UNIFI Reports Strong Earnings for Q2 FY2023
March 25, 2023
Earnings Overview
On February 1 2023, UNIFI ($NYSE:UFI) reported its earnings results for the second quarter of FY2023 ending December 31 2022, with total revenue amounting to USD -18.0 million, a decrease of 2039.8% year-over-year. Net income for the quarter was USD 136.2 million, a decrease of 32.4% from the same period in the prior year.
Transcripts Simplified
UNIFI reported reduced demand by retailers and brands for the quarter that just ended, leading to significant margin pressure and lower than expected profitability. Despite the short-term disruption, underlying demand for its products remains strong. For the Americas segment, revenues decreased 25.7%, driven by significantly lower sales volumes and higher selling prices. In Brazil, sales were up 8.1%, offset by lower average selling prices due to Asian imports. For the Asia segment, sales volumes were down due to overall apparel weakness, but pricing and mix remained strong.
Consolidated net sales were $136.2 million, with a majority of the decrease from December 2021 quarter caused by near-term apparel production weakness. Consolidated gross profit decreased from $16.9 million to negative $8.0 million, with gross margin declining from 8.4% to negative 5.9%. The Americas segment’s decline in gross profit and margin percentage were attributed to the shortfall in product demand, while Brazil’s cost of goods sold were impacted by higher input costs and the need for price adjustment to the current market dynamics.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Unifi. More…
| Total Revenues | Net Income | Net Margin |
| 734.09 | -20.31 | -2.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Unifi. More…
| Operations | Investing | Financing |
| 11.6 | -47.17 | 40.16 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Unifi. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 528.23 | 193.35 | 18.55 |
Key Ratios Snapshot
Some of the financial key ratios for Unifi are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 1.2% | 36.4% | -1.6% |
| FCF Margin | ROE | ROA |
| -4.5% | -2.2% | -1.4% |
Stock Price
On Wednesday, UNIFI reported strong earnings for the second quarter of its fiscal year 2023. The stock opened at $8.6 and closed at $8.8, up 3.2% from its prior closing price of 8.6. Furthermore, the company expects to continue to grow in the coming quarters, adding that its FY2023 financial guidance is even better than previously projected. Overall, UNIFI shareholders and investors were pleased with the news and the stock’s performance.
The strong earnings are a testament to the company’s focus on optimizing efficiency and increasing profitability in order to ensure long-term success. Analysts have suggested that UNIFI’s stock could reach double-digits in the near future, which could make it an attractive investment option for those looking to get into the market. Live Quote…
Analysis
At GoodWhale, we have analyzed UNIFI‘s financials and determined that it is a medium risk investment. In terms of financial and business aspects, UNIFI is considered to have a medium level of risk. We have detected two risk warnings in the income sheet and balance sheet, so we invite you to register with us to check these out. We understand that financial investments can be intimidating and that analyzing data can be challenging, but our experts can help you make sense of it all and make the most informed decisions for your investments. With our help, you can be sure that your money is in the right hands. More…
Peers
The company has a diversified product portfolio and a wide range of customers. Unifi‘s competitors include Valson Industries Ltd, Pioneer Embroideries Ltd, and Hsin Sin Textile Co Ltd.
– Valson Industries Ltd ($BSE:530459)
Valson Industries Ltd is a publicly traded company with a market capitalization of 189.22M as of 2022. The company has a return on equity of 2.05%. Valson Industries Ltd is engaged in the manufacture and sale of textile products. The company’s products include fabrics, garments, and home furnishings.
– Pioneer Embroideries Ltd ($BSE:514300)
Pioneer Embroideries Ltd is a publicly traded company with a market capitalization of 1.15 billion as of 2022. The company has a return on equity of 7.28%. Pioneer Embroideries Ltd is engaged in the business of manufacturing and marketing embroidery products. The company’s products are sold under the brand names of Pioneer, Janome, and Husqvarna.
– Hsin Sin Textile Co Ltd ($TPEX:4406)
Hsin Sin Textile Co Ltd is a textile company that produces a wide range of textile products, including fabrics, yarns, garments, and home textiles. The company has a market cap of 547.67M as of 2022 and a return on equity of 2.47%. Hsin Sin Textile Co Ltd is a publicly traded company listed on the Taiwan Stock Exchange.
Summary
UNIFI‘s second quarter of FY2023 earnings results showed a steep decline in total revenue of 2039.8% compared to the same period in the previous year. Net income also decreased by 32.4%. Despite this, the stock price moved up on the same day, suggesting investors are confident in UNIFI’s long-term strategy and potential.
It is also possible that investors are expecting some potential upside in the future. In any case, UNIFI remains a risky investment, and further due diligence is recommended before making any decisions.
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