Aug 7, 2026, 6:36 AM ETBasic Materials

Interface — Second Quarter 2026 Earnings Summary

TILEINTERFACE INC

Financial Performance

Net sales for the quarter ended July 5, 2026, totaled $396 million, a 5.4% year-over-year increase (3.8% currency neutral).
GAAP gross profit margin increased 560 basis points to 45.0% from 39.4% in the prior year period; adjusted gross profit margin increased 524 basis points to 45.0% from 39.8%.
Adjusted gross profit margin improvement included 131 basis points from operational execution and 393 basis points from $15.6 million in IEEPA tariff refunds.
Operating income rose 43.9% year-over-year to $74.9 million from $52.0 million.
Net income increased 57.9% year-over-year to $51.4 million from $32.6 million.
Earnings per diluted share grew 60.0% to $0.88 from $0.55.
Adjusted operating income increased 34.1% to $74.9 million from $55.9 million.
Adjusted net income rose 45.4% to $51.5 million from $35.4 million.
Adjusted earnings per diluted share increased 46.7% to $0.88 from $0.60.
Adjusted EBITDA for the quarter was $87.7 million, up 35.2% from $64.8 million.
Cash on hand was $81.5 million as of July 5, 2026, compared to $71.3 million at the end of fiscal 2025.
Total debt was $204.4 million, up from $181.6 million; net debt was $122.8 million.
Net leverage ratio (Net Debt to Last 12-Months Adjusted EBITDA) was 0.5x.
Last 12-months adjusted EBITDA was $250.5 million.

Interface raised full fiscal year 2026 net sales guidance to $1.455 billion to $1.485 billion (previously $1.450 billion to $1.480 billion).
Full year 2026 adjusted gross profit margin guidance increased to 40.6% of net sales (previously 38.8% to 39.0%).
Full year 2026 adjusted SG&A expenses guidance is now a fixed $395 million (previously 26.2% to 26.4% of net sales).
Full year 2026 adjusted interest and other expenses guidance is $15 million (previously $14 million to $16 million).
Q3 2026 net sales are forecast at $370 million to $380 million.
Q3 2026 adjusted gross profit margin is projected at 40.8% of net sales.
Q3 2026 adjusted SG&A expenses are projected at $100 million.
Q3 2026 adjusted effective income tax rate is projected at 27.5%.
Q3 2026 fully diluted weighted average share count is projected at 58.2 million.
Full year 2026 capital expenditures guidance remains at $60 million.
The company cites a robust backlog and strong first-half performance as drivers for the raised guidance, while acknowledging a dynamic and uncertain global macro environment.

The Healthcare segment led performance with global billings up 19% year-over-year.
Education and Corporate Office billings both increased by 5% year-over-year.
The AMS segment reported net sales of $247.7 million for the quarter, a 3.4% increase, with currency-neutral orders increasing 4.8%.
The EAAA segment reported net sales of $148.0 million for the quarter, an 8.8% increase, with currency-neutral orders increasing 6.4%.
EAAA segment operating income surged 334.6% to $13.9 million from $3.2 million in the prior year.
EAAA segment adjusted operating income increased 97.6% to $14.0 million from $7.1 million.
Six-month net sales for the AMS segment were $443.3 million (up 5.7%), and for the EAAA segment were $283.4 million (up 11.8%).

Interface describes itself as a global flooring and sustainability leader with a diversified portfolio including Interface carpet tile, LVT, nora rubber flooring, and FLOR premium area rugs.
The company notes that growth was broad-based across all regions and product categories.
The One Interface strategy is credited with strengthening the company's competitive position and long-term growth profile.
The press release mentions competition with a large number of manufacturers in the floorcovering products market, some of which have greater financial resources.

Risks include changes in foreign trade policies and tariffs, large increases in raw material costs, shipping costs, duties, or tariffs.
Potential disruptions to supply chains from unanticipated termination of arrangements with primary third-party suppliers of synthetic fiber or LVT.
Risks related to geopolitical conflicts (Russia/Ukraine, Middle East), pandemics, natural disasters, and adverse economic conditions affecting new construction and renovation markets.
Risks associated with substantial debt levels, servicing debt obligations, and potential additional indebtedness.
Risks regarding fluctuations in foreign currency exchange rates and the impact of environmental laws and regulations.

Laurel Hurd, CEO, stated the company delivered strong results reflecting continued momentum and disciplined execution, highlighting the strength of the diversified portfolio and One Interface strategy.
Bruce Hausmann, CFO, noted that higher sales volumes, proactive pricing, favorable mix, and manufacturing efficiencies drove margin expansion, further enhanced by IEEPA tariff refunds.
Management expressed confidence in executing disciplined capital allocation and delivering long-term shareholder value, citing a healthy balance sheet.
The tone is positive and confident, emphasizing robust momentum and a strong backlog.

The company received $15.6 million in IEEPA tariff refunds which significantly boosted the adjusted gross profit margin.
Adjusted SG&A expenses increased $9.7 million year-over-year due to higher sales commissions, variable compensation, and foreign currency exchange variances.
The company paid dividends of $3,483,000 in the quarter and $3,621,000 in the first six months.
The company repurchased common stock costing $8,795,000 in the quarter and $20,795,000 in the first six months.
The company repaid $43,207,000 in long-term debt in the quarter and $70,283,000 in the first six months, while borrowing $51,011,000 and $92,763,000 respectively.
Capital expenditures were $12,200,000 in the quarter and $22,527,000 in the first six months.
The company maintains a goal of becoming carbon negative by 2040 without the use of offsets.