What Happened?
Shares of modular flooring manufacturer Interface (NASDAQ:TILE) fell 2.7% in the afternoon session after the company's third quarter earnings failed to impress markets.
The company posted revenue of $364.5 million, up 5.9% year-over-year, which surpassed consensus estimates. Profitability was also a bright spot, with adjusted earnings per share of $0.61 coming in 27.1% ahead of forecasts. Interface also lifted its earnings guidance for the full year. Despite the positive report, the subsequent downturn may reflect investor focus on other aspects of the release. For instance, the company's free cash flow margin of 18.1% was down from 20.3% in the same quarter last year. The broader sector also faces a tepid outlook as evolving hybrid work models soften demand for office furnishings.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Interface? Access our full analysis report here.
What Is The Market Telling Us
Interface’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 19.1% on the news that the company reported strong second-quarter earnings that surpassed analyst expectations and raised its full-year forecast. The carpet tile maker announced adjusted earnings of $0.60 per share on revenue of approximately $376 million, which comfortably beat Wall Street's projections. This performance represented a significant 50% jump in adjusted earnings and an 8% increase in sales compared to the same quarter last year. Following the strong results, management lifted its financial guidance for the full year. The company credited its success to its "One Interface" strategy, which helped drive market share gains and expanded its gross profit margin.
Interface is up 4.1% since the beginning of the year, but at $24.94 per share, it is still trading 16.5% below its 52-week high of $29.88 from September 2025. Investors who bought $1,000 worth of Interface’s shares 5 years ago would now be looking at an investment worth $3,958.
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