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What's happening?
Shares of Interface (TILE 0.40%) have fallen by more than 17% on Tuesday morning after the carpet-maker issued a disappointing third-quarter forecast and expanded its restructuring plan.
Why it's happening
Interface expects third-quarter revenue to range from $250 million to $255 million, which falls below both the year-ago quarter's result of $255 million and analysts' expectations of $275.2 million. The company also warned that its adjusted earnings would likely range from $0.12 to $0.14 per share, well below expectations of $0.25 in adjusted EPS.
CEO Daniel T. Hendrix noted that "preliminary results... have not shaped up to our expectations" due to more deferred orders and fewer orders in general. To cope with this disappointment, Interface broadened the scope of its restructuring plan, which is now expected to cost $12.5 million rather than the $3 million to $5 million range it had been expected to cost when first announced in late July. This plan should shave off roughly $14 million in costs beginning in 2015, which will help the company begin a buyback plan that calls for repurchasing 500,000 shares per fiscal year, starting with the current year.