Q1 2025 Unifi Inc Earnings Call
Will allow us to continue to strategically invest into exciting new product.
That will not only help us grow our business globally, but also enhance our financial performance.
I'll now provide a brief update on each of our business segments.
In the Americas segment, our performance was relatively in line with our expectations. However, we did experience a modest slowdown in the region due to a combination of seasonality and.
And as we mentioned earlier the recent impacts from the weather events.
With that said, we do believe our America segment is poised to benefit from some upcoming beyond apparel initiatives that I will touch on in greater detail shortly.
Our Brazil segment was our strongest performing segment for the third quarter in a row. This continued strength is the results of both our ability to take price in the region and benefit from the market share that we have been able to capture in the past few quarters, which has resulted in stronger sales volumes.
In our Asia segment, we saw a slowdown in performance in the region due to the struggling economy in China, and some pricing pressure that is impacting sales volume. However.
However, we are hopeful that the recent Chinese government stimulus policies will help revive the economy and drive a stronger performance in the region in the long run.
Turning now to slide five for an update on Repreve.
During the first quarter were <unk> represented 30% of sales.
<unk> decrease when compared to the previous quarter.
This decrease in <unk> sales was largely driven by the slowdown in our Asia business that I just noted.
Constraining our growth, but also taking the appropriate and careful time to evaluate where we should be investing.
Our steps to strengthen the balance sheet, coupled with our continued improvement in financial performance gives us confidence that the business is well positioned to pivot to growth in fiscal 2025 and beyond.
Speaker Change: With that I'll now pass the call back to Eddie to take us through the last few slides of the presentation and make some final comments.
Eddie: Thank you AJ, let's now turn to slide 12 fees to discuss our forecast for the second quarter of fiscal 2025.
More specifically for the second quarter, we are expecting net sales between $140 million and $145 million adjusted.
Speaker Change: Adjusted EBITDA to range between negative $4 million of negative $2 million as a result of the current economic environment in China and the typical seasonality of the holiday period in the Americas and Brazil.
Speaker Change: Lastly, we are continuing to keep a disciplined eye on capital expenditures and believe capex for the quarter will come in between $4 million and $5 million.
Speaker Change: Let's now transition to slide 13 to discuss our outlook for fiscal 2025.
We are reiterating our outlook for fiscal 2025 and as a reminder, this includes our belief that we'll see a return to more normal conditions, which will support top line growth of 10% year over year.
Speaker Change: We also continue to believe that the proactive decisions, we have made to control our costs and streamline our business will continue to show up and stronger profitability results in fiscal 2025. Additionally.
Additionally, these despite the softness across global markets. We continue to expect a significant year over year increase in gross profit gross margin and adjusted EBITDA.
Finally, we are budgeted to keep capital expenditures contained and we remain on track to see capital expenditures of around $12 million for fiscal 2025.
<unk> that we have to invest in the promotion of these products and their promotion landscape comes in many forms where social media is bigger.
Figuring out whether there has been but we also see the importance of trade shows we did a show in Europe, two weeks ago, which was very well received these two products, we're going to do another one in coming up in Portland, Oregon. So we do feel that needs to get in front of the <unk>.
Brands to show them, the actual fabrics that we're making and installation that we're making so they can touch and feel it I will say that on top of that we've got the roadshow, where we're bringing technical people with marketing people and our.
Got a brand sales team going to these brands truly help educate them and see how they can utilize this new product offering to help them get their sustainability goals. So it's a it's a three pronged approach and we are investing some money to make this happen.
We're not going crazy, but we do recognize part of this is an education part of it is actually physically getting out there and spending time with the brands.
Speaker Change: Alright that makes a lot of some of these drugs.
Speaker Change: Anthony some of these.
Speaker Change: Some of the companies that we're working with a very big brands.
Speaker Change: And yes, we will spend money to get this out into the public but I'll tell you when they decided to put their shoulder.
Against these products their capability.
Capability of marketing as a extreme you know, they're very strong and we they will many of them will be doing that.
That's great to hear and then lastly for me as far as you know the cost.
Speaker Change: <unk> efforts.
Speaker Change: As you know.
Can you talk about like I guess, what inning are we in in terms of just to use kind of baseball terms, maybe you know.
What have you done so far and what is yet to come here as far as just just the profit improvement plan.
Speaker Change: How are you thinking about efficiency savings.