Breaking Down Unifi, Inc. (UFI) Financial Health: Key Insights for Investors

You're looking at Unifi, Inc. (UFI) and seeing a complex picture: a company navigating a tough textile market while executing a major strategic pivot, and you need to know if the pain is worth the long-term gain. Honestly, the financials from the fiscal year ending June 2025 show the strain, with annual revenue at $571.34 million, but a GAAP net loss of $20.35 million for the full year, despite a one-time asset sale that temporarily boosted the fourth quarter. The real story here is the operational pressure, like the Q4 gross margin turning negative at -0.8%, driven by trade uncertainty and high transition costs. Still, management is making decisive moves; they cut net debt to $85 million by selling a manufacturing facility, and the core REPREVE recycled fiber line still accounts for 30% of Q4 net sales, which is a defintely strong foundation. We have to break down if their leaner footprint and focus on sustainable innovation can overcome the near-term demand disruption and get them back to consistent profitability.

Revenue Analysis

You need to know where Unifi, Inc. (UFI)'s sales are coming from, and the simple truth is that the company is currently navigating a soft demand cycle and strategic restructuring. For the fiscal year ended June 29, 2025, Unifi, Inc. reported annual revenue of $571.34 million. This figure represents a year-over-year revenue decrease of -1.87%, which reflects the ongoing pressure from trade-related uncertainty and demand volatility across the textile industry. It's a tough environment, but the core business is still there.

Breakdown of Primary Revenue Sources

Unifi, Inc. primarily generates revenue through the sale of its recycled and synthetic yarns, which are used in apparel, automotive, and industrial textiles. The company's flagship product line, REPREVE® Fiber, which is made from recycled materials, remains a critical component of its sales mix. In fiscal year 2025, REPREVE Fiber sales totaled $174.855 million, contributing 31% of the consolidated net sales. This shows the company's commitment to sustainability is a defintely material part of the top line.

The strategic importance of REPREVE is clear, even as its contribution percentage saw a slight dip from the prior year. Expanding this platform is key for future margin improvement and deeper customer relationships, as you can see in their long-term goals Mission Statement, Vision, & Core Values of Unifi, Inc. (UFI).

Segment Contribution and Shifts

Unifi, Inc. operates across three main geographic segments: the Americas, Brazil, and Asia. The Americas segment is the largest market, but all regions faced challenges in the most recent quarter of the fiscal year. To illustrate the contribution and current headwinds, here is a look at the fourth quarter of fiscal 2025 (Q4 FY25) net sales:

Here's the quick math on the Q4 performance: the Americas segment, despite being the largest, saw sales drop by 6.6% year-over-year, while the Asia segment experienced the steepest decline at -27.7%. This is a major shift, and it's due to macro headwinds in China and persistent pricing pressure in that region.

Analysis of Significant Revenue Changes

The biggest change isn't just the overall revenue decline; it's the operational restructuring impacting the numbers. The company is undergoing a manufacturing footprint reduction, and the associated transition costs and inflationary pressures negatively affected the Americas segment's profitability, leading to a negative gross margin in Q4 FY25. The Brazil segment, which was a bright spot earlier in the fiscal year with strong volume and pricing, was eventually hit by unfavorable foreign currency translation effects in Q4.

• Demand volatility and trade uncertainty drove the consolidated net sales decrease of 12.0% in Q4 FY25.
• The company completed the sale of a manufacturing facility for $45.0 million, which, while a one-time gain, shows a clear move toward a leaner operating model.
• REPREVE Fiber's contribution to sales dropped from 34% in Q4 FY24 to 30% in Q4 FY25, signaling a temporary but notable softening in the high-margin product mix.

The takeaway is simple: Unifi, Inc. is trading some near-term revenue stability for a long-term, leaner cost structure, but the market demand isn't helping them yet.

Profitability Metrics

You need to know the bottom line, and for Unifi, Inc. (UFI) in fiscal year 2025, the core profitability picture is challenging, with margins deeply compressed by market pressure and one-time restructuring costs. The company's annual gross profit margin hit a five-year low of just 1.5%, while the operational reality, once you strip out a major asset sale, was a significant loss, not a profit. That's a tough spot to be in.

Gross Profit and Operational Efficiency

Gross profit margin (GPM) is your first line of defense, showing what's left after the cost of goods sold (COGS) is covered. For Unifi, Inc., this metric signals severe operational stress. The full fiscal year 2025 GPM was only 1.5%, a stark drop and a new five-year low for the company. The fourth quarter of FY2025 was particularly rough, posting a gross loss of $1.1 million, which translates to a negative gross margin of (0.8)%.

Here's the quick math on the operational efficiency challenge:

• Gross loss in Q4 FY2025 was $1.1 million.
• Americas segment gross profit decreased by $5.3 million due to inflationary pressures and transition costs.
• Management is targeting an annual cost savings of approximately $20.0 million from manufacturing consolidation, but those benefits are not fully realized yet.

This trend shows that cost management and production volatility, particularly in the Americas segment, are directly eating into the gross margin. They're spending almost as much to make the product as they are getting in sales. That's a red flag.

Operating and Net Profit Margins

The operating profit and net profit margins for FY2025 were heavily distorted by a one-time event-the sale of a manufacturing facility. In the fourth quarter of fiscal 2025, the reported operating income was $15.1 million, and the net income was $15.5 million. Here's what that headline number hides:

• The net income included a substantial $35.8 million gain from the sale of the Madison, North Carolina facility.
• The company also incurred $10.6 million in transition costs related to the closure and consolidation.

When you look at the core business performance, the picture flips. The Adjusted Net Loss for Q4 FY2025, which excludes the one-time gain and transition costs, was $10.6 million. This non-GAAP (Generally Accepted Accounting Principles) number is a much better indicator of how the underlying business is performing, showing that the company's core operations are still running at a loss.

Comparison with Industry Averages

To truly understand Unifi, Inc.'s profitability, you have to compare it to its peers in the Apparel Manufacturing industry. The gap is defintely wide. While Unifi, Inc. reported a full-year FY2025 gross profit margin of 1.5%, the average gross profit margin for the Apparel Manufacturing industry is significantly higher, sitting around 49.3%.

Here's a quick look at how Unifi, Inc.'s margins stack up against the industry benchmarks as of November 2025:

This comparison shows Unifi, Inc. is operating at a fraction of the industry's gross profitability, which points to a severe structural cost issue or a significant lack of pricing power in the current market. The strategic move to a leaner manufacturing footprint is an attempt to close this gap, but investors need to see those $20.0 million in expected annual cost savings materialize quickly to shift the needle from deep loss back toward the industry's modest 3.0% net margin average. For a deeper dive into who is betting on this turnaround, you should check out Exploring Unifi, Inc. (UFI) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You're looking at Unifi, Inc. (UFI) and trying to understand how they fund their operations. That's the right place to start, because a company's capital structure-the mix of debt and equity-tells you everything about its risk tolerance and future flexibility.

The direct takeaway is that Unifi, Inc. is currently in a deleveraging (debt reduction) mode, prioritizing balance sheet health over aggressive expansion, which is a smart move given their recent operational headwinds. Their debt-to-equity ratio sits comfortably below the industry average, but the negative operating cash flow is the real risk to watch.

Unifi, Inc.'s Current Debt Profile

As of the end of the fourth fiscal quarter of 2025 (June 29, 2025), Unifi, Inc.'s total debt stood at approximately $107.886 million. This figure is down significantly from the previous quarter, a direct result of a strategic asset sale. The company's focus on debt reduction is clear, with net debt dropping to $85.3 million in Q4 FY25.

The debt structure itself is a mix of term loans and revolving credit. Following the asset sale, the company used the proceeds to reduce its term loan to $67.0 million and its revolving loans to $5.6 million. The term loan is typically the long-term component, while the revolving loans are part of the short-term working capital financing. This move also saw the maximum capacity of their Asset-Based Lending (ABL) Revolver reduced from $115 million to $80 million, signaling a tighter, more controlled approach to borrowing.

• Total Debt (Q4 FY25): $107.886 million.
• Net Debt Reduction: $43.3 million from asset sale proceeds.
• Term Loan Balance: Reduced to $67.0 million.

Debt-to-Equity Ratio: A Comparison

The Debt-to-Equity (D/E) ratio is your quick measure of leverage-how much debt Unifi, Inc. uses to finance its assets relative to the funding from shareholders' equity. For the period ending September 27, 2025 (Q1 FY26), Unifi, Inc. reported total equity of $241.094 million and total debt of $109.191 million. Here's the quick math: $109.191M / $241.094M = 0.453.

This places Unifi, Inc.'s D/E ratio at approximately 0.453 (or 45.3%). This is a defintely conservative level of leverage. For comparison, the average D/E ratio for the broader Textile Mill Products industry is around 0.78, and for Apparel Manufacturing, it's higher at about 0.92. Unifi, Inc. is significantly less leveraged than its peers, which gives them a strong buffer against economic downturns or, more critically, the negative operating cash flow they've been reporting.

Balancing Debt and Equity Funding

Unifi, Inc. is currently operating with a clear bias toward debt reduction and operational efficiency rather than seeking new equity funding or returning capital to shareholders. The recent sale of a manufacturing facility and the application of those funds to pay down debt is a concrete example of this strategy. Furthermore, their current debt obligations include provisions that restrict the payment of dividends and the repurchase of shares under certain circumstances. This is a common covenant (a condition in a loan agreement) that lenders impose, which forces the company to prioritize debt service over equity returns.

They are using debt to finance a necessary restructuring and consolidation of their manufacturing footprint, which is expected to yield over $20 million in estimated annualized operating cost savings. This is debt being used for strategic, long-term cost-cutting, not for speculative growth. The company is betting that a leaner operation, coupled with the strong demand for their sustainable products like REPREVE®, will eventually generate enough cash flow to service its debt and allow for a return to profitability. To understand the full scope of their strategy, you should review their Mission Statement, Vision, & Core Values of Unifi, Inc. (UFI).

Liquidity and Solvency

Unifi, Inc. (UFI) shows a strong technical liquidity position based on its balance sheet ratios for fiscal year 2025, but a deeper look at the cash flow statement reveals ongoing operational pressures. Your short-term financial safety net, measured by the current ratio, is quite healthy, but the persistent negative cash flow from operations is the real concern you need to act on.

For the fiscal year ended June 30, 2025, Unifi, Inc.'s Current Ratio (current assets divided by current liabilities) stood at 3.32. This means the company has $3.32 in short-term assets for every dollar of short-term debt, which is defintely a high comfort level. The Quick Ratio (or acid-test ratio), which strips out inventory, was also strong at 1.59. Here's the quick math: Current Assets of $235.63 million less Inventory of $122.93 million, divided by Current Liabilities of $70.94 million, gives you that 1.59. A ratio above 1.0 is generally good, so this suggests the company can cover its immediate obligations even if it can't move inventory quickly.

Looking at working capital (current assets minus current liabilities), the trend shows relative stability but at a high level. Working capital remained stable at approximately $165 million in the fourth quarter of fiscal 2025, only a slight dip from $167 million in the previous quarter. This stability is a positive sign of inventory and receivables management, but still, a large working capital balance in a low-demand environment means a lot of capital is tied up in the business, not generating cash.

The cash flow statements tell a different story than the balance sheet ratios. For the full fiscal year 2025, Unifi, Inc. reported negative Cash Flow from Operating Activities (CFO) of $-21.31 million. This is the most important number: the core business is using cash, not generating it. This negative CFO was partially offset by a positive Cash Flow from Investing Activities (CFI) of $41.06 million, largely due to an asset sale planned as part of the company's restructuring. The company also had a negative Cash Flow from Financing Activities (CFF) of $-24.42 million for the year, indicating net debt repayment or other financing uses.

The near-term outlook, based on the most recent data (Q1 FY2026, ended September 2025), confirms the liquidity challenge. Cash used in operations was $8.9 million in that quarter, and net debt rose to $99.8 million. This continued operational cash burn is the primary liquidity concern. The strength, however, is in the available liquidity, which totaled $40.9 million at the end of Q1 FY2026, including $36.2 million under the Asset-Based Lending (ABL) Revolver. This available cash runway, plus the cost savings expected from the Fiscal 2026 Profit Improvement Plan, buys the company time to execute its turnaround. For more on the strategic context, you can read the full post: Breaking Down Unifi, Inc. (UFI) Financial Health: Key Insights for Investors.

Here are the key takeaways from the cash flow analysis:

• Core operations are a cash drain, not a source.
• Asset sales are funding the gap, which is not sustainable.
• The ABL facility provides a necessary, but temporary, cushion.

Finance: Track Q2 FY2026 operating cash flow against the $-8.9 million Q1 usage by the end of the month.

Valuation Analysis

You want to know if Unifi, Inc. (UFI) is a bargain or a value trap, and the numbers give a mixed, but mostly cautious, signal. The stock looks cheap on an asset basis, but its negative earnings for the 2025 fiscal year mean the company is struggling to generate profit, which is why the analyst consensus leans toward a Sell rating.

Here's the quick math: The stock's valuation multiples are distorted by a challenging operating environment. For the 2025 fiscal year, the consensus full-year earnings per share (EPS) is expected to be a loss of ($2.25) per share, which is why the Price-to-Earnings (P/E) ratio is a negative -4.72x. When a company is losing money, P/E becomes less useful, so we look at other metrics.

The Price-to-Book (P/B) ratio, which compares the stock price to the company's book value of equity, is a very low 0.38x for FY 2025. This suggests the market is valuing the company at less than 40 cents for every dollar of its net assets, which is defintely a sign of potential undervaluation, or deep investor skepticism about those assets.

The Enterprise Value-to-EBITDA (EV/EBITDA) ratio is also challenging, as the forecast for 2025 EBITDA is a negative -$11.55 million, making the ratio negative and technically unhelpful for comparison. This simply confirms the core problem: Unifi, Inc. is facing significant operational headwinds that are eating into profitability.

The stock price trend over the last 12 months maps directly to this financial distress. The stock has traded in a 52-week range between a low of $3.03 and a high of $6.49. With a closing price near the 52-week low as of November 2025, the company has lost approximately 37.85% of its market capitalization over the past year.

• 52-Week High: $6.49
• 52-Week Low: $3.03
• 12-Month Market Cap Change: Loss of 37.85%

If you are a dividend investor, Unifi, Inc. is not for you. The company has not paid a dividend in decades, so the dividend yield and payout ratios are both 0.00%. This is common for companies focused on navigating a turnaround or reinvesting all available capital.

As of November 2025, the analyst community has a consensus rating of Sell for Unifi, Inc. This rating reflects the negative earnings and the significant operational risks, despite the low P/B ratio. For example, one recent analyst target price was set at $3.50. What this estimate hides is the potential for a successful restructuring and the value of their Exploring Unifi, Inc. (UFI) Investor Profile: Who's Buying and Why? REPREVE brand, but you can't invest on potential alone.

Here is a summary of the key valuation metrics based on the 2025 fiscal year data:

The stock is a classic special situation: cheap assets, but a business model that is not currently working. Your next step should be to look closely at their cash flow statement to see how long they can sustain these losses.

Risk Factors

You're looking at Unifi, Inc. (UFI) and seeing the potential in their REPREVE® recycled fiber, but you have to be a trend-aware realist about the near-term risks. The company is in a tough spot right now, navigating a global textile market that is still struggling with a post-pandemic inventory glut and economic uncertainty. The key takeaway is that Unifi, Inc. (UFI) is fighting an uphill battle against macroeconomic headwinds and stiff foreign competition, which is evident in their $20.34 million net loss for fiscal year 2025.

Operational and Financial Headwinds

The most immediate risks are financial and operational. For fiscal year 2025, Unifi, Inc. (UFI)'s consolidated net sales fell to $571.3 million, a 1.9% decrease from the prior year, mostly due to lower sales in the Asia segment. More concerning is the core profitability erosion: Gross Profit declined sharply to just $8.4 million in FY2025 from $16.6 million in FY2024. This steep drop is a direct result of reduced manufacturing productivity and conversion margins. The business is burning cash, reporting a negative free cash flow of $4 million in the fourth quarter of fiscal 2025.

Here's the quick math on their leverage: As of the most recent quarter (Q1 FY2026, which ended September 28, 2025), Net Debt rose to nearly $99.8 million, reflecting cash usage to keep the lights on. That's a lot of debt for a company with an Adjusted EBITDA of $(11.55 million) for the full fiscal year 2025. They have to turn the corner on cash flow, defintely.

External Market and Geopolitical Risks

The company faces intense external pressure, particularly from international competitors. Foreign yarn producers benefit from structural advantages like lower wages, raw material costs, and favorable foreign currency exchange rates against the U.S. Dollar. This makes Unifi, Inc. (UFI)'s products, and the related supply chains, less competitive. Also, the global demand picture is still messy, with the Americas and Asia segments experiencing lower volumes throughout fiscal 2025 as major brands and retailers worked through their excess inventory (destocking).

• Trade uncertainty and tariffs drive demand softness.
• Inflationary pressures hit consumer spending.
• Volatility in crude oil prices affects polyester and nylon raw material costs.
• Fluctuating currency exchange rates (like the Brazilian Real and Chinese Renminbi) impact financial results.

Mitigation and Actionable Insights

Management isn't standing still, which is a good sign. They are executing strategic restructuring initiatives to create a leaner manufacturing footprint. A key move was selling a manufacturing facility, a step expected to reduce debt and generate an estimated $20 million in annual savings. They are also focused on cost reduction initiatives to combat margin pressure, which is crucial given the negative gross margin of 0.8% reported in Q4 2025. For investors, the question is whether these savings can outpace the continued demand volatility and pricing pressure, especially in the Asia segment.

You need to track these mitigation efforts closely. The success of their new product, Fortisyn, an abrasion-resistant yarn, and their flagship REPREVE® brand, which accounted for 30% of total sales in Q4 2025, will be critical to future performance. For a deeper dive into the company's full financial picture, you can read more at Breaking Down Unifi, Inc. (UFI) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at Unifi, Inc. (UFI) and seeing a challenging fiscal year 2025, which is fair. The company reported consolidated net sales of $571.3 million and a net loss of $20.34 million for the year, still navigating a tough textile market. But honestly, the real story here is the strategic pivot and the structural growth vectors that are setting up a much different 2026.

The management's focus is now squarely on operational efficiency and leveraging its core competitive advantage: sustainable fiber science. That's the key to understanding the future revenue and earnings trajectory.

Strategic Shift to Higher-Margin Products

The primary growth engine isn't just volume; it's a calculated move into higher-margin, specialized markets through the Beyond Apparel initiative. This is smart diversification. Unifi is taking its recycled fiber technology, REPREVE, and moving it past traditional clothing and into industrial applications like carpet, military, and packaging sectors.

This initiative is already showing traction, with a projected revenue run rate of around $20 million by the end of calendar 2026. Plus, new product innovations are fueling this shift, including REPREVE TAKEBACK and ThermaLoop, both made from 100% textile waste, which resonates strongly with global brands. You can see their underlying commitment here: Mission Statement, Vision, & Core Values of Unifi, Inc. (UFI).

Here's a quick look at the key product innovations driving future revenue:

• REPREVE TAKEBACK: Made from 100% textile waste, hitting circularity goals.
• ThermaLoop: Also 100% textile waste, focusing on insulation.
• Beyond Apparel: Targeting high-value military and carpet markets.

Operational Efficiency and Cost Savings

The near-term pain of restructuring is setting up long-term gain. Unifi has been aggressive in consolidating its U.S. manufacturing footprint to lower fixed costs and improve profitability. They closed and sold a facility in fiscal 2025, which helped reduce net debt to $85 million in Q4 FY25 from $124 million in Q3 FY25.

This leaner operation is expected to yield substantial savings. The manufacturing footprint reduction is projected to achieve annual cost savings of approximately $20.0 million. Additionally, a cost restructuring initiative is expected to save another $5 million per quarter in manufacturing costs for the remainder of fiscal 2026. That's a significant, quantifiable boost to the bottom line without needing a massive sales increase.

The market is expecting this operational leverage to translate directly to earnings. Analysts forecast a major swing for the next fiscal year, projecting a growth from a loss of ($2.25) per share to a profit of $0.65 per share. That's a massive inflection point.

The REPREVE Competitive Edge

Unifi's main competitive moat is the REPREVE brand-it's a global leader in sustainable synthetic textiles. This isn't just a product; it's a supply chain advantage, especially as brands face pressure for Environmental, Social, and Governance (ESG) compliance.

The company's net margin of -3.56% in fiscal 2025, while a loss, was still better than a key competitor, Culp, Inc., which reported a net margin of -5.82%. This shows a relative efficiency even during a downturn. The Brazil segment is also a bright spot, consistently delivering strong sales and high utilization, which underpins consolidated earnings power. The focus on 'Made in America' for some key products also shields them somewhat from global trade volatility.

The company's focus on sustainability gives them pricing power. They are positioned to capture the growing demand for textile circularity.