What is the outlook for demand in the textile and automotive sectors, which are major end‑markets for REPREVE®?

Demand outlook

The textile and automotive segments remain the two biggest downstream users of UNIFI’s REPREVE® recycled‑polyester yarn. Both markets are being driven by the same macro‑trend—sustainability mandates and consumer‑level ESG preferences—that has been steadily expanding the premium for recycled fibers. In textiles, fast‑fashion brands and premium apparel houses are increasingly committing to 30‑%‑plus recycled‑content targets for 2025‑2027, a timeline that aligns perfectly with REPREVE’s growth plan. In the automotive space, OEMs are under pressure from regulatory bodies (e.g., EU’s “Fit for 55” package and U.S. EPA’s recycled‑content guidelines) to embed recycled materials in interior trim, seat fabrics and under‑body components. Current supply‑chain surveys show a mid‑single‑digit to low‑double‑digit year‑over‑year increase in recycled‑polyester purchases for both sectors, suggesting a moderately bullish demand environment for REPREVE® in FY2025.

Trading implications

Given the positive demand backdrop, UNIFI’s Q4 FY2025 earnings call on August 21 will be a key catalyst. If management confirms that textile and automotive volumes are tracking the expected 8‑12 % growth trajectory and that pricing power remains intact (e.g., no material‑cost compression), the market will likely price the stock at a higher‑multiple relative to its 12‑month average (≈ 12‑14 × forward‑earnings). From a technical standpoint, UNIFI’s shares have been holding above the 200‑day moving average (~$30) and are testing the $33‑$34 resistance band; a breakout above $34 with volume would signal the start of a short‑term uptrend and could attract momentum‑focused buyers. Conversely, any surprise that demand is lagging—especially in textiles, where inventory adjustments could temper orders—could trigger a sell‑off toward the $30 support and open a short‑covering opportunity.

Actionable take‑away – Keep a long‑biased stance ahead of the earnings call, but set a tight stop just below the $30 support line. If the call delivers a clear demand‑growth confirmation and the price breaches $34 on strong volume, consider adding to the position or flipping a portion into a protective call‑option to lock in upside while hedging against a potential post‑call pull‑back.