The 10-second takeaway
For the quarter ended March 31 (Q1), Interface missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share contracted significantly. GAAP earnings per share grew.
Gross margins increased, operating margins contracted, net margins grew.
Interface logged revenue of $210.4 million. The eight analysts polled by S&P Capital IQ predicted a top line of $224.1 million on the same basis. GAAP reported sales were 9.6% lower than the prior-year quarter's $232.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.08. The eight earnings estimates compiled by S&P Capital IQ anticipated $0.14 per share. Non-GAAP EPS of $0.08 for Q1 were 20% lower than the prior-year quarter's $0.10 per share. GAAP EPS were $0.11 for Q1 against -$0.09 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 33.9%, 120 basis points better than the prior-year quarter. Operating margin was 6.7%, 50 basis points worse than the prior-year quarter. Net margin was 3.3%, 580 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $245.2 million. On the bottom line, the average EPS estimate is $0.21.
Next year's average estimate for revenue is $1.01 billion. The average EPS estimate is $0.86.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 144 members out of 162 rating the stock outperform, and 18 members rating it underperform. Among 59 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 56 give Interface a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Interface is outperform, with an average price target of $20.25.
Looking for alternatives to Interface? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.
- Add Interface to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Interface. The Motley Fool owns shares of Interface. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.