transition charges ($1–2 million) expected in Q1 fiscal 2026, with cost savings realized thereafter.

• Anticipate meaningful revenue from new products (Fortisyn, REPREVE Takeback, Thermaloop) in the second half of fiscal 2026.

• Management expects long-term benefits from a leaner manufacturing footprint and ongoing demand for sustainable products.

• Focus remains on generating positive free cash flow and maintaining balance sheet strength.