Floor & Decor (FND) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $1,133.1 million, down 0.2% year-over-year, with comparable store sales declining 9.0% due to lower transactions and average ticket size.

• Diluted EPS for Q2 2024 was $0.52, down from $0.66 in Q2 2023, reflecting weaker sales and higher expenses.

• Net income for Q2 2024 was $56.7 million, a 20.7% decrease year-over-year.

• Gross margin improved by 110 bps to 43.3%, exceeding expectations and partially offsetting weak sales.

• The company continues to face headwinds from soft housing demand, high mortgage rates, and low existing home sales, impacting large project and discretionary flooring purchases.

Financial highlights

• Q2 2024 operating income was $71.3 million, down 24.9% year-over-year; operating margin fell to 6.3%.

• Adjusted EBITDA for Q2 2024 was $136.9 million, down 10.4% year-over-year.

• Cash flow from operations for the first half of 2024 was $341.5 million.

• Inventory at quarter end was $1,037.3 million, down from $1,106.2 million at year-end 2023.

• Unrestricted liquidity at quarter-end was $772.1 million, including $138.1 million in cash and $634 million ABL availability.

Outlook and guidance

• FY2024 net sales expected at $4.4–$4.49 billion, down from prior $4.6–$4.77 billion guidance.

• Comparable store sales projected to decline 6.5%–8.5%.

• Gross margin expected at 43.2%–43.3%; adjusted EBITDA at $480–$505 million.

• Diluted EPS forecasted at $1.55–$1.75.

• Capex reduced to $360–$410 million, with 30 new warehouse store openings planned for 2024 and 25 for 2025.