Q2 2026 Interface Inc Earnings Call Transcript
Key Points
- Interface Inc (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.
Hello everyone.
Thank you for joining us and welcome to the Interface Second Quarter 2026 Earnings
(Operator Instructions)
Christine Needles. Corporate Communications.
:/
Good morning and welcome to Interface's conference call regarding second quarter 2026 results hosted by Laurel Hurd, CEO, and Bruce Hausman, 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,
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