Interface Inc (TILE) Reports Q3 2023 Earnings: Net Sales Down 5. ...
Interface Inc (NASDAQ:TILE) reported Q3 2023 net sales of $311.0 million, a decrease of 5.1% year-over-year.
Gross profit margin increased to 35.5%, up 226 basis points from the same period last year.
The company generated $66.3 million of cash from operations and repaid $30.6 million of debt in the quarter.
Adjusted earnings per share stood at $0.28.
Interface Inc (NASDAQ:TILE), a global leader in commercial flooring and sustainability, released its Q3 2023 earnings report on November 3, 2023. Despite a challenging market environment, the company demonstrated resilience through its global diversification strategy and effective execution.
Financial Performance Overview
Interface's net sales for Q3 2023 totaled $311.0 million, marking a 5.1% decrease year-over-year. This decline was primarily due to the impact from retail sector softness and broader macroeconomic uncertainty. However, the company's gross profit margin increased to 35.5%, up 226 basis points from the same period last year.
Interface generated $66.3 million of cash from operations and repaid $30.6 million of debt in the quarter. The company's GAAP earnings per share were $0.17, while adjusted earnings per share were $0.28.
Key Financial Highlights
Interface's third-quarter operating income was $31.0 million, compared to $28.0 million in the prior year period. The company recorded a GAAP net income of $9.9 million, or $0.17 per diluted share, compared to $14.1 million, or $0.24 per diluted share, in Q3 2022. Adjusted net income for Q3 2023 was $16.4 million, or $0.28 per diluted share.
For the first nine months of 2023, net sales were $936.4 million, down 2.7% compared to the same period in 2022. The company's gross profit margin for this period was 34.0%, a decrease of 58 basis points from the prior year period.
Company's Outlook
Looking ahead, Interface is revising its full-year guidance to reflect ongoing retail sector softness and sluggish global demand. The company remains focused on winning business, managing costs, and paying down debt to further strengthen its financial position.
Management's Commentary
CEO of Interface, Laurel Hurd, commented on the results:
Our third quarter results reflect the resiliency of our global diversification strategy and effective execution in a relatively sluggish market... Despite lower volumes in the quarter, we increased gross profit margin by 226 basis points and our strong cash flow generation enabled us to pay down debt, driving accelerated improvements in our balance sheet."
Interface's CFO, Bruce Hausmann, added:
With strong cash flow from operations, debt repayment remains our top capital allocation priority. During the quarter we repaid $30.6 million of debt, reducing our debt balances by $75.7 million year-over-year, ahead of expectations."
Explore the complete 8-K earnings release (here) from Interface Inc for further details.
This article first appeared on GuruFocus.
