Floor & Decor Holdings, Inc. Announces Third Quarter Fiscal 2023 Financial Results

Net sales of $1,107.8 million increased 0.9% from the third quarter of fiscal 2022

Comparable store sales decreased 9.3%

Diluted earnings per share of $0.61

Opened five new warehouse stores

Floor & Decor Holdings, Inc. (“We,” “Our,” the “Company,” or “Floor & Decor”) announces its financial results for the third quarter of fiscal 2023, which ended September 28, 2023.

Tom Taylor, Chief Executive Officer, stated, “Amidst the continuing economic challenges posed by rising mortgage interest rates, near-record-low existing home sales, ongoing pressure on housing affordability, and slowing sales of large ticket discretionary products, we are pleased to deliver third-quarter diluted earnings per share of $0.61. Our fiscal 2023 third-quarter results are a testament to our company’s agility and unwavering commitment to executing our key growth and customer engagement strategies at an exceptional level. We remain focused on continuing to grow our market share by capitalizing on our everyday low prices and value-driven options, trend-right product assortments, in-stock job lot quantities, and the exceptional customer service provided by our store associates. We believe that our execution and new warehouse store openings will position us for accelerating sales and earnings growth when industry growth returns.”

Mr. Taylor continued, “In the third quarter of fiscal 2023, we opened five new warehouse stores. We continue to open new warehouse stores and intend to open 15 in the fourth quarter of fiscal 2023 toward achieving our 32 new store opening plan for fiscal 2023.”

Please see “Comparable Store Sales” below for information on how the Company calculates period-over-period changes in comparable store sales.

For the Thirteen Weeks Ended September 28, 2023

• Net sales of $1,107.8 million increased 0.9% from $1,097.8 million in the third quarter of fiscal 2022.
• Comparable store sales decreased 9.3%.
• We opened five new warehouse stores and closed one warehouse store, ending the quarter with 207 warehouse stores and five design studios.
• Operating income of $84.8 million decreased 16.6% from $101.7 million in the third quarter of fiscal 2022. Operating margin of 7.7% decreased 160 basis points from the third quarter of fiscal 2022.
• Net income of $65.9 million decreased 13.5% from $76.2 million in the third quarter of fiscal 2022. Diluted earnings per share (“EPS”) of $0.61 decreased 14.1% from $0.71 in the third quarter of fiscal 2022.
• Adjusted EBITDA* of $140.9 million decreased 4.7% from $147.9 million in the third quarter of fiscal 2022.

For the Thirty-nine Weeks Ended September 28, 2023

• Net sales of $3,365.8 million increased 4.6% from $3,216.4 million in the same period of fiscal 2022.
• Comparable store sales decreased 6.3%.
• We opened 17 new warehouse stores and closed one warehouse store.
• Operating income of $275.3 million decreased 8.9% from $302.0 million in the same period of fiscal 2022. Operating margin of 8.2% decreased 120 basis points from the same period of fiscal 2022.
• Net income of $208.9 million decreased 8.8% from $229.0 million in the same period of fiscal 2022. Diluted EPS of $1.94 decreased 8.9% from $2.13 in the same period of fiscal 2022.
• Adjusted EBITDA* of $443.4 million increased 2.2% from $434.0 million in the same period of fiscal 2022.

*Non-GAAP financial measure. Please see “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below for more information.

Outlook for the Fiscal Year Ending December 28, 2023:

• Net sales of approximately $4,345 million to $4,385 million
• Comparable store sales of approximately (8.5)% to (7.8)%
• Diluted EPS of approximately $2.14 to $2.24
• Adjusted EBITDA* of approximately $535 million to $550 million
• Depreciation and amortization expense of approximately $200 million
• Interest expense, net of approximately $11.5 million
• Tax rate of approximately 21.5%
• Diluted weighted average shares outstanding of approximately 108 million shares
• Open 32 new warehouse stores
• Capital expenditures of approximately $550 million to $575 million

*Non-GAAP financial measure. Please see “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below for more information.

Comparable Store Sales

Comparable store sales refer to period-over-period comparisons of our net sales among the comparable store base and are based on when the customer obtains control of the product, which is typically at the time of sale. A store is included in the comparable store sales calculation on the first day of the thirteenth full fiscal month following a store’s opening, which is when we believe comparability has been achieved. Changes in our comparable store sales between two periods are based on net sales for stores that were in operation during both of the two periods. Any change in the square footage of an existing comparable store, including for remodels and relocations within the same primary trade area of the existing store being relocated, does not eliminate that store from inclusion in the calculation of comparable store sales. Stores that are closed for a full fiscal month or longer are excluded from the comparable store sales calculation for each full fiscal month that they are closed. Since our e-commerce, regional account manager, and design studio sales are fulfilled by individual stores, they are included in comparable store sales only to the extent the fulfilling store meets the above mentioned store criteria. Sales through our Spartan Surfaces, LLC (“Spartan”) subsidiary do not involve our stores and are therefore excluded from the comparable store sales calculation.

For the full third quarter results, click here.

About Floor & Decor Holdings, Inc.

Floor & Decor is a multi-channel specialty retailer and commercial flooring distributor operating 207 warehouse-format stores and five design studios across 36 states as of September 28, 2023. The Company offers a broad assortment of in-stock hard-surface flooring, including tile, wood, laminate, vinyl, and natural stone along with decorative accessories and wall tile, installation materials, and adjacent categories at everyday low prices. The Company was founded in 2000 and is headquartered in Atlanta, Georgia.

Contact:

Wayne Hood – Vice President of Investor Relations – wayne.hood@flooranddecor.com – (678) 505-4415

Source: Floor & Decor Holdings, Inc.