Strategic Exchange: The Iran conflict has obscured the residential outlook for 2026 – April 2026

By Kemp Harr

Quarter one for 2026 has been a blur due to all the travel. When the year began, we were hoping for some relief in the residential remodel business. Consumer demand for flooring in January outpaced the previous year up until winter storm Fern hit, which negatively impacted residential flooring sales for the first two weeks of February. 

The second half of February started to show life again, but on the last Friday of the month, the Iran conflict started. Prior to the conflict, oil was selling for $67/barrel. Today, the price of oil is right around $100/barrel, a 49% increase. Fortunately, commercial flooring sales have continued to expand. As the quarter winds down, spring is in the air, and the last couple of days of March brought the Coverings Expo in Las Vegas, while Alliance Flooring, the Chattanooga-based retailer buying group, met in San Antonio. Just around the corner, after a quick break for Easter, April brings the NWFA Wood Flooring Expo in Orlando and the Starnet annual meeting in northern Miami. 

Thanks to the inflationary impact of higher fuel costs and raw material prices, all bets are off for lower mortgage rates and more affordable housing. Stronger income tax refunds from The One, Big, Beautiful Bill could bring some minor stimulus, but unless there is some surprising news about a quick resolution in the Middle East, what happens in 2026 is anybody’s guess. 

NFA SPRING MEETING IN LAKE TAHOE

At the NFA spring meeting in Lake Tahoe, we learned that business conditions with many of the dealers with scale (multiple stores) are outperforming the national average at flat to slightly up. Interestingly, higher-end carpet and hardwood sales are seeing a resurgence. Consumers with money are still on the move, and they are choosing more traditional flooring surfaces. 

How the consumer finds a retail store through the internet is changing thanks to the AI-driven search function. Moving forward, reviews, reputation and consistency across internet-based platforms bring the retailer closer to the top than SEO tricks like keywords. As this AI shift evolves, NFA members are sharing best practices with each other to stay ahead of the pack.

RESULTS OF PUBLICLY TRADED COMPANIES

Mohawk’s year-end numbers came out last month, with the total company’s sales down about 1%, while its Flooring NA (North America) sales were down 3.4% to $3.64 billion for the year. 

A few weeks ago, we learned that Interface grew 5.4% to $1.4 billion in fiscal year 2025 with earnings up 34%. These are stellar results, but not surprising when you recognize that most of its business is focused in the more-robust commercial market. 

The Dixie Group reported a decline of 2.9% in revenue for fiscal year 2025 and lost $7.6 million in earnings. Today, Dixie’s focus is solely on the residential market, which, as we know, is more challenging. Chairman Dan Frierson commented that the company has paid $3.3 million for IEPPA tariffs, which should be refunded. On a more positive note, since the average net sale for Dixie’s carpet is four times the industry average, the company is finding success on the upper end to the market. While the carpet industry was down 4%, Dixie’s revenue for carpet was down less than 1%. The company reports that it is continuing to cut costs. 

Home Depot and Lowe’s also reported their year-end numbers. Most people know that, from a top-line revenue number, Home Depot is almost twice the size of Lowe’s. Home Depot reported annual revenues of $165 billion and Lowe’s’ 2025 year-end number was $86 billion. Same-store sales for Home Depot grew 0.5% for the year (in the U.S.), and Lowe’s reported a growth range of flat to up 2%. Closer to home in the flooring business, Home Depot’s focus on the pro has been paying off. We estimate that Home Depot’s flooring sales are $9.1 billion, and Lowe’s’ are $4.3 billion, including all sundries. We’re also hearing that Lowe’s’ carpet sales are a bigger part of its mix thanks to the use of the Stainmaster brand name, and Home Depot is stronger in the LVT, tile and wood segments of the business.

FLOORING PRICE INCREASES

I mentioned above the rise in oil prices, so it should be no surprise that prices are going up on flooring products that are derived from oil. Just prior to closing this issue, we saw price increase letters from Engineered Floors, Dixie, Mohawk and Shaw. Details on these increases are available on FloorDaily.

CHANGES IN FLOOR FOCUS’ EDITORIAL COVERAGE RHYTHM FOR 2026

This issue contains our retail survey, which for years has been featured in our July issue. There are several other big changes in how and when we cover the topics that will help you be more successful as our reader. We track our internet traffic success using Similar Web, and we’re excited to maintain our consistent leadership, with FloorDaily being the number one news site in the business. Thank you for noticing who brings you the most honest and objective coverage in flooring. We are already working on our May annual report issue, which is the industry’s first statistical look at how last year compared to the previous year. Don’t miss it. n

For comments on this column, email kemp@floorfocus.com.