Second quarter 2026
Filed Aug 7, 2026Operational execution drives strong quarter; Company raises full year guidance
Second-quarter net sales increased 5.4%, GAAP operating income increased 43.9%, GAAP net income increased 57.9%, and adjusted EBITDA increased 35.2%. The Company raised full fiscal year 2026 net sales and adjusted gross profit margin guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| GAAP Net Sales, three months ended 7/5/2026GAAP | $395.7 | – | 5.4 % |
| Gross Profit Margin % of Net Sales, three months ended 7/5/2026GAAP | 45.0 % | – | 560 bps |
| SG&A Expenses, three months ended 7/5/2026GAAP | $103.2 | – | 7.5 % |
| SG&A Expenses % of Net Sales, three months ended 7/5/2026GAAP | 26.1 % | – | 53 bps |
| Operating Income, three months ended 7/5/2026GAAP | $74.9 | – | 43.9 % |
| Net Income, three months ended 7/5/2026GAAP | $51.4 | – | 57.9 % |
| Earnings per Diluted Share, three months ended 7/5/2026GAAP | $0.88 | – | 60.0 % |
| Currency-Neutral Net Sales, three months ended 7/5/2026non-GAAP | $389.9 | – | 3.8 % |
| Adjusted Gross Profit Margin % of Net Sales, three months ended 7/5/2026non-GAAP | 45.0 % | – | 524 bps |
| Adjusted SG&A Expenses, three months ended 7/5/2026non-GAAP | $103.1 | – | 10.4 % |
| Adjusted SG&A Expenses % of Net Sales, three months ended 7/5/2026non-GAAP | 26.1 % | – | 119 bps |
| Adjusted Operating Income, three months ended 7/5/2026non-GAAP | $74.9 | – | 34.1 % |
| Adjusted Net Income, three months ended 7/5/2026non-GAAP | $51.5 | – | 45.4 % |
| Adjusted Earnings per Diluted Share, three months ended 7/5/2026non-GAAP | $0.88 | – | 46.7 % |
| Adjusted EBITDA, three months ended 7/5/2026non-GAAP | $87.7 | – | 35.2 % |
| GAAP Net Sales, six months ended 7/5/2026GAAP | $726.7 | – | 8.0 % |
| Gross Profit Margin % of Net Sales, six months ended 7/5/2026GAAP | 41.9 % | – | 346 bps |
| SG&A Expenses, six months ended 7/5/2026GAAP | $197.6 | – | 7.6 % |
| SG&A Expenses % of Net Sales, six months ended 7/5/2026GAAP | 27.2 % | – | (11) bps |
| Operating Income, six months ended 7/5/2026GAAP | $107.2 | – | 42.5 % |
| Net Income, six months ended 7/5/2026GAAP | $75.0 | – | 64.6 % |
| Earnings per Diluted Share, six months ended 7/5/2026GAAP | $1.28 | – | 66.2 % |
| Currency-Neutral Net Sales, six months ended 7/5/2026non-GAAP | $707.6 | – | 5.1 % |
| Adjusted Gross Profit Margin % of Net Sales, six months ended 7/5/2026non-GAAP | 41.9 % | – | 308 bps |
| Adjusted SG&A Expenses, six months ended 7/5/2026non-GAAP | $197.1 | – | 9.4 % |
| Adjusted SG&A Expenses % of Net Sales, six months ended 7/5/2026non-GAAP | 27.1 % | – | 35 bps |
| Adjusted Operating Income, six months ended 7/5/2026non-GAAP | $107.7 | – | 32.3 % |
| Adjusted Net Income, six months ended 7/5/2026non-GAAP | $75.4 | – | 50.7 % |
| Adjusted Earnings per Diluted Share, six months ended 7/5/2026non-GAAP | $1.28 | – | 50.6 % |
| Adjusted EBITDA, six months ended 7/5/2026non-GAAP | $134.4 | – | 32.0 % |
| AMS Operating Income, three months ended 7/5/2026GAAP | $61.0 | – | 24.9 % |
| AMS Adjusted Operating Income, three months ended 7/5/2026non-GAAP | $61.0 | – | 24.9 % |
| EAAA Operating Income, three months ended 7/5/2026GAAP | $13.9 | – | 334.6 % |
| EAAA Adjusted Operating Income, three months ended 7/5/2026non-GAAP | $14.0 | – | 97.6 % |
| Cash, 7/5/2026other | $81.5 | – | 14.3 % |
| Total Debt, 7/5/2026other | $204.4 | – | 12.5 % |
| Total Debt Minus Cash ("Net Debt"), 7/5/2026non-GAAP | $122.8 | – | 11.4 % |
| Last 12-Months Adjusted EBITDAnon-GAAP | $250.5 | – | – |
| Total Debt divided by Last 12-Months Net Incomeother | 1.4x | – | – |
| Net Debt divided by Last 12-Months Adjusted EBITDA ("Net Leverage Ratio")non-GAAP | 0.5x | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| AMS, three months ended 7/5/2026Currency-Neutral Orders Increase Year-Over-Year 4.8 % | $247.7 | – | 3.4 % |
| EAAA, three months ended 7/5/2026Currency-Neutral Orders Increase Year-Over-Year 6.4 % | $148.0 | – | 8.8 % |
| AMS, six months ended 7/5/2026Currency-Neutral Net Sales $442.8; Currency-Neutral Net Sales change 5.6 % | $443.3 | – | 5.7 % |
| EAAA, six months ended 7/5/2026Currency-Neutral Net Sales $264.8; Currency-Neutral Net Sales change 4.4 % | $283.4 | – | 11.8 % |
Q3 Fiscal Year 2026 and Full Fiscal Year 2026 outlook
- RevenueQ3 Fiscal Year 2026: $370 to $380 million; Full Fiscal Year 2026: $1.455 to $1.485 billion
- Gross marginQ3 Fiscal Year 2026: 40.8% of net sales; Full Fiscal Year 2026: 40.6% of net sales
- Operating expensesQ3 Fiscal Year 2026: $100 million; Full Fiscal Year 2026: $395 million
- Tax rateQ3 Fiscal Year 2026: 27.5%; Full Fiscal Year 2026: 26.0%
- NoteQ3 Fiscal Year 2026 Adjusted interest & other expenses: $4 million
- NoteQ3 Fiscal Year 2026 Fully diluted weighted average share count: 58.2 million shares
- NoteFull Fiscal Year 2026 Adjusted interest & other expenses: $15 million
- NoteFull Fiscal Year 2026 Capital expenditures: $60 million
- NoteAll figures are approximate and updated guidance includes Q2 2026 IEEPA tariff refund
What drove it
- Higher sales volumes, proactive pricing actions, favorable mix, and manufacturing efficiencies drove robust margin expansion and earnings growth.
- Adjusted gross profit margin benefitted from 131 basis points of operational improvement and 393 basis points from $15.6 million of IEEPA tariff refunds.
- Performance was led by Healthcare, with global billings up 19%, while Education and Corporate Office billings both increased by 5%.
- Growth was broad-based across all regions and product categories.
- Q2 currency-neutral orders increased 5.4% year-over-year.
Concerns
- The Company acknowledged a dynamic and uncertain global macro environment.
- The full fiscal year 2026 updated guidance includes the Q2 2026 IEEPA tariff refund.
- Adjusted SG&A expenses increased due to higher sales commissions and variable compensation on increased sales and profits, and foreign currency exchange variances.
- Risks cited include changes in foreign trade policies and tariffs, raw-material, shipping-cost, duty and tariff increases, and supply interruptions.
What to watch
- Conversion of the robust backlog supporting continued momentum.
- Q3 net sales outlook of $370 to $380 million.
- Sustainability of adjusted gross profit margin following the IEEPA tariff refunds.
- Currency-neutral order trends in AMS and EAAA.
- Progress toward full fiscal year 2026 net sales guidance of $1.455 to $1.485 billion and adjusted gross profit margin guidance of 40.6% of net sales.
Balance sheet and cash flow
- Cash: $81.5 at 7/5/2026, compared with $71.3 at 12/28/2025
- Total Debt: $204.4 at 7/5/2026, compared with $181.6 at 12/28/2025
- Total Debt Minus Cash ("Net Debt"): $122.8 at 7/5/2026, compared with $110.3 at 12/28/2025
- Last 12-Months Adjusted EBITDA: $250.5
- Net Debt divided by Last 12-Months Adjusted EBITDA ("Net Leverage Ratio"): 0.5x
Analysis
Interface reported second-quarter GAAP net sales of $395.7, up 5.4%, while currency-neutral net sales were $389.9, up 3.8%. Currency-neutral orders increased 5.4% year-over-year. Management described growth as broad-based across regions and product categories, with Healthcare global billings up 19% and Education and Corporate Office billings each up 5%.
Both reporting segments grew. AMS net sales were $247.7, up 3.4%, and currency-neutral orders increased 4.8%. EAAA net sales were $148.0, up 8.8%, with currency-neutral net sales of $142.2, up 4.5%, and currency-neutral orders up 6.4%. EAAA GAAP operating income increased to $13.9 from $3.2, while AMS GAAP operating income increased to $61.0 from $48.8.
Margin and earnings expansion outpaced sales growth. GAAP gross profit margin was 45.0%, compared with 39.4%, and adjusted gross profit margin was 45.0%, compared with 39.8%. The Company attributed adjusted margin improvement to favorable price/mix, lower manufacturing costs on higher sales volumes, manufacturing efficiency initiatives, and IEEPA tariff refunds. Adjusted gross profit margin included 131 basis points of operational improvement and 393 basis points from $15.6 million of IEEPA tariff refunds. GAAP operating income increased 43.9% to $74.9, GAAP net income increased 57.9% to $51.4, and adjusted EBITDA increased 35.2% to $87.7.
The balance sheet metrics show cash of $81.5 and total debt of $204.4 at July 5, 2026. Net debt was $122.8, and the reported net leverage ratio was 0.5x. The release reported no dividends, share repurchases, operating cash flow, or free cash flow. Full fiscal year 2026 capital expenditures guidance remained $60 million.
Interface raised full fiscal year 2026 net sales guidance to $1.455 to $1.485 billion and adjusted gross profit margin guidance to 40.6% of net sales. The outlook also calls for $395 million of adjusted SG&A expenses, $15 million of adjusted interest and other expenses, and a 26.0% adjusted effective income tax rate. For Q3 fiscal year 2026, the Company guided to net sales of $370 to $380 million and adjusted gross profit margin of 40.8% of net sales, while acknowledging a dynamic and uncertain global macro environment.
Management, verbatim
We delivered strong second quarter results, reflecting continued momentum and disciplined execution across the business.
Laurel Hurd, CEO of Interface
This growth was broad-based across all regions and product categories, underscoring the strength of our diversified portfolio and the benefits of our One Interface strategy.
Laurel Hurd, CEO of Interface
We are raising our full year guidance based on strong first half performance and a robust backlog supporting continued momentum.
Bruce Hausmann, CFO of Interface
Not in the filing
stated, not guessed- Prior-quarter comparisons for consolidated and segment metrics
- Operating cash flow
- Free cash flow
- Share repurchases
- Dividend declarations or payments
- Adjusted gross profit dollar amount
- GAAP effective income tax rate
- GAAP and adjusted diluted weighted average share count for the reported period
- Previous-release outlook for comparison against actual results
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.