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Floor & Decor Holdings (FND)
:FND
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Floor & Decor Holdings
(NYSE:FND)61Neutral
Positive Factors
Financial Performance
Floor & Decor delivered a solid Q4 performance with revenues growing by 5.7% year-over-year, surpassing Street estimates.
Growth Strategy
Management introduced guidance for FY25E with total revenues expected to increase by 8% at the midpoint, supported by 25 new units.
Negative Factors
Market Conditions
Slowing leading housing indicators and high mortgage rates suggest the improvement in existing home sales could be slow.
Floor & Decor Holdings (FND) vs. S&P 500 (SPY)
Market Cap
$9.80B
Dividend YieldN/A
Average Volume (3M)1.88M
Price to Earnings (P/E)48.0
Beta (1Y)1.47
Revenue Growth0.95%
EPS Growth-16.97%
CountryUS
Employees13,690
SectorConsumer Cyclical
Sector Strength53
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)1.90
Shares Outstanding107,395,510
10 Day Avg. Volume2,144,626
30 Day Avg. Volume1,879,736
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.20
Price to Cash Flow (P/CF)24.20
P/FCF Ratio24.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$106.71Price Target Upside16.99% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
Floor & Decor Holdings Business Overview & Revenue Model
Company DescriptionFloor & Decor Holdings, Inc. is a leading specialty retailer in the home improvement sector, focusing on the sale of hard surface flooring and related accessories. The company offers a broad selection of tile, wood, laminate, and natural stone flooring products, as well as decorative and installation accessories at competitive prices. With a growing network of warehouse-format stores across the United States, Floor & Decor targets both professional contractors and do-it-yourself customers, providing an extensive range of in-stock products to meet various design needs.
How the Company Makes MoneyFloor & Decor generates revenue primarily through the sale of its hard surface flooring products and related accessories. The company's key revenue streams include retail sales to both professional customers, such as contractors and designers, and individual consumers. Floor & Decor's business model is supported by its large-format stores, which allow it to maintain a wide variety of in-stock inventory, thus appealing to customers who require immediate availability. Additionally, the company's competitive pricing and focus on a broad product assortment help drive sales. While Floor & Decor operates independently, its earnings are further enhanced by strategic partnerships with suppliers, which enable the company to offer exclusive products and maintain cost-effective sourcing. The company also leverages its e-commerce platform to extend its market reach and facilitate customer purchases.
Floor & Decor Holdings Financial Statement Overview
Summary
Floor & Decor Holdings shows robust revenue growth and strong gross margins, indicating effective cost management. However, the decline in net profit margin and free cash flow signals potential challenges in controlling expenses and managing cash. The balance sheet reflects a healthy equity position but moderate leverage, which needs careful monitoring. The cash flow statement highlights excellent cash generation from operations but concerns about free cash flow sustainability.Income Statement
Floor & Decor Holdings shows a consistent revenue growth pattern over the years, with the most recent annual growth rate at 0.95%. The gross profit margin stands at 43.27%, indicating strong cost management. However, the net profit margin has declined slightly to 4.62%, suggesting rising expenses or other challenges impacting net income. The EBIT and EBITDA margins are at 5.75%, reflecting moderate operational efficiency.75
Positive
Balance Sheet
The company maintains a solid equity base, with an equity ratio of 61.01%. The debt-to-equity ratio is 0.69, which is manageable but indicates a fair amount of leverage. Return on equity is lower at 9.49%, signaling room for improvement in generating returns from equity.70
Positive
Cash Flow
The operating cash flow to net income ratio is strong at 2.93, indicating good cash generation relative to net income. The free cash flow has decreased significantly, with a negative growth rate of 38.91% year-over-year, raising concerns about the company's cash management and investment strategies.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.46B | 4.41B | 4.26B | 3.43B | 2.43B | Gross Profit |
| 1.93B | 1.86B | 1.73B | 1.42B | 1.03B | EBIT |
| 256.18M | 321.43M | 396.76M | 338.99M | 214.58M | EBITDA |
| 256.18M | 523.30M | 551.78M | 457.19M | 306.22M | Net Income Common Stockholders |
| 205.87M | 245.98M | 298.19M | 283.23M | 194.98M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 187.67M | 34.38M | 9.79M | 139.44M | 307.77M | Total Assets |
| 5.05B | 4.66B | 4.35B | 3.73B | 2.88B | Total Debt |
| 1.49B | 1.63B | 1.74B | 1.42B | 1.24B | Net Debt |
| 1.30B | 1.59B | 1.73B | 1.28B | 936.66M | Total Liabilities |
| 2.88B | 2.73B | 2.69B | 2.41B | 1.88B | Stockholders Equity |
| 2.17B | 1.93B | 1.66B | 1.32B | 997.39M |
| Cash Flow | Free Cash Flow | |||
| 156.33M | 255.98M | -344.15M | -106.33M | 193.72M | Operating Cash Flow |
| 603.15M | 803.59M | 112.45M | 301.34M | 406.16M | Investing Cash Flow |
| -446.83M | -564.97M | -455.64M | -471.24M | -212.45M | Financing Cash Flow |
| -3.04M | -214.03M | 213.54M | 1.57M | 87.02M |
Floor & Decor Holdings Technical Analysis
Negative
91.21
Price Trends
98.25
Negative
102.57
Negative
105.21
Negative
Market Momentum
-2.57
Positive
41.96
Neutral
22.16
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FND, the sentiment is Negative. The current price of 91.21 is below the 20-day moving average (MA) of 95.61, below the 50-day MA of 98.25, and below the 200-day MA of 105.21, indicating a bearish trend. The MACD of -2.57 indicates Positive momentum. The RSI at 41.96 is Neutral, neither overbought nor oversold. The STOCH value of 22.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FND.
Floor & Decor Holdings Risk Analysis
Floor & Decor Holdings disclosed 40 risk factors in its most recent earnings report. Floor & Decor Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Floor & Decor Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $374.30B | 25.27 | 385.37% | 2.39% | 4.48% | -1.27% | |
61 Neutral | $305.46M | 130.32 | 1.91% | ― | -7.97% | -77.05% | |
61 Neutral | $9.80B | 47.99 | 10.04% | ― | 0.95% | -16.97% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
59 Neutral | $137.49B | 19.93 | -51.07% | 1.87% | -3.13% | -7.21% | |
58 Neutral | $359.95M | 18.39 | 6.48% | 5.74% | -19.60% | -60.94% | |
47 Neutral | $5.23B | 75.32 | -38.18% | ― | 1.41% | -62.21% |
* Consumer Cyclical Sector Average
Performance Comparison
FND
Floor & Decor Holdings
91.21
-29.63
-24.52%
HVT
Haverty
21.82
-8.92
-29.02%
HD
Home Depot
376.80
10.07
2.75%
LOW
Lowe's
242.66
6.05
2.56%
TTSH
Tile Shop
6.92
0.10
1.47%
RH
RH
262.43
-19.39
-6.88%
Floor & Decor Holdings Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -1.76% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed sentiment with significant strategic growth and financial stability highlights, including store expansion and improved customer satisfaction metrics. However, challenges such as a decline in Spartan Surfaces sales and the impact of tariffs were notable lowlights. The company shows resilience and strategic planning to navigate these challenges.Highlights
Strong Financial Position
Floor & Decor reported a strong financial position with $200.3 million in debt and $187.7 million in cash and cash equivalents. The company has a total unrestricted liquidity of $905.7 million, allowing for strategic growth investments.
Improvement in Comparable Store Sales
Despite a 7.1% decline in comparable store sales for fiscal 2024, there was a sequential improvement each quarter, with the fourth quarter experiencing only a 0.8% decline compared to a 6.4% decline in the third quarter.
Expansion and Store Growth
The company opened 30 new warehouse format stores in fiscal 2024, reaching a total of 251 stores. Plans for 2025 include opening 25 new stores, indicating ongoing strategic growth.
Record High Net Promoter Score
Floor & Decor achieved a record high net promoter score in January 2025, highlighting customer satisfaction and effective associate training.
Growth in Design Services
Design service sales growth accelerated significantly throughout fiscal 2024, with the highest net promoter score for design services recorded since measurement began.
Lowlights
Decline in Spartan Surfaces Sales
Spartan Surfaces sales declined 17.9% in Q4 2024 due to weakness in the multifamily residential market and pricing pressures in the commercial LVT market. Full-year EBIT declined 25.4%.
Overall Decline in Comparable Store Sales
While showing improvement, fiscal 2024 saw a 7.1% decline in comparable store sales. The company noted challenging conditions in the hard surface flooring category.
Impact of Tariffs
Anticipated tariffs on products from China and other geopolitical uncertainties present potential challenges, although the company is diversifying its supply chain to mitigate impacts.
Company Guidance
In the Floor & Decor Holdings Fourth Quarter 2024 Conference Call, the company's performance and future guidance were discussed in detail. The company reported better-than-expected results for the fourth quarter, with diluted earnings of $0.44 per share, including a $0.05 per share benefit from a derivative litigation settlement. Total sales for the fourth quarter increased by 5.7%, while comparable store sales decreased slightly by 0.8%. For the full fiscal year 2024, diluted earnings were $1.90 per share. Floor & Decor opened 30 new warehouse format stores in 2024 and plans to open 25 more in 2025, with potential adjustments based on macroeconomic conditions. The company expects fiscal 2025 total sales to range from $4.74 billion to $4.9 billion, with comparable store sales projected to be flat to a 3% increase. The gross margin rate for 2025 is expected to be between 43.4% and 43.7%. The company continues to invest in new stores, merchandise, and technology to enhance long-term growth, while also managing costs and maintaining a strong financial position.Floor & Decor Holdings Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Floor & Decor Announces Leadership Transition with New President
Positive
Jan 28, 2025
On January 24, 2025, Floor & Decor Holdings announced the retirement of Trevor S. Lang, its current President, effective March 1, 2025. Bradley S. Paulsen has been appointed as the new President, effective April 28, 2025, with an extensive background in leadership roles at companies such as Rentokil Initial plc and Rexel USA. Paulsen’s appointment is expected to bring valuable expertise in home improvement and supply chain operations, aligning with Floor & Decor’s growth strategy. His employment terms include a base salary of $800,000, a sign-on bonus of $1.6 million, and a long-term equity compensation award of $3.7 million. The transition signals a strategic leadership shift aimed at driving the company’s continued expansion and maintaining its competitive edge in the hard surface flooring industry.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.