Key Highlights

  • Net sales were $127.9 million, down 5.7% from $135.7 million in the first quarter of fiscal 2026.
  • Gross Margin rose to 9.8% from 2.5%, with Gross Profit of $12.5 million versus $3.4 million.
  • Net loss narrowed to $2.0 million, or $0.11 per share, from $11.4 million, or $0.62 per share.
  • Adjusted EBITDA was $6.1 million, compared with a loss of $2.5 million a year earlier.
  • A $60.0 million real estate sale closed on October 28, 2026 and repaid the $55.5 million term loan.

Sales slip 5.7% but gross profit nearly quadruples

Unifi (NYSE:UFI), the maker of REPREVE recycled and synthetic yarns with operations in the United States, Colombia, El Salvador and Brazil, reported results for its first fiscal quarter ended September 27, 2026, on October 29, 2026. Net sales were $127.9 million, down from $135.7 million, which the company attributed to tepid customer ordering in the Americas and Asia amid geopolitical, trade and Tariff uncertainty, partly offset by higher Brazil sales.

Gross profit rose to $12.5 million from $3.4 million, lifting gross margin by 730 basis points to 9.8%. REPREVE Fiber Revenue was $36.4 million, or 29% of net sales.

Americas swings to a gross profit as cost cuts take hold

Americas net sales fell 9.7% to $77.0 million, yet gross profit was $4.7 million against a loss of $1.7 million, a margin of 6.1% versus negative 2.0%. The company credited a 2026 profit improvement plan that cut fixed and variable costs.

Brazil net sales rose 14.4% to $32.9 million, with gross profit of $5.1 million and a 15.6% margin, on favorable pricing and sales mix. Asia net sales fell 16.9% to $18.0 million.

Operating loss shrinks to $24 thousand and net loss to $2.0 million

SG&A expenses were $11.5 million, down 4.1%, mainly from cost reduction efforts. The operating loss was just $24 thousand, compared with $9.6 million a year earlier, when restructuring costs were $1.1 million.

Interest expense fell to $1.4 million from $2.0 million. Adjusted net loss was $1.7 million versus $10.3 million.

Cash generation continues while the term Loan disappears

Cash provided by Operating Activities was $3.7 million, compared with cash used of $8.9 million, marking the fourth consecutive quarter of positive operating cash flow. Free cash flow was $2.5 million.

At September 27, 2026, Debt principal was $90.9 million and net debt was $64.8 million, compared with $67.4 million at June 28, 2026. Cash was $26.1 million, and inventories rose to $109.2 million from $101.1 million.

The Yadkin County sale reshapes the balance sheet

The company sold roughly 120 acres of land and 500,000 square feet of Warehouse space across two Yadkin County, North Carolina locations for $60 million of gross proceeds, before fees and expenses. The company expects no impact on production capacity.

Proceeds fully repaid the $55.5 million term loan. Subtracting that repayment from the September 27 debt principal leaves about $35.4 million on a calculated basis.

Outlook points to improvement from fiscal 2026, with Asia still under pressure

Management expects fiscal 2027 sales and profitability to improve from fiscal 2026 as it realizes full-year benefits from portfolio actions and cost containment. For the second quarter, it expects cost savings and stable Demand to help the Americas, Brazil to be consistent with last year, and Asia to remain pressured, though profitability there should stay stable.

The conference call was scheduled for October 30, 2026, at 9:00 a.m. Eastern Time. Whether sales can stabilize while margins hold is the key question as the lower debt load takes effect.