Executives at iFabric TSE: IFA highlighted record fiscal 2025 results and issued strong first-quarter fiscal 2026 revenue guidance during an investor call, while also addressing margin headwinds tied to tariffs and a temporary pause in intimate apparel shipments.
Business overview and strategy
Giancarlo Beevis, COO of iFabric and CEO of its Intelligent Fabric Technologies unit, described the company as operating two divisions: Intelligent Fabric Technologies, which develops textile performance chemistries and treatments (including antimicrobial protection, moisture management, cooling, and UV protection), and Coconut Grove Intimates, which distributes “solution-driven” intimate apparel and accessories through major retailers in North America and select markets in Europe and the U.K.
Beevis said iFabric is aiming to bring its “proprietary technology, clinically proven technology” to market by pairing treatments with finished products, describing the model as “chemistry to checkout.”
Fiscal 2025 results: revenue up 20%, margins pressured
Chief Financial Officer Hilton Price said fiscal 2025 revenue rose to CAD 32.9 million from CAD 27.3 million in the prior year, a 20% increase and a company record. Fourth-quarter revenue was CAD 11.0 million, up from CAD 10.5 million a year earlier.
Price noted that Q4 revenue would have been higher but for a shipping-timing issue tied to Costco’s revenue recognition terms. He said roughly CAD 1 million of product shipped in late December arrived at customer warehouses after year-end, and because Costco does not treat risk as transferred until receipt at its warehouse, the revenue shifted into Q1. Price said this timing issue was “one of the reasons why we amended our guidance” for Q1.
Gross margin was a central theme. Price said margins declined to 32% in fiscal 2025 from 41% the prior year, and in Q4 fell to 26% from 40% in the year-ago quarter. He attributed pressure primarily to tariffs affecting about CAD 17 million in U.S. sales, and to the company’s decision to temporarily stop shipping intimate apparel in Q4 following the non-renewal of the Maidenform license agreement. Price emphasized intimate apparel is the company’s highest-margin business, meaning the absence of those shipments had an outsized impact on blended gross margin.
Price added that the company had not been able to fully reprice goods previously due to committed pricing. Instead, management chose to share tariff costs with suppliers, saying iFabric “ate half and our suppliers ate half,” but he said that approach is expected to change as the company reprices to recover a new 10% tariff level that he described as “far more manageable” than the prior IEEPA tariff regime. He also said iFabric is lodging a refund claim for “illegal tariffs” of about $600,000 (about CAD 800,000) and expects to recognize the amount upon receipt.
Adjusted EBITDA was CAD 1.9 million in fiscal 2025 compared with CAD 2.7 million in 2024, which Price said was mainly due to lower gross margin. Selling and administrative costs rose about CAD 1 million, which Price said reflected variable royalties tied to higher sales and approximately CAD 200,000 in one-time costs related to implementing a new ERP system. Price said most ERP costs were incurred in 2025, and implementation has been delayed into Q2 fiscal 2026 due to staffing bandwidth during a “massive quarter.”
Intimates brand change: no royalties, broader product flexibility
Management said the company has already resumed intimate apparel shipping in Q1 fiscal 2026 under its own brand, and expects margin improvement as higher-margin intimate sales return. Price said that when the mix normalizes, management expects blended margins to return to a “normal range of around about 35%-37%.”
Beevis told investors the company has launched the new intimate apparel brand at two major retailers and has another intimate apparel program launching at another major retailer under private label. He said early performance is strong, with some programs “100%, 200% over what we planned.”
CEO Hylton Karon said moving away from the Maidenform license provides more than just royalty savings. He said the prior license restricted what the company could sell because Maidenform marketed traditional lingerie, but under iFabric’s own branding “it is now open season for us” to pursue additional lingerie products. Karon characterized the shift as “very dynamic and very strategic” for the long term.
Q1 fiscal 2026 outlook: CAD 25 million to CAD 27 million revenue guidance
Price reiterated management’s Q1 fiscal 2026 revenue guidance of CAD 25 million to CAD 27 million, which he said is supported by inventory built ahead of the quarter. Inventory increased to CAD 21 million at fiscal year-end 2025 from CAD 10.1 million the prior year, which Price described as inventory brought in to support the quarter’s expected shipments.
Beevis said the Q1 outlook is driven by “a nice mix of all programs across both divisions,” including fulfilling additional Walmart stores, the new intimates brand rollouts, and an expanded leak-proof underwear program at Walmart with additional styles and store count. He said Q1 includes only part of the company’s CAD 8 million Roots-related contract shipments, with some shipped in Q4 and some in Q1.
On seasonality, Beevis said Q1 and Q4 are typically strong quarters for the company, while also indicating management expects expansion activity in Q3 and solid performance in Q2, though not necessarily at the Q1 revenue level. Price said Q4 fiscal 2026 “won’t be as strong as Q1, but it’ll be significant,” while adding that potential new wins could impact timing.
Price also shared profitability goals, saying he is “trying to get to 15% in 2026 and hopefully as high as 20% in 2027” for adjusted EBITDA margin, citing a cost structure with meaningful fixed costs and relatively low incremental costs as revenue scales.
Scrubs rollout, hospital pathways, and supply chain flexibility
Beevis discussed the company’s “Doctor’s Choice” scrubs program, saying it began as a test in about 367 Walmart stores and expanded by an additional 1,000 stores, bringing the total to roughly 1,367 locations—about 20% of Walmart’s U.S. store base, which he said is roughly 4,400 stores. He described the scrubs as the only offering in-store touting “full clinically proven technologies.” He also said the program is a “52-week replenishment” business, with weekly replenishment after initial store sets, and that additional store expansions can create shipment spikes when new doors are added.
On selling scrubs directly to hospitals, Beevis said iFabric is pursuing multiple routes, including buying groups, a relationship involving iFabric, Walmart and a hospital group that could route purchasing through a Walmart B2B portal, and outreach to nursing unions to pursue endorsement. He said management expects progress to become clearer “within the next 12 months.”
Regarding scaling and working capital, Beevis said Walmart store additions do not require significant headcount increases and that factory partners have ample capacity. Price said the balance sheet is “very under-leveraged,” with capacity to take on debt and access to potential expanded bank lines backed by EDC guarantees, while noting the company could also consider raising capital if needed.
On sourcing and tariffs, Beevis said iFabric has begun diversifying supply chain options since early last year and can make products in multiple countries including Vietnam, Bangladesh, and India, while Karon argued that fabric sourcing is heavily dependent on China across the industry.
Beevis also provided a brief update on the company’s EPA “kill claim” efforts, saying iFabric is still working on a leaching study and expects that achieving the claim—combined with its clinical trial results—could support continued growth.
About iFabric TSE: IFA
iFabric Corp is engaged in the business of women's intimate apparel. It has three business segments. The Intimate apparel segment is involved in the design and distribution of women's intimate apparel, and accessories. Its Intelligent fabric segment develops and distributes innovative products and treatments that are suitable for application to textiles, plastics, liquids, and hard surfaces as well as finished performance apparel. The other segment engages in the leasing of property to group companies, related parties, and third parties.
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