Floor & Decor (FND) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales rose 0.9% year-over-year to $1.118 billion, driven by new store openings and Spartan growth, but comparable store sales declined 6.4%.

• Q3 diluted EPS was $0.48, down 21.3% from the prior year but above expectations, with net income at $51.7 million, a 21.6% decrease.

• Gross margin improved to 43.5% from 42.2% year-over-year, primarily due to lower supply chain costs.

• 11 new warehouse-format stores opened in Q3, ending with 241 warehouse-format stores and 5 Design Studios across 38 states.

• Store teams responded quickly to hurricanes, reopening stores and supporting affected communities, with 45 stores impacted.

Financial highlights

• Q3 2024 net sales: $1.118 billion (+0.9% year-over-year); nine-month net sales: $3.35 billion (-0.5% year-over-year).

• Comparable store sales declined 6.4% in Q3 and 9.0% for the nine-month period.

• Adjusted EBITDA for Q3 2024 was $132.9 million (11.9% of net sales), down 5.7% year-over-year.

• Operating income for Q3 2024 was $66.3 million, down 21.8% year-over-year, with an operating margin of 5.9%.

• Ended Q3 with $803.1 million in liquidity, including $180.8 million in cash.

Outlook and guidance

• Fiscal 2024 net sales expected between $4.4 billion and $4.43 billion; comparable store sales projected to decline 7.5% to 8.5%.

• Gross margin expected at 43.2–43.3%; selling and store operating expenses at ~31% of sales.

• Adjusted EBITDA guidance raised to $490–$500 million; diluted EPS guidance narrowed to $1.65–$1.75.

• Plan to open 30 new warehouse-format stores in FY24 and target 25 new stores in FY25, mainly in existing markets.

• Capital expenditures for FY24 expected at $360–$390 million, mainly for new store openings, remodels, and IT investments.