Industry Update: Takeaways from Tile Solutions Plus

Last week, the TwinShore Advisors team spent three days in Phoenix meeting with nearly 20 tile manufacturers, distributors, and installers at Tile Solutions Plus and across the local area. Discussions covered a wide range of topics, including general market trends, industry outlook, and M&A activity.

Market Sentiment

Overall, the tone was noticeably more positive than at recent industry events such as Coverings, KBIS, and Surfaces. Participants agreed that the tile industry largely avoided major disruption from the latest tariff actions, with increases viewed as comparable to a routine annual price adjustment.

Despite the cautious commentary from Mohawk’s recent earnings calls and the sub-50 reading on the ABI, the commercial end market appears healthy—except in the Washington D.C. area, where federal spending cuts have slowed activity. Encouragingly, most companies reported that their project pipelines now consist of new developments, rather than deferred projects from the COVID period. Several noted surprising strength in the multi-family segment, despite recent negative headlines.

The residential market remains slower overall, except for the high-end, luxury segment, where activity continues to be strong. Many affluent consumers have grown tired of waiting for the market to “stabilize” and are moving ahead with kitchen, bath, and outdoor living upgrades. Participants expressed optimism that the strong stock market would sustain this high-end demand, while further interest rate cuts could reinvigorate new home construction and make home equity–financed remodels more feasible.

In the meantime, many companies are using the slower environment to execute on operational initiatives and efficiency improvements, positioning themselves for stronger profitability when the market rebounds.

M&A Activity

While overall deal volume remains subdued, larger players continue to actively pursue acquisitions. Spartan Surfaces reiterated its intent to be more acquisitive, consistent with recent earnings commentary, particularly as Floor & Decor experiences a slowdown in the residential segment. Virginia Tile remains focused on integrating Walker Zanger and Anthology, though it remains open to future opportunities.

On the commercial side, strong performers indicated they may “test the waters” as early as next year. Residential participants, on the other hand, are waiting for a clearer market recovery. With consolidation continuing and private equity–backed companies, including TileBar, Artivo, and Nemo Tile, pursuing aggressive growth, many smaller firms expressed concern about how to remain competitive. TwinShore Advisors engaged several of these companies in conversations about potential merger partnerships that could enhance scale, profitability, and geographic reach—key ingredients to competing effectively in an evolving landscape and positioning for an eventual exit.

Conclusion

The conversations in Phoenix reflected an improving outlook for the tile industry. While the residential market continues to lag, strength in commercial and multi-family segments—and a growing sense of operational discipline across the industry—suggests that companies are laying a solid foundation for the next upcycle.

TwinShore Advisors remains actively engaged with owners and executives across the sector as they evaluate strategic opportunities in this changing environment. As a trusted advisor to owners and executives in the Tile & Stone space, we leverage our unmatched industry knowledge and M&A expertise to achieve best-in-class outcomes for founders and owners.

We welcome a confidential conversation to discuss your options and strategy in this rapidly evolving market. 

Please reach out to Chobun Hieblinger at chieblinger@twinshoreadvisors.com or Wade Bennett at wbennett@twinshoreadvisors.com.