Floor & Decor(US:FND)2020-02-21 04:08Financial Data and Key Metrics Changes - Total fourth quarter sales increased 20.7% to a record $527 million from $436.7 million last year [8] - Full-year total sales increased 19.6% to a record $2 billion, nearly triple the 2015 sales of $784 million [8] - Fourth quarter GAAP diluted earnings per share rose 100% to $0.34 from $0.17 in Q4 2018 [9] - Full-year GAAP diluted earnings per share increased 29.7% to $1.44 from $1.11 in 2018 [10] - Adjusted EBITDA margin rate increased 100 basis points to 11.2% from 10.2% last year [80] Business Line Data and Key Metrics Changes - Comparable store sales grew 5.2% in Q4 2019, slightly above the guidance of 4% to 5% [18] - Fourth quarter sales in the laminate and rigid core luxury vinyl plank category increased 36.7% to $120.4 million, accounting for 22.8% of total sales [24] - Decorative accessories sales grew 25.5% to $101.5 million, accounting for 19.3% of sales [28] - Comparable store sales in wood and tile categories were below last year due to product transition challenges [29] Market Data and Key Metrics Changes - E-commerce sales accelerated to 66% growth in Q4 from 54% in Q3 2019, accounting for 11.4% of total sales [33] - Full-year e-commerce sales increased 61.2%, accounting for 10.1% of total sales [34] - Existing home sales were up 10.8% in December 2019, reversing a year-over-year decline [56] Company Strategy and Development Direction - The company plans to open 24 new warehouse stores in 2020, maintaining a 20% unit growth rate [15] - A new design studio in Dallas is being tested to capture market share in higher-income areas [16] - The introduction of free design services is expected to enhance customer engagement and conversion rates [47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a favorable macroeconomic backdrop for 2020, with expectations for mid to high single-digit comparable store sales growth [58] - The company is monitoring potential production delays due to the coronavirus outbreak and is in a good position to manage supply chain disruptions [52] - Management anticipates recovering approximately $19.3 million related to Section 301 tariff refunds in 2020 [55] Other Important Information - The company announced the promotion of Lisa Laube to President, highlighting her contributions since joining in 2012 [60] - New multi-year employment agreements were established for the executive leadership team to align compensation with long-term performance objectives [62] Q&A Session All Questions and Answers Question: How does the company view the controversy in 2020 regarding market growth and pricing? - Management expects a better macro backdrop with improving existing home sales and plans to maintain a price leadership position despite tariff relief [109][113] Question: Can you provide insights on product margins during the quarter? - Management noted that product margins were satisfactory, and the company is experiencing a good, better, best trade-up tailwind [120]