Yarn producer Unifi has downgraded its second quarter EBITDA guidance in the face of a pronounced drop in sales during October and November.

The speed and severity of the decline took the company by surprise, leading it to forecast EBITDA for the quarter ended 28 December of US$2-4m, well down on the previous guidance figure of $8-9m.

Unifi blamed the downgrade on significant decreases in consumer spending, coupled with high supply chain inventories across the company's key business segments.

Retail apparel sales fell 4% in October and 7% in November, while retail furnishing sales fell 11% and 13% over the same period, and automotive sales have declined 16% year to date.

"We are disappointed in having to revise our guidance at this time, particularly after the significant improvements we have made to our business in the past year," said Bill Jasper, president and CEO of Unifi.

"We expected the December quarter to be a very challenging one, but the speed and severity of the declines in spending have been much greater than anticipated."

Jasper added that he expected sales to recover during the first six months of 2009, although consumer spending was set to remain weak.

Unifi now expects adjusted EBITDA for fiscal 2009 to be about $40-45m.

Meanwhile, the company has completed the sale of real estate and related assets in Yadkinville, North Carolina, for a sum of $7m.