UNIFI delivered a significant profitability turnaround during the fiscal fourth quarter of 2026, with gross margin improving by more than 1,000 basis points and adjusted EBITDA swinging into positive territory despite only modest revenue growth. Fourth-quarter net sales increased 4.1% to $144.2 million from $138.5 million. Gross profit, however, improved dramatically to $14.3 million from a gross loss of $1.1 million in the prior-year period.
Gross margin reached 9.9%, compared with negative 0.8%, representing an improvement of approximately 1,070 basis points.
The margin improvement reflected contributions from all three of UNIFI’s reporting segments.
Americas gross profit improved by approximately $8.6 million to $3.3 million from a $5.3 million loss, primarily because of multi-year cost-reduction efforts.
Brazil gross profit increased to $7.7 million from $1.3 million, driven primarily by favorable pricing dynamics, while Asia gross profit increased modestly to $3.4 million.
Adjusted EBITDA swung to positive $8.2 million from negative $4.1 million, representing an improvement of approximately $12.3 million.
The improvement is particularly notable because quarterly revenue increased by only $5.7 million, illustrating the operating leverage created by UNIFI’s restructuring and cost-reduction initiatives.
SG&A expenses declined 1% to $11.8 million as cost reductions continued.
UNIFI nevertheless reported a GAAP net loss of $1.2 million, compared with net income of $15.5 million a year earlier. The prior-year quarter included a $35.8 million gain from the sale of a manufacturing facility, partially offset by $10.6 million of transition costs, making the GAAP comparison less representative of underlying operating performance.
The company’s cash-flow position also improved substantially over the full fiscal year.
Operating cash flow swung to positive $26.5 million from negative $21.3 million, an improvement of $47.8 million. Capital expenditures declined to $5 million from $10.5 million.
Debt principal fell $15.6 million to $92.4 million, while net debt declined to approximately $67.4 million.
UNIFI could further strengthen the balance sheet through a planned sale of non-strategic real estate assets in its Americas segment for $60 million in gross proceeds. The company plans to use the proceeds to reduce debt and improve financial flexibility.
For fiscal 2027, management expects both sales and profitability to improve as UNIFI realizes a full year of benefits from portfolio actions, cost controls, and improved operating execution.
KEY QUOTES:
“We closed fiscal 2026 with clear momentum, highlighted by meaningful improvement in profitability and cash generation. These results reflect disciplined execution of our cost reduction, operational optimization, and portfolio management initiatives, each of which have driven lower our revenue break-even point.”
Eddie Ingle, CEO of UNIFI
