In 2017, home improvement retail chain Floor & Decor Holdings (FND -1.45%) went public. It only had about 70 locations and was still virtually unknown. And investors could have bought it at any time during the past eight years. But now it's time to buy Floor & Decor stock like there's no tomorrow.Of course, that's just an expression -- there will be a tomorrow for Floor & Decor, and I believe it will be great for shareholders. That's why I believe it's worth the investment today. But when it comes to buying ...

In the dynamic world of home improvement retail, two powerful players are vying for dominance, but with very different playbooks. The Home Depot Inc. (HD) , the industry’s undisputed heavyweight, commands the market with unmatched scale, an expansive product mix and a deeply entrenched national presence. Floor & Decor (FND) is a fast-moving challenger making waves with its focused, high-growth approach to hard surface flooring.While Home Depot commands the lion’s share of the market with its vast scale and ...

Core Viewpoint - The current economic turmoil in the U.S. presents investment opportunities, echoing Warren Buffett's advice from 2008 to invest in American companies, as highlighted by Jamie Dimon, CEO of JPMorgan Chase [2][3][5]. Company Summaries 1. Tractor Supply - Tractor Supply operates over 2,300 locations in the U.S. and is recognized as the largest rural lifestyle retailer in the country [7]. - The company has experienced minimal growth, with only 15 net new stores opened in Q1 2025 and a projected net sales growth of 4% to 8% for the year [8]. - Operating margins are under pressure, expected to be just under 10% for 2025, down from over 10% in previous years, with potential further declines due to tariffs [9]. - Despite challenges, Tractor Supply has a loyal customer base and has consistently paid and raised dividends for 16 consecutive years [10]. 2. Floor & Decor - Floor & Decor operates around 250 locations in the U.S. and sources 18% of its products from China, which poses challenges [11]. - The company anticipates modest revenue growth for 2025 and expects EPS to decline to $2, down from 2023 results [12]. - Floor & Decor is strategically opening 20 to 25 new stores annually until reaching 500 locations, positioning itself for future profit growth as the housing market rebounds [14][21]. 3. Texas Roadhouse - Texas Roadhouse has nearly 800 restaurants in the U.S., making it a quintessential American stock [15]. - The restaurant chain recorded almost 10% year-over-year revenue growth in Q1 2025, despite a pullback in profit margins [16]. - Management is investing in technology upgrades to improve long-term profit margins, and the brand remains popular among consumers [17][19]. Investment Recommendations - Tractor Supply and Texas Roadhouse are suitable for investors seeking low volatility and consistent business results [20]. - Floor & Decor is recommended for those looking for better growth potential, especially with the anticipated recovery in the housing market [20][21].

Following my coverage on Floor & Decor Holdings (NYSE: FND ), for which I reiterated a hold rating as I was not convinced that the business is recovering, especially with the visible headwinds I noted, this post is toI take a fundamentals-based approach to value investing.I disagree with the common misconception held by many investors that low multiple stocks must be cheap. I look for companies that offer the best long-term durability at the most affordable prices. Consequently, I have a propensity to be dr ...

Floor & Dcor (FND) reported $1.16 billion in revenue for the quarter ended March 2025, representing a year-over-year increase of 5.8%. EPS of $0.45 for the same period compares to $0.46 a year ago.The reported revenue represents a surprise of -0.31% over the Zacks Consensus Estimate of $1.16 billion. With the consensus EPS estimate being $0.45, the company has not delivered EPS surprise.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations ...

Company Performance - Floor & Decor (FND) reported quarterly earnings of $0.45 per share, matching the Zacks Consensus Estimate, but down from $0.46 per share a year ago [1] - The company posted revenues of $1.16 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 0.31%, compared to $1.1 billion in the same quarter last year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times, but has topped consensus revenue estimates only once [2][3] Stock Movement and Outlook - Floor & Decor shares have declined approximately 28.4% since the beginning of the year, contrasting with the S&P 500's decline of 5.3% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.56 on revenues of $1.23 billion, and for the current fiscal year, it is $1.99 on revenues of $4.83 billion [7] Industry Context - The Retail - Home Furnishings industry, to which Floor & Decor belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Floor & Decor's stock performance [5][6]

Floor & Decor (FND) Q1 2025 Earnings Call May 01, 2025 05:00 PM ET Company Participants Wayne Hood - Senior Vice President of IRThomas Taylor - Chief Executive OfficerBradley Paulsen - PresidentBryan Langley - Executive VP & CFOErsan Sayman - EVP of MerchandisingSteven Forbes - Senior Managing DirectorSteven Zaccone - Director, Equity Research, Hardlines RetailMax Rakhlenko - Managing DirectorChuck Grom - Managing Director Conference Call Participants Seth Sigman - Managing Director, Senior Equity Research ...

Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $0.45 for the first quarter of fiscal 2025, a slight decrease from $0.46 in the same period last year [5][6] - Total sales increased by 5.8% to $1,161 million from $1,097 million year-over-year [6][30] - Gross profit rose by 8.1% driven by the sales increase and a 100 basis point increase in gross margin rate to 43.8% [30][34] - Selling and store operating expenses increased by 10.3% to $368.8 million, primarily due to new stores [30][31] Business Line Data and Key Metrics Changes - Comparable store sales decreased by 1.8% year-over-year, with the West Division outperforming this decline [16][17] - Sales growth was strongest in laminate and luxury vinyl plank, wood, and installation materials [18] - Connected customer sales increased by 2.1%, now accounting for approximately 18.3% of total sales [19][20] - Sales to professional customers continued to grow, accounting for about 50% of total sales [22] Market Data and Key Metrics Changes - The U.S. is now the largest country of manufacture for the company, accounting for approximately 27% of products sold, up from 20% in fiscal 2018 [11] - China accounted for 18% of products sold, down from 25% in fiscal 2023 and 50% in fiscal 2018 [11] - The company anticipates receipts from China to approximate mid to low single digits of total receipts by the end of fiscal 2025 [11][12] Company Strategy and Development Direction - The company is focused on managing tariff impacts through vendor negotiations and sourcing diversification strategies [9][10] - Plans to open 20 new warehouse format stores in fiscal 2025, down from a previous expectation of 25 [14][15] - The company aims to maintain its competitive advantage through a broad assortment and innovative product offerings [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding consumer spending due to economic volatility and potential recession risks [7][36] - The company is proactively implementing flexible plans to navigate economic challenges [7][36] - Updated fiscal 2025 guidance reflects a cautious outlook, with total sales expected to increase by 5% to 8% [37][39] Other Important Information - The company maintains a strong liquidity position with $949.8 million in unrestricted liquidity [35] - General and administrative expenses increased by 3.5% to $69.1 million, attributed to investments in store growth [32] Q&A Session Summary Question: Clarification on tariff impact and pricing strategy - Management confirmed that they have experience managing tariffs and are negotiating with vendors to offset impacts, expecting modest price increases if necessary [44][46] Question: Concerns about business weakness and guidance reduction - Management acknowledged the challenges but emphasized strong execution and market share growth, while being prepared for various scenarios [56][58] Question: Store growth strategy and criteria for adjustments - The company plans to open 20 new stores based on current market conditions, with flexibility to adjust if necessary [66][68] Question: Impact of tariffs on gross margin - Management aims to maintain gross margin rates despite tariff impacts, with a focus on managing gross profit dollars [102]

Financial Performance - Net sales for the quarter ended March 27, 2025, increased to $1,160,740, representing a growth of 5.8% compared to $1,097,289 for the same period in 2024[17] - Gross profit for the quarter was $508,168, up from $470,026 in the prior year, indicating a gross margin improvement[17] - Operating income rose to $64,229, compared to $59,311 in the previous year, reflecting a year-over-year increase of 3.1%[17] - Net income for the quarter was $48,878, slightly down from $50,032 in the same quarter last year, resulting in basic earnings per share of $0.45[17] - Net income for the thirteen weeks ended March 27, 2025, was $48,878,000, a decrease of 2.3% from $50,032,000 for the same period in 2024[23] - Basic earnings per share for the period was $0.45, down from $0.47 in the prior year, while diluted earnings per share also decreased to $0.45 from $0.46[64] - Operating income for the Retail segment was $61.929 million, compared to $57.050 million in the prior year, indicating a growth in operational efficiency[73] Assets and Liabilities - Total assets increased to $5,368,264, up from $5,050,478 as of December 26, 2024, showing a growth of 6.3%[15] - Total liabilities rose to $3,146,501, compared to $2,880,320 at the end of the previous quarter, indicating an increase of 9.3%[15] - Current liabilities totaled $1,253,504, slightly higher than $1,244,192 from the previous quarter, indicating a marginal increase[15] - Long-term debt as of March 27, 2025, was $194,424,000, slightly down from $194,527,000 at the end of the previous fiscal year[37] - As of March 27, 2025, amounts due to financial intermediaries for supply chain finance programs were $177.3 million, up from $167.7 million at the end of 2024[70] Cash Flow - Net cash provided by operating activities decreased to $71,164,000 from $147,510,000 year-over-year, reflecting a decline of 51.7%[23] Equity and Stockholder Information - The company reported total stockholders' equity of $2,221,763, up from $2,170,158, reflecting a growth of 2.4%[15] - The number of outstanding stock options as of March 27, 2025, was 1,097,465, with a weighted average exercise price of $31.16[59] Risks and Future Strategies - The company continues to face risks related to economic conditions, competition, and supply chain disruptions, which could impact future performance[11] - Future growth strategies include managing new store openings and enhancing brand awareness to drive sales[11] - The Company plans to continue expanding its product offerings and market presence, focusing on both professional and DIY customer segments[26] Lease and Interest Expenses - Total fixed operating lease costs for the thirteen weeks ended March 27, 2025, were $60.164 million, compared to $53.279 million for the same period in 2024, representing an increase of 13.5%[50] - Total operating lease costs for the thirteen weeks ended March 27, 2025, were $83.161 million, up from $72.724 million in the prior year, reflecting a year-over-year increase of 14.3%[50] - The effective income tax rate for the thirteen weeks ended March 27, 2025, was 22.0%, up from 12.8% for the same period in 2024[47] - The Company recognized interest expense of $1,548,000 for the thirteen weeks ended March 27, 2025, compared to $1,955,000 for the same period in 2024[38] - A 1.0% increase in the effective interest rate on the company’s $199.8 million outstanding Credit Facilities would result in an additional interest expense of approximately $2.0 million over the next twelve months[116] Legal Matters - The Company is currently involved in litigation with potential damages exceeding $11.0 million related to a wrongful death lawsuit[55] Other Financial Metrics - The laminate and vinyl category generated $286,160,000 in sales, representing 25% of total net sales, up from 24% in the previous year[36] - The company’s contingent earn-out liability decreased from $4.502 million to $0.750 million during the thirteen weeks ended March 27, 2025, reflecting a fair value adjustment of $(375,000) and payments of $(3.377 million)[66] - The change in fair value of the company’s interest rate cap contracts was less than $0.1 million for the thirteen weeks ended March 27, 2025, compared to a $1.0 million change in the prior year[69] - The company’s fair value assessment for its interest rate cap contract considered counterparty default risk and its own credit risk, utilizing Level 2 inputs for valuation[69]

Financial Performance - Net sales for the first quarter of fiscal 2025 were $1,160.7 million, an increase of 5.8% from $1,097.3 million in the first quarter of fiscal 2024[6] - Comparable store sales decreased by 1.8% in the first quarter of fiscal 2025[6] - Diluted earnings per share (EPS) for the first quarter was $0.45, down 2.2% from $0.46 in the same period last year[6] - Operating income increased by 8.3% to $64.2 million, with an operating margin of 5.5%, up 10 basis points from the previous year[6] - Adjusted EBITDA for the first quarter was $129.8 million, reflecting a 5.5% increase from $123.0 million in the first quarter of fiscal 2024[6] - Net income for the thirteen weeks ended March 27, 2025, was $48,878,000, a decrease of 2.3% compared to $50,032,000 for the same period in 2024[21] - EBITDA for the same period was $123,616,000, representing an increase of 7.5% from $115,190,000 in the prior year[22] - Adjusted EBITDA increased to $129,821,000, up 5.8% from $122,998,000 year-over-year[22] - Net cash provided by operating activities was $71,164,000, down 51.8% from $147,510,000 in the previous year[21] - Cash and cash equivalents at the end of the period were $186,930,000, compared to $57,426,000 at the end of the same period last year[21] - Purchases of fixed assets totaled $66,728,000, a decrease from $111,688,000 in the prior year[21] - The company reported a loss on asset impairments and disposals of $32,000, compared to $37,000 in the previous year[21] Future Outlook - The company plans to open 20 new warehouse stores in fiscal 2025, reduced from a prior expectation of 25 new stores[2] - The updated outlook for fiscal year 2025 includes net sales projected between $4,660 million and $4,800 million[11] - Comparable store sales guidance for fiscal year 2025 is expected to range from (2.0)% to 1.0%[11] - Capital expenditures are projected to be approximately $310 million to $360 million for fiscal year 2025[11] Challenges and Risks - The company anticipates challenges in managing new store growth and potential impacts from economic conditions[27] - Future performance may be affected by various risks including supply chain disruptions and changes in consumer preferences[27] - The company is focused on maintaining brand image and managing competition in the market[27]