Floor & Decor Holdings, Inc. (FND)

Loading financial statements...

Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals.

From 10-Q filed 2026-04-30 (period ending 2026-03-26).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of our operations should be read together with the financial statements and related notes of Floor & Decor Holdings, Inc. and Subsidiaries included in Part I, Item 1, “Financial Statements” of this Quarterly Report and with our audited financial statements and the related notes included in our Annual Report. As used in this Quarterly Report, except where the context otherwise requires or where otherwise indicated, the terms “Floor & Decor,” “Company,” “we,” “our,” or “us” refer to Floor & Decor Holdings, Inc. and its subsidiaries, and “Spartan” refers to our subsidiary Spartan Surfaces, LLC.

Overview

Founded in 2000, Floor & Decor is a high-growth, differentiated, multi-channel specialty retailer of hard surface flooring and related accessories and seller of commercial surfaces with 276 warehouse-format stores and five small-format standalone design studios across 39 states as of March 26, 2026. We believe our unique approach to selling hard surface flooring and our consistent and disciplined culture of innovation and reinvestment create a differentiated business model in the hard surface flooring category. We believe that we offer the broadest in-stock assortment of laminate and vinyl, tile, wood, and natural stone flooring and installation materials and decorative accessories, as well as adjacent categories, at everyday low prices. This positions us as the one-stop destination for our customers’ entire hard surface flooring needs. We appeal to a variety of customers, including Pros and homeowners, which are comprised of DIY and BIY customers.

During the thirteen weeks ended March 26, 2026, we opened six new warehouse-format stores, ending the quarter with 276 warehouse-format stores and five design studios.

We operate on a 52- or 53-week fiscal year ending the Thursday on or preceding December 31. The following discussion contains references to the thirteen weeks ended March 26, 2026 and March 27, 2025, respectively.

Key Performance Indicators

We consider a variety of performance and financial measures in assessing the performance of our business. The key performance and financial measures we use to determine how our business is performing are comparable store sales, the number of new store openings, gross profit and gross margin, operating income, and EBITDA and Adjusted EBITDA. For definitions and a discussion of how we use our key performance indicators, see the “Key Performance Indicators” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report. See “Non-GAAP Financial Measures” below for a discussion of how we define EBITDA and Adjusted EBITDA and a reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.

Other key financial terms we use include net sales and selling, general and administrative (“SG&A”) expenses. For definitions and a discussion of how we use other key financial terms, see the “Other Key Financial Definitions” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report.

Results of Operations

Results of operations for any period should not be considered indicative of future results. See Part II, Item 1A, “Risk Factors” for information about the potential impacts that risks, such as declines in economic conditions that affect the residential housing market and consumer spending for hard surface flooring, interest rates, inflation, global supply chain disruptions, regulatory and political conditions, tariffs and trade policy, and geopolitical instability, among others, may have on our results of operations and overall financial performance for future periods.

Table of Contents

The following tables summarize key components of our results of operations for the periods indicated:

	Thirteen Weeks Ended
	March 26, 2026				March 27, 2025				Increase (Decrease)
dollars in thousands	Amount		% of Net Sales		Amount		% of Net Sales		$		%
Net sales	$	1,152,278	100.0	%	$	1,160,740	100.0	%	$	(8,462)	(0.7)	%
Cost of sales	644,827		56.0		652,572		56.2		(7,745)		(1.2)	%
Gross profit	507,451		44.0		508,168		43.8		(717)		(0.1)	%
Selling, general and administrative expenses	455,055		39.5		443,939		38.3		11,116		2.5	%
Operating income	52,396		4.5		64,229		5.5		(11,833)		(18.4)	%
Interest expense, net	1,133		0.1		1,548		0.1		(415)		(26.8)	%
Income before income taxes	51,263		4.4		62,681		5.4		(11,418)		(18.2)	%
Income tax expense	11,554		1.0		13,803		1.2		(2,249)		(16.3)	%
Net income	$	39,709	3.4	%	$	48,878	4.2	%	$	(9,169)	(18.8)	%

	Thirteen Weeks Ended
	March 26, 2026			March 27, 2025
Comparable store sales	(3.7)		%	(1.8)		%
Comparable average ticket	1.9		%	2.1		%
Comparable transactions	(5.5)		%	(3.8)		%
Number of warehouse-format stores	276			254
Adjusted EBITDA (in thousands) (1)	$	121,493		$	129,821
Adjusted EBITDA (% of net sales) (1)	10.5		%	11.2		%

(1)Refer to “Non-GAAP Financial Measures” further below for a reconciliation of Adjusted EBITDA to net income.

Net Sales

Net sales during the thirteen weeks ended March 26, 2026 decreased $8.5 million, or 0.7%, compared to the corresponding prior year period primarily due to a decrease in comparable store sales of 3.7%, partially offset by sales from the 22 new warehouse-format stores that we opened since March 27, 2025. The comparable store sales decline during the period of 3.7%, or $40.8 million, was due to a 5.5% decrease in comparable transactions, partially offset by a 1.9% increase in comparable average ticket. We believe the decrease in comparable transactions was largely driven by the continued impact of low existing home sales and low consumer sentiment, as well as adverse weather conditions. The increase in comparable average ticket was primarily due to strategic price increases. Non-comparable sales increased $32.3 million from the corresponding prior year period primarily driven by new stores.

We estimate that retail sales during the thirteen weeks ended March 26, 2026 were approximately 45% from homeowners and 55% from Pros compared to approximately 50% from homeowners and 50% from Pros during the thirteen weeks ended March 27, 2025.

Gross Profit and Gross Margin

Gross profit during the thirteen weeks ended March 26, 2026 decreased $0.7 million, or 0.1%, compared to the corresponding prior year period. The decrease in gross profit was primarily driven by the 0.7% decrease in net sales, partially offset by an increase in gross margin to 44.0%, up approximately 20 basis points from 43.8% in the corresponding prior year period. The increase in gross margin was primarily driven by strategic pricing initiatives, partially offset by an increase in supply chain costs.

Table of Contents

Selling, General and Administrative Expenses

SG&A expenses during the thirteen weeks ended March 26, 2026 increased $11.1 million, or 2.5%, compared to the corresponding prior year period. The increase in SG&A expenses was primarily driven by the 22 new stores that we opened since March 27, 2025, which increased compensation and occupancy costs. SG&A expenses for non-comparable stores increased $21.4 million and for comparable stores decreased $9.0 million. As a percentage of net sales, SG&A expenses increased by approximately 120 basis points to 39.5% from 38.3% in the corresponding prior year period. This increase was primarily attributable to the addition of new stores and deleverage from a decrease in comparable store sales.

Interest Expense, Net

Net interest expense during the thirteen weeks ended March 26, 2026 decreased $0.4 million, or 26.8%, compared to the corresponding prior year period primarily due to higher interest income as a result of higher cash balances.

Income Tax Expense

Income tax expense was $11.6 million during the thirteen weeks ended March 26, 2026 compared to $13.8 million during the thirteen weeks ended March 27, 2025. The effective tax rate was 22.5% for the thirteen weeks ended March 26, 2026 compared to 22.0% in the corresponding prior year period. The effective tax rate increase during the thirteen weeks ended March 26, 2026 was primarily due to a decrease in excess tax benefits related to stock-based compensation awards.

Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA are key metrics used by management and our Board of Directors to assess our financial performance and enterprise value. We believe that EBITDA and Adjusted EBITDA are useful measures, as they eliminate certain items that are not indicative of our core operating performance and facilitate comparisons on a consistent basis from period to period. We also use Adjusted EBITDA as a basis to determine covenant compliance with respect to our ABL Facility and Term Loan Facility (together, the “Credit Facilities”), to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. EBITDA and Adjusted EBITDA are also frequently used by analysts, investors, and other interested parties as performance measures to evaluate companies in our industry.

EBITDA and Adjusted EBITDA are supplemental measures of financial performance that are not required by or presented in accordance with GAAP. We define EBITDA as net income before interest, taxes, and depreciation and amortization. We define Adjusted EBITDA as net income before interest, taxes, and depreciation and amortization adjusted to eliminate the impact of non-cash stock-based compensation expense and certain items that we do not consider indicative of our core operating performance. See below for a reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.

EBITDA and Adjusted EBITDA are non-GAAP measures of our financial performance and should not be considered as alternatives to net income as a measure of financial performance or any other performance measure derived in accordance with GAAP, and they should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of liquidity or free cash flow for management’s discretionary use. In addition, these non-GAAP measures exclude certain non-recurring and other charges. Each of these non-GAAP measures has its limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the items eliminated in the adjustments made to determine EBITDA and Adjusted EBITDA, such as stock-based compensation expense, fair value adjustments related to contingent earn-out liabilities, and other adjustments. Definitions and calculations of EBITDA and Adjusted EBITDA differ among companies in the retail industry, and therefore EBITDA and Adjusted EBITDA disclosed by us may not be comparable to the metrics disclosed by other companies.

Table of Contents

For the periods presented, the following table reconciles EBITDA and Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP:

	Thirteen Weeks Ended
in thousands	March 26, 2026		March 27, 2025
Net income	$	39,709	$	48,878
Depreciation and amortization (1)	60,728		59,387
Interest expense, net	1,133		1,548
Income tax expense	11,554		13,803
EBITDA	113,124		123,616
Stock-based compensation expense (2)	8,369		6,580
Other (3)	—		(375)
Adjusted EBITDA	$	121,493	$	129,821

(1)Excludes amortization of deferred financing costs, which is included as part of interest expense, net.

(2)Represents non-cash charges related to stock-based compensation programs, which vary from period to period depending on the timing of awards and forfeitures.

(3)Other adjustments include amounts management does not consider indicative of our core operating performance. The amount for the thirteen weeks ended March 27, 2025 relates to the change in the fair value of the contingent earn-out liability.

Liquidity and Capital Resources

Liquidity is provided primarily by cash flows from operations and our $800.0 million ABL Facility. Unrestricted liquidity as of March 26, 2026 was $1,007.2 million, consisting of $293.6 million in cash and cash equivalents and $713.6 million immediately available for borrowing under the ABL Facility without violating any covenants thereunder. Our liquidity is generally not seasonal.

Our primary cash needs are for merchandise inventories, payroll, store rent, and other operating expenses and capital expenditures associated with opening new stores and remodeling existing stores as well as information technology, e-commerce, store support center, and distribution center infrastructure. We also use cash for the payment of taxes and interest and, as applicable, share repurchases and acquisitions. We expect that cash generated from operations together with cash on hand, the availability of borrowings under our Credit Facilities, and if necessary, additional funding through other forms of external financing, will be sufficient to meet liquidity requirements, anticipated capital expenditures, and payments due under our Credit Facilities for the next twelve months and the foreseeable future.

Total capital expenditures in fiscal 2026 are planned to be between approximately $250 million to $300 million and are expected to be funded primarily by cash generated from operations. Our capital needs may change in the future due to changes in our business, new opportunities that we choose to pursue, or other factors. We currently expect the following for capital expenditures in fiscal 2026 (projected amounts are based on the gross costs that we expect to accrue for these investments on the Condensed Consolidated Balance Sheets in fiscal 2026, which may include amounts incurred but not yet settled in cash during the period):

•invest approximately $160 million to $190 million to open 20 warehouse-format stores, relocate stores, and begin construction on stores opening after fiscal 2026;

•invest approximately $60 million to $70 million in existing stores and new and existing distribution centers; and

•invest approximately $30 million to $40 million in information technology infrastructure, e-commerce, and other store support center initiatives.

On April 23, 2026, the Company’s Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $400 million of the Company’s common stock. Repurchases will be made at the Company’s discretion and will depend on a variety of factors, including business, economic, and market conditions. The share repurchase program has no expiration date and does not obligate the Company to repurchase any shares under the program.

Table of Contents

Cash Flow Analysis

A summary of our operating, investing, and financing activities is shown in the following table:

	Thirteen Weeks Ended
in thousands	March 26, 2026		March 27, 2025
Net cash provided by operating activities	$	109,248	$	71,164
Net cash used in investing activities	(63,434)		(66,728)
Net cash used in financing activities	(1,478)		(5,175)
Net increase (decrease) in cash and cash equivalents	$	44,336	$	(739)

Net Cash Provided by Operating Activities

Cash provided by operating activities consists primarily of (i) net income adjusted for non-cash items, including depreciation and amortization, stock-based compensation, and deferred income taxes and (ii) changes in working capital.

Net cash provided by operating activities during the thirteen weeks ended March 26, 2026 and March 27, 2025 was $109.2 million and $71.2 million, respectively. The increase in net cash provided by operating activities was primarily driven by changes in inventory and trade accounts payable.

Net Cash Used in Investing Activities

Investing activities typically consist primarily of capital expenditures for new store openings and existing store remodels, including leasehold improvements, racking, fixtures, vignettes, design centers, and new infrastructure and information systems.

Net cash used in investing activities during the thirteen weeks ended March 26, 2026 and March 27, 2025 was $63.4 million and $66.7 million, respectively. The decrease in net cash used in investing activities was due to a decrease in capital expenditures primarily driven by an increase in new stores being constructed at second-use sites and store size optimization.

Net Cash Used in Financing Activities

Financing activities consist primarily of borrowings and related repayments under our Credit Facilities, tax payments related to the vesting or exercise of stock-based compensation awards, proceeds from the exercise of stock options and our employee stock purchase program, and payments of contingent earn-out consideration.

Net cash used in financing activities during the thirteen weeks ended March 26, 2026 and March 27, 2025 was $1.5 million and $5.2 million, respectively. The decrease in net cash used in financing activities was primarily driven by a decrease in tax payments for stock-based compensation awards.

Our Credit Facilities

As of March 26, 2026, total Term Loan Facility debt outstanding was $197.7 million, and no amounts were outstanding under our ABL Facility. For additional information regarding our Term Loan Facility and ABL Facility, including applicable covenants and other details, please refer to Note 3, “Debt” to our condensed consolidated financial statements included in this Quarterly Report.

Credit Ratings

Our credit ratings are periodically reviewed by rating agencies. As of March 26, 2026, our Standard & Poor’s issuer credit rating of BB with a stable outlook and Moody’s issuer credit rating of Ba3 with a stable outlook remain unchanged from December 25, 2025. These ratings and our current credit condition affect, among other things, our ability to access new capital. Negative changes to these ratings may result in more stringent covenants and higher interest rates under the terms of any new debt. Our credit ratings could be lowered or rating agencies could issue adverse commentaries in the future, which could have a material adverse effect on our business, financial condition, results of operations, and liquidity. In particular, a weakening of our financial condition, including an increase in our leverage or decrease in our profitability or cash flows, could adversely affect our ability to obtain necessary funds, result in a credit rating downgrade or change in outlook, or otherwise increase our cost of borrowing.

Table of Contents

U.S. Tariffs and Global Economy

The current geopolitical environment, particularly related to existing and potential changes in global trade and tariffs, has created uncertainty surrounding the future state of the global economy and related impacts to our supply chain. In 2025, the U.S. government imposed significant additional tariffs on products from most countries where we source products. In early 2026, the U.S. Supreme Court invalidated tariffs previously implemented under the authority of the International Emergency Economic Powers Act. The ruling did not specifically require these tariffs to be refunded, resulting in uncertainty regarding potential tariff refunds. As a result of the ruling, the U.S. government has implemented and continues working to implement new tariffs using other authorities to maintain continuity in its tariff policy.

While we continue to take steps to mitigate the overall effect of increased tariffs, these tariffs have increased and will continue to increase our inventory costs and associated cost of sales, which have resulted in and in the future may result in increased retail prices and may adversely impact sales. Furthermore, the impact of increased tariffs on the economy, as well as the broader geopolitical environment, including recent tensions in the Middle East, have and in the future may negatively impact consumer demand for our products, which may also have an adverse impact on sales.

Critical Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with GAAP, which requires management to make estimates and assumptions that affect reported amounts. The estimates and assumptions are based on historical experience and other factors management believes to be reasonable. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

For a description of our critical accounting policies and estimates, refer to Part II, Item 7, “Critical Accounting Policies and Estimates” in our Annual Report. There have been no material changes to our critical accounting policies and estimates as disclosed in our Annual Report. See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” to our condensed consolidated financial statements included in this Quarterly Report, which describes recent accounting pronouncements adopted by us.

Loading holders...

Held by

holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Next expected filings

~2026-07-30 10-Q expected by 2026-08-04 (in 90 days)
~2026-10-29 10-Q expected by 2026-11-03 (in 181 days)
~2027-02-18 10-K expected by 2027-02-22 (in 293 days)
~2027-04-29 10-Q expected by 2027-05-04 (in 363 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-04-30 8-K Earnings Release; Other Events; Financial Statements and Exhibits
2026-04-30 10-Q Quarterly Report
2026-02-19 10-K Annual Report
2026-02-19 8-K Earnings Release; Financial Statements and Exhibits
2025-10-30 10-Q Quarterly Report
2025-10-30 8-K Officer/Director Change; Financial Statements and Exhibits
2025-10-30 8-K Earnings Release; Financial Statements and Exhibits
2025-07-31 10-Q Quarterly Report
2025-07-31 8-K Earnings Release; Financial Statements and Exhibits
2025-05-01 10-Q Quarterly Report
2025-05-01 8-K Earnings Release; Financial Statements and Exhibits
2025-02-20 10-K Annual Report
2025-02-20 8-K Earnings Release; Financial Statements and Exhibits
2025-02-18 8-K/A Officer/Director Change
2025-01-28 8-K Officer/Director Change; Financial Statements and Exhibits

Line item