On February 20, 2025, Floor & Decor Holdings Inc (FND, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full fiscal year 2024, which ended on December 26, 2024. Floor & Decor Holdings Inc operates as a specialty retailer in the hard surface flooring market, offering a wide range of products including tile, wood, laminate, and natural stone flooring, along with decorative and installation accessories. The company caters to professional installers, commercial businesses, DIY customers, and those purchasing for professional installation, with a strong presence in the United States and an e-commerce platform.
Performance and Challenges
Floor & Decor Holdings Inc reported net sales of $1,107.4 million for the fourth quarter, marking a 5.7% increase from the same period in fiscal 2023. Despite a 0.8% decrease in comparable store sales, the company achieved a diluted earnings per share (EPS) of $0.44, surpassing the analyst estimate of $0.25. This performance highlights the company's resilience amidst macroeconomic challenges affecting the hard surface flooring category.
Tom Taylor, Chief Executive Officer, commented,
“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 better-than-expected despite the macroeconomic challenges affecting our category.”
Financial Achievements
Floor & Decor Holdings Inc's financial achievements are significant in the retail-cyclical industry, where economic fluctuations can impact consumer spending. The company opened 10 new warehouse stores in the fourth quarter, ending fiscal 2024 with 251 stores across 38 states. For the full fiscal year, the company opened 30 new stores, aligning with its expansion strategy.
Operating income for the fourth quarter increased by 28.3% to $59.2 million, benefiting from a $6.8 million derivative litigation settlement. The operating margin improved by 100 basis points to 5.4%. Net income rose by 28.1% to $47.5 million, with a diluted EPS increase of 29.4% from the previous year.
Key Financial Metrics
For fiscal 2024, Floor & Decor Holdings Inc reported net sales of $4,455.8 million, a slight increase of 0.9% from fiscal 2023. However, comparable store sales decreased by 7.1%. Operating income decreased by 20.3% to $256.2 million, and net income fell by 16.3% to $205.9 million, with a diluted EPS of $1.90, exceeding the annual estimate of $1.71.
Adjusted EBITDA for the fiscal year was $512.5 million, a 7.0% decrease from the previous year. The company's balance sheet showed total assets of $5,050.5 million, with cash and cash equivalents significantly increasing to $187.7 million from $34.4 million in fiscal 2023.
Analysis and Outlook
Floor & Decor Holdings Inc's ability to exceed earnings expectations in the fourth quarter demonstrates its effective cost management and strategic store expansion. The company's focus on enhancing its store network and maintaining a broad product assortment positions it well for future growth. However, challenges such as declining comparable store sales and reduced annual earnings highlight the need for continued adaptation to market conditions.
Looking ahead, Floor & Decor Holdings Inc plans to open 25 new stores in fiscal 2025, with projected net sales between $4,740 million and $4,900 million. The company anticipates a diluted EPS range of $1.80 to $2.10, reflecting its commitment to driving shareholder value amidst a dynamic retail environment.
Explore the complete 8-K earnings release (here) from Floor & Decor Holdings Inc for further details.
