Unifi, Inc. (UFI) Tops Q2 EPS by 12c, Revenues Beat; Offers FY19 Outlook

Unifi, Inc. (NYSE: UFI) reported Q2 EPS of $0.06, $0.12 better than the analyst estimate of ($0.06). Revenue for the quarter came in at $167.7 million versus the consensus estimate of $166.83 million.

Fiscal 2019 Outlook

Fiscal 2019 contains 53 fiscal weeks, with the additional week included in the first fiscal quarter. In consideration of profitability pressures from raw material costs that occurred in the first half of fiscal 2019, as well as suppressed demand in certain regions and a weaker sales mix, the Company anticipates the following outlook, consistent with the second quarter business update provided on January 14, 2019:

• Mid-single-digit percentage growth for net sales;
• Operating income between $19.0 million and $23.0 million;
• Adjusted EBITDA between $42.0 million and $46.0 million;
• Capital expenditures of approximately $25.0 million; and
• An effective tax rate in the mid-40% range, with a cash-based tax rate in the high-30% range.

"Our fiscal 2019 second-half outlook assumes some moderate gross margin improvement due to lower raw material costs and improved sales and production volumes from the seasonality that typically lifts our second-half," said Hall. "Gross margins in this second-half outlook are expected to benefit from a more favorable price-to-cost relationship. However, lingering competitive dynamics and downward pricing pressure are expected to prevent a full recapture of the recent margin lost during the periods of rising and elevated raw material costs."

Hall concluded, "Our regional business continues to face a challenging environment, and it is critical that we strengthen our competitive position and accelerate sales opportunities that improve cost leverage on our regional assets, at the same time that we continue expansion of our PVA platforms globally. International PVA sales remain a solid growth engine, and the REPREVE® brand resonates with customers worldwide, as sustainability goals are increasingly imperative for our direct and indirect customers. With our continued PVA momentum and a renewed focus on driving improved leverage from our regional cost structure, we remain confident that our Partner, Innovate and Build Strategy will drive long-term shareholder value."

For earnings history and earnings-related data on Unifi, Inc. (UFI) click here.

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