TILE

As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the business services & supplies industry, including Interface (NASDAQ:TILE) and its peers. This is a sector that encompasses many types of business, and so it follows that a number of trends will impact the space. For industrial and environmental services companies, for example, trends around environmental compliance and increasing corporate ESG commitments matter while for safety and security services companies, the intersection of physical security, cybersecurity, and workplace safety regulations are the topics du jour. Broadly, AI and automation could be tailwinds for companies in the space that invest wisely. On the other hand, shifting regulatory frameworks could force continual changes in go-to-market and costly investments. The 20 business services & supplies stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was in line. In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results. Pioneering carbon-neutral flooring since its founding in 1973, Interface (NASDAQ:TILE) is a global manufacturer of modular carpet tiles, luxury vinyl tile (LVT), and rubber flooring that specializes in carbon-neutral and sustainable flooring solutions. Interface reported revenues of $395.7 million, up 5.4% year on year. This print exceeded analysts’ expectations by 1.4%. Overall, it was a strong quarter for the company with a beat of analysts’ EPS estimates and full-year revenue guidance meeting analysts’ expectations. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 1.9% since reporting and currently trades at $34.42. We think Interface is a good business, but is it a buy today? Read our full report here, it’s free. Facilitating the sale of approximately 1.3 million used vehicles in 2023, OPENLANE (NYSE:OPLN) operates digital marketplaces that connect sellers and buyers of used vehicles across North America and Europe, facilitating wholesale transactions. OPENLANE reported revenues of $554.6 million, up 15.1% year on year, outperforming analysts’ expectations by 4.4%. The business had a stunning quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 13.8% since reporting. It currently trades at $35.50. Is now the time to buy OPENLANE? Access our full analysis of the earnings results here, it’s free. Starting as a single salvage yard in California in 1982, Copart (NASDAQ:CPRT) operates an online auction platform that connects sellers of damaged and salvage vehicles with buyers ranging from dismantlers and rebuilders to used car dealers and exporters. Copart reported revenues of $1.15 billion, up 2.4% year on year, exceeding analysts’ expectations by 1%. Still, it was a softer quarter as it posted a significant miss of analysts’ EPS estimates. Interestingly, the stock is up 4.3% since the results and currently trades at $31.83. Read our full analysis of Copart’s results here. Born from the 1958 founding of Ritchie Bros. Auctioneers and rebranded in 2023, RB Global (NYSE:RBA) operates global marketplaces that connect buyers and sellers of commercial assets, vehicles, and equipment across multiple industries. RB Global reported revenues of $1.32 billion, up 11.1% year on year. This result surpassed analysts’ expectations by 6.8%. All in all, it was a strong quarter for the company. The stock is down 24.5% since reporting and currently trades at $83.87. Read our full, actionable report on RB Global here, it’s free. Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE:VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada. Vestis reported revenues of $661.7 million, down 1.8% year on year. This number missed analysts’ expectations by 1.2%. Taking a step back, it was still a strong quarter as it produced a beat of analysts’ EPS estimates. Vestis had the weakest performance against analyst estimates in the group. The stock is down 7.3% since reporting and currently trades at $12.85. Read our full, actionable report on Vestis here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Interface’s second quarter results were met with a notably positive market reaction, reflecting strong revenue growth and margin expansion. Management attributed the outperformance to broad-based demand across key market segments, increased operational efficiency, and the successful execution of its “One Interface” strategy. CEO Laurel Hurd highlighted, “Growth was broad-based across regions, product categories and primary market segments,” with both price and volume contributing to the company’s top-line momentum. Hurd also noted that ongoing investments in automation and robotics have improved manufacturing efficiency, which, combined with a one-time tariff refund, supported the significant margin gains. Is now the time to buy TILE? Find out in our full research report (it’s free). Revenue: $395.7 million vs analyst estimates of $390.1 million (5.4% year-on-year growth, 1.4% beat) Adjusted EPS: $0.88 vs analyst estimates of $0.64 (37.6% beat) Adjusted EBITDA: $87.7 million vs analyst estimates of $67.41 million (22.2% margin, 30.1% beat) The company slightly lifted its revenue guidance for the full year to $1.47 billion Operating Margin: 18.9%, up from 13.9% in the same quarter last year Market Capitalization: $2.24 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Brian Biros (TRG): Asked about margin dynamics in Q3 and Q4. CFO Bruce Hausman explained that margin changes primarily reflect the timing of cost flow-through, with proactive pricing taken to offset future input cost increases. David S. MacGregor (Longbow Research): Inquired about the composition of margin improvement. Hausman and CEO Laurel Hurd highlighted automation, mix, and pricing as key contributors, with automation being a structural, durable change. Alexander Paris (Barrington Research): Asked whether the one-time tariff refund was included in future guidance. Hausman confirmed it was, and clarified that ongoing tariffs are still part of the cost base. Reuben Garner (Benchmark): Sought details on the pace of corporate office recovery and the role of new products in healthcare. Hurd attributed growth to the return-to-office trend and said new products like noravant timber will have a greater impact in future quarters. David S. MacGregor (Longbow Research): Queried long-term gross margin targets and whether the company’s ambitions had changed. Hurd reiterated commitment to margin expansion but noted the goal is to navigate uncertainty while driving growth and innovation. Looking forward, the StockStory team will closely watch (1) the pace of new product adoption in healthcare and education, (2) the impact of ongoing automation investments on operational efficiency and margins, and (3) continued momentum in corporate office renovations as return-to-work trends evolve. Execution against these milestones, as well as management’s ability to manage input cost pressures, will be critical in the coming quarters. Interface currently trades at $38.76, up from $35.10 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Friday, Aug. 7, 2026 at 8:00 a.m. ET Corporate Communications - Christine Needles Chief Executive Officer - Laurel Hurd Chief Financial Officer - Bruce Hausmann Operator: Hello, everyone. Thank you for joining us, and welcome to the Interface Second Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Christine Needles, Corporate Communications. Christine, please go ahead. Christine Needles: Good morning, and welcome to Interface's conference call regarding second quarter 2026 results, hosted by Laurel Hurd, CEO; and Bruce Hausmann, CFO. During today's conference call, any management comments regarding Interface's business, which are not historical information, are forward-looking statements within the meaning of federal securities laws. Forward-looking statements include statements regarding the intent, belief or current expectations of our management team as well as the assumptions on which such statements are based. Any forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could cause actual results to differ materially from any such statements, including risks and uncertainties described in our most recent annual report on Form 10-K filed with the SEC. The company assumes no responsibility to update forward-looking statements. Management's remarks during this call also refer to certain non-GAAP measures. Reconciliations of the non-GAAP measures to the most comparable GAAP measures and explanations for their use are contained in the company's earnings release and Form 8-K furnished with the SEC today. Lastly, this call is being recorded and broadcasted for Interface. It contains copyrighted material and may not be rerecorded or rebroadcasted without Interface's express permission. Your participation on the call confirms your consent to the company's taping and broadcasting of it. After our prepared remarks, we will open up the call for questions. Now I will turn the call over to Laurel Hurd, CEO. Laurel Hurd: Thank you, Christine, and good morning, everyone. Interface delivered another strong quarter, exceeding our expectations, achieving 4% year-over-year currency-neutral net sales growth, building on 7% currency-neutral growth in the second quarter of last year. Growth was broad-based across regions, product categories and primary market segments. We saw healthy contributions from both price and volume, reflecting the strength of our diversified portfolio. Profitability also improved significantly this quarter, driven in part by the IEEPA tariff refunds we recognized. More importantly, continued operational execution improvements also contributed to margin expansion, highlighting the underlying strength and durability of the business. Our strong results continue to reinforce that our One Interface strategy is working. As we've discussed before, One Interface is a multiyear strategy focused on: building strong global functions to support our world-class local selling teams; accelerating growth through enhanced commercial productivity of our commercial teams; expanding margins through global supply chain management and simplifying operations; and leading in design, performance and sustainability. We continue to invest in design and innovation that expands our addressable market. Noravant timber, the rubber flooring innovation we launched earlier this year, which combines the durability and performance of rubber with a distinctive wood grain aesthetic is gaining momentum in the market. At Clerkenwell Design Week in London, it was named Best Product for Health Care, and we're seeing encouraging specification activity from leading design firms. We believe noravant represents a meaningful opportunity to further expand in Healthcare and other segments over time. We also continue to expand our reach across price points, with 2 notable additions to our carpet tile offering. First, building on our highly successful Open Air platform, we launched Open Air Neutrals at Chicago Design Days. This offering extends the collection to warmer, more neutral tones and works seamlessly across our carpet tile, LVT and nora rubber flooring portfolios. Second, we previewed Twist & Texture, which pairs textile-inspired design with an accessible price point and quick delivery, giving customers the options they are looking for and continuing to drive share gains in the market. Clerkenwell Design Week and Chicago Design Days provided strong platforms to connect with customers and the design community and to showcase our latest products and innovations. The interest we're seeing across the portfolio reinforces our confidence in the innovation investments we're making to expand our addressable market. Turning to manufacturing and supply chain. We're continuing to invest in automation and robotics to improve efficiency and expand margins. Last quarter, we highlighted the robotic solutions we brought online in our carpet tile manufacturing facilities in Europe and Australia. And I'm pleased to say that investments are exceeding expectations. We've also added new packaging automation in Australia and continue to invest in robotics in Germany to enhance efficiency in our rubber business. Overall, these investments are helping us reduce costs and support sustainable growth as we scale. I'd also like to share a few highlights from our recently published 2025 Impact report. Sustainability is core to Interface and central to how we create long-term value for our employees, customers, shareholders and the planet. In 2025, we reduced our product carbon footprint across all product lines by 4% compared to 2024. We achieved this improvement through material and manufacturing innovations. Across our portfolio, 51% of materials are now recycled or bio-based, the highest in the commercial flooring industry with innovative materials like captured carbon helping to further drive carbon reduction. In addition, 79% of our manufacturing energy came from renewable sources. Overall, we cut our global greenhouse gas emissions by 36% compared to our 2019 baseline. We are focused on reaching our 2030 science-based targets and making progress towards our ambitious all-in goal to be carbon negative by 2040, without offsets. Before we move to the financials, I'm proud to share that we were recently certified as a Great Place to Work in all 14 countries where we are eligible. This represents 95% of our global workforce, including those in U.S., Germany, The Netherlands, China and Australia. Attracting and retaining great talent remains a crucial part of our success, and this recognition reflects the strength of our culture and the engagement of our teams around the world. Now let's turn to our second quarter results. We delivered 4% year-over-year currency-neutral net sales growth in the second quarter. In the Americas, currency-neutral net sales increased 3% year-over-year, driven by our One Interface combined selling teams and demand across our key market segments. In EAAA, currency-neutral net sales increased 5%, driven by stronger volumes and encouraging broad-based growth. Turning to our market segments. Our diversification strategy continues to drive growth. Healthcare had a standout quarter with global billings up 19% on top of 28% growth in the second quarter of last year. Nora continues to be a meaningful growth engine in this market segment, and we continue to benefit from our combined Interface and Nora selling teams in the U.S. Education billings were up 5% in the second quarter on top of 11% growth in the second quarter of last year. We remain well positioned across both K-12 and higher education, supported by our low-carbon, high-performing products, broad range of price points and our design leadership. The market continues to benefit from strong macro drivers, including renovation, modernization initiatives and new construction activity. Our ability to serve projects across a wide range of budgets is helping us win. Corporate Office billings were up 5% in the second quarter on broad-based global growth, where we continue to gain share. One factor contributing to our success is the Interface Design Studio, which pairs customers with experienced interface design experts who help bring projects to life from concept to completion. By making it easier to evaluate flooring solutions across our portfolio, our Design Studio strengthens customer engagement and reinforces our competitive position as organizations make specification decisions. We continue to see healthy underlying demand, supported by return to office trends, renovation activities and an ongoing flight to quality in Class A space where our brand, design leadership and broad product portfolio are well positioned. Turning to orders. Consolidated currency-neutral orders increased 5% year-over-year. Orders in the Americas grew 5%, while EAAA increased 6%, driven by strength across all regions and supported by continued development of our product portfolio. Backlog was strong at the end of the quarter, up 22% year-to-date, reflecting continued momentum across the business, giving us confidence to raise our full year guidance. With that, I'll turn it over to Bruce. Bruce Hausman: Well, thank you, Laurel, and good morning, everyone. All comparisons provided are year-over-year versus the second quarter of 2025, unless otherwise noted. Second quarter net sales were $395.7 million, up 5.4% as reported and 3.8% on a currency-neutral basis. Second quarter currency-neutral net sales were up 3.5% in the Americas and up 4.5% in EAAA. Second quarter adjusted gross profit margin was 45%, up 524 basis points. Higher sales volumes, proactive pricing, favorable mix and manufacturing efficiencies drove 131 basis points of that improvement, reflecting the strong operational execution that Laurel referenced. The remaining 393 basis points were driven by a $15.6 million benefit from IEEPA tariff refunds and represented approximately $0.19 of earnings per diluted share. As a reminder, this tariff refund was not included in our full year guidance that we provided last quarter during our Q1 2026 earnings release. Second quarter adjusted SG&A expenses were $103.1 million compared to $93.4 million due to higher sales commissions and variable compensation on increased sales and profits and foreign currency exchange variances. Second quarter adjusted operating income was $74.9 million, up 34% compared to $55.9 million. Second quarter adjusted net income was $51.5 million compared to $35.4 million. Second quarter adjusted EBITDA was $87.7 million compared to $64.8 million and second quarter adjusted earnings per diluted share was $0.88, up 47% compared to $0.60. With these results in mind, I'll turn to capital allocation. As a reminder, our capital allocation strategy is balanced and disciplined. First, we prioritize investing in the business in areas like innovation and productivity to drive growth and margin expansion. Second, we focus on managing leverage through a disciplined use of debt. Third, we continue to evaluate potential M&A opportunities that align with our strategy and that can accelerate growth and margins. Finally, and importantly, we remain committed to returning excess cash to shareholders through a combination of dividends and disciplined share repurchases. To recap our progress against these objectives in the second quarter, we generated $38.4 million of cash from operating activities and capital expenditures were $12.2 million, which included continued investments in automation and robotics to support our growth and efficiency. We also repurchased $8.8 million of Interface common stock and paid our quarterly dividend, reflecting our ongoing commitment to return excess cash to shareholders. Turning to our outlook. With a healthy backlog, strong order momentum and the margin performance we achieved in the first half, we are raising our full year guidance. A few dynamics are worth noting as you think about the balance of the year. Second quarter margins benefited from proactive pricing implemented to offset raw material cost increases that will flow through the P&L in future quarters. We also recorded a $15.6 million tariff refund in the second quarter that equates to roughly 105 basis points of our improved full year margin outlook. This is reflected in our updated full year guidance. We are not assuming any additional refunds going forward. With that in mind, we anticipate, for the third quarter of fiscal 2026, net sales of $370 million to $380 million; adjusted gross profit margin of approximately 40.8% of net sales; adjusted SG&A expenses of approximately $100 million; adjusted interest and other expenses of approximately $4 million, an adjusted effective income tax rate of approximately 27.5% and fully diluted weighted average share count of approximately 58.2 million shares. And for the full fiscal year of 2026, which, as a reminder, is a 53-week year for Interface with the extra week occurring in the first quarter of 2026, we anticipate net sales of $1.455 billion to $1.485 billion; adjusted gross profit margin of approximately 40.6% of net sales; adjusted SG&A expenses of approximately $395 million; adjusted interest and other expenses of approximately $15 million; an adjusted effective income tax rate of approximately 26% and capital expenditures of approximately $60 million. And with that, I'll turn the call back to Laurel for concluding remarks. Laurel Hurd: Thank you, Bruce. Interface delivered a strong second quarter, and we're encouraged by the momentum we're building across the business. Growth was broad-based across all regions, product categories and primary market segments, reflecting the strength and diversification of our business. Our strong financial position provides us with the flexibility to continue investing in the business while also returning capital to shareholders. With strong order momentum and backlog entering the second half of the year, we are well positioned to deliver another year of strong performance. I want to thank the entire Interface team for their continued execution and their passion for serving our customers every day. And with that, I'll open it up to questions. Operator? Operator: [Operator Instructions] Your first question comes from the line of Brian Biros with TRG. Brian Biros: Can you talk about the margins for Q3 and Q4 a little bit more? Q4 seems to imply a decline year-over-year. It sounds like that's mostly the timing of the flow-through of kind of the increased cost that I think you already put price through. So maybe just a little bit more finer point on the puts and takes for that would be helpful. Bruce Hausman: Yes, you got it, Brian. It's just the timing of the flow-through. We feel really good about the gross margins, not just the historical performance that we're seeing throughout the year, but also about our forward projection. If you look at the back half in total, gross margins are around 39% in the back half in our guide, which is ahead of our ambition, as you might remember. And if we can achieve that for the full year, if we can achieve that for Q4 -- or I'm sorry, for the back half, it'd be up about 60 bps. And if we can achieve that for the full year, we'd be up about 100 bps off of our baseline. So we feel really good about gross margins going forward. Brian Biros: That's a good lead into my next question, which was going to be about gross margin going forward. I know long-term guidance before was kind of the 38.5%. And I think it kind of ramped up a little bit to 39%, which I think is what you delivered last year. And you said you might finish above that this year even without the tariff refund. So is there a different view of margins going forward? Or how would you phrase that at the moment? Bruce Hausman: Yes. We're -- the way we're thinking about that, Brian, is you think about the back half run rate around 39%. We feel really good about that. Again, that will be up about 60 bps year-over-year off of our baseline. We feel really good about the run rate for the full year being up about 100 basis points off of our baseline. And as we move into the year, we're going to continue to navigate it and continue -- we know that we have -- our job is to continue improving margins. And we feel really good about how we're going into the back half and how we're going into the future periods. Laurel Hurd: I'll just add on that, Brian. We're committed to continuing margin expansion. So we're ahead of where we thought we'd be. We continue to outperform. Our productivity initiatives are delivering ahead of our expectations. And yet we know it's a really volatile marketplace. So we're watching that, but we feel really good about our ability to continue to grow our margins. Brian Biros: Understood. On the guidance raise, it seems like it was mostly on the Q2 beat maybe, but you also talked about the increase in backlog and the order momentum giving you the confidence to raise the guidance. So just trying to gauge, I guess, if there's anything in the second half that is slightly expected to be better than you previously thought or if it really is just the Q2 beat? Laurel Hurd: Q2 came in ahead of our expectations, as you said, and we're pleased with that. We feel good about our momentum, which -- we felt good about our momentum last quarter as well when we provided full year guidance. So, nothing has really changed on that front. We still feel good. We came in a little bit better in Q2, and we'll see what happens for the back half. Bruce Hausman: Yes. And Brian, coming off of a really strong quarter and strong first half operationally, it was great to see all the broad-based growth globally across all of our geographies, all of our products and all of our key market segments. So it gives us confidence in the solid momentum going into the second half, which we feel really good about. Brian Biros: Great. And then last one for me, I think, just on Education, up 5% in the quarter on an 11% comp, which I think was also then on a 13% comp a year before that. So great growth there over the last 2, 3 years. Can you talk about the strength of that market and your position there? I mean it seems like the more approachable price points are working. And I just want to make sure that we aren't confusing the trend there of the lowering percentage, just how larger numbers work. Laurel Hurd: Yes, exactly. Brian Biros: But it's not slowing and it almost seems like it's getting stronger and I just want to make sure that's clear and give you guys a chance to talk to that. Laurel Hurd: Yes, that's great. So we feel great about our Education business, as you said, a strong quarter on -- its sort of growth on growth on growth. And as you said, it's becoming a much bigger, bigger piece of our business. So to grow on top of it is really impressive. And I think it's a few things. We love the macros in the Education space. There's a lot of activity there, both in K-12 and higher education. But we remain really well positioned. Our approachable price points in both carpet tile and LVT have definitely helped us gain share there. And we're also selling nora, especially in K-12, which is one of our fastest-growing markets as well. So we're finding really selling across the portfolio is helping us grow that market as well. Operator: Your next call comes from the line of David MacGregor with Longbow Research. David S. MacGregor: Congratulations on all the progress. Obviously, a lot of focus around gross margins here and just what you have been able to accomplish. And I realize there's a lot of moving parts. You talked about sales volume and pricing and mix and efficiencies. Can you help us understand just kind of maybe bridge for us the 131 basis points and just help us understand the composition of that growth? How much of it is volume leverage versus the mix, the pricing and the efficiencies? Bruce Hausman: Yes. As you pointed out, David, it's a mixture of all those things. The automation and robotics that we have put into our manufacturing facilities are a large piece of that 131 basis points of operational improvement. I think the key thing that is encouraging to us is these are durable and structural changes that we made to the business, which really help us on a go-forward situation. So -- and that obviously has informed our strong guide around gross margins in the second half of the year. David S. MacGregor: And maybe mix as well, if you could talk to the contribution from mix. It sounds like [ nora ] was pretty strong. Bruce Hausman: Yes, mix definitely helps. That's one of the things I love about Laurel. She has just really, really helped ingrain that into the organization, how important that is. really focusing on mix, and it's around geographic mix, product mix. And that's a huge helper, obviously as well, is helping us to improve our margins. Laurel Hurd: And also, David, the price that we took helped read through as well. So, it was a mix of all those things. Bruce Hausman: Yes. We mentioned we did take some proactive pricing. We're seeing and you're aware of this, David, we mentioned this on our last call. We're seeing low single-digit inflation cost increases in our raw materials. So we did do some proactive pricing in Q2. And obviously, as you know, the mechanics of the accounting, that's -- those costs sit up in inventory, but they flow through the P&L in future quarters. So... David S. MacGregor: Right. which gets back to your timing observation around 3Q versus 4Q gross profit. Bruce Hausman: Exactly. That's just how they flow. David S. MacGregor: Sure. Within nora, and I realize you've got a mix there of different products. But -- and you talked about noravant and the progress you made there with the PVC-free product. But can you just talk about norament and data centers and the extent to which you feel you're succeeding with that product in heavier gauges in data center markets? Laurel Hurd: Yes. I think data centers is still small for us. It's something that we've got a bit of success in, but really where we're seeing the success is in labs. So we've got strong performance throughout in bio, in labs, in higher education. And a lot of our corporate relationships that historically we've sold carpet tile and LVT to some of the strong, whether it's pharma or biotech companies, we're now selling nora and norament into their labs. So that's, I think, the play that has been really successful for us. David S. MacGregor: Okay. And just sort of leveraging off the story of success, maybe just talk about product innovation as a driver behind expanding total available markets and just what that might represent as you think longer, maybe 2, 3 years out, how you are expanding the total available market? You've got the medium price point now with the carpet tiles as well. So I realize it's happening in a number of different places within the mix. But just how should we think about that as a top line driver? Laurel Hurd: Yes, it's a great question, and we're really focused on the product portfolio. I'm pleased with the progress that we're making. And we think about it really in 2 buckets. The first is, how we drive market share gains in our existing markets, and we're focused on that day in and day out. And then really, as you said, continue to focus on where and how can we best expand our addressable market in a way that really suits our brand and also holds up our margin requirements and fits our selling system. So, a few examples. As you said, there's approachable price point in carpet tile, and that's been really successful. We're expanding the Open Air collection, and we're also launching our next platform on that. So we're really pleased in carpet tile. We've done that consistently across our other product forms. So LVT, we have a more approachable price point of LVT and a thinner gauge. And then we also have some noraplan rolled goods that are at more approachable price points. So we've been taking that consistently across our product portfolio. And then the other example of that, as you said, is noravant and our first launch of noravant Timber, the wood grain look, which takes all the benefits of rubber and adds this new design element, which is primarily -- the primary opportunity for that incrementally is really patient rooms, as we've talked about. So that's another example of -- that's really going after the premium end of the vinyl sheet market that we don't play in today. So we're thinking about that really systematically looking category by category and how we can continue to expand the market. Bruce Hausman: And David, with all that interesting stuff that -- with all that stuff that Laurel articulated, I think it's really helped us diversify the company. And I think we're seeing the results of that in the P&L. When we're able to say quarter-to-quarter, and we've been able to say this for a while, all product lines are growing. and that we're growing in our key market segments consistently. And this quarter, we grew very broadly across geographies. It's really encouraging to see this -- the innovation really kicking in on the P&L and on the results. David S. MacGregor: Yes, it definitely is. And just to tie this back to capital allocation, do you feel like you've got sufficient capacity in place right now to support the expansion of your total available markets? Laurel Hurd: Yes. I would say at this point, we feel good about our ability to support demand. And the good news about things like the productivity and automation investments in our nora facility in Germany is those kind of -- they do a few things for us. They help improve our efficiencies. They're actually some of the toughest jobs to fill that we're automating, and they help us drive more throughput. So it helps enhance our customer service levels and increases our available capacity. So that's how we're looking at it today, but we're watching it regularly to see if we need to continue to expand and invest, which we'll do. David S. MacGregor: Got it. Last question for me is just, you mentioned back to the office or back to work as a driver in the Corporate segment. Where do you think we are in that journey? Are we in early innings, mid-innings, late innings? Just what's your sense from what you're hearing back from your sales people? Laurel Hurd: Yes. In Corporate, we've said for a while, we feel really good about the corporate space, and it fits so well with the Interface brand and our value proposition because there is such a strong return to work. I think it's accelerating. I would say people are really coming back to work around the world. I see it everywhere I go. And the need to update the office space to the new ways of working is happening. So we're seeing a lot of renovation work. And it feels on the early end of that, certainly as more and more companies are bringing people back. David S. MacGregor: How much forward visibility do you have on that? Laurel Hurd: I mean it's talking to customers and the trending that we're getting and thinking about the work that's coming through the A&D firms. So it's -- we see it in our opportunity pipeline, certainly, and then obviously, in the order book as it flows through. A lot of it is just feeling the market and getting out there with customers. Bruce Hausman: And David, you're aware one of the great dynamics of our business is just the lease turn rates. So when leases are turning, it typically means some sort of renovation remodel around, oftentimes flooring and paint. And so as those leases are turning and as companies are thinking about the design of the future of their office or landlords are encouraging tenants to stay and providing tenant improvement dollars to do that, all that kind of goes into this mix around the R&R work that we're seeing in office, which is really helpful for our business. David S. MacGregor: Are you still seeing pretty high levels of tenant improvement budgeting? Bruce Hausman: Yes, we are. Laurel Hurd: Yes. David S. MacGregor: Those dollars are still there. Congrats on all the progress. Operator: Your next question comes from the line of Alex Paris with Barrington Research. Alexander Paris: Congrats on the beat and raise. I got a couple of questions. First off, performance was led by Healthcare with global billings up 19%. Corporate and Education were both up 5%. Are there any other markets to call out, customer segments to call out beyond the big 3, government, retail, et cetera? Laurel Hurd: No. If I look at -- the big 3 really account for the majority of our business and our primary focus. The government was up a little bit. Our retail business was up a little bit. So nothing really notable outside of the ones that we've highlighted. Alexander Paris: All right. Then perhaps we can dive a little deeper into Education. Q2 is really the education season, but I think that also bleeds into Q3 as well. What does Q3 look like? Laurel Hurd: So it's really -- most of the billing has happened in Q2 as we ship the product in time for renovations that happen before kids go back to school. So, again, as you said, we had a really strong Q2 and feel good about where we are for Q3 as well. Bruce Hausman: Yes. And it's coming off of double-digit growth. I feel really good. Education is -- we have such a great value proposition in that space. We feel really good about our momentum there and about our value proposition, about the future. Alexander Paris: And within education, what are the strong product lines? Obviously, you talked about it before, design leadership, low-carbon, high-performing products, carpet tile, LVT, maybe some additional color there on product categories. Laurel Hurd: Yes. It's really -- so what does -- if I take -- I'll take it in pieces, K-12 our carpet tile does well in the kind of approachable price points. We've launched some colors, so the brighter colors are strong for that market. So we've got some new collections that are doing well there as well as LVT has also historically been really strong in K-12. And then as I mentioned briefly, nora has been a really strong growth driver in K-12 as well. It sort of started in the cafeteria space and the maintenance folks in K-12 really, they love working with the product. It's easy to clean. So we've seen growth in nora as well. And then in higher education, again, it's really across categories. So we'll see LVT in some of the living spaces. We'll see carpet throughout the education buildings. And in labs and science spaces, we've got nora. So it's a cross-category sell there as well. Alexander Paris: Great. And then regarding the tariff refunds, I think you had said last year that about 15% to 20% of your COGS are subject to tariffs. What did you pay in tariffs in 2025? And is this -- I know there's no further tariff refunds in your guidance, but is this one and done? Bruce Hausman: Well, it still holds true that about 15% to 20% of our COGS are subject to tariffs. We're paying those every day still. The refund that we got was the IEEPA tariff refunds that we -- and it was a onetime refund. That's the Supreme Court ruling that those were deemed illegal. So we filed for the refund. That was for the tariffs that we paid as a blend of last year and this year, sort of blended over the 2 different periods. But we're still subject to tariffs, and we're still paying tariffs every single day going forward. And that's baked into our guide. Alexander Paris: Yes. So the $15.6 million you got, that's part of the new revised full year guidance. Bruce Hausman: Correct. And the ongoing tariffs that we're going to -- that we believe we're going to have to continue paying around 15% to 20% of our COGS are subject to tariffs. That's in our guide as well. Alexander Paris: Got you. And then on proactive pricing, just to be clear, you said you're seeing raw material cost increases, inflation, and this is an attempt to get ahead of those increases. Laurel Hurd: Yes. I think as we said, we took -- we've taken price across the market, really across the globe in response to the known increases that we were getting in our input costs. And our teams are really effective at executing price increases. I'm proud of the work that they've done to get ahead of it and it flows through the P&L over time with inventory. Alexander Paris: Great. And then last question for me. Repurchases in the second quarter, repurchases in the first half. I think it was $8.8 million in the second quarter and around $21 million year-to-date. Is this new or accelerating? It is opportunistic, obviously. What color can you put around share repurchases? Bruce Hausman: Yes. You've got the numbers right. So it's around $21 million year-to-date. Our thinking on that is just disciplined and opportunistic. And we're going to continue to return excess cash to shareholders through share repurchases and through dividends. We -- that's a key part of our balanced capital allocation strategy. Alexander Paris: And how many shares did you repurchase in the second quarter? How many shares did you repurchase year-to-date? Bruce Hausman: Around 310,000 shares. So... Alexander Paris: That's year-to-date? Bruce Hausman: No, that was in the second quarter. In the first quarter, it was... Alexander Paris: Oh, that was in your quarter. Bruce Hausman: Yes, $461,000 in the first quarter. Operator: Your next question comes from the line of Reuben Garner with Benchmark. Reuben Garner: Congrats on the strong quarter. Let's see, so Healthcare and Education, obviously, very strong. If you said a Corporate or an office growth rate, I didn't hear it. But just curious, the -- what the opportunity there is to see an acceleration? You mentioned return to office. There's also some other pretty strong leading indicators, whether it's lease turnover, absorption, just general business confidence recoveries that have been on the way up. Like how do you think about the office portion of your business on a go forward? And can you remind us what percentage of your business that is today? I know it's probably much smaller than it was even just a few years ago. Laurel Hurd: Yes. So the Corporate Office grew 5% in the quarter. So we had strong -- and it was really broad-based growth across the globe. So we're seeing that return to work trend really helping us. And it's a few things. It's not only return to work, but there's also a flight to quality. So when folks are -- companies are looking at their space, it's that Class A space that's really driving the activity. And -- sorry, excuse me, fighting a cold. So the underlying trends there are great really around the globe, and we're continuing to see that. It represents -- Bruce, what's the number year-to-date. Bruce Hausman: Yes. Office is around -- year-to-date, it was around 44% of our total billings. Yes. Laurel Hurd: But we feel great about it. We felt great about it for a while. I think it's still early days as folks are coming back to work. And we've got a really good -- we're selling across the product portfolio. We're also leveraging our Interface Design Studio, does a really nice job helping our customers design for what comes next after return to work and more need for collaboration space. Sometimes it makes the floor plate more complex to design. And they do a great job helping them. And when they work with our customers, we really sell across the portfolio across LVT, carpet tile and nora as well. Reuben Garner: Great. And then new products-wise, I can't remember the name of the product, but at NeoCon, there was a new health care product launched. How is that launch gone? Is that a meaningful portion of the growth that you've seen? Or is that something that will take a little bit more time to kind of be material within your Healthcare results? Laurel Hurd: Yes. Thanks for mentioning that. The noravant timber is the new product that brings all the benefits of rubber with a wood grain look that you saw at NeoCon. And that's not really reflected in our Q2 Healthcare numbers. So we just launched that to the market. NeoCon was the first place that we showcased it and got samples to our sellers in late Q1. And that really starts with sampling and then mockups. We're really pleased with the progress to date. It's early days. It will be a meaningful new platform for us. We've gotten some strong specs from our A&D customers and some major health care systems. So we're feeling really confident about it, but that's yet to come. That will really help impact our long-term growth in health care as we continue to expand the portfolio with noravant. Reuben Garner: Got it. And then last one for me. The SG&A spending a little bit higher than we had, and I think it came up. Can you just talk about a couple of things? One, is that where we would see the bulk of the freight inflation impact? And two, the mix benefits that you're getting on the gross margin line, are there offsets in terms of selling expenses or otherwise that we need to think about going forward? Bruce Hausman: Yes. So just to clarify the geography in the P&L, the freight, most of the freight lands on the cost of goods sold line, not the SG&A line. So what we're seeing on the SG&A line, the increase in dollars is mostly due to variable selling commissions. I'm sure you noticed that we overachieved the high end of our net sales guide. So I'll take that all day long. We had to pay more variable sales commissions to our selling people as a result of that. And by the way, I think I'll take that all day long. So, and also just variable comp -- we do have a variable comp that affects all employees around the globe. That has also increased the dollars as a result of the stronger sales and strong business performance that we're seeing. And then one last thing. We had foreign -- if you just look at it in U.S. dollars, foreign currency actually in USD also affected the dollars as we translated things like euro and Australian dollars into U.S. dollars. It increased the dollars of SG&A spend that you see on the P&L when we translate everything into USD. But we -- I want to just -- kind of get on in front, we are all over SG&A. We know where every dollar is spent. We have a ton of discipline in this area and a management team that knows that we need to continue being really disciplined with our SG&A spend, being really thoughtful about it and being really thoughtful and knowing that we need to be generating margin expansion on that line. So I don't want that to get past us because it's a really important topic that we talk about regularly as a team. Laurel Hurd: And I'll jump in on that, too, Reuben. The -- as we've said a couple of times, like we're focused on really disciplined, and Bruce is an amazing partner in helping make sure that we stay really disciplined in our SG&A on the front end of the business, so sales commissions, our selling organization, innovation, we're spending in that area and really tightening up everything that doesn't touch the customer or innovation. Operator: Your next question comes from the line of David MacGregor with Longbow Research. David S. MacGregor: I thought I'd circle back with a couple of sort of bigger picture questions. And you had mentioned that you're ahead of plan on the gross margin journey, if we can call it that. I guess what I'm trying to get at is how much of this is maybe how you're thinking about the destination or the terminal rate? Or as you think through the implementation of everything you're working on here, I'm sure in the back of your mind, you've got some sense of this is ultimately where I think maybe 2, 3, 4 years down the road, we can get gross margins. Is that number changing? Is that number migrating higher and higher as we go? Or is this really just kind of we're just pulling things forward faster and the terminal rate probably hasn't changed much? Laurel Hurd: So I appreciate the question. And if you remember back a ways, we had about -- we have 38.5% as our destination. And we said that's where we want to get to by 2030. And we're there ahead of where we thought we'd be and we're higher than we thought we'd be because all these things are really coming together with price and mix and all the efficiencies are really working well together. So -- and that said, I'd say it's a really -- it's a dynamic world out there with a lot of input cost challenges and the tariffs back and forth and all of that. So we've been -- we haven't stated a new destination, but our goal is to continue to improve our margins and navigate the uncertainty while driving growth and making sure that we're focused on driving innovation and mix and everything else so we can continue to expand our margins. David S. MacGregor: Got it. I guess second question. And you talked about just kind of back to the office, and I asked you about that earlier. And I guess what I'm trying to get a sense of is, as you talk to architects and designers and you talk to corporate sponsors on a lot of these projects, to what extent do you think people have sort of moved on from thinking about workplace furnishings and the finishing of the environment of the office is just we need to spend this money, so our people have a place to work and thinking about it more in terms of a recruiting strategy. And if I'm going to get the very best in human capital, I have to really invest in the workplace and all the new amenities to attract the best and the brightest. And so all this money that's being spent on the workplace environment is really more integrated within to how people are thinking about human capital costs rather than just outfitting a workspace. Laurel Hurd: Yes, absolutely. You're absolutely right there. And I think initially, we felt it was a -- everybody come back to work. And I think what companies found is that when they mandated, their employees came back and they came back to maybe the same office space that they had left. It wasn't what they needed anymore. And so there was a lot of employee dissatisfaction with man, I came back to the office. I don't have a place for collaboration. I don't have a quiet room for a Teams or a Zoom call. And so just as you said, the customers have really found that they need to invest in their office space to get the best and brightest talent. And we're seeing more and more of that. I mean the discussions that we have with our customers aren't about what color carpet they want. It's really about what environment are they trying to create for their employees? How can they denote one space as, "This is the space to collaborate." And in another part, to denote that it's a really quiet space for concentrated work. Those are things that our customers are trying to solve and we help them do every day. But you're absolutely right, it's much more about human capital management and having a workplace that they can be really proud of to encourage recruitment and retention. Bruce Hausman: And another dynamic that we're seeing, Dave, is that this is becoming more and more of a data-driven decision. Employee engagement surveys are -- have been around for a long time. But more and more companies are doing them, paying attention to them. And so many of the employee engagement surveys ask employees about their work environment and how they feel about it. And as companies are trying to improve those scores and trying to have stronger employee engagement and trying to have stronger employee engagement scores, they're trying -- this is a very tangible way that they can address, by improving their space, improve those scores and we were so pleased at our scores and the certifications that we were able to get. And, full disclosure, we had one remote location where we get some feedback that we need to upgrade the space, and we're going to do that because we know that's important. And so, it's just pulling out the mirror, it's a tangible way that we're going to help improve our scores internally, and we see our customers doing the same thing. David S. MacGregor: Great. And then let me ask one more last one here, just looks like we've got a couple of minutes. AI, I mean, are you seeing people bringing up AI as a reason to sort of pause on spending? Or I'm not quite sure what our headcount is going to look like a year or 2 years from now? I think we're going to hold off on these projects? Or is this just a nonissue in your world? Laurel Hurd: Yes. I wouldn't say we're not hearing that. We certainly hear -- we get the question a lot of like how is this going to impact the workplace environment. And yet whether I'm out in the Bay Area meeting with tech customers or anywhere else around the world, it's not something that we're feeling slowing anything down. I think if anything, people want to encourage their workers to come back, as you said, we're not seeing people pause to say, I need to see what happens with AI before I make any transition. I think it's the opposite. They're getting ahead of it to really encourage and have the best and brightest talent. Operator: There are no further questions at this time. I will now turn the call back to Laurel Hurd, President and Chief Executive Officer, for closing remarks. Laurel Hurd: Well, thank you all for joining us today. Thanks again to the Interface team for everything you do, and we look forward to speaking to you again next quarter. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Interface, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Interface wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $421,943!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,382,819!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 14, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Interface (TILE) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. Interface (TILE) drew investor attention after second quarter earnings and guidance updates highlighted stronger profitability, support from a one time tariff refund, and a modest lift to full year 2026 sales expectations. See our latest analysis for Interface. Interface's recent guidance raise and stronger second quarter margins came on top of a sharp share price move, with a 1 day share price return of 2.8% and a 90 day share price return of 39.08%. Total shareholder return of 48.38% over 1 year and very large 3 year total shareholder return of 283.42% suggest momentum has been building rather than fading around the current US$38.54 share price. If Interface's jump on earnings has you rethinking where growth could come from next, it might be worth widening your search with the 18 top founder-led companies After a move this sharp and a cluster of upgraded guidance, the focus shifts to price. With Interface trading at US$38.54 against a range of value estimates and analyst targets, the question now is where fair value really sits. The most followed valuation narrative for Interface points to a fair value of $40.50, slightly above the current $38.54 share price. This approach places modest weight on future earnings and margin assumptions. Read the complete narrative. Want to see what sits behind that earnings story for Interface? The narrative references steady revenue growth, firmer margins, and a higher future profit multiple. The mix of these inputs underpins the $40.50 fair value. Result: Fair Value of $40.50 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, the Interface narrative still depends on execution. Any slowdown in automation benefits or weaker commercial flooring demand could quickly challenge those fair value assumptions. Find out about the key risks to this Interface narrative. Given the mix of optimism and concern around Interface, it is worth checking the underlying numbers yourself and judging how balanced the story feels. You can move quickly from headline reactions to your own view by weighing the 4 key rewards and 1 important warning sign If Interface has sharpened your focus, do not stop here. Broadening your watchlist with other clear setups could help you spot opportunities before they feel obvious. Spot potential mispricings early and scan through the 49 high quality undervalued stocks that currently screen well on both quality and valuation filters. Prioritise resilience and check out the 85 resilient stocks with low risk scores that stand out for steadier risk profiles and more robust financial characteristics. Get ahead of the crowd and review the screener containing 20 high quality undiscovered gems that combine solid fundamentals with relatively limited market attention so far. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include TILE. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Modular flooring manufacturer Interface (NASDAQ:TILE) reported Q2 CY2026 results exceeding the market’s revenue expectations , with sales up 5.4% year on year to $395.7 million. On the other hand, next quarter’s revenue guidance of $375 million was less impressive, coming in 0.7% below analysts’ estimates. Its non-GAAP profit of $0.88 per share was 37.6% above analysts’ consensus estimates. Is now the time to buy TILE? Find out in our full research report (it’s free). Revenue: $395.7 million vs analyst estimates of $390.1 million (5.4% year-on-year growth, 1.4% beat) Adjusted EPS: $0.88 vs analyst estimates of $0.64 (37.6% beat) Adjusted EBITDA: $87.7 million vs analyst estimates of $67.41 million (22.2% margin, 30.1% beat) The company slightly lifted its revenue guidance for the full year to $1.47 billion at the midpoint from $1.47 billion Operating Margin: 18.9%, up from 13.9% in the same quarter last year Market Capitalization: $2.22 billion Interface’s second quarter results were met with a notably positive market reaction, reflecting strong revenue growth and margin expansion. Management attributed the outperformance to broad-based demand across key market segments, increased operational efficiency, and the successful execution of its “One Interface” strategy. CEO Laurel Hurd highlighted, “Growth was broad-based across regions, product categories and primary market segments,” with both price and volume contributing to the company’s top-line momentum. Hurd also noted that ongoing investments in automation and robotics have improved manufacturing efficiency, which, combined with a one-time tariff refund, supported the significant margin gains. Looking ahead, Interface’s updated guidance is shaped by continued backlog strength, order momentum, and the expectation of sustained gross margin improvement. Management emphasized that proactive pricing actions and ongoing productivity investments will help offset input cost pressures in the coming months. CFO Bruce Hausman stated, “We feel really good about the gross margins, not just the historical performance that we’re seeing throughout the year, but also about our forward projection.” The company’s focus remains on margin expansion and disciplined investment in automation, product innovation, and market diversification to support long-term growth. Management cited demand diversification, operational improvements, and product innovation as central to the quarter’s performance, while one-time tariff refunds and disciplined capital allocation further supported results. Healthcare momentum: The healthcare segment delivered standout growth, with global billings up 19%. Management attributed this to the growing adoption of nora rubber flooring in hospitals and labs, as well as increased demand for new products like noravant timber, which combines the durability of rubber with a wood-grain appearance. Education segment resilience: The education market remained a solid performer, supported by approachable pricing and a broad product portfolio. The company’s focus on K-12 and higher education, offering both carpet tile and LVT (luxury vinyl tile) at multiple price points, helped Interface capture modernization and renovation trends in schools and universities. Corporate office recovery: Interface experienced a 5% rise in corporate office billings, driven by companies investing in collaborative and high-quality workspaces as return-to-office trends strengthen. The Interface Design Studio has been integral in helping clients reimagine floor layouts and adapt to new workplace needs. Operational efficiency gains: Investments in automation and robotics, particularly in carpet tile facilities in Europe and Australia and in the nora rubber business in Germany, have yielded structural cost reductions and supported margin expansion. Management emphasized these changes as durable contributors to ongoing profitability. Proactive pricing and tariff refunds: The company executed proactive pricing to stay ahead of raw material cost inflation. Additionally, a one-time IEEPA tariff refund significantly boosted margins this quarter, though management noted ongoing tariffs continue to impact costs and are factored into future planning. Interface’s outlook is anchored by strong backlog, ongoing operational investments, and disciplined pricing to offset raw material cost pressures. Sustained margin focus: Management expects gross margins to remain elevated as automation, robotics, and efficiency initiatives continue to deliver benefits. CFO Bruce Hausman highlighted that the company aims to maintain a run rate around 39% gross margin in the back half of the year, even after accounting for the absence of further tariff refunds. Demand diversification and backlog: The company’s healthy backlog and broad-based order momentum across healthcare, education, and corporate office segments provide visibility into future revenue streams. CEO Laurel Hurd pointed to ongoing share gains and a strong pipeline in both established and emerging customer segments as underpinning guidance. Input cost and macro risks: While confident in productivity gains and pricing power, management acknowledged ongoing input cost inflation, tariff exposure, and broader market volatility as risks. The company remains watchful regarding raw material trends and is prepared to adjust pricing or cost structures as needed. Looking forward, the StockStory team will closely watch (1) the pace of new product adoption in healthcare and education, (2) the impact of ongoing automation investments on operational efficiency and margins, and (3) continued momentum in corporate office renovations as return-to-work trends evolve. Execution against these milestones, as well as management’s ability to manage input cost pressures, will be critical in the coming quarters. Interface currently trades at $38.37, up from $35.10 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved 4% currency-neutral net sales growth driven by the One Interface strategy, which integrates global functions to support local selling teams and enhances commercial productivity. Performance was broad-based across all regions and segments, with Healthcare notably delivering 19% global billings growth on top of a 28% comp from the prior year. Operational improvements, including automation and robotics in Europe and Australia, contributed significantly to margin expansion by reducing costs and increasing throughput. The Corporate Office segment grew 5% globally, benefiting from a 'flight to quality' in Class A spaces and the need for companies to redesign offices for collaboration and talent retention. Innovation remains a core driver, with the launch of noravant timber expanding the addressable market by offering rubber flooring performance with a wood grain aesthetic for healthcare patient rooms. Sustainability initiatives resulted in a 4% reduction in product carbon footprint year-over-year, with 51% of materials now being recycled or bio-based, the highest in the industry. The Interface Design Studio is serving as a competitive differentiator by helping customers navigate complex flooring specifications across the company's diversified portfolio. Raised full-year 2026 guidance based on a strong 22% year-to-date increase in backlog and continued order momentum across all geographies. Management anticipates a second-half gross margin run rate of approximately 39%, representing a 60 basis point improvement over the prior year's baseline. Guidance assumes the flow-through of low single-digit raw material inflation in future quarters, which is expected to be offset by proactive pricing implemented in Q2. The company is focused on reaching 2030 science-based sustainability targets and remains committed to becoming carbon negative by 2040 without the use of offsets. Capital allocation priorities remain balanced between investing in automation/innovation, managing leverage, evaluating M&A, and returning cash to shareholders. Recognized a $15.6 million benefit from IEEPA tariff refunds in Q2, contributing approximately $0.19 to earnings per diluted share; no further refunds are assumed in the guidance. Adjusted SG&A increased to $103.1 million, primarily driven by higher sales commissions and variable compensation resulting from exceeding sales and profit targets. Management noted that 15% to 20% of cost of goods sold remains subject to ongoing tariffs, which are factored into the current guidance. Foreign currency exchange variances impacted reported SG&A expenses when translating international results into U.S. dollars. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed they have reached their 2030 gross margin target of 38.5% ahead of schedule due to efficiency gains and favorable mix. While no new long-term terminal rate was provided, the company is committed to continuous margin expansion despite a volatile macro environment. Management believes the return-to-office trend is in its 'early innings' as companies realize they must redesign spaces to support new collaboration needs. Investment in office environments is increasingly viewed as a human capital strategy to attract and retain talent rather than just a facility cost. Nora is seeing success beyond traditional healthcare settings, expanding into life sciences, biotech labs, and K-12 education cafeterias. The new noravant timber product is specifically targeting the premium vinyl sheet market in patient rooms where Interface previously did not compete. Management has not observed customers pausing projects due to AI-related headcount uncertainty. Instead, tech and corporate customers are prioritizing high-quality workspaces to encourage employee engagement and collaboration.

Interested in Interface, Inc.? Here are five stocks we like better. Interface delivered broad-based Q2 growth: Net sales rose 5.4% to $395.7 million, while adjusted EPS increased 47% to $0.88. Healthcare led demand with a 19% increase in billings, alongside 5% growth in education and corporate office markets. Profitability benefited from operational improvements and a one-time tariff refund: Adjusted gross margin expanded to 45%, including a $15.6 million tariff-refund benefit, while adjusted operating income rose 34% to $74.9 million. The company raised its full-year outlook as orders increased 5% and backlog climbed 22% year to date. Interface now expects 2026 sales of $1.455 billion to $1.485 billion and adjusted gross margin of approximately 40.6%. How to Choose a Brokerage Account or Online Broker Interface (NASDAQ:TILE) reported second-quarter 2026 sales growth across regions, product categories and its largest end markets, while profitability benefited from operational improvements and a one-time tariff refund. The commercial flooring company raised its full-year outlook, citing order momentum and a backlog that was up 22% year to date at the end of the quarter. Second-quarter net sales totaled $395.7 million, up 5.4% as reported and 3.8% on a currency-neutral basis. CEO Laurel Hurd said the company achieved 4% currency-neutral sales growth, building on 7% currency-neutral growth in the prior-year quarter. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth “Growth was broad-based across regions, product categories, and primary market segments,” Hurd said, attributing the performance to contributions from both price and volume as well as the company’s diversified portfolio. Adjusted gross profit margin increased 524 basis points from a year earlier to 45% during the second quarter. CFO Bruce Hausmann said 131 basis points of the increase came from higher volumes, pricing, favorable product mix and manufacturing efficiencies. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High The remaining 393 basis points reflected a $15.6 million benefit from IEEPA tariff refunds, equal to approximately $0.19 per diluted share, Hausmann said. He noted that the refund had not been included in the company’s previous full-year guidance and that Interface is not assuming additional refunds going forward. Hausmann said Interface continues to face low-single-digit raw-material cost inflation and implemented proactive pricing during the second quarter. The increased input costs will flow through the income statement in future periods as inventory is sold, creating differences in expected quarterly margin performance during the second half. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling For the back half of 2026, Interface expects gross margins of roughly 39%, which Hausmann said would represent about a 60-basis-point improvement from the comparable prior-year period, excluding the effects of the one-time tariff refund. Hurd said the company is ahead of its earlier margin objectives but has not established a new long-term gross-margin target amid volatile input costs and tariffs. Second-quarter adjusted operating income rose 34% to $74.9 million, while adjusted net income increased to $51.5 million from $35.4 million a year earlier. Adjusted EBITDA was $87.7 million, compared with $64.8 million in the prior-year quarter. Adjusted diluted earnings per share rose 47% to $0.88 from $0.60. Healthcare was the company’s fastest-growing primary market, with global billings up 19% after rising 28% in the second quarter of 2025. Hurd said nora rubber flooring remained a meaningful driver in the segment, supported by combined Interface and nora sales teams in the United States. Education billings increased 5%, following 11% growth in the previous year’s second quarter. Hurd said demand spans both K-12 and higher education, supported by renovation, modernization and new-construction activity. The company said it has been gaining share through its range of price points in carpet tile and luxury vinyl tile, as well as nora products used in K-12 cafeterias, laboratories and other settings. Corporate office billings also rose 5%, driven by broad-based global growth. The segment represented approximately 44% of year-to-date billings, according to Hausmann. Management cited return-to-office trends, renovations and a “flight to quality” in Class A office space as supporting demand. Hurd said customers are increasingly focused on designing offices for collaboration, concentrated work and employee recruitment and retention rather than simply outfitting workspace. The company’s Interface Design Studio, which pairs customers with design specialists, has helped customers evaluate flooring across the company’s carpet tile, LVT and rubber offerings, she said. Interface highlighted several newer products intended to broaden its addressable market. The company launched Open Air Neutrals, an extension of its carpet-tile platform with warmer and neutral tones, and previewed Twist and Texture, a textile-inspired carpet-tile offering positioned at an accessible price point with quick delivery. Hurd also pointed to noravant timber, a rubber flooring product with a woodgrain appearance that was introduced earlier in 2026. The product was named Best Product for Healthcare at London’s Clerkenwell Design Week, and the company has seen specifications from design firms and healthcare systems. Management said the product’s contribution was not yet reflected meaningfully in second-quarter healthcare sales because it remains early in its commercial rollout. In manufacturing, Interface continued to invest in automation and robotics across carpet tile and rubber flooring facilities. Hurd said robotic investments in Europe and Australia were exceeding expectations, while packaging automation in Australia and robotics investments in Germany are intended to reduce costs, increase throughput and support capacity. Currency-neutral orders increased 5% in the quarter, including 5% growth in the Americas and 6% growth in EAAA. Management said strong order activity and backlog supported its decision to raise full-year guidance. Third-quarter net sales are expected to be $370 million to $380 million. Third-quarter adjusted gross margin is expected to be approximately 40.8%. Full-year 2026 net sales are projected at $1.455 billion to $1.485 billion. Full-year adjusted gross margin is expected to be approximately 40.6%. Capital expenditures are forecast at approximately $60 million for the 53-week fiscal year. During the quarter, Interface generated $38.4 million in cash from operating activities and spent $12.2 million on capital expenditures. The company repurchased $8.8 million of common stock, or approximately 310,000 shares, and paid its quarterly dividend. Hausmann said share repurchases will remain “disciplined and opportunistic” as part of a capital-allocation approach that also prioritizes business investment, leverage management and potential acquisitions. Interface, Inc (NASDAQ: TILE) is a global manufacturer of modular flooring and resilient commercial flooring solutions. The company specializes in carpet tiles, luxury vinyl tile (LVT) and other environmentally responsible hard-surface products designed for use in corporate, education, healthcare, hospitality and retail environments. Interface's portfolio also includes broadloom carpet, rubber flooring and acoustic underlays, all engineered to meet performance, design and sustainability requirements in modern interior spaces. Founded in 1973 by Ray C. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Interface Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Interface (TILE) came out with quarterly earnings of $0.88 per share, beating the Zacks Consensus Estimate of $0.63 per share. This compares to earnings of $0.6 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +39.68%. A quarter ago, it was expected that this carpet tile company would post earnings of $0.33 per share when it actually produced earnings of $0.41, delivering a surprise of +24.24%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Interface, which belongs to the Zacks Textile - Home Furnishing industry, posted revenues of $395.7 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.46%. This compares to year-ago revenues of $375.52 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Interface shares have added about 25.7% since the beginning of the year versus the S&P 500's gain of 12.6%. While Interface has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Interface was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.66 on $380 million in revenues for the coming quarter and $2.11 on $1.47 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Textile - Home Furnishing is currently in the bottom 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the broader Zacks Consumer Discretionary sector, Kontoor Brands (KTB), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 12. This maker of Wrangler and Lee apparel is expected to post quarterly earnings of $1.05 per share in its upcoming report, which represents a year-over-year change of -13.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Kontoor Brands' revenues are expected to be $588.97 million, down 10.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Interface, Inc. (TILE) : Free Stock Analysis Report Kontoor Brands, Inc. (KTB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Net Sales: $395.7 million, up 5.4% as reported and 3.8% on a currency-neutral basis. Adjusted Gross Profit Margin: 45%, up 524 basis points, including a $15.6 million benefit from IEPA tariff refunds. Adjusted SG&A Expenses: $103.1 million. Adjusted Earnings Per Diluted Share: 88 cents, up 47% compared to 60 cents. Cash from Operating Activities: $38.4 million. Capital Expenditures: $12.2 million. Share Repurchases: $8.8 million of Interface Common stock. Americas Currency-Neutral Net Sales: Increased 3.5% year-over-year. EAAA Currency-Neutral Net Sales: Increased 4.5% year-over-year. Consolidated Currency-Neutral Orders: Increased 5% year-over-year. Healthcare Billings: Up 19% globally. Corporate Office Billings: Up 5% in the second quarter. Backlog: Up 22% year to date. Warning! GuruFocus has detected 3 Warning Sign with LEFUF. Is TILE fairly valued? Test your thesis with our free DCF calculator. Release Date: August 07, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Interface Inc (NASDAQ:TILE) delivered strong Q2 2026 results with 4% currency-neutral net sales growth, exceeding expectations and building on prior year growth. The company saw broad-based growth across all regions, product categories, and key market segments, including a standout 19% increase in global healthcare billings. Adjusted gross profit margin improved significantly by 524 basis points to 45%, driven by higher volumes, proactive pricing, favorable mix, and manufacturing efficiencies. Innovation and product launches, such as Novant Timber and new carpet tile offerings, are expanding the addressable market and gaining traction with customers. The company raised its full-year guidance due to strong order momentum, a 22% year-to-date increase in backlog, and confidence in continued margin expansion. The Q2 gross margin benefited from a one-time $15.6 million IEPA tariff refund, which is not expected to recur and was not included in prior guidance. Raw material cost increases are expected to flow through the P&L in future quarters, potentially pressuring margins despite proactive pricing actions. The company continues to pay tariffs on 15-20% of its COGS, which are factored into guidance and represent an ongoing cost headwind. SG&A expenses increased due to higher variable sales commissions and variable compensation tied to strong performance, as well as foreign currency translation effects. The company faces a volatile marketplace with input cost challenges and tariff uncertainties, which could impact future margin performance. Q: Can you provide more detail on the puts and takes for gross margins in Q3 and Q4, as Q4 seems to imply a year-over-year decline?A: Bruce Hausmann (CFO): The decline is just due to the timing of the flow-through of costs. We feel really good about gross margins, with the back half projected around 39%, which is ahead of our ambition. If we achieve that for the full year, it would be up about 100 basis points off our baseline. Q: Given the strong margin performance, is there a different view of long-term gross margin guidance going forward?A: Bruce Hausmann (CFO) and Laurel Hurd (CEO): We are committed to continuing margin expansion and are ahead of where we thought we'd be. The back-half run rate of around 39% is a strong indicator. While the marketplace is volatile, our productivity initiatives are delivering ahead of expectations, giving us confidence in our ability to continue growing margins. Q: Was the full-year guidance raise mostly due to the Q2 beat, or is there something expected to be better in the second half?A: Laurel Hurd (CEO) and Bruce Hausmann (CFO): Q2 came in ahead of expectations, but our confidence in the momentum hasn't changed since last quarter. The broad-based growth across all geographies, products, and key market segments gives us solid confidence going into the second half. Q: Can you talk about the strength in the education market and your position there, given the strong growth on top of high comps?A: Laurel Hurd (CEO): We feel great about our education business. The macros are strong in both K-12 and higher education. Our approachable price points in carpet tile and LVT have helped us gain share, and Nora is also a fast-growing product in K-12. Selling across the portfolio is helping us grow in this market. Q: Can you help bridge the 131 basis points of operational improvement in gross margin, breaking down volume leverage, mix, pricing, and efficiencies?A: Bruce Hausmann (CFO): The improvement is a mixture of all those things. The automation and robotics investments in our manufacturing facilities are a large piece of the operational improvement. These are durable, structural changes that inform our strong gross margin guide for the second half. Mix, including geographic and product mix, is also a huge helper, along with proactive pricing taken in response to raw material cost increases. Q: Can you talk about the success of NoraMent and the data center market, and where you are seeing the most success?A: Laurel Hurd (CEO): Data centers are still small for us. We are seeing the most success in labs, particularly in pharma and biotech. We are leveraging existing corporate relationships to sell Nora and NoraMend into their lab spaces, which has been a very successful play. Q: How do you think about expanding your total addressable market through product innovation over the next few years?A: Laurel Hurd (CEO): We focus on two buckets: driving market share gains in existing markets and expanding our addressable market. We are doing this by introducing approachable price points across product forms like carpet tile, LVT, and Nora. New innovations like Noravant Timber target the premium end of the vinyl sheet market, which we don't play in today. We are thinking about this systematically, category by category. Q: Do you feel you have sufficient manufacturing capacity to support the expansion of your total addressable markets?A: Laurel Hurd (CEO): Yes, we feel good about our ability to support demand. Investments in automation and robotics, like in our Nora facility in Germany, improve efficiency, help fill tough jobs, drive more throughput, and increase available capacity. We are watching this regularly to see if we need to continue to expand and invest. Q: Where do you think we are in the return-to-office journey, and what is your forward visibility on that trend?A: Laurel Hurd (CEO) and Bruce Hausmann (CFO): We feel really good about the corporate space, and the return-to-work trend is accelerating. We are seeing a lot of renovation work as companies update spaces for new ways of working. We see it in our opportunity pipeline and order book. Lease turn rates are a great dynamic, as they typically mean renovation and remodel work, which is helpful for our business. Q: Are there any other market segments to call out beyond healthcare, corporate, and education?A: Laurel Hurd (CEO): The big three account for the majority of our business and are our primary focus. Government and retail were both up a little bit, but there was nothing else notable outside of the ones we highlighted. Q: Can you provide more color on the tariff refunds and your ongoing tariff exposure?A: Bruce Hausmann (CFO): About 15% to 20% of our COGS are still subject to tariffs, and we are paying those every day. The $15.6 million refund was a one-time IEPA tariff refund due to a Supreme Court ruling. We are not assuming any additional refunds in our guidance, but the ongoing tariffs are included in our guide. Q: Can you provide color on the share repurchases in the second quarter and year-to-date?A: Bruce Hausmann (CFO): We repurchased around $8.8 million in the second quarter (approximately 310,000 shares) and around $21 million year-to-date (approximately 771,000 shares total). Our thinking is disciplined and opportunistic, and we will continue to return excess cash to shareholders through repurchases and dividends as part of our balanced capital allocation strategy. Q: What is the current percentage of office billings, and what is the opportunity for acceleration in that segment?A: Laurel Hurd (CEO) and Bruce Hausmann (CFO): Corporate office grew 5% in the quarter, with broad-based growth globally. Office is around 44% of total billings year-to-date. We are seeing a flight to quality in Class A space, and the underlying trends are great. It's still early days as people come back to work, and we are leveraging our design studio to help customers design for the future of work. For the complete transcript of the earnings call, please refer to the full earnings call transcript.