Floor & Decor: Glass Half Full or Half Empty? Key Mgmt Takes Plus Tariff Math

研报英文原文证据摘录

Floor & Decor: Glass Half Full or Half Empty? Key Mgmt Takes Plus Tariff Math

d GM in its Quarterly Forecasts (FYE Dec)

43.6-43.8% range (so less price investments?) and it expects 2027 gross Adj. EPS ($)

margin NOT to be burdened by lapping the estimated 60-bp tariff benefit in 2025A 2026E 2027E

2027 (which we note mgmt's adept ability in managing gross margin despite tariffs Q1 0.45 0.37A

and supply chain disruptions over the past ten years in a freight intensive industry). Q2 0.58 0.58A

Q3 0.53 0.59

In our view, one could understand why coastal markets improved (housing markets Q4 0.36 0.44

are quite healthy on the coasts), in addition to stock market wealth and tax FY 1.92 1.98 2.09

stimulus. But, the data points above are dependent on your perspective (half full

Style Exposure

or half empty), plus higher rates make a clear bottom (or perhaps better said, a

recovery) difficult to endorse, especially as home prices continue to correct in

many of its large southern markets.

Key takeaways from the call and our follow-up with management:

• (1) 2026 bottom line guidance raised. Indeed, FND still expects $4.77-4.99B

sales (~$65MM from 53rd week), -4% to flat comps, 43.6-43.8% gross margin

(flat to +20 bps YOY), and SG&A dollars 38% of sales. EBITDA dollars and

EPS expectations were tweaked up to $550-585MM ($11MM from 53rd week)

and $1.88-2.13 ($0.08 from 53rd week), respectively, on 2Q strength and repo.

Recall, the low end represents further deterioration in housing turnover and

big-ticket aversion persisting longer than expected, while “any” improvement

in demand drivers would result in the high-end. On new store openings, FND

reiterated its 20 store guidance, with the remaining openings (~9 stores) 4Q

weighted.