Interface Inc ((TILE)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Interface Inc. Reports Strong Q2 Performance Amid Challenges
Interface Inc. recently held its earnings call, revealing a strong performance in the second quarter of 2025. The company reported significant growth in key regions and product categories, particularly in the Americas and nora rubber segment. While the company is making strides in sustainability and has raised its full-year guidance, challenges persist in the EAAA region, and tariff impacts remain a concern.
Strong Q2 Performance
Interface delivered impressive results in Q2 2025, with a currency-neutral net sales growth of 7% and adjusted earnings per share (EPS) of $0.60, both exceeding expectations. This performance underscores the company’s robust operational strategies and market presence.
Americas Sales Growth
The Americas region was a standout performer, achieving an 11% sales growth. This was driven by significant market share gains in carpet tile and rubber, highlighting the region’s strategic importance to Interface’s overall growth.
Significant Growth in Nora Rubber
Nora rubber emerged as a key growth engine, particularly in the education segment, with nearly 40% growth in the Americas. This underscores the product’s increasing relevance and demand in specific markets.
Sustainability Achievements
Interface continues to lead in sustainability, reducing the carbon footprint of its products significantly. Carpet tile saw a 35% reduction, LVT a 46% reduction, and nora rubber a 21% reduction compared to the 2019 baseline. Additionally, 52% of materials used are now recycled or bio-based.
Financial Strength
The company demonstrated strong financial health with liquidity at $419.9 million and a net leverage ratio of 0.9x. Interface also repurchased $4.3 million of common stock, reinforcing its commitment to shareholder value.
Raised Full Year Guidance
Despite a dynamic global environment, Interface raised its full-year guidance, buoyed by strong Q2 results. The company now anticipates net sales between $1.370 billion and $1.390 billion and an adjusted gross profit margin of approximately 37.7%.
EAAA Sales Performance
Sales in the EAAA region remained flat year-over-year, though there was a 4% currency-neutral order growth. This indicates potential for future growth despite current challenges.
Inventory and Backlog Concerns
While the backlog increased by 24% year-to-date, concerns were raised about the sustainability of this backlog and its timely conversion to sales, which could impact future performance.
Tariff Challenges
Approximately 15% of global product costs are exposed to tariffs, with an estimated in-year impact of $8 million to $10 million. This remains a significant challenge for Interface as it navigates the global trade environment.
Forward-Looking Guidance
Looking ahead, Interface has positioned itself well for continued growth in the second half of the year. The company has raised its full-year guidance, forecasting net sales between $1.370 billion and $1.390 billion and an adjusted gross profit margin of approximately 37.7%. Strategic investments in automation and robotics are expected to further enhance operational efficiency and drive future performance.
In summary, Interface Inc.’s earnings call highlighted a strong Q2 performance with significant growth in key areas, particularly in the Americas and nora rubber segment. The company’s commitment to sustainability and financial strength were evident, despite challenges in the EAAA region and ongoing tariff impacts. With raised full-year guidance, Interface is poised for continued success in the coming months.