Net income amounted to US$8.96m, compared to $9.4m a year earlier

Net income amounted to US$8.96m, compared to $9.4m a year earlier

US yarn manufacturer Unifi booked a mixed first-quarter as its operations in Asia and Brazil led sales growth, but expenses hampered profit for the period.

For the three months to 24 September, net income amounted to US$8.96m, compared to $9.4m a year earlier, benefiting from higher earnings from the group's Parkdale America (PAL) spinning division, and a lower effective tax rate. Earnings were impacted however, by higher administrative expenses and higher interest rates, Unifi said.

Net sales, on the other hand, increased $4.2m, or 2.7%, to $164.2m from $160m in the year-ago period. Revenue growth was driven by an overall increase in sales volume, as the company continued to benefit from strength in Brazil and Asia and the ongoing ramp-up of its recycling operations, which contributed to sales of Repreve products, partially offset by challenging domestic market conditions for the traditional fibre portfolio.

Meanwhile, gross margin in the period narrowed to 14.2% from 14.7% in the prior year, reflecting higher costs and increased sales of lower-margin products in the group's international businesses in the first quarter of fiscal 2018.

"We are pleased with the first quarter results, as we grew domestic and international sales despite continued market pressures," said CEO Kevin Hall. "Our PVA brands, like Repreve, continue to take hold within the marketplace and exhibit our strong and growing partnerships with global brands and retailers. Overall, PVA products now account for more than 40% of our consolidated sales, driving another strong quarter, with contributions from our Repreve platform of products. We remain focused on recycling and innovation to fuel our growth, and are proud to maintain the portfolio diversity we believe is necessary to succeed over the long term."

Unifi expects revenue growth in the low-single digit percentage range, and operating income and earnings growth in the mid-single digit percentage range, excluding PAL.

"We continue to expect growth in both revenue and earnings during fiscal 2018," added Hall. "As we remain focused on combining recycling, innovation and technology with our superior supply chain capabilities, we are excited about our growth opportunities in fiscal 2018 and beyond."