Floor & Decor: Scale, Selection, and Efficiency

The story of Floor & Decor began with a home renovation project that sparked the idea for a hard-surface flooring store. That idea grew into a nationwide specialist retail chain with over 250 locations all over the U.S. Along the way, the company has carved out a distinct niche through its direct sourcing model, expansive warehouse stores, and focus on a growing trend in the flooring industry. This is how Floor & Decor turned a gap in the market into an American retail success story – tile by tile.

• One-stop destination: Floor & Decor was born from the frustration of a renovation project and the realization that the market lacked a true flooring specialist.

• IPO on the NYSE: In 2017, Floor & Decor went public, raising its store target from 350 to 400 locations across the U.S. – a goal that would later be lifted to 500.

• The U.S. flooring trend: Over the past decade, hard-surface flooring has overtaken carpet as the most popular American floor, fueled by lower prices and wider availability through global sourcing.

• Big-box retailer: Floor & Decor operates warehouse stores averaging 77,000 square feet, fully dedicated to hard-surface flooring with deep in-stock selection.

• Direct sourcing: With decades of sourcing expertise, the company cuts out middlemen and secures trend-forward products at industry-leading prices and quality.

This story begins with a home renovation project in suburban Atlanta. George Vincent West, the man responsible for the job, couldn't find the flooring his wife had envisioned. After coming up short in the local hardware stores, he realized there was a clear gap in the market. That frustration quickly turned into a business idea (Speedwell Research, 2022).

Fast forward 25 years, and Floor & Decor has grown into a big-box retailer with a dominant niche in hard-surface flooring. What might sound like a plain or even dull business is, in reality, a disruptive force – steadily expanding its footprint, deepening its moat, and capturing market share in a growing category.

Most people have likely found themselves in situations similar to the one Vincent West faced back in 2000. But while most settle for "good enough" and move on with their lives, some see the lack of options as opportunities and act on them. Fortunately for this story, West was one of those people.

West had a strong entrepreneurial background, beginning his career in retail where he ran a glassware business. After this he joined the family company, West Building Materials, eventually serving as its President. Both ventures were successful, but neither would come close to what was to come.

In 2000, West launched Floor & Decor and soon opened the first store on the outskirts of Atlanta. The first store was exactly what he had been looking for during his renovation project months prior: a warehouse-styled and stacked with an ever-growing assortment of flooring options. While the big home improvement retailers offered wide selections across many categories, there wasn't a specialist concept dedicated to hard-surface flooring – until now.

The very first Floor & Decor store, located in the Atlanta area.

The very first Floor & Decor store, located in the Atlanta area.

In 2003, just as Vincent West had followed the success of the first store with the opening of the second Floor & Decor location, outside investors began taking an interest in his niche flooring concept. Interest quickly turned into concrete offers, and by February, private equity firms Saugatuck Capital and Najeti Ventures had acquired the company, bringing with them the capital, guidance, and expertise needed to accelerate growth.

Although West stepped down as CEO after the sale, he remained closely involved with the company he had founded. He later returned as Co-CEO in 2008, was reappointed CEO from 2010 to 2012, and has served as Vice Chairman on the board ever since.

Over the next few years, the company focused on expanding its retail footprint. By early 2006, Floor & Decor operated 13 stores across the southern U.S., from Florida to Arizona – offering hardwood, laminate, tile, marble, and more.

Following the financial crisis, another ownership shift took place. Despite a weaker consumer environment and tighter renovation budgets, Floor & Decor had continued to grow both sales and store count, which attracted outside interest. When private equity departments at firms Ares Management and Freeman Spogli & Co. acquired the business in 2010, it had expanded to 25 large-format stores across nine states.

The new owners were significantly larger than the previous ones and came with even bigger ambitions, setting their sights on nationwide expansion and taking the company public.

With new ownership in place and increased financial backing, Floor & Decor's expansion continued. This part of the story also brought a key leadership change, one of which, in hindsight, remains the most pivotal move in the company's history.

In 2012, Thomas Taylor joined as CEO. Taylor brought over two decades of industry experience, including 23 years at The Home Depot, where he had risen through the ranks to become Executive Vice President of Merchandising and Marketing, overseeing all U.S. and Mexican stores. Before taking the reins at Floor & Decor, he had served as a managing director at Sun Capital Partners, managing a portfolio of retail investments.

Taylor turned out to be the perfect fit for Floor & Decor – underscored by the fact that he remains CEO to this day. Under his leadership, the company accelerated its growth and formalized a strategic plan to expand its store base to over 350 locations across the U.S. within 15 years.

CEO Thomas Taylor (left) and founder Vincent West (right) at a Floor & Decor store.

CEO Thomas Taylor (left) and founder Vincent West (right) at a Floor & Decor store.

Since the ownership change in 2010, there had been a clear ambition to take the company public. In 2014, the company even filed an S-1, officially starting the IPO process, but it withdrew before moving into the final stages. Finally, after several years of careful evaluation, they pulled the trigger.

In early 2017, Floor & Decor completed its IPO on the New York Stock Exchange, raising $185 million at a valuation of approximately $1.7 billion. The company's prospectus detailed just how much ground it had covered in the preceding years: since Taylor's arrival in 2012, comparable store sales had increased at an average annual rate of 16.5%, while total net sales had grown at a CAGR of 33%, surpassing $1 billion in 2016.

By then, Floor & Decor had expanded to 72 locations, stretching from California in the West to Pennsylvania in the Northeast. Alongside the IPO, the company raised its long-term store count target from 350 to 400 locations.

From the very beginning, Floor & Decor has remained committed to offering the widest possible selection of hard-surface flooring while steadily expanding its U.S. store base. The only thing that's changed over time is the scale of its ambition. At the company's 2022 Investor Day, leadership raised the long-term goal once again – to 500 stores.

Let's take a closer look at the business itself and what lies beneath and ahead on the “path to 500”.

Floor & Decor is what's known as a big-box retailer – operating large, or more accurately, enormous warehouse-style stores with a vast product selection. Unlike generalist home improvement retailers like Home Depot or Lowe's, which aim to cover every aspect of a renovation, Floor & Decor zeroes in on one element: the floor. But not all kinds – it specializes in hard-surface flooring, carving out a precise and powerful niche.

Its deeply integrated sourcing model, expansive warehouse stores with fully stocked shelves, and commitment to price and quality all help to ensure that when the next Vincent West starts a renovation, they'll know exactly where to go.

So, why hard-surface flooring? It might seem like an unassuming category to some, but it's one with real potential for disruption by a focused and committed specialist.

More than 80% of the roughly 130 million housing units in the U.S. are over 20 years old – an aging housing stock that points to a steady pipeline of potential renovation demand. At the same time, rising disposable income among middle- and upper-income households over the past decade has fueled spending on higher-quality home upgrades. These two structural tailwinds – greater need and greater willingness to invest – align perfectly with an ongoing shift in flooring preference.

For decades, carpet dominated U.S. homes due to its convenience and low cost. But over the past few decades, hard-surface flooring has steadily taken market share. It now accounts for nearly 60% of all flooring installed, thanks to lower production costs, improved availability, and easier installation. For consumers, the appeal is obvious: hard surfaces are more durable, easier to clean, and according to many, they simply look better.

At its 2022 Investor Day, the company estimated the total addressable market (TAM) for hard-surface flooring at $41 billion, of which it currently holds roughly 10%. Given that this share is growing steadily in favor of hard surfaces, the runway ahead is long.

The remaining 90% of the market is fragmented across four groups. About one-third is held by generalist home improvement centers, led by Home Depot and Lowe's. Another third is independent flooring retailers, typically small, local businesses with higher prices and narrower selections, but with strong community ties. Around 15% belongs to distributors, who sell to retailers, contractors, and builders rather than directly to consumers. The final 15% is shared among specialist retailers.

Among those specialists, Floor & Decor stands out as the clear leader. Its two most notable peers are Lumber Liquidators and Tile Shop. The former filed for bankruptcy in 2024 but was acquired at the last minute and is currently still in operation. But as you might understand, not exactly the most threatening competition as of right now. The latter focuses solely on tile and generated roughly 10% of Floor & Decor's revenue in 2024, keeping it well behind in scale.

As we move deeper into Floor & Decor's business model, it becomes clear that its specialist focus isn't just a differentiator – it's the company's greatest competitive edge, and likely the key to claiming more of that remaining 90% TAM.

Let's start with one of Floor & Decor's core strengths: its big-box stores. These warehouse-style locations are purpose-built as a one-stop destination for hard-surface flooring. The stores are designed to inspire, giving customers the chance to see, touch, and compare materials in real life.

Most shoppers arrive with a general idea: they might want tile, or perhaps vinyl, but they don't yet know which specific product. Making all of these different alternatives available in the most inspiring environment possible is one of Floor & Decor's biggest strengths.

Now, let's briefly compare that to the generalist home improvement giants: Home Depot and Lowe's. Both operate stores averaging over 100,000 square feet, but they cover far more than just flooring, stocking everything from lighting to lumber. If they tried to match Floor & Decor's depth in flooring across all their categories, they'd need stores approaching a million square feet – clearly not the strategy of a generalist retailer.

For a majority of customers, Home Depot and Lowe's may offer “good enough” flooring options, and their sales reflect that. Home Depot's flooring revenue is roughly double that of Floor & Decor, and Lowe's is in the same ballpark. But if you're looking for the full range of in-stock, hard-surface flooring options, the generalists can't compete with a specialist like Floor & Decor:

Beyond product selection, Floor & Decor's stores offer support from in-store specialists. Each location has trained staff who help customers with everything from design advice to installation support. Whether it's choosing the right stone in the tile section or calculating how much wood flooring a space needs, customers get guidance tailored to their project, highlighting the store's value as a customer acquisition tool.

An interior view of a typical Floor & Decor warehouse store.

An interior view of a typical Floor & Decor warehouse store.

At the time of its IPO, Floor & Decor operated 65 warehouse stores. As of early 2025, that number has grown to 254, with an additional five small-format design studios located in urban areas. These studios offer design consultations and order placement but do not stock inventory on-site.

As mentioned earlier, at Floor & Decor's 2022 Investor Day, it announced a long-term ambition to reach 500 stores, without specifying a precise timeline. In the near term, it aims to grow its footprint by 20% annually through 2024. While it has continued to meet its yearly store opening guidance (updated at the beginning of each year), it hasn't maintained the original 20% cumulative pace.

The company's sharp focus on store-driven growth is easy to get behind. Its success over the past two decades validates the model, and it follows a proven playbook used by other major U.S. retailers such as The Home Depot, Lowe's, Walmart, Costco, Target, Best Buy, AutoZone, and Dollar General.

Floor & Decor's 259 locations (254 warehouse stores + 5 design studios) now span 38 states, typically positioned in high-visibility areas with strong customer access. New store openings follow a methodical strategy – which actually is a printed playbook – that prioritizes markets based on population density, housing trends, and median income.

Though it's still only halfway to its long-term goal, the value of Floor & Decor's store network is steadily compounding. This physical presence forms the company's greatest asset – one that would be incredibly difficult for a new competitor to replicate. Building such a footprint requires years of capital investment, operational discipline, and strategic patience. That long runway makes it unlikely that a new hard-surface flooring specialist could suddenly appear and disrupt Floor & Decor's lead.

Additionally, the company's continued expansion into suburban areas across U.S. cities is broadening its national reach. The more stores it opens, the more visible the brand becomes and the more customers become aware of Floor & Decor's offering.

Supporting this national growth is a network of four strategically located distribution centers in Los Angeles, Houston, Savannah, and Baltimore – each ranging from 1 to 2 million square feet. To keep pace with expansion, additional centers are planned near Seattle and outside Baltimore in 2025-2026. The company also operates dedicated fleets of vehicles to optimize logistics and support store operations.

Floor & Decor's path to 500 stores across the U.S.

Floor & Decor's path to 500 stores across the U.S.

Perhaps the strongest case for the company's store-driven expansion is the economics of a newly opened store. Floor & Decor invests between $8 million and $10 million to open a new store, covering construction, fixtures, and inventory (net of payables). Each location typically delivers a ROIC of around 20% in its first year, reaching approximately 50% by year five or six. On average, the investment is paid back within three years.

While the company relied heavily on debt to fund store growth during its private equity ownership years, recent expansion has been financed primarily through operating cash flow. At the 2022 Investor Day, Floor & Decor outlined that of its capital expenditure for 2022-2024, roughly 70% would be earmarked to new store openings.

However, total capex has come in about 20% below target for these years, leading to a similar shortfall in capital allocated to store expansion. This has contributed to the gap between the company's 20% annual store growth ambition and the more conservative pace of openings seen in recent guidance.

For 2025, the company plans to spend $330-400 million in total capex, including the opening of 25 new stores at a projected cost of $200-245 million. Looking ahead, it remains to be seen whether management has permanently eased off the 20% annual store growth pace or if this moderation is simply a reflection of current market conditions. We will get back to this discussion later on.

As with nearly every consumer-facing business, there's always the looming question: could Amazon disrupt this category? While the threat is real in many markets, flooring might be one of the more resistant segments. Most customers want to see and compare products in person, get advice on materials and installation, and walk away with what they need without waiting for delivery or risking a poor fit.

The portion of Floor & Decor's business most exposed to digital disruption is, naturally, its online sales, which made up 19% of total revenue in 2024. However, even this risk appears limited. A large majority of online purchases are fulfilled via in-store pickup – a behavior that suggests convenience, not channel shift. The last time this was reported on, in 2022, over 80% of online orders were picked up in-store.

Let's move on to what's inside Floor & Decor's enormous warehouse stores. At each store, you will find a different product mix depending on the specific regional preferences. For example, in warmer climates, the stores tend to have a wider selection of tile, while colder markets lean more heavily toward wood flooring.

On average, each Floor & Decor store carries over 4,400 SKUs. Of these, roughly 2,300 are related to flooring, and more than 1,700 are kept in stock. By comparison, other hard-surface flooring specialists may offer somewhere between 500 and 2,100 SKUs, typically with only 5-10% of that inventory stocked on-site. Home improvement centers, like Home Depot and Lowe's, average around 650 flooring SKUs, though their in-stock availability is relatively high at 60-80%. Finally, the independent retailers offer between 300 and 1,500 SKUs but usually carry little to no in-stock inventory.

Of course, these numbers vary, but when it comes to selection and in-stock availability, Floor & Decor is second to none. Reinforcing that breadth and reliability in the minds of both consumers and professionals is a core part of the company's strategy.

So how does Floor & Decor consistently deliver such a deep in-stock assortment? The answer lies in its sourcing model – a centerpiece in the company's business.

Unlike the traditional flooring supply chain, which typically passes through a long series of intermediaries (agents, exporters, importers, wholesalers), Floor & Decor, for the majority of its products, goes straight to the source. Over the years, the company has built an extensive global network of suppliers and long-term vendor relationships that allow it to design and co-develop products directly with manufacturers.

Floor & Decor's direct sourcing model compared to the typical supply chain in the industry.

Floor & Decor's direct sourcing model compared to the typical supply chain in the industry.

The company's team of merchants plays a central role in this process. Many of these have long experience within the company, working with the same vendors for decades. For example, Ersan Sayman, Executive Vice President of Merchandising, has been with the company since 2003. Working closely with its suppliers, Floor & Decor's merchants shape product lines that reflect both customer preferences and regional demand.

Combined with its robust logistics and distribution network, this direct sourcing model ensures that stores stay well-stocked across the country. Floor & Decor's CEO Thomas Taylor describes it perfectly (2022):

Whether it's marble tiles from Greece or natural stone from Turkey, the company goes wherever quality aligns with value. As alluded to by Taylor, the fact that most often, the company often bypasses middlemen allows it to maintain competitive prices.

The company's ability to source at scale has turned into a competitive advantage that most competitors can't match. Smaller players simply lack the purchasing power and logistics infrastructure to compete on either quality or cost.

This sourcing strength also enables the company to stay ahead of trends. Close vendor relationships and in-house merchandising teams give Floor & Decor the ability to develop and introduce new products quickly, adapting to shifting design trends and regional preferences.

While Floor & Decor sources from all over the world, its largest single-country source as of 2024 is the U.S., accounting for 28% of products sold. China remains the second-largest, contributing roughly 18%, including 11% from a single supplier. However, the company has made steady progress in shifting away from overreliance on Chinese imports.

This shift has become increasingly important amid rising tariffs and ongoing geopolitical tensions between the U.S. and China. With tariffs on Chinese imports rising and trade policies remaining uncertain, the company continues to diversify sourcing, negotiate costs, and adjust pricing to mitigate potential financial impacts. Given that China stood for 28% in 2023 and over 50% in 2018, the sourcing strategy appears to be moving in the right direction.

As its name suggests, Floor & Decor sells both floor and decorative elements. But the emphasis is firmly on the floor, which in 2024 accounted for 98% of total revenue. The company's two largest product categories are laminate and vinyl and tile, each contributing nearly a quarter of sales.

Following those are products that support the installation and completion of flooring projects, such as installation materials, decorative accessories, and wall tile, combined making up nearly 40% of revenue. Wood and natural stone flooring account for roughly 5% each. Across all categories, Floor & Decor offers a range of price points, making its products accessible to a broad customer base.

The remaining 2% of sales come from non-flooring, adjacent categories, such as vanities, bathroom accessories, shower doors, and custom countertops. Floor & Decor estimates that the addressable market for the relevant parts of this category, where it believes it can expand, is between $8-13 billion. Beyond the high revenue potential, this category also serves a strategic role by allowing customers to complete their entire renovation project in one place.

In 2024, Floor & Decor reported net sales of approximately $4.5 billion. The company segments its customers into two main groups: consumers and professionals (Pros), with revenue in 2024 split almost perfectly 50/50 between them.

Consumers fall into two sub-groups: DIY (do-it-yourself) and BIY (buy-it-yourself), the latter representing customers who purchase flooring but hire professionals to install it. The Pro segment includes flooring installers, contractors, home builders, and other professionals who purchase on behalf of clients.

Since going public in 2017, Floor & Decor has made the Pro segment a key strategic focus. When it began disclosing its customer mix in 2020, the split was 70% consumer to 30% Pro. As revenue has grown from $2.4 billion in 2020 to $4.5 billion in 2024, Pros have steadily gained share, reaching 50% of total sales in 2024.

This trend highlights one of Floor & Decor's most compelling growth opportunities: becoming the go-to destination for flooring professionals across the U.S. Unlike a retail customer who may renovate once every two decades, a “recruited” Pro might return every few weeks for new projects. In fact, in 2021, the company's top 10% of Pros returned for an average of 37 different projects.

Additionally, Pros often influence homeowners in the BIY segment, recommending Floor & Decor's wide assortment to their clients. This means a Pro customer not only represents recurring business but also acts as a customer acquisition tool.

To strengthen its relationship with Pros, Floor & Decor has developed several targeted initiatives. Its Pro Premier loyalty program lets members earn points redeemable for third-party rewards, ranging from cruise trips to iPads. As of the last report, about 60% of Pros were enrolled, and those customers spent roughly three times more than non-enrolled Pros. Other Pro-focused efforts include dedicated help desks, a mobile app, free storage, and educational resources aimed at increasing efficiency and loyalty.

In addition to these categories, Floor & Decor also serves the commercial market through its subsidiary Spartan Services, a business it acquired in 2021. While commercial sales currently represent less than 5% of total revenue, the company sees this segment as highly prospective and believes Spartan can become a substantial player in U.S. commercial flooring.

A noteworthy detail within the previously mentioned $41 billion TAM for hard-surface flooring is that an estimated $17 billion is tied to this commercial opportunity. While it currently accounts for a small share of Floor & Decor's revenue, Spartan's expansion will be interesting to follow in the years ahead.

We've already touched on CEO Thomas Taylor's decades of experience at Home Depot before joining Floor & Decor. But he's far from the only seasoned executive at the company. Among his six closest associates, half have extensive backgrounds at Home Depot, and five have been with Floor & Decor for over a decade.

This depth of experience, both within the company and the industry, has been one of the key factors behind Floor & Decor's success. Together, Taylor and much of his executive team have navigated a decade of challenges – from the pandemic and multiple rounds of tariffs to taking the company public and weathering the macroeconomic headwinds of recent years. Their long tenures are also likely a major reason why the company has maintained such a consistent and focused long-term strategy, one that has remained largely unchanged for years.

While the management team has remained relatively intact over the years, the same can't be said for ownership. Since going public, Floor & Decor's shareholder base has become increasingly institutional – partly a legacy of its private equity-backed past. That's why it raised eyebrows in 2021 when Warren Buffett's Berkshire Hathaway began accumulating a stake, eventually reaching nearly 5% ownership. However, filings in 2024 revealed that Berkshire had fully exited its position.

In the quote recently referred to, Thomas Taylor referred to some of the issues the company has had to deal with since going public. From a macroeconomic perspective, Floor & Decor is highly affected by consumer spending on housing, having to adapt to the cyclicality of the economy.

While these forces don't define the company's long-term success, they do influence its strategic execution, impact short-term performance, and shape much of the surrounding narrative. Recent years have made that extremely evident.

The initial wave of challenges came early in the pandemic. Supply chain issues, temporary store closures, and labor shortages presented significant operational hurdles. In response, Floor & Decor quickly expanded its e-commerce capabilities and introduced curbside pickup to help offset lost in-store sales.

Soon, however, those difficulties gave way to unexpected tailwinds. Record-low mortgage rates, government stimulus, and consumers spending more time at home sparked a surge in home renovations – and with it, strong demand for flooring. Floor & Decor capitalized, ramping up its digital presence and continuing store expansion. Between 2020 and 2022, sales rose from $2.4 billion to $4.3 billion, while operating profit nearly doubled from $214 million to $396 million.

At the 2022 Investor Day, management acknowledged that the environment had been unusually favorable since the IPO while addressing the market's short-term fluctuations over the long-term trend:

In hindsight, this commentary came just as the market pivoted from strength to strain.

Following two years of near-zero interest rates, the aggressive rate hikes of 2022 and 2023 swiftly reversed the momentum, with consumer spending and home improvement projects regressing sharply. Mortgage rates surged well beyond prior levels, and U.S. existing home sales fell steeply.

Lower mortgage rates tend to drive higher home turnover, and new homeowners often invest in renovation projects. But even without high turnover, low rates can free up disposable income or unlock refinancing opportunities, which can lead to more renovations. While the low rate and high turnover dynamic in 2020-2022 created an especially favorable period for companies like Floor & Decor, the opposite can be said of what has followed.

Before the pandemic, existing home sales had remained relatively flat for years. Then came a sharp, V-shaped spike. Firstly, driven by pandemic-related dynamics and then bouncing back as an effect of the policy responses. This post-pandemic high was sustained until interest rate increases triggered a steep decline, pushing existing home sales well below pre-2020 levels.

All things considered, the post-pandemic shift in macro conditions has brought a challenging period for Floor & Decor. Still, the company has shown resilience, delivering flat to modest revenue growth through 2023 and 2024, reaching approximately $4.5 billion in sales for 2024. In the context of broader declines across the consumer sector, this stability speaks to the strength of the company's model.

That said, the tougher conditions have weighed on margins. Operating profit has declined from 9.3% in 2022 to 7.3% in 2023, and landed at 5.7% in 2024, reflecting operational deleverage in a softer demand environment. Notably, gross margins have remained solid through this period, rising from 40.5% in 2022 to 43.3% in 2024 – a strong sign of the stability and strength of Floor & Decor's sourcing model.

A visualization of Floor & Decor's revenue and EBIT since 2011.

A visualization of Floor & Decor's revenue and EBIT since 2011.

For 2025, Floor & Decor expects revenue growth of 6.5% to 10%, with margins remaining around current levels. But as you have understood at this point, the macroeconomic conditions continue to influence short-term performance heavily.

Looking at these coming years, an important factor for profitability is store maturity. According to the company, its more mature stores are considerably more profitable than its newly opened stores. As of early 2025, approximately 55% of Floor & Decor's stores had been opened in the last five years. With the bulk of its stores becoming more mature, its profitability is likely to increase.

Another factor is the company's cost base mix – more than half of each store's costs are fixed. As newer stores mature and the proportion of new openings declines relative to the total base, operational leverage improves. We have recently witnessed the downside of this, but once the environment becomes more favorable – or even just neutral – this leverage could begin to unlock material cash flow.

So, what are Floor & Decor's long-term targets? At the 2022 Investor Day, the company outlined annual goals through 2024: 20% new store openings, 20% revenue growth, and 25% growth in operating income. These objectives were not met and as of now, there has been no update on targets beyond 2025.

Given the ongoing market uncertainty, this conservatism is understandable. From the long stretch of predictability pre-pandemic to the V-shaped turn to three years of headwinds, it's easy to see why management is proceeding with caution.

Looking past the current downcycle, the company has previously projected that a long-term operating margin of around 15% could be attainable and sustainable. But for now, with over 55% of stores at pre-maturity, that target remains a future goal. In 2025, the company intends to open 25 new warehouse stores in total, which reasonably is a pace that reflects its near-term expectations as long as conditions remain constrained.

While its store openings on the path to 500 will likely be somewhere between 20-35 stores per year, its execution of this year-by-year will likely continue to depend on market conditions. Ultimately, as discussed in a recent earnings conference call, it will continue to correlate with how the company's top line is trending. Because, just as the last few years have shown, the company won't chase the upper end of its guidance if it doesn't believe that consumers will spend any money on flooring.

However, there's a question that has to be asked: when the market eventually returns, wouldn't you want to have a larger store network ready when the consumers return for their renovation projects?

As the company gradually approaches its long-term target of 500 stores, the question of what comes next begins to take shape. Whenever Floor & Decor does start easing off the accelerator, attention will shift to capital allocation.

So far, the macro environment has limited the company's ability to generate the kind of excess cash flow to consider its long-term capital allocation strategy. But as conditions improve and the store base matures, Floor & Decor will enter a new chapter. After decades of disciplined big-box expansion, what comes next?

What began with one frustrated renovation has grown into a nationwide specialist retailer with a clear and consistent strategy. Floor & Decor's expansion is driven by its deeply integrated direct sourcing network and the distinct offering it enables across its massive warehouse stores – both shaped by a management team with decades of experience in the industry and within the company. As it navigates the current downcycle, Floor & Decor continues laying its tiles across the market. And when demand returns, it's making sure it's stocked, stacked, and strategically positioned.