Modular flooring manufacturer Interface (NASDAQ: TILE) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 5.9% year on year to $364.5 million. The company expects the full year’s revenue to be around $1.38 billion, close to analysts’ estimates. Its non-GAAP profit of $0.61 per share was 27.1% above analysts’ consensus estimates.

Is now the time to buy TILE? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Interface’s third quarter results reflected continued execution of its One Interface strategy, with management citing strong health care segment momentum and broad-based regional growth as primary drivers. CEO Laurel Hurd emphasized, “Our combined selling teams drove growth across key market segments,” highlighting 29% global health care billings growth and manufacturing productivity improvements. The company also reported benefits from product mix, automation, and a steady pace of orders, indicating resilience amid a challenging macro environment.

Looking ahead, Interface’s guidance is shaped by ongoing investments in automation, product innovation, and commercial productivity, with management expecting these areas to support sustainable margin expansion. Hurd signaled confidence in the company’s strategy, stating, “Continued investments in innovation, automation and commercial excellence are strengthening our foundation for sustainable growth.” CFO Bruce Hausman outlined that future capital allocation will prioritize margin-focused projects and capacity expansion, particularly in the Nora Rubber business, while monitoring potential headwinds like tariffs and market variability outside the U.S.

Key Insights from Management’s Remarks

Management attributed quarterly outperformance to sustained share gains in health care, operational efficiencies from automation, and the benefits of a unified sales structure.

• Health care growth momentum: Management identified health care as the strongest segment in Q3, with billings up 29% globally, driven by expanded product offerings and effective collaboration between Interface and Nora sales teams. This growth was seen both in the Americas and internationally, reflecting success in serving evolving healthcare needs.
• Automation and productivity gains: Investments in automation and robotics contributed meaningfully to productivity and margin improvement. CFO Bruce Hausman noted these initiatives reduced waste, enhanced throughput, and are now being expanded to European and Australian facilities, supporting cost efficiency across the business.
• One Interface sales approach: The implementation of a unified sales structure in the U.S. enabled cross-selling of carpet tile, luxury vinyl tile (LVT), and Nora Rubber, which management believes drove consistent growth and share gains across categories and regions.
• Product innovation pipeline: Interface released new carpet tile and resilient flooring collections during the quarter, with CEO Hurd emphasizing their durability, design, and performance. Management also previewed a major Nora Rubber innovation expected to launch in early 2026, aimed at further penetrating the health care segment.
• Tariff cost management: The company continued to offset tariff-related costs, especially for imports from Germany and South Korea, through pricing and productivity initiatives. Although tariffs diluted gross margin by about 30 basis points, management expects to maintain profitability by balancing cost recovery with operational efficiencies.

Drivers of Future Performance

Interface’s outlook is anchored in ongoing investments, segment expansion, and operational discipline, while remaining attentive to external risks.

• Expansion in health care and Nora: Management expects sustained growth from the health care segment and Nora Rubber, supported by additional capacity investments and targeted innovation. CEO Hurd highlighted plans to accelerate Nora automation and launch a new product tailored to health care, aiming to capture further share in this expanding market.
• Continued margin improvement focus: CFO Hausman described future margin opportunity as driven by a combination of productivity enhancements, favorable product mix, and volume leverage, especially as automation projects scale globally. However, management acknowledged the need to balance share gains with competitive pricing, stating that finding a “sweet spot” between margin expansion and volume growth will be key.
• Monitoring macro and tariff risks: While the Americas remain stable, management noted ongoing macroeconomic challenges in Europe and Asia-Pacific. The team is also closely watching tariff-related costs, which are expected to persist, but expressed confidence in offsetting their impact through price adjustments and efficiency improvements.

Catalysts in Upcoming Quarters

In upcoming quarters, our analysts will focus on (1) the pace and impact of automation rollouts in Europe and Australia, (2) sustained growth in the health care and Nora Rubber segments as new capacity and products come online, and (3) management’s ability to offset tariffs while maintaining gross margin discipline. Execution on product innovation and commercial strategies will also be closely monitored as indicators of continued outperformance.

Interface currently trades at $24.90, down from $26.64 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).

Our Favorite Stocks Right Now

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.