Floor & Decor(US:FND)2025-07-31 20:18Part I – Financial Information Financial Statements 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 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 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 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 period20 Condensed Consolidated Statements of Cash Flows 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 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, 20252526 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 loss5455 Management's Discussion and Analysis of Financial Condition and Results of Operations 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 transactions82 - Gross margin for Q2 2025 increased by 60 basis points to 43.9%, primarily driven by a decrease in supply chain costs8687 - 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 construction105113 Quantitative and Qualitative Disclosures About Market Risk 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 million121 - 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 2026121 Controls and Procedures 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, 2025122 - 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 controls124 Part II – Other Information Legal Proceedings 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 lawsuit12554 Risk Factors 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 economy126 Unregistered Sales of Equity Securities and Use of Proceeds 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, 2025127 Other Information 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 quarter128 Exhibits 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 documents132