Sales Down, Profits Up Year-Over-Year for Unifi in Q3

The impact of Unifi’s cost-cutting measures were evident in the company’s Q3 earnings.​The impact of Unifi’s cost-cutting measures were evident in the company’s Q3 earnings. 

The impact of Unifi‘s cost-cutting measures were evident in the company’s Q3 earnings.

The maker of the branded recycled performance fiber Repreve reported lower year-over-year net sales in the third fiscal quarter of 2026, though the company posted an increase in gross profit compared with the same period last year.

The North Carolina-based recycled textile manufacturer reported that Q3 net sales were $130 million, an 11.3 percent decrease from third quarter 2025 ($146.6 million), but a 7.1 percent increase from the second quarter of fiscal 2026. Unifi attributed that decrease to reduced customer orders stemming from tariff and geopolitical uncertainty.

Despite a decrease in year-over-year sales, gross profit for the quarter was $9.1 million with a gross margin of 7 percent—a significant improvement from a gross loss of $400,000 and a gross margin of 0.3 percent during the same period last year.

Gross profit for Unifi’s Americas segment grew by $10.6 million, primarily due to cost reduction efforts but offset by lower sales. The company’s Brazil segment saw a gross profit decrease of $200,000 primarily due to import pricing increases, while the Asia segment dropped by $800,000, due to lower sales volumes.

Unifi also reduced its debt—which had ballooned to $140 million in 2023—to a $94.9 million debt principal and $68.4 million net debt at the close of the quarter on March 29, 2026. The company has chipped away at its debt in several ways, including cost-cutting measures such as shuttering one of its North Carolina facilities last year.

“We are pleased to report that the impact of our team’s hard work is beginning to translate into improved financial performance, highlighted by improved gross profit and debt reduction,” said Eddie Ingle, CEO of Unifi. “These results were driven by the actions we have taken over the past several quarters to realign our cost structure and optimize our operations, and give us confidence that we can generate stronger profitability and cash flow from a lower revenue base moving forward. In addition, we remain focused on partnering with our global customers to deliver innovative solutions to address their evolving needs, which will serve us well in supporting sustainable, long-term market and business growth.”

Revenues for Repreve fiber products increased to $38.2 million for the quarter from $34.3 million in the second quarter, representing 29 percent of net sales, a 1 percent bump from the previous period.

Unifi’s operating loss improved to $100,000 from $13.9 million in the third quarter of fiscal 2025, which the company attributed to higher gross profit, lower SG&A and a gain on foreign currency transaction. SG&A expenses were $11.2 million, a decrease of 9 percent from the third quarter of fiscal 2025, primarily driven by cost reduction efforts.

Net loss for the quarter was $2.3 million compared to a net loss of $16.8 million during the same period last year. Unifi’s adjusted net loss was $3.8 million, which excludes $1.5 million in net gain on foreign currency transaction, compared to adjusted net loss of $13.9 million in the third quarter of fiscal 2025. Adjusted EBITDA was $4 million, which excludes the net foreign currency transaction, compared to $(4.9) million from the previous year.

Looking ahead to the final quarter of fiscal 2026, the company reported a continued focus on leveraging its improved cost footprint while investing in innovations such as its new Luxel linen-inspired yarn, which debuted during the third quarter. While Unifi said it was better positioned to grow in the coming quarter, it also cautioned that results for the end of fiscal 2026 will include responsive price increases due to petrochemical-related inflation.

“As we enter the fourth quarter and look towards the remainder of calendar year 2026, we are encouraged by the momentum we are seeing across our businesses,” Ingle said. “Our innovative beyond apparel business is continuing to gain traction, which should help support improved financial results. We also anticipate the need to support higher working capital levels to accommodate demand and petrochemical-related inflation. While the business is in a stronger position today than it has been in some time, we remain focused on driving sustained financial improvement and long-term shareholder value.”