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TILE Nasdaq· Interface Inc
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TILE Nasdaq· Interface Inc
Earnings report Q4 2023

Interface Inc. Reports Decreased Revenue in Q3 2023

Segments of revenue

In the third quarter of 2023, Interface Inc. generated revenue from the sale of flooring material, accounting for 98% of net sales, and revenue from the installation of flooring material, accounting for 2% of net sales.

Strengths

Despite a decrease in consolidated net sales of 5.1% compared to the same quarter last year, Interface Inc. managed to increase its consolidated operating income from $28.0 million to $31.0 million. This improvement can be attributed to higher gross profit margin resulting from higher pricing and lower freight costs, as well as lower selling, general, and administrative costs. The company's management highlighted these factors as contributing to the higher operating income.

Challenges

Interface Inc. faced decreased customer demand in the third quarter of 2023, leading to a decline in consolidated net sales. The retail, public buildings, and corporate office market segments experienced lower sales, which impacted the overall revenue. Additionally, the company mentioned inflationary pressures on raw materials and lower manufacturing fixed cost absorption as factors contributing to a decline in consolidated operating income.

Noteworthy

Interface Inc. saw a decrease in consolidated net income from $14.1 million in the third quarter of the previous year to $9.9 million in the third quarter of 2023. This decline in net income per share from $0.24 to $0.17 can be attributed to the decrease in net sales and lower gross profit margin.

Summary

Interface Inc. faced challenges in the third quarter of 2023 due to decreased customer demand, particularly in the retail, public buildings, and corporate office market segments. However, the company managed to improve its consolidated operating income through higher pricing, lower freight costs, and reduced selling, general, and administrative costs. Despite these efforts, Interface Inc. experienced a decline in consolidated net income. The company will need to address the challenges in customer demand and manage inflationary pressures on raw materials to improve its financial performance in the future.

Source documents

Form 10-Q  filed on Nov 07, 2023
101 pages scanned

Reference data

Company financials Q4 revenue 325M
Analyst estimates Q4 EPS beat by 86.36%
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