Greensboro - Textured yarn supplier Unifi has reported a 32.4 per cent plunge in second quarter sales to $136.2 million, hit by a drop in demand from many of its apparel customers.
The manufacturer of recycled and synthetic yarns said revenues from Repreve Fiber products represented 31 per cent of net sales, or $42.9 million, compared to 40 per cent, or $81.5 million, in the second quarter of fiscal 2022, primarily impacted by lower sales volumes in Asia. Net loss was $18.0 million, compared to net income of $0.9 million in the same period last year.
Announcing results, Eddie Ingle, chief executive officer of Unifi, said that the second quarter performance was significantly impacted by a sequential decline in apparel production beyond the company's expectations. "Our team remained proactive and executed numerous cost reduction initiatives and other savings measures during the period, but the headwinds caused by near-term inventory destocking efforts impacted demand from many of our apparel customers," he said. "The good news is that our customers’ supply chains are beginning to normalize and the drivers of our mid- and long-term growth engines remain fully intact. Further, our customers are forecasting a stronger second half of the calendar year as they work through their remaining excess inventory and short-term headwinds.
"In the interim, we will continue to invest prudently with an eye towards supporting long-term growth, while simultaneously controlling costs and building efficiencies. We remain confident in our position as a global leader for sustainable solutions and in the long-term demand profile for our Repreve products and other innovative solutions.”
For the full year, net sales were $315.7 million compared to $397.4 million. Revenues from Repreve Fiber products represented 29 per cent of net sales, or $92.0 million, compared to 39%, or $153.4 million in the previous year.
Looking ahead, Unifi said that the operating environment and textile demand trends for the apparel market were expected to recover at a modest pace during 2023.
“Although current economic conditions have impacted our financial results in the first half of the fiscal year, our team has taken the proper actions to mitigate these headwinds," Ingle said. "We believe we have positioned the business to return to strength in the second half of the fiscal year. As the apparel markets recover, we expect to see our business bounce back fairly quickly and are confident we have the right strategic plan to drive long-term growth and value for all of our stakeholders.”
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