Core Viewpoint - Floor & Decor Holdings, Inc. is expected to report an increase in revenue for the first quarter of 2025, with a consensus estimate of $1.16 billion, reflecting a 6.1% improvement from the previous year [1] Revenue and Earnings Estimates - The Zacks Consensus Estimate for first-quarter earnings per share is stable at 45 cents, indicating a decline of 2.2% from the same period last year [2] - The company has a trailing four-quarter earnings surprise average of 18.2%, with the last reported quarter exceeding estimates by 50% [2] Key Growth Drivers - The company's disciplined expansion strategy, supply chain agility, strategic investments, and merchandise innovation are expected to enhance market share [2] - A persistent supply-demand imbalance in housing and the increasing median age of owner-occupied homes are driving demand for home upgrades and remodeling, benefiting hard surface flooring and related categories [2] Product and Market Expansion - The launch of new product categories, including a semi-custom cabinet program in 40 warehouse stores and online, is anticipated to be a significant revenue catalyst [3] - By entering adjacent remodeling categories such as cabinets and outdoor products, the company is expanding its share of customer projects beyond flooring [3] Store Expansion Strategy - The disciplined approach to expanding the store footprint is a key driver of top-line growth, focusing on warehouse-format store openings in markets with existing brand awareness [4] - The strategic push to capture a larger share of the professional customer base is gaining traction [4] Sales Performance Concerns - A soft start to the first quarter is noted, with comparable store sales declining 1.7% as of February 20, indicating that momentum from the previous quarter may not have continued [5] - The company has diversified its sourcing away from China, reducing reliance from 50% in 2018 to 18% in 2024, although tariffs remain a challenge [5] Earnings Prediction Model - The current model does not predict a definitive earnings beat for Floor & Decor, as it holds a Zacks Rank of 3 and an Earnings ESP of 0.00% [6][7]

Company Overview - Floor & Decor (FND) shares increased by 11.9% to close at $78.20, following President Trump's announcement to suspend U.S. tariffs for 90 days, which renewed investor optimism [1] - The stock had previously experienced a 22.2% loss over the past four weeks [1] Earnings Expectations - Floor & Decor is expected to report quarterly earnings of $0.45 per share, reflecting a year-over-year decrease of 2.2% [2] - Revenue is projected to be $1.16 billion, representing a 6.1% increase from the same quarter last year [2] Stock Performance Insights - The consensus EPS estimate for Floor & Decor has remained unchanged over the last 30 days, indicating a lack of upward momentum in earnings estimate revisions [3] - The stock currently holds a Zacks Rank of 3 (Hold), suggesting a neutral outlook [3] Industry Context - Floor & Decor is part of the Zacks Retail - Home Furnishings industry, which includes Haverty Furniture (HVT) [3] - Haverty Furniture's consensus EPS estimate is $0.16, showing a year-over-year increase of 14.3%, but it currently has a Zacks Rank of 4 (Sell) [4]

Core Insights - The article discusses the investment perspective on Floor & Decor Holdings (NYSE: FND), emphasizing a hold rating due to expectations of the stock remaining rangebound [1] Group 1: Investment Philosophy - The company adopts a fundamentals-based approach to value investing, focusing on long-term durability and affordability rather than merely low multiples [1] - There is a belief that successful companies can be risky investments if overvalued, highlighting the importance of valuation in investment decisions [1] - The article suggests that in certain situations, the potential for growth may outweigh immediate price concerns [1]

Financial Data and Key Metrics Changes - In Q4 2024, diluted earnings per share were reported at $0.44, including a net benefit of $6.8 million from a derivative litigation settlement [14] - For the full year 2024, diluted earnings per share were $1.90, which also included the $0.05 net benefit from the settlement [15] - The gross profit for Q4 2024 rose by 8.9%, with a gross margin rate of 43.5%, while the full-year gross profit grew by 3.8% with a gross margin rate of 43.3% [56] - Selling and store operating expenses increased by 10.1% in Q4 2024, while general and administrative expenses decreased by 5.4% [57][59] Business Line Data and Key Metrics Changes - Total sales in Q4 2024 increased by 5.7% year-over-year, while comparable store sales decreased by 0.8%, showing improvement from previous quarters [23][24] - Spartan Surfaces experienced a 17.9% decline in Q4 sales compared to the previous year, primarily due to weakness in the multifamily residential market [46] Market Data and Key Metrics Changes - The fourth quarter saw a sequential improvement in comparable store sales, with a notable decrease of 0.8% compared to a 7.1% decline for the full year [24] - Existing home sales rose for the third consecutive month in December, indicating a potential positive trend for the housing market [25] Company Strategy and Development Direction - The company plans to open 25 new warehouse format stores in fiscal 2025, continuing its commitment to strategic growth despite industry pressures [20][76] - Investments in innovative merchandise and technology are expected to enhance market share and prepare for future sales growth [15][16] - The company aims to expand its connected customer sales and improve brand awareness through targeted marketing initiatives [36][39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth opportunities in hard-surface flooring, driven by an aging housing stock and supply-demand imbalances [16] - The company is cautious about the macroeconomic environment, providing a wide range of potential earnings outcomes for fiscal 2025 [68][70] - Management noted that existing home sales growth could positively impact same-store sales if sustained [100] Other Important Information - The company has diversified its sourcing to reduce reliance on China, with U.S. manufacturing now accounting for approximately 27% of products sold [34] - The company achieved a record high net promoter score in January 2025, reflecting strong customer service and associate training efforts [53] Q&A Session Summary Question: What is driving the slightly weaker performance quarter-to-date? - Management attributed the slowdown to weather impacts affecting store operations, noting that sales typically recover over time [80] Question: How should we think about the incrementality or flow-through to the model? - Management indicated that better-than-expected sales in Q4 resulted in strong flow-through, with expectations for continued improvement if sales increase [82][84] Question: What is the outlook for existing home sales and its impact on the business? - Management expects existing home sales to improve but not return to historical levels, which could benefit same-store sales [100] Question: How will the company manage potential tariff impacts in 2025? - The company plans to negotiate with suppliers, diversify sourcing, and adjust pricing as necessary to manage tariff impacts [128]

Financial Data and Key Metrics Changes - The company reported diluted earnings of $0.44 per share for Q4 2024, including a net benefit of $6.8 million from a derivative litigation settlement [14] - For the full year 2024, diluted earnings were $1.90 per share, which also included the $0.05 benefit from the settlement [15] - Q4 2024 gross profit rose by 8.9%, with a gross margin rate of 43.5%, while the full-year gross margin rate increased to 43.3% from 42.1% [56] - Selling and store operating expenses increased by 10.1% in Q4 2024, while general and administrative expenses decreased by 5.4% [57][59] - Adjusted EBITDA for Q4 2024 increased by 11.1% to $119.8 million, while full-year adjusted EBITDA declined by 7.0% to $512.5 million [63][65] Business Line Data and Key Metrics Changes - Total sales for Q4 2024 increased by 5.7% year-over-year, while comparable store sales decreased by 0.8%, showing improvement from previous quarters [23][24] - The company opened 10 new warehouse format stores in Q4 2024, totaling 30 new stores for the fiscal year [19] - Spartan Surfaces experienced a 17.9% decline in Q4 sales, primarily due to weakness in the multifamily residential market [46] Market Data and Key Metrics Changes - The company noted that existing home sales rose for the third consecutive month in December 2024, despite elevated mortgage interest rates [24] - The west division showed encouraging comparable store sales trends, with modest growth year-over-year [28] Company Strategy and Development Direction - The company aims to open 25 new warehouse format stores in fiscal 2025, focusing on strategic growth despite industry pressures [20][21] - Investments in innovative merchandise and technology are prioritized to enhance customer experience and drive long-term growth [15][30] - The company is diversifying its supply chain to reduce reliance on China, with the U.S. now being the largest country of manufacture [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth opportunities in hard-surface flooring due to supply and demand imbalances in housing [16] - The company is carefully planning for fiscal 2025 amid geopolitical uncertainties and mixed economic indicators, with total sales expected to range from $4.740 billion to $4.900 billion [68][70] - Management highlighted the importance of existing home sales for driving growth in same-store sales [100] Other Important Information - The company achieved a record high net promoter score in January 2025, reflecting strong customer service [53] - The company plans to continue investing in technology and e-commerce to enhance customer engagement [37] Q&A Session Summary Question: What is driving the slightly weaker performance quarter-to-date? - Management attributed the slowdown to weather impacts, noting that sales typically recover over time [80] Question: How should we think about the incrementality or flow-through to the model? - Management indicated that better-than-expected sales lead to strong flow-through, with expectations of high 30s flow-through if sales exceed projections [84][86] Question: What are the expectations for housing backdrop and its impact on sales? - Management expects a slow recovery in housing, with benefits from immature stores contributing to sales growth [99][100] Question: How will the company manage supply chain costs and pricing in 2025? - The company plans to negotiate with suppliers, diversify sourcing, and adjust prices as necessary to manage costs [128]

Company Performance - Floor & Decor (FND) reported quarterly earnings of $0.39 per share, exceeding the Zacks Consensus Estimate of $0.26 per share, and up from $0.34 per share a year ago, representing an earnings surprise of 50% [1] - The company posted revenues of $1.11 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.20%, compared to $1.05 billion in the same quarter last year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates four times, but has only topped consensus revenue estimates once [2] Stock Performance and Outlook - Floor & Decor shares have declined approximately 4.4% since the beginning of the year, while the S&P 500 has gained 4.5% [3] - The current consensus EPS estimate for the upcoming quarter is $0.50 on revenues of $1.18 billion, and for the current fiscal year, it is $2 on revenues of $4.88 billion [7] Industry Context - The Retail - Home Furnishings industry, to which Floor & Decor belongs, is currently ranked in the bottom 46% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [5]

Financial Outlook - The fiscal year ended December 26, 2024, includes forward-looking statements regarding future operating results and financial position [18]. - The company does not plan to publicly update forward-looking statements unless required by law [24]. Risk Management - The company anticipates potential risks including economic decline, inflation, and challenges in new store growth [21]. - The management's discussion highlights the need for effective risk management to navigate uncertainties [19]. - Future performance may be affected by unexpected events such as natural disasters or public health crises [21]. - The company acknowledges geopolitical risks and their potential impact on import costs and supply chain [21]. Operational Efficiency - The company emphasizes the importance of managing inventory and supply chain disruptions to maintain operational efficiency [21]. - The company plans to continue monitoring market conditions and adjusting strategies accordingly [20]. Brand and Consumer Focus - There is a focus on maintaining brand image and successfully anticipating consumer preferences to drive demand [21]. Human Resources - The company is committed to attracting and retaining qualified personnel to support its growth strategy [21].

Floor & Decor Holdings, Inc. Announces Fourth Quarter and Fiscal 2024 Financial Results Highlights for the Fourth Quarter of Fiscal 2024: Tom Taylor, Chief Executive Officer, stated, "We are extremely proud of our store and store support teams for executing our sales and customer service initiatives and diligently managing our costs during the fourth quarter and full-year. Their hard work enabled us to report fourth quarter comparable store sales, earnings flow-through, and earnings per share that were bett ...

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Floor & Dcor (FND) , which belongs to the Zacks Retail - Home Furnishings industry, could be a great candidate to consider.When looking at the last two reports, this company has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 9.14%, on average, in the last two quarters.For the most recent quarter, Floor & ...

For Immediate ReleaseChicago, IL – January 3, 2025 – Today, Zacks Equity Research The Home Depot Inc. (HD) , Williams-Sonoma, Inc. (WSM) , Floor & Decor Holdings, Inc. (FND) and Tempur Sealy International, Inc. (TPX) .Industry: Home FurnishingLink: https://www.zacks.com/commentary/2390715/4-retail-home-furnishing-stocks-to-watch-in-a-thriving-industryThe Zacks Retail-Home Furnishings industry presents a compelling investment opportunity driven by improving sales trends, product innovation, and strong e-comm ...