Financial Performance - For the quarter ended June 2025, Floor & Dcor reported revenue of $1.21 billion, reflecting a year-over-year increase of 7.2% [1] - The earnings per share (EPS) for the quarter was $0.58, up from $0.52 in the same quarter last year [1] - The reported revenue matched the Zacks Consensus Estimate of $1.21 billion, resulting in a surprise of +0.34% [1] - The company achieved an EPS surprise of +1.75%, with the consensus EPS estimate being $0.57 [1] Key Metrics - Comparable store sales increased by 0.4%, surpassing the average estimate of 0.1% from seven analysts [4] - The total number of warehouse stores was 257, slightly below the average estimate of 259 from three analysts [4] - The number of warehouse stores opened during the quarter was 3, matching the average estimate from two analysts [4] Stock Performance - Shares of Floor & Dcor have returned -5.3% over the past month, in contrast to the Zacks S&P 500 composite's +2.7% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - Floor & Decor (FND) reported quarterly earnings of $0.58 per share, exceeding the Zacks Consensus Estimate of $0.57 per share, and showing an increase from $0.52 per share a year ago, indicating a positive earnings surprise of +1.75% [1][2] Financial Performance - The company achieved revenues of $1.21 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.34%, and up from $1.13 billion in the same quarter last year [2] - Over the last four quarters, Floor & Decor has exceeded consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Floor & Decor shares have declined approximately 21.4% since the beginning of the year, contrasting with the S&P 500's gain of 8.2% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating expectations of outperforming the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.48 on revenues of $1.19 billion, and for the current fiscal year, it is $1.84 on revenues of $4.72 billion [7] - The trend of estimate revisions for Floor & Decor was favorable ahead of the earnings release, suggesting potential positive adjustments in the future [6] Industry Context - The Retail - Home Furnishings industry, to which Floor & Decor belongs, is currently ranked in the top 39% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - The company reported a diluted earnings per share increase of 11.5% to $0.58 compared to $0.52 in the same period last year, reaching the high end of expectations [5] - Sales for the quarter rose by 7.1% to $1,214 million, with comparable store sales increasing by 0.4%, marking the first quarterly increase since 2022 [5][15] - Gross profit rose by 8.5% compared to the same period last year, driven by a 7.1% increase in sales and a 60 basis points improvement in the gross margin rate, which rose to 43.9% [26][29] Business Line Data and Key Metrics Changes - Connected Customer sales rose by 2% year over year, now accounting for approximately 19% of sales, with strong growth in weekly active users and conversions [18] - The design services segment delivered strong sequential and year-over-year sales growth, significantly outpacing the company average [18] - Spartan Surfaces saw sales rise approximately 7% year over year, with June marking the strongest month in the company's history [22] Market Data and Key Metrics Changes - Store sales in the West Division outperformed the company for the quarter and year to date [15] - The second quarter benefit to comparable store sales from Hurricane Helene and Milton was approximately 40 basis points compared to 100 basis points in the first quarter [15] - Existing home sales fell 2.7% in June to a seasonally adjusted annual rate of 3,930,000 units, marking the lowest level in nine months [32] Company Strategy and Development Direction - The company plans to open 20 new warehouse format stores in fiscal 2025, with a disciplined and agile growth strategy [7][8] - The company is focused on mitigating the impact of tariffs through vendor negotiations and product diversification [10][11] - The company aims to maintain pricing gaps and reinforce its everyday low price message while enhancing its product assortment [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the resilience of the U.S. consumer, supported by a solid labor market, but acknowledged challenges in discretionary spending due to elevated mortgage rates [31][32] - The company does not expect significant changes in consumer behavior or housing activity for the remainder of 2025 [33] - Management highlighted the importance of internal initiatives to drive sales and improve in-store productivity amid a challenging macro environment [66][68] Other Important Information - The company ended the quarter with $876.9 million in unrestricted liquidity, consisting of $176.9 million in cash and cash equivalents [30] - The effective tax rate increased to 21.8% from 19.8% in the same period last year, primarily due to a decrease in excess tax benefits related to stock-based compensation [29] Q&A Session Summary Question: How much of the ticket increase was tariff-induced versus trade-up to better products? - Management indicated that much of the average ticket increase came from product mix, particularly in wood, with minor price changes affecting the ticket [41][44] Question: How does the company view pricing throughout the year given inventory cycles? - Management stated that modest price increases are expected in the back half of the year, with a focus on managing tariffs through SKU adjustments and vendor negotiations [45][46] Question: What is the outlook for fiscal 2026? - Management noted it is too early to react to 2026 estimates, emphasizing the need for improvement in existing home sales and the impact of new store maturation [52][54] Question: How does the company approach creating shareholder value in a challenging environment? - Management highlighted ongoing investments in in-store experiences and commercial opportunities to drive growth, even if existing home sales remain subdued [65][66] Question: How is the company performing across different income demographics? - Management indicated that the company attracts a wide range of income levels and is revisiting its studio strategy to appeal to higher-income consumers [88][90]

Part I – Financial Information [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Floor & Decor Holdings, Inc. as of June 26, 2025, and for the thirteen and twenty-six week periods then ended [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 26, 2025, total assets increased to **$5.41 billion** from **$5.05 billion** at the end of fiscal 2024, primarily driven by increases in inventories and fixed assets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 26, 2025 | December 26, 2024 | | :--- | :--- | :--- | | **Total current assets** | $1,553,164 | $1,492,385 | | Inventories, net | $1,211,431 | $1,132,599 | | **Total assets** | **$5,411,247** | **$5,050,478** | | **Total current liabilities** | $1,237,781 | $1,244,192 | | Lease liabilities (Current & Long-term) | $1,755,416 | $1,489,928 | | **Total liabilities** | **$3,116,905** | **$2,880,320** | | **Total stockholders' equity** | **$2,294,342** | **$2,170,158** | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) For the second quarter of 2025, net sales increased by **7.1%** and net income by **11.5%** year-over-year, reflecting continued business growth Statement of Operations Summary (in thousands, except per share data) | Metric | Thirteen Weeks Ended June 26, 2025 | Thirteen Weeks Ended June 27, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net sales | $1,214,150 | $1,133,139 | +7.1% | | Gross profit | $532,688 | $491,034 | +8.5% | | Operating income | $81,894 | $71,328 | +14.8% | | Net income | $63,178 | $56,666 | +11.5% | | Diluted earnings per share | $0.58 | $0.52 | +11.5% | | **Metric** | **Twenty-six Weeks Ended June 26, 2025** | **Twenty-six Weeks Ended June 27, 2024** | **YoY Change** | | Net sales | $2,374,890 | $2,230,428 | +6.5% | | Gross profit | $1,040,856 | $961,060 | +8.3% | | Operating income | $146,123 | $130,639 | +11.9% | | Net income | $112,056 | $106,698 | +5.0% | | Diluted earnings per share | $1.03 | $0.99 | +4.0% | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity increased from **$2.17 billion** at the end of fiscal 2024 to **$2.29 billion** as of June 26, 2025, driven by net income and stock-based compensation - **Retained earnings increased from $1.62 billion to $1.73 billion** during the first twenty-six weeks of 2025, mainly due to the **net income of $112.1 million** earned during the period[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first twenty-six weeks of 2025, net cash provided by operating activities was **$155.3 million**, a significant decrease from the prior year, primarily due to an increase in inventory Cash Flow Summary (in thousands) | Activity | Twenty-six Weeks Ended June 26, 2025 | Twenty-six Weeks Ended June 27, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $155,276 | $341,480 | | Net cash used in investing activities | ($160,827) | ($225,614) | | Net cash used in financing activities | ($5,242) | ($12,185) | | **Net (decrease) increase in cash** | **($10,793)** | **$103,681** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed information on the company's accounting policies, revenue disaggregation, debt structure, and ongoing litigation, with the company operating **257 warehouse-format stores** as of June 26, 2025 - The company operates as a multi-channel specialty retailer of hard surface flooring and related accessories, with **257 warehouse-format stores and five design studios in 38 states** as of June 26, 2025[25](index=25&type=chunk)[26](index=26&type=chunk) Net Sales by Product Category (Thirteen Weeks Ended June 26, 2025) | Product Category | Net Sales (in thousands) | % of Net Sales | | :--- | :--- | :--- | | Laminate and vinyl | $284,164 | 23% | | Tile | $276,044 | 23% | | Installation materials and tools | $252,504 | 21% | | Decorative accessories and wall tile | $201,876 | 17% | | Wood | $85,214 | 7% | | Natural stone | $53,523 | 4% | | Other & Adjacent | $60,825 | 5% | - The company is a defendant in a **wrongful death lawsuit** alleging product defects, with plaintiffs seeking **damages exceeding $1.0 million** plus exemplary damages, and the company is currently **unable to estimate the possible loss**[54](index=54&type=chunk)[55](index=55&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results for Q2 and H1 2025, highlighting net sales growth from new stores, improved gross margin, and capital expenditure plans for fiscal 2025 Key Performance Indicators | Metric | Thirteen Weeks Ended June 26, 2025 | Thirteen Weeks Ended June 27, 2024 | | :--- | :--- | :--- | | Comparable store sales | 0.4% | (9.0)% | | Comparable average ticket | 3.8% | (4.3)% | | Comparable transactions | (3.3)% | (4.9)% | | Number of warehouse-format stores | 257 | 230 | - **Net sales for Q2 2025 increased 7.1% to $1.21 billion**, driven by **28 new stores** opened since Q2 2024 and a **0.4% increase in comparable store sales**, with the comparable sales increase due to a **3.8% rise in average ticket**, offset by a **3.3% decrease in transactions**[82](index=82&type=chunk) - **Gross margin for Q2 2025 increased by 60 basis points to 43.9%**, primarily driven by a decrease in supply chain costs[86](index=86&type=chunk)[87](index=87&type=chunk) - The company plans **capital expenditures of approximately $280 million to $320 million** in fiscal 2025, with the majority allocated to **opening 20 new warehouse-format stores** and related construction[105](index=105&type=chunk)[113](index=113&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is to interest rate fluctuations on its variable-rate credit facilities, partially mitigated by an interest rate cap contract - The company is subject to **interest rate risk** on its variable-rate Credit Facilities, where a hypothetical **1.0% increase in the effective interest rate** would **increase annual interest expense by approximately $2.0 million**[121](index=121&type=chunk) - To mitigate interest rate risk, the company has an **interest rate cap contract** with a **notional value of $150.0 million**, which effectively **caps the SOFR-based interest rate at 5.50%** on a portion of its Term Loan Facility until April 2026[121](index=121&type=chunk) [Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 26, 2025, with no material changes to internal controls, though a new ERP system implementation may lead to future changes - The company's management concluded that **disclosure controls and procedures were effective** at a reasonable assurance level as of June 26, 2025[122](index=122&type=chunk) - The company has begun a **multi-year implementation of a new enterprise resource planning (ERP) system**, which is expected to be completed in phases through 2027 and **may result in future changes to internal controls**[124](index=124&type=chunk) Part II – Other Information [Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 5 of the financial statements, which details a wrongful death lawsuit filed against the company, with an indeterminable outcome and potential financial impact - The company **incorporates by reference the information on legal proceedings from Note 5**, which discusses an **ongoing wrongful death lawsuit**[125](index=125&type=chunk)[54](index=54&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K, except for ongoing uncertainty related to U.S. tariffs and the global economy - There have been **no material changes to the risk factors** from the company's Annual Report, aside from the **heightened uncertainty surrounding U.S. tariffs and the global economy**[126](index=126&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the second quarter of 2025, the company did not engage in any unregistered sales or repurchases of its equity securities - The company reported **no unregistered sales of equity securities** and **no repurchases of its equity securities** during the fiscal quarter ended June 26, 2025[127](index=127&type=chunk) [Other Information](index=27&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated a Rule 10b5-1 trading plan or any non-Rule 10b5-1 trading arrangement during the fiscal quarter ended June 26, 2025 - **No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans** during the quarter[128](index=128&type=chunk) [Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO as required by the Sarbanes-Oxley Act, and XBRL data files - The report includes standard exhibits such as **Sarbanes-Oxley Act certifications (31.1, 31.2, 32.1)** and **Inline XBRL documents**[132](index=132&type=chunk)

Financial Results and Outlook [Second Quarter Fiscal 2025 Performance Highlights](index=1&type=section&id=Second%20Quarter%20Fiscal%202025%20Performance%20Highlights) Floor & Decor reported strong Q2 2025 results, with net sales up 7.1% to $1.21 billion and 0.4% comparable store sales growth Q2 2025 Key Metrics | Metric | Value | Change vs Q2 2024 | | :--- | :--- | :--- | | Net Sales | $1,214.2 million | +7.1% | | Comparable Store Sales | +0.4% | - | | Diluted EPS | $0.58 | +11.5% | - The **0.4% increase in comparable store sales** is significant as it represents the first quarterly increase since the fourth quarter of fiscal 2022, indicating a potential turnaround in store performance[2](index=2&type=chunk) - Store expansion continues with **three new stores opened in Q2 2025**, bringing the total to 257 stores. The company plans to open a total of **20 new stores in fiscal 2025**[2](index=2&type=chunk) [Detailed Financial Results](index=1&type=section&id=Detailed%20Financial%20Results) [For the Thirteen Weeks Ended June 26, 2025 (Q2 2025)](index=1&type=section&id=For%20the%20Thirteen%20Weeks%20Ended%20June%2026%2C%202025%20(Q2%202025)) Q2 2025 net sales increased 7.1% to $1.21 billion, with operating income up 14.8% and net income growing 11.5% Q2 2025 Financial Summary | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,214.2M | $1,133.1M | +7.1% | | Operating Income | $81.9M | $71.3M | +14.8% | | Operating Margin | 6.8% | 6.3% | +50 bps | | Net Income | $63.2M | $56.7M | +11.5% | | Diluted EPS | $0.58 | $0.52 | +11.5% | | Adjusted EBITDA* | $150.2M | $136.9M | +9.7% | [For the Twenty-six Weeks Ended June 26, 2025 (YTD 2025)](index=1&type=section&id=For%20the%20Twenty-six%20Weeks%20Ended%20June%2026%2C%202025%20(YTD%202025)) YTD 2025 net sales grew 6.5% to $2.37 billion, operating income rose 11.9% to $146.1 million, and net income increased 5.0% YTD 2025 Financial Summary | Metric | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $2,374.9M | $2,230.4M | +6.5% | | Comparable Store Sales | -0.7% | - | - | | Operating Income | $146.1M | $130.6M | +11.9% | | Operating Margin | 6.2% | 5.9% | +30 bps | | Net Income | $112.1M | $106.7M | +5.0% | | Diluted EPS | $1.03 | $0.99 | +4.0% | | Adjusted EBITDA* | $280.0M | $259.9M | +7.7% | [Updated Fiscal Year 2025 Outlook](index=2&type=section&id=Updated%20Fiscal%20Year%202025%20Outlook) FY2025 guidance projects net sales of $4.66-$4.75 billion, comparable store sales from -2.0% to 0.0%, and diluted EPS of $1.75-$2.00 Fiscal Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Net Sales | $4,660M - $4,750M | | Comparable Store Sales | (2.0)% to 0.0% | | Diluted EPS | $1.75 - $2.00 | | Adjusted EBITDA* | $520M - $550M | | New Warehouse Stores | 20 | | Capital Expenditures | $280M - $320M | Consolidated Financial Statements [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2025 income statement shows 7.1% net sales growth, gross margin expanded to 43.9%, and operating income increased 14.8% to $81.9 million - Gross margin expanded to **43.9% in Q2 2025** from 43.3% in Q2 2024, driven by a lower rate of growth in cost of sales (6.1%) compared to net sales (7.1%)[19](index=19&type=chunk) - Pre-opening expenses decreased by **51.8% in Q2 2025** compared to the prior year, contributing to the **14.8% growth in operating income**[19](index=19&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 26, 2025, total assets increased to $5.41 billion, driven by inventories, with total liabilities rising to $3.12 billion Balance Sheet Comparison | Account | June 26, 2025 | Dec 26, 2024 | | :--- | :--- | :--- | | Total Assets | $5,411.2M | $5,050.5M | | Inventories, net | $1,211.4M | $1,132.6M | | Total Liabilities | $3,116.9M | $2,880.3M | | Total Stockholders' Equity | $2,294.3M | $2,170.2M | - Inventories increased by **$78.8 million** since the end of fiscal 2024, reflecting investment to support sales growth and new store openings[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 net cash from operating activities declined to $155.3 million, primarily due to inventory investment Cash Flow Summary (YTD) | Activity | Twenty-six Weeks Ended June 26, 2025 | Twenty-six Weeks Ended June 27, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $155.3M | $341.5M | | Net cash used in investing activities | ($160.8M) | ($225.6M) | | Net cash used in financing activities | ($5.2M) | ($12.2M) | - The significant year-over-year decrease in operating cash flow was largely driven by changes in working capital, specifically a **$78.8 million increase in inventory in H1 2025** versus a $68.9 million decrease in H1 2024[21](index=21&type=chunk) Supplemental Information and Disclosures [Reconciliation of GAAP to Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP Net Income to Adjusted EBITDA, showing Q2 2025 Net Income of $63.2 million adjusted to $150.2 million Q2 2025 GAAP to Non-GAAP Reconciliation | Line Item | Amount (in thousands) | | :--- | :--- | | Net income (GAAP) | $63,178 | | Depreciation and amortization | $59,337 | | Interest expense, net | $1,076 | | Income tax expense | $17,640 | | **EBITDA** | **$141,231** | | Stock-based compensation expense | $8,922 | | **Adjusted EBITDA** | **$150,153** | [Key Definitions](index=3&type=section&id=Key%20Definitions) This section defines key performance metrics such as Comparable Store Sales, EBITDA, and Adjusted EBITDA, clarifying their calculation and purpose - A store is included in the comparable store sales calculation on the first day of the **thirteenth full fiscal month** following its opening[14](index=14&type=chunk) - Adjusted EBITDA is defined as net income before interest, taxes, depreciation, and amortization, further adjusted for non-cash stock-based compensation and other items not considered indicative of core operating performance[15](index=15&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) This legal disclaimer highlights that forward-looking statements are subject to significant risks and uncertainties, including economic conditions and competition - The company explicitly states that future results are subject to risks and uncertainties and are not guaranteed[25](index=25&type=chunk)[27](index=27&type=chunk) - Key risk factors cited include the health of the economy, housing market trends, supply chain performance, competition, and the ability to manage new store growth effectively[26](index=26&type=chunk)

Group 1 - Floor & Decor Holdings is expected to announce fiscal second-quarter earnings on July 31, 2025, with analysts predicting earnings of 56 cents per share and revenue of $1.2 billion, reflecting a 6% increase in earnings and a 7% rise in sales year-over-year [2] - The company operates 250 locations averaging between 50,000 and 80,000 square feet, generating a $4.5 billion business with $301 million in operating profit and $205 million in net income over the past year [3] - Floor & Decor aims to expand to approximately 500 stores, indicating a focus on high efficiency and scalability in its operations, supported by an $8.6 billion market cap [3] Group 2 - Historical data shows that Floor & Decor stock has increased 60% of the time following earnings announcements, with a median rise of 2.3% on the day of the announcement [2][6] - Over the last five years, there have been 20 documented earnings data points, with positive one-day returns occurring approximately 60% of the time, increasing to 75% over the last three years [6] - The median of positive one-day returns is 2.3%, while the median of negative returns is -5.8% [6]

Core Insights - True value in investments is derived from growth rather than short-term gains, emphasizing the importance of a long-term perspective [1] - Great businesses provide significant societal value and demonstrate durability, which is a key factor in their valuation [1] - Companies that offer products and services significantly superior to competitors are positioned for substantial growth [1] Business Characteristics - Selection, convenience, and value are critical attributes sought in businesses [1] - Durability acts as a multiplier for value, with a preference for non-cyclical businesses [1] - The ability to innovate and maintain competitive advantages through unique product features is essential [1] Revenue and Structure - Companies should aim to develop multiple revenue streams and possess anti-fragile business structures [1] - Complex operations can be advantageous, particularly if the business can recover from adversities [1] - Uniqueness is identified as the primary driver of value [1] Cost and Investment Strategy - Low costs associated with maintaining existing business operations allow for high leverage in reinvestment and growth [1] - Minimal marketing expenditures are required for sustainable growth [1] - Trust and network effects are valuable indicators of a company's durability [1] Management and Leadership - Effective management is crucial, with a preference for executives who have aligned interests and a strong focus on the business [1] - Companies led by seasoned CEOs, founders, or family businesses are favored [1] - A culture that empowers employees and attracts talent is indicative of a good business [1] Market Timing and Investment Philosophy - The best investment opportunities arise when negative news is already priced in, revealing true value [1] - Companies that initiate layoffs may signal a turning point where real value becomes apparent [1] - A strategy of buying more shares during price declines is recommended for long-term investors [1]

Core Insights - Floor & Decor has formed a partnership with Habitat for Humanity International to enhance community stability through safe and affordable housing [1][3] - In 2025, Floor & Decor has donated over $300,000 in flooring and installation materials to more than 60 local Habitat affiliates, impacting over 80 communities across the U.S. [2] - The partnership reflects a shared commitment to improving lives and communities, aligning with the mission of Habitat for Humanity [3][4] Company Overview - Floor & Decor is a leading retailer specializing in hard surface flooring, operating over 250 warehouse-format stores and five design studios across 38 states as of March 27, 2025 [6] - The company offers a wide range of flooring products, including laminate, vinyl, tile, wood, and natural stone, at competitive prices [6] - Founded in 2000 and headquartered in Atlanta, Georgia, Floor & Decor emphasizes continuous improvement in both its business operations and philanthropic efforts [4][6]

If you invested $10,000 in warehouse-style retailer Costco Wholesale (COST -0.70%) in 1990, you'd have over $400,000 today. Simply put, Costco stock was a life-changing investment for some investors thanks to its incredibly consistent performance. As stellar as returns have been for Costco, one current risk unsettles some investors: It currently trades at a price-to-earnings (P/E) valuation of nearly 60. That's its highest valuation in over 30 years even though its growth prospects have cooled considerably ...

Core Viewpoint - Floor & Decor Holdings is positioned as a strong investment opportunity due to its attractive business model, growth plans, and favorable valuation compared to competitors like Home Depot [1][12][16] Group 1: Business Model - Floor & Decor operates a high-volume retail model with around 250 locations, each between 50,000 and 80,000 square feet, generating $4.5 billion in trailing-12-month revenue [7][8] - The business model is praised for its efficiency, allowing for operating leverage and strong profitability, akin to Costco's approach [6][8] - The company aims to maintain a limited number of high-volume stores rather than expanding into numerous low-volume locations [11] Group 2: Growth Plans - Floor & Decor plans to grow to at least 500 locations, with 20 new stores expected to open in 2025, representing about 8% growth [9][10] - The company also owns Spartan Surfaces, which provides flooring installations for commercial properties, offering an additional growth avenue [10][11] - Revenue is projected to potentially double in the next five years through sales growth, new store openings, and ancillary business initiatives [11] Group 3: Valuation - Floor & Decor's price-to-sales (P/S) ratio is more attractive compared to Home Depot, despite the latter's higher profit margins [12][14] - The company has demonstrated the ability to achieve profit margins over 8% during peak periods, currently maintaining around 5% [14][15] - The current valuation is considered one of the cheapest in its history, making it an opportune time for investment [16]