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Unifi, Inc. (NYSE:UFI) released its fourth quarter and fiscal year 2025 earnings presentation on August 21, 2025, revealing continued pressure across all business segments but highlighting progress in its strategic restructuring initiatives. The textile manufacturer reported a 12% year-over-year revenue decline amid what it described as "transitory demand disruption" driven by trade uncertainty and mixed economic conditions.
Quarterly Performance Highlights
Unifi’s Q4 fiscal 2025 results showed significant deterioration compared to the same period last year, with consolidated revenue falling to $138.5 million, down 12% from $157.5 million in Q4 2024. The company reported an adjusted loss per share of $0.56, representing a 155% decline year-over-year, while adjusted EBITDA fell to negative $4.1 million, a 169% decrease from the prior year.
The company’s flagship recycled product line, REPREVE, accounted for 30% of total sales in the quarter, down 400 basis points from 34% in the same period last year.
As shown in the following quarterly performance overview:
Gross profit turned negative in the fourth quarter, with the company reporting a gross loss of $1.1 million compared to a $10.8 million profit in the prior-year period. This resulted in a negative gross margin of 0.8%, a substantial decline from the 6.9% reported in Q4 2024.
Segment Analysis
The Americas segment, which represents Unifi’s largest market, saw net sales decrease by 6.6% to $85.0 million. More concerning was the segment’s profitability, with a gross loss of $5.3 million and a negative gross margin of 6.3%. Management attributed this decline to "inflationary pressures and transition costs related to the manufacturing footprint reduction."
The Brazil segment, previously a bright spot for Unifi, also experienced challenges with net sales declining 10.6% to $28.8 million. Gross profit fell by 76.6% to $1.3 million, resulting in a gross margin of just 4.6%, down 1,280 basis points from 17.4% in the prior year. The company cited "unfavorable foreign currency translation effects and cost dynamics" as primary factors, while noting "continued demand stability and growth potential" in the region.
The Asia segment showed the steepest revenue decline, with net sales falling 27.7% to $24.7 million. Gross profit decreased by 44.1% to $2.9 million, though the segment maintained the highest gross margin among all regions at 11.7%, despite a 340 basis point decline from the prior year. The company attributed this performance primarily to "lower sales volumes and a less favorable sales mix in China."
Strategic Initiatives & Outlook
Despite the challenging quarter, Unifi highlighted progress in its strategic restructuring efforts. The company reported that its manufacturing consolidation is "progressing well," including the sale of a large property that reduced debt principal by $43 million. This transaction is expected to generate annual savings of $3 million in interest expenses and $20 million in manufacturing costs.
The company also showcased several new product innovations, including REPREVE TAKEBACK (made from 100% textile waste), Α.Μ.Υ. (with odor control properties), Fortisyn™ (offering inherent durability), and ThermaLoop™ (also made from 100% textile waste).
Looking forward, Unifi provided a cautiously optimistic outlook, expecting sequential improvement in net sales and adjusted EBITDA in Q1 FY26 compared to Q4 FY25. Management anticipates seeing "the full benefits of our proactive efforts to reduce costs and increase facility utilization" after Q1 FY26, which should support improved profitability levels throughout fiscal 2026.
The company outlined four strategic priorities centered on returning to profitability:
Capital Structure & Financial Position
Unifi’s capital structure showed some improvement following the asset sale, with net debt decreasing to $85 million in Q4 FY25 from $124 million in Q3 FY25. However, the company continued to report negative free cash flow of $4 million in the quarter, though this represented an improvement from the $8 million negative FCF in Q3 FY25.
Working capital remained relatively stable at $165 million, down slightly from $167 million in the previous quarter. The company’s capital expenditures for FY25 totaled $10 million, with projections of less than $12 million for FY26.
This presentation follows Unifi’s challenging Q1 2025 results reported earlier, where the company missed earnings forecasts with an EPS of -0.57 against expectations of -0.07. The stock has been trading near its 52-week low, closing at $4.45 on August 20, 2025, reflecting continued investor concerns about the company’s performance and turnaround timeline.
While management remains focused on operational optimization, innovation, and customer engagement to drive long-term margin expansion, the near-term outlook suggests continued challenges as the company works through its restructuring process and navigates uncertain global trade conditions.
Full presentation:
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