Floor & Decor (FND) Q3 2024 earnings summary

Executive summary

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

• Diluted EPS for Q3 2024 was $0.48, down 21.3% year-over-year, exceeding expectations due to tight expense management.

• Net income for Q3 2024 was $51.7 million, down 21.6% from the prior year.

• Store base expanded to 241 warehouse-format stores and five Design Studios, up from 207 warehouse-format stores a year ago.

• Hurricanes Helene and Milton impacted 45 stores, with recovery efforts underway and potential for multi-quarter rebuilding benefit.

Financial highlights

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

• 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.

• Selling and store operating expenses increased 9.9% to $339.1 million, driven by new stores, partially offset by $7.7 million in cost reductions.

• Inventory decreased 5.4% to $1.0 billion; unrestricted liquidity at $803.1 million.

Outlook and guidance

• FY2024 net sales expected at $4.4–$4.43 billion; comparable store sales projected to decline 7.5%–8.5%.

• Gross margin expected at 43.2%–43.3%; Adjusted EBITDA at $490–$500 million.

• Diluted EPS guidance narrowed to $1.65–$1.75.

• Plan to open 30 new warehouse-format stores in FY2024; 25 new stores targeted for FY2025, mainly in existing markets.

• Capital expenditures expected at $360–$390 million for FY2024.