Unifi Inc (UFI) Q4 2024 Earnings Call Highlights: Strong Sales Growth and Strategic Innovations

GuruFocus News
3 min read

In This Article:

  • Consolidated Net Sales: $157.5 million, up 4% year-over-year and 6% sequentially.

  • EBITDA: $5.9 million, improved from previous quarters.

  • Gross Profit Improvement: $6 million sequential increase.

  • Americas Segment Net Sales: Flat sequentially, down 4% year-over-year.

  • Brazil Segment Net Sales Growth: 9% sequentially, 19% year-over-year.

  • Asia Segment Net Sales Growth: 21% sequentially, 17% year-over-year.

  • REPREVE Sales: 34% of total sales, increased from previous quarter.

  • CapEx for Fiscal 2024: $11 million, a multiyear low.

  • First Quarter Fiscal 2025 Net Sales Forecast: $147 million to $153 million.

  • First Quarter Fiscal 2025 Adjusted EBITDA Forecast: $1 million to $3 million.

  • Fiscal 2025 CapEx Projection: $10 million to $12 million.

Release Date: August 22, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Unifi Inc (NYSE:UFI) reported a 4% year-over-year increase in consolidated net sales for the fourth quarter of fiscal 2024, driven by strong performance in the Brazil segment.

  • The company achieved a significant improvement in EBITDA, reaching $5.9 million, attributed to cost reductions implemented in previous quarters.

  • Unifi Inc (NYSE:UFI) is seeing improved market share in North America and is close to booking sales in new categories beyond apparel, such as home, military, automotive, and industrial applications.

  • The introduction of innovative products, including the Textile Takeback program and new REPREVE offerings, is expected to generate sales in calendar 2025 and 2026.

  • The REPREVE segment saw a meaningful increase, representing 34% of sales in the fourth quarter, driven by recovery trends in Central America and Asia.

Negative Points

  • The broader textile and apparel industry sales are recovering slower than expected, with retail sales for apparel and furnishings growing at low single digits, factoring in inflation.

  • Despite improvements, the operating environment remains challenging, with customers cautious about rebuilding inventories due to sluggish consumer trends.

  • The Americas segment experienced a slowdown due to competitive shuffling and customers pushing out orders, resulting in flat sequential net sales.

  • Raw material costs in Brazil are rising due to increased international container costs, which may pressure margins as input costs normalize.

  • The anticipated benefits from new product innovations and beyond apparel initiatives will not be realized immediately, with significant impacts expected in fiscal 2026.

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