Floor & Decor Holdings, Inc. (FND) | Investment Case

1. Company Snapshot

1.a. Company Description

Floor & Decor Holdings, Inc.operates as a multi-channel specialty retailer and commercial flooring distributor of hard surface flooring and related accessories.The company's stores offer tile, wood, laminate, vinyl, and natural stone flooring products, as well as decorative and installation accessories.

It serves professional installers, commercial businesses, and do it yourself customers.As of May 5, 2022, the company operated 166 warehouse-format stores and five design studios in 34 states.It also sells products through its Website, FloorandDecor.com.

The company was formerly known as FDO Holdings, Inc.and changed its name to Floor & Decor Holdings, Inc.in April 2017.

Floor & Decor Holdings, Inc.was founded in 2000 and is headquartered in Atlanta, Georgia.

Show Full description

1.b. Last Insights on FND

Floor & Decor Holdings, Inc.'s recent performance was negatively impacted by weak near-term earnings growth outlook due to ongoing macro headwinds and sluggish housing market conditions. The company's comparable store sales and unit growth remain weak, with negative sales trends and trade-down behavior. Exposure to struggling housing markets in Florida and Texas also poses a challenge. Despite a 10.4% increase in Q3 diluted earnings per share, concerns persist. Additionally, Abdiel Capital's liquidation of a $113 million stake may have contributed to short-term pressure.

1.c. Company Highlights

Last Price	63.48
Change Percentage	-2.26%
Open	65.02
Previous Close	64.95
Market Cap ( Millions)	6839
Volume	1994493
Year High	115.52
Year Low	55.11
M A 50	66.68
M A 200	76.85

FCF Yield	0.50%
Dividend Yield	0.00%
ROE	9.58%
Debt / Equity	75.83%
Net Debt / EBIDTA	347.12%
Price To Book	2.95
Price Earnings Ratio	32.16
Price To FCF	200.43
Price To sales	1.5
EV / EBITDA	18.78

2. Floor & Decor's Q3 Earnings: A Strong Performance Amidst a Challenging Market

Floor & Decor reported a robust financial performance in its fiscal 2025 third quarter, with diluted earnings per share (EPS) of $0.53, a 10.4% increase over the prior year, beating analyst estimates of $0.4558. Total sales grew 5.5% to $1.180 billion, driven by the company's continued focus on delivering exceptional value and service to customers. The company's gross margin rate decreased, while selling and store operating expenses increased, resulting in an adjusted EBITDA of $138.8 million, a 4.4% increase from the same period last year.

Publication Date: Nov -02

                                    📋 Highlights
                                    CEO Transition and Leadership Change:
                                                Tom Taylor announced Brad Paulsen, President, will succeed him as CEO in fiscal 2026, ensuring continuity in strategic direction.
Q3 Earnings Growth:
                                                Fiscal 2025 third quarter diluted EPS rose 10.4% to $0.53, with total sales up 5.5% to $1.180 billion despite 1.2% decline in comparable store sales.
Store Expansion and Logistics:
                                                20 new stores planned for fiscal 2025 and 2026, supported by a new Seattle-Tacoma distribution center enhancing supply chain efficiency.
Design Services Growth:
                                                Connected customer sales grew 2% YoY (18.8% of total sales), while Spartan Surfaces delivered 13.3% sales growth despite soft commercial markets.
Financial Strength and Efficiency:
                                                Adjusted EBITDA increased 4.4% to $138.8 million, with $893.5 million in unrestricted liquidity and 40-basis-point improvement in G&A expenses to 5.7% of sales.

                                

Operational Highlights

The company opened 20 new stores in fiscal 2025, with plans to open an additional 20 in fiscal 2026. Floor & Decor also expanded its supply chain capacity with the opening of its fifth distribution center in the Seattle-Tacoma metropolitan area. The company's design services continued to deliver robust year-over-year sales growth, fueled by sustained increases in customer transactions. Connected customer sales rose 2% year-over-year, representing 18.8% of total sales.

Growth Strategy and Outlook

Brad Paulsen, incoming CEO, emphasized the company's focus on delivering exceptional value and service to customers, with a growth strategy centered on expanding its store count and enhancing its supply chain capacity. The company anticipates little divergence from prevailing housing sector trends, with total sales expected to be in the range of $4.660 billion to $4.710 billion, representing a 5% to 6% increase from fiscal 2024. Analysts estimate next year's revenue growth at 8.1%, indicating a positive outlook for the company's future performance.

Valuation and Metrics

With a P/E Ratio of 30.93 and an EV/EBITDA of 18.19, the company's valuation appears to be pricing in a strong growth trajectory. The company's return on equity (ROE) of 9.58% and return on invested capital (ROIC) of 7.77% indicate a decent level of profitability. However, the Net Debt / EBITDA ratio of 3.47 suggests that the company still has some leverage to contend with. As Thomas Taylor emphasized, the company's commitment to playing the long game with discipline and focus is expected to drive sustainable long-term growth.

3. NewsRoom

Floor & Decor Holdings, Inc. $FND Shares Sold by Cetera Investment Advisers

Dec -02

Source: defenseworld.net

Stock Traders Purchase Large Volume of Floor & Decor Put Options (NYSE:FND)

Nov -29

Source: defenseworld.net

Abdiel Capital Liquidates Massive $113 Million Floor & Decor Stake: Should Investors Follow Suit?

Nov -17

Source: fool.com

Is Floor & Decor Quietly Positioning For A 2026 Housing Upswing?

Nov -13

Source: benzinga.com

Floor & Decor: Weak Near-Term Earnings Growth Outlook

Nov -11

Source: seekingalpha.com

Teacher Retirement System of Texas Buys 1,898 Shares of Floor & Decor Holdings, Inc. $FND

Nov -04

Source: defenseworld.net

Floor & Decor Holdings, Inc. (FND) Q3 2025 Earnings Call Transcript

Oct -31

Source: seekingalpha.com

Floor & Dcor (FND) Reports Q3 Earnings: What Key Metrics Have to Say

Oct -30

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.57%)

6. Segments

Laminate and Vinyl

Expected Growth: 12.5%

Laminate and Vinyl from Floor & Decor Holdings, Inc. achieved 12.5% growth driven by increasing demand for affordable, durable, and water-resistant flooring options. Rising popularity of DIY home renovations, growing awareness of laminate's eco-friendliness, and expanding distribution channels also contributed to this growth.

Tile

Expected Growth: 12.8%

Floor & Decor's 12.8% growth in Tile segment is driven by increasing demand for hard-surface flooring, expansion of product offerings, and strategic store openings. Additionally, the company's focus on private label brands, competitive pricing, and exceptional customer service experience contribute to its market share gain.

Installation Materials and Tools

Expected Growth: 13.2%

Strong demand for home improvement and renovation projects, driven by increasing consumer spending and housing market growth, contributes to the 13.2% growth of Installation Materials and Tools from Floor & Decor Holdings, Inc. Additionally, the company's strategic expansion into new markets and e-commerce platform enhancements also support this growth.

Decorative Accessories and Wall Tile

Expected Growth: 12.2%

The 12.2% growth in Decorative Accessories and Wall Tile from Floor & Decor Holdings, Inc. is driven by increasing consumer spending on home decor, rising demand for DIY home improvement projects, and the company's successful expansion into new markets and e-commerce channels.

Wood

Expected Growth: 11.8%

Floor & Decor's 11.8% growth in wood segment is driven by increasing demand for hardwood flooring, expansion of product offerings, and strategic store openings. Additionally, the company's focus on private label brands, competitive pricing, and strong supply chain management contribute to its growth. Furthermore, the rising trend of home renovation and remodeling also supports the segment's growth.

Natural Stone

Expected Growth: 11.5%

Floor & Decor Holdings, Inc.'s Natural Stone segment growth of 11.5% is driven by increasing demand for premium home decor, rising consumer spending on home renovation, and the company's strategic expansion into new markets. Additionally, the segment benefits from the company's strong supplier relationships, efficient logistics, and competitive pricing, enabling it to capitalize on the growing trend of homeowners seeking high-quality, unique natural stone products.

Other

Expected Growth: 12.0%

Floor & Decor's 12.0% growth driven by increasing demand for home improvement, expansion into new markets, and strategic investments in e-commerce and digital capabilities, enabling omnichannel experiences. Additionally, the company's focus on private label products and competitive pricing strategies contribute to its growth momentum.

Adjacent Categories

Expected Growth: 13.5%

Floor & Decor Holdings, Inc.'s 13.5% growth in Adjacent Categories is driven by increasing demand for home improvement, expansion into new markets, and strategic partnerships. Additionally, the company's focus on private label brands, e-commerce growth, and effective inventory management also contribute to this growth.

7. Detailed Products

Hard Surface Flooring

Floor & Decor offers a wide selection of hard surface flooring products, including hardwood, engineered wood, laminate, luxury vinyl tile (LVT), and porcelain tile.

Tile and Stone

Floor & Decor offers a vast selection of tile and stone products, including ceramic, porcelain, natural stone, and glass tile.

Laminate and Luxury Vinyl Flooring

Floor & Decor offers a wide range of laminate and luxury vinyl flooring products, including waterproof and scratch-resistant options.

Area Rugs and Accessories

Floor & Decor offers a variety of area rugs, mats, and accessories, including rug pads, underlayment, and installation tools.

Installation Materials and Tools

Floor & Decor offers a range of installation materials and tools, including adhesives, underlayment, and fastening systems.

8. Floor & Decor Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Floor & Decor Holdings, Inc. operates in the home improvement industry, where substitutes are limited. However, online shopping platforms and DIY tutorials can be considered substitutes, but their impact is moderate.

Bargaining Power Of Customers

Floor & Decor Holdings, Inc. has a large customer base, but individual customers do not have significant bargaining power. The company's pricing strategy and product offerings are designed to appeal to a broad customer base.

Bargaining Power Of Suppliers

Floor & Decor Holdings, Inc. relies on a diverse supplier base, which reduces dependence on individual suppliers. However, suppliers of specialized products may have some bargaining power.

Threat Of New Entrants

The home improvement industry has high barriers to entry, including significant capital requirements and complex logistics. New entrants would face significant challenges in competing with established players like Floor & Decor Holdings, Inc.

Intensity Of Rivalry

The home improvement industry is highly competitive, with several established players competing for market share. Floor & Decor Holdings, Inc. faces intense competition from companies like Home Depot, Lowe's, and others.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	45.70%
Debt Cost	3.95%
Equity Weight	54.30%
Equity Cost	13.26%
WACC	9.00%
Leverage	84.17%

11. Quality Control: Floor & Decor Holdings, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Penske Automotive Group

A-Score: 6.5/10

Value: 6.9

Growth: 7.1

Quality: 4.8

Yield: 5.0

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

SCI

A-Score: 5.7/10

Value: 3.5

Growth: 6.4

Quality: 4.7

Yield: 4.0

Momentum: 6.0

Volatility: 9.3

1-Year Total Return ->

GPC

A-Score: 5.5/10

Value: 3.6

Growth: 5.1

Quality: 4.4

Yield: 6.0

Momentum: 5.0

Volatility: 8.7

1-Year Total Return ->

Arhaus

A-Score: 3.5/10

Value: 4.2

Growth: 4.1

Quality: 4.9

Yield: 0.0

Momentum: 5.5

Volatility: 2.3

1-Year Total Return ->

Tile Shop Holdings

A-Score: 3.5/10

Value: 4.7

Growth: 3.4

Quality: 3.1

Yield: 2.0

Momentum: 3.0

Volatility: 4.7

1-Year Total Return ->

Floor & Decor

A-Score: 3.4/10

Value: 2.6

Growth: 7.7

Quality: 4.3

Yield: 0.0

Momentum: 1.5

Volatility: 4.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

25.76%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.00%

Floor & Decor Holdings, Inc. - US3397501012

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on FND

1.c. Company Highlights

Expensive

Higher Growth

Average Yield

Earnings Beats

Revenues Miss

Average Growth

Revenues Beats

Stable Momentum

2. Floor & Decor's Q3 Earnings: A Strong Performance Amidst a Challenging Market

Operational Highlights

Growth Strategy and Outlook

Valuation and Metrics

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.57%)

6. Segments

Laminate and Vinyl

Expected Growth: 12.5%

Tile

Expected Growth: 12.8%

Installation Materials and Tools

Expected Growth: 13.2%

Decorative Accessories and Wall Tile

Expected Growth: 12.2%

Wood

Expected Growth: 11.8%

Natural Stone

Expected Growth: 11.5%

Other

Expected Growth: 12.0%

Adjacent Categories

Expected Growth: 13.5%

7. Detailed Products

Hard Surface Flooring

Tile and Stone

Laminate and Luxury Vinyl Flooring

Area Rugs and Accessories

Installation Materials and Tools

8. Floor & Decor Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Floor & Decor Holdings, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

63.48$

Current Price

63.48$

Potential

-0.00%

12.e Scoring ^Insights

12.f DCF ^BETA