Unifi, Inc. reported its second‑quarter fiscal 2026 results on February 3 2026, showing net sales of $121.4 million—a 12.6% year‑over‑year decline from $138.9 million. Gross profit rose to $3.6 million from $0.5 million a year earlier, lifting the gross margin to 3.0% versus 0.4% in FY2025. Operating loss narrowed to $7.3 million from $7.6 million, and net loss fell to $9.7 million from $11.4 million. Adjusted earnings per share of $‑0.48 beat the consensus estimate of $‑0.57 by $0.09, a 16% improvement, while diluted EPS of $‑0.53 also surpassed the $‑0.57 estimate.
The margin expansion was driven largely by disciplined cost realignment and a shift in product mix toward higher‑margin beyond‑apparel initiatives. Repreve® fiber sales declined to $34.3 million from $43.3 million, reflecting weaker demand for recycled performance fibers, but the company’s focus on new high‑margin segments offset the loss. The company’s cost‑saving program, which includes the sale of its Madison, North Carolina facility for $45 million, has reduced SG&A expenses to $9.7 million from $12.9 million a year earlier, supporting the improved gross margin.
Unifi’s cash‑flow profile improved markedly, with operating activities providing $25.3 million in cash, a significant turnaround from the $5.5 million cash outflow reported in the prior year. Debt principal payments of $105.4 million reduced net debt to $75.2 million, strengthening the balance sheet and positioning the company to fund future growth initiatives. Management highlighted that the restructuring and cost‑saving measures are expected to generate positive operating cash flow in the coming quarters.
CEO Eddie Ingle said, “Our results for the second quarter were in line with our expectations. Over the last two years, we have executed numerous strategic initiatives to realign our cost structure and operations. The combination of disciplined cost control and a more favorable product mix has delivered a stronger gross margin and a narrower operating loss.” He added that as demand normalizes and the beyond‑apparel initiatives mature, the company anticipates further margin recovery.
Management guided for continued improvement in operating cash flow and projected that the cost‑realignment program will sustain margin expansion into the next quarter. While revenue is expected to remain below the prior year level, the company’s focus on high‑margin segments and a leaner cost base signals confidence in its long‑term profitability trajectory. Investors responded positively to the adjusted EPS beat and margin expansion, reflecting confidence in Unifi’s execution of its profit‑improvement plan.
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