Interface (TILE) Margin Improvement Challenges Slower Earnings Growth Narrative

Interface (TILE) closed out FY 2025 with Q4 revenue of US$349.4 million and basic EPS of US$0.42, while trailing twelve month EPS reached US$1.99 on revenue of about US$1.4 billion, setting a clear earnings and sales backdrop for investors. Over the past few quarters, the company has seen revenue move from US$335.0 million in Q4 2024 to US$375.5 million in Q2 2025 and then to US$349.4 million in Q4 2025, with basic EPS ranging from US$0.22 in Q1 2025 to US$0.79 in Q3 2025, giving a view of how the top and bottom line have been tracking. With earnings growth of 33.6% over the last year and margins improving from 6.6% to 8.4%, this latest set of results highlights a business where profitability trends are a key focus for investors.

See our full analysis for Interface.

With the headline numbers on the table, the next step is to see how they compare with the most widely held narratives around Interface and where the story investors tell themselves might differ from what the margins and earnings are actually showing.

See what the community is saying about Interface

33.6% earnings growth riding modest 5% revenue lift

• Over the last 12 months, revenue is reported at about US$1.4b, up from US$1.32b a year earlier, while net income reached US$116.1 million and earnings grew 33.6% with net margin at 8.4% compared with 6.6% previously.
• Analysts' consensus view links this profitability picture to rising demand for sustainable, carbon focused flooring and a 24% increase in year to date backlog. However, the reported 5% revenue growth over the last year shows earnings expanding much faster than sales, which may prompt you to ask how repeatable that margin mix really is.

Profit margin shift versus slower future growth

• Margins over the last year sit at 8.4% compared with 6.6% a year earlier, while analysts expect earnings to grow about 5.8% per year and margins to move from 7.1% to 8.5% over the next three years.
• What is interesting for the bullish narrative is that it leans on operational improvements like automation and the One Interface integration to support long term earnings potential. Yet the 5.8% forecast earnings growth is below the 31.3% annualized earnings growth reported over the past five years and below the US market forecast of 15.7%, which means the past margin shift is stronger than what analysts are baking into the next few years.
  • Consensus narrative points to productivity investments and broader product offerings as drivers, while the forecasts imply a more measured pace than the recent 33.6% one year earnings growth.
  • The combination of higher recent margins and slower projected growth gives you a clear line between trailing execution and the more cautious expectations analysts are using in their models.

Strong recent margin gains and measured growth forecasts are exactly where bulls and skeptics start to disagree on how much earnings power carries forward, so it can be useful to see how that argument is laid out in full in the 🐂 Interface Bull Case

P/E of 16x and DCF fair value tension

• The shares trade on a trailing P/E of 16x, below the peer average of 17.9x and industry average of 24.6x, while the current share price of US$31.88 sits well under the DCF fair value of US$70.18 and the allowed analyst price target reference of US$36.33.
• Bears in the broader discussion often highlight reliance on the U.S. market and slower forecast earnings growth of about 5.8% per year. However, the current valuation multiples and the gap to the DCF fair value suggest the market is already pricing in that lower growth profile quite conservatively.
  • The 16x P/E at US$31.88 is below both peer and industry averages, which can be read as the market applying a discount even as net margin stands at 8.4% over the last year.
  • At the same time, the DCF fair value of US$70.18 and the reference analyst target of US$36.33 anchor a range of outcomes that is higher than the current price, giving you specific numbers to weigh against the concerns around slower growth and geographic concentration.

For readers who want to see how cautious views on growth and concentration risk stack up against those valuation markers in more detail, the full bear case on Interface is laid out in the 🐻 Interface Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Interface on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If this all sounds optimistic or cautious in parts, it is worth checking the numbers yourself and deciding how you feel about the story. You can move quickly, pressure test your own thesis, and see what stands out in the 4 key rewards.

See What Else Is Out There

Interface pairs a 33.6% jump in earnings with only 5% revenue growth and slower expected earnings expansion, which raises questions about how durable current margins are.

If you are unsure how long that kind of margin profile can last, it is worth comparing with companies in our 78 resilient stocks with low risk scores that aim to keep earnings quality and risk in tighter balance.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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