Shares of Interface, Inc. (TILE 4.95%) fell as much as 13.2% in trading Thursday after reporting of first-quarter earnings. At 11:15 a.m. EDT, shares were still down 10.7% in volatile trading.
Revenue was up 24% versus a year ago to $297.7 million on the addition of Nora to operations. On an organic basis, revenue was up 2% in the quarter. However, this fell short of the $303.5 million estimate that Wall Street analysts had set for the company.
Net income was $7 million, down from $15 million a year ago, or $0.12 per share. Adjusted for one-time items, earnings were $0.14 per share, beating analyst estimates by $0.03. The bottom-line beat wasn't enough to save the stock from falling today, which may be because management said organic sales growth for the year would be just 2% to 4%.
There are plenty of signs that growth is beginning to slow in the economy, and carpet tiles are just one of the products being impacted. Companies are putting off purchases or upgrades, and that's slowing sales growth for Interface. Adjusted earnings may be holding up relatively well, but with shares trading at 18 times trailing earnings, the stock is still fairly expensive considering how little growth is expected this year.