Interface, Inc.

Second-quarter net sales were $395.7 million, up 5.4% as reported and 3.8% on a currency-neutral basis. Adjusted gross profit margin was 45%, up 524 basis points year over year; about 131 basis points of that improvement came from volume, pricing, mix and manufacturing efficiencies, and 393 basis points came from a $15.6 million IEEPA tariff refund, equal to about $0.19 per diluted share. Adjusted SG&A was $103.1 million versus $93.4 million, adjusted operating income was $74.9 million versus $55.9 million, adjusted net income was $51.5 million versus $35.4 million, adjusted EBITDA was $87.7 million versus $64.8 million, and adjusted EPS was $0.88 versus $0.60. For Q3 FY2026, management guided to net sales of $370 million to $380 million, adjusted gross margin of about 40.8%, and adjusted SG&A of about $100 million. For full-year FY2026, guidance was raised to net sales of $1.455 billion to $1.485 billion, adjusted gross margin of about 40.6%, adjusted SG&A of about $395 million, adjusted interest and other expenses of about $15 million, an adjusted tax rate of about 26%, and capex of about $60 million.

Laurel Hurd framed the quarter as proof that the One Interface strategy is working, citing broad-based growth, stronger profitability, and improving execution across the business. She highlighted innovation as a growth driver, including noravant timber, Open Air Neutrals, and Twist & Texture, and said these products are helping expand the company’s reach across price points and end markets. Her tone was upbeat but disciplined, repeatedly stressing margin expansion, operational improvements, and ongoing investment in design, automation, and sustainability.

Bruce Hausmann focused on the mechanics behind the quarter’s financial improvement and the updated outlook. He said adjusted gross margin reached 45% in Q2, with 131 basis points from operational factors and 393 basis points from the $15.6 million tariff refund, and noted that the refund is not assumed again in guidance. He also pointed to $38.4 million of operating cash flow, $12.2 million of capex tied to automation and robotics, $8.8 million of buybacks in Q2, and continued dividend payments, while outlining disciplined capital allocation around investment, leverage, M&A, and shareholder returns.

Analysts pressed management on whether the Q3/Q4 margin pattern implies a softer back half, and Bruce said the difference is mainly timing of pricing and cost flow-through, not a change in confidence, with back-half gross margins around 39% still ahead of ambition. Questions also focused on whether the guidance raise was mostly due to the Q2 beat; Laurel said Q2 came in ahead of expectations, but momentum had already been solid. Other analyst topics included Education durability, office-return trends, tariff refunds and ongoing tariff exposure, SG&A pressure from commissions and variable comp, and repurchase pace; management said Education remains strong, tariffs still apply to about 15% to 20% of COGS, and share repurchases remain opportunistic.