Yarn maker Unifi Inc has raised its third quarter earnings guidance on the back of increasing demand for its products both in the US and in Brazil.

It now forecasts earnings of between $13m and $14m for the three months to 27 September - up from previous guidance of $9m to $11m.

"Business conditions in our key segments have been better than anticipated," said president and CEO Bill Jasper, "resulting in improved demand levels across the supply chain.

"The increase in the guidance reflects the incremental benefit of better capacity utilisation on our profitability."

The company, which makes multi-filament polyester and nylon textured yarns, reiterated its annual forecast of adjusted EBITDA of $40m to $50m, but said results are likely to be in the higher-end of the range.