Home / Knowledge / News / Textiles / Unifi gross margin rises 10% in Q3FY18
Unifi gross margin rises 10% in Q3FY18
Apr '18
Unifi gross margin rises 10% in Q3FY18
The gross margin of Unifi, one of the world's leading innovators in synthetic and recycled yarns, for the third quarter of fiscal 2018 has increased 10.0 per cent, compared to 13.1 per cent for the third quarter of 2017, impacted by elevated raw material costs and volume and sales mix challenges. For nine months of 2018, gross margin was 12.6 per cent.

Net sales increased $5.0 million, or 3.1 per cent, to $165.9 million, compared to $160.9 million for the third quarter of fiscal 2017, and increased $4.6 million, or 2.9 per cent, when excluding the impact of foreign currency translation. For the reported period, revenues from premium value-added ("PVA") products grew 17 per cent compared to the third quarter of fiscal 2017, and represented approximately 44 per cent of consolidated net sales.

The company's operating income was recorded at $1.6 million, compared to $9.1 million for the third quarter of fiscal 2017, impacted by a decline in gross profit, an increase in selling, general and administrative expenses, and foreign currency losses.

"As we previously announced, our performance during the third quarter was below our expectations," said Kevin Hall, chairman and CEO of Unifi.  "We were unable to counterbalance large headwinds that significantly weighed on short-term profitability. Persistently rising raw material costs, the difficult domestic landscape, sales mix challenges and foreign currency losses were the primary drivers of the disappointing bottom-line performance. In a heightened raw material cost environment, our pricing actions tend to lag behind the cost increases, but we believe we can correct this imbalance as raw material prices stabilise."

Adjusted EBITDA was $7.3 million for the third quarter of fiscal 2018, compared to $14.4 million for the third quarter of fiscal 2017. The decrease in Adjusted EBITDA resulted primarily from the combination of rising raw material costs, domestic volume and sales mix challenges, and foreign currency losses that could not be offset quickly enough with higher selling prices and cost mitigation measures.

The company continues to expect sales volume growth driving revenue growth in the low-to-mid single digit percentage range for the year. However, many of the challenges that impacted the third quarter's profitability remain ongoing. Thus, while fourth quarter profitability is expected to improve over third quarter results, the company expects fiscal 2018 operating income and adjusted EBITDA to be well below fiscal 2017 results. Capital expenditures are expected to total $28 million, which is $2 million below the prior outlook, and the ongoing effective tax rate is still expected to be in the mid-20 per cent range.

"We remain committed in our efforts to expand our commercial capabilities as cost effectively as possible, while continuing to secure our position as the sustainability partner of choice, with a constant focus on recycling and innovation. We are focused on driving both top-line and bottom-line growth over the long-term, which will help us deliver on our goal of maximizing long-term shareholder value," Hall concluded. (RR)

Fibre2Fashion News Desk – India

Must ReadView All

Vietnam targets $40 bn in textile-garment exports in 2019

Apparel/Garments | On 22nd Jan 2019

Vietnam targets $40 bn in textile-garment exports in 2019

The Vietnam Textile and Apparel Association (VITAS) has set a target...

Myanmar RMG units exporting to EU rose by 180 in 5 yrs

Apparel/Garments | On 22nd Jan 2019

Myanmar RMG units exporting to EU rose by 180 in 5 yrs

The number of readymade garment (RMG) factories in Myanmar that...

Courtesy: Microsoft

Textiles | On 22nd Jan 2019

Microsoft India launches e-com site for handloom weavers

Microsoft India recently launched a new e-commerce platform,...

Interviews View All

Cindy McNaull, Cordura

Cindy McNaull

We have broad range of options in durable fabrics

Varinder Singh Jawanda, Trendy Bharat

Varinder Singh Jawanda
Trendy Bharat

Sizing and fitting issues are inherent problems for companies expanding...

Abhishek Ganguly, Puma India

Abhishek Ganguly
Puma India

‘As a brand, Puma is always looking for new and innovative ways to inspire ...

Spring Chang,

Spring Chang

A specialist in manufacturing printing machines, <b>Wenzhou Changs</b>...

Abhishek Dhanuka,

Abhishek Dhanuka

Vyom International Pvt Ltd, established in 2002, is one of Surat's leading ...

Marcus Hardelauf,

Marcus Hardelauf

Germany-based Textechno is one of the leading manufacturers of testing...

Kazuaki Yazawa, Purdue University

Kazuaki Yazawa
Purdue University

Scientist <b>Kazuaki Yazawa</b> has developed thermoelectric semiconductor ...

Mr Ambrose Chan, DSG International (Thailand) PLC

Mr Ambrose Chan
DSG International (Thailand) PLC

Mary-Cathryn Kolb, Brrr°

Mary-Cathryn Kolb

Atlanta-based private start-up Brrr° was founded in 2014 to develop...

Robert Brunner, Devereux

Robert Brunner

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Priya Somaiya, Usha Social Services

Priya Somaiya
Usha Social Services

The Usha Silai label from Usha International is all set for a retail...

Aditi Somani, Aditi Somani

Aditi Somani
Aditi Somani

Aditi Somani specialises in luxury fusion wear with international cuts and ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


Leave your Comments

January 2019

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category

Related Categories:

Advanced Search