Interface, Inc. (TILE) got hit by the double whammy of bad weather in the United States and the slowdown in Asia in the first quarter. This Zacks Rank #5 (Strong Sell) missed the Zacks Consensus Estimate by 53%.

Interface is the largest producer of modular carpet in the world. It sells under the Interface and FLOR brands to both commercial and residential buyers.

Weather and Asia...Oh My

On Apr 23, Interface reported its first quarter results and missed the Zacks Consensus by 7 cents. Earnings were $0.06 compared to the Zacks Consensus of $0.13.

Sales rose 4.1% to $219 million from $210.4 million a year ago but this was under the consensus.

Even though the company blamed poor weather for decreasing store traffic and lowering consumer sentiment in January and February, FLOR sales still rose 6% year over year. Overall, in the Americas, business held up and improved into March.

Europe also showed continued improvement, with first quarter sales up 15%. They also accelerated into April which is a good sign for the second quarter if that momentum continues.

But Asia-Pacific was hammered, with sales falling 17%. Interface blamed it on a drop in business in Australia as a result of longer lead times and service issues following its 2012 plant fire in Australia. The Chinese New Year holiday also had negative impacts on the quarter.

But April in Asia-Pacific was also supposedly tracking softly again.

Estimates Cut for 2014

It's not surprising that with the earnings miss in the first quarter that the analysts cut full year estimates. 6 estimates have been cut in the last 30 days pushing the Zacks Consensus down to $0.85 from $0.93.

All is not doom and gloom, however, as that's still 26% earnings growth in 2014.

But in the short-term, the analysts expect Interface to face some difficulties.

Shares Fall in 2014

Investors have been selling Interface shares all year. They have slid 17% so far in 2014.

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Still, Interface isn't cheap. It is trading with a forward P/E of 21.

If you're looking for a company in the flooring industry that's cheaper but also has similar double digit growth, you might want to consider Mohawk Industries Inc. (MHK). It's a Zacks Rank #3 (Hold) but trades with a forward P/E of just 16.

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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec.
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Tickers in this Article: MHK, TILE

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