Floor & Decor’s first quarter results were met with a positive market reaction, as the company delivered sales and non-GAAP earnings per share in line with Wall Street expectations. Management credited the quarter’s performance to disciplined cost control, gross margin improvement from lower supply chain costs, and ongoing market share gains despite industry-wide demand softness. CEO Tom Taylor highlighted that the company’s ability to “grow our market share even as sales and the hard surface flooring industry contract” reflected effective execution of its strategies and a flexible approach to dealing with external volatility.
Is now the time to buy FND? Find out in our full research report (it’s free).
Floor And Decor (FND) Q1 CY2025 Highlights:
- Revenue: $1.16 billion vs analyst estimates of $1.16 billion (5.8% year-on-year growth, in line)
- Adjusted EPS: $0.45 vs analyst estimates of $0.45 (in line)
- Adjusted EBITDA: $129.8 million vs analyst estimates of $129.3 million (11.2% margin, in line)
- The company dropped its revenue guidance for the full year to $4.73 billion at the midpoint from $4.82 billion, a 1.9% decrease
- EBITDA guidance for the full year is $540 million at the midpoint, below analyst estimates of $549.3 million
- Operating Margin: 5.5%, in line with the same quarter last year
- Locations: 254 at quarter end, up from 225 in the same quarter last year
- Same-Store Sales fell 1.8% year on year (-11.6% in the same quarter last year)
- Market Capitalization: $8.18 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Floor And Decor’s Q1 Earnings Call
- Seth Sigman (Barclays) asked how tariffs are incorporated into guidance and whether pricing can offset margin risk. CEO Tom Taylor and President Brad Paulsen explained that modest price increases and sourcing diversification should allow the company to maintain margins, though broader economic risks persist.
- Michael Lasser (UBS) questioned whether guidance sufficiently reflects downside risks from tariffs and potential recession. Taylor responded that the outlook is intentionally cautious and includes scenarios for further sales declines, with contingency plans for cost control if conditions deteriorate.
- Simeon Gutman (Morgan Stanley) inquired about criteria for further reducing store openings. CFO Bryan Langley said additional cuts would be considered if business trends fall below the low end of guidance, but current store productivity and early Q2 comps do not warrant further reductions.
- Christopher Horvers (JPMorgan) asked whether improved Q2 trends reflect pull-forward demand due to tariff concerns. Taylor noted a modest sales lift following tariff announcements, but attributed sustained momentum to improved execution, new product rollouts, and better in-stock positions.
- Steven Zaccone (Citi) probed the company’s ability to flex SG&A expenses and maintain gross margin amid guidance cuts. Langley detailed ongoing cost reductions at the store level and highlighted that the gross margin goal is achievable through a mix of supply chain savings, product mix, and price management.
Catalysts in Upcoming Quarters
In the coming quarters, StockStory analysts will monitor (1) the company’s ability to maintain gross margin rates as tariffs take effect and as pricing actions are rolled out, (2) whether comparable store sales stabilize or improve amid macro headwinds, and (3) the success of new store openings and the continued ramp of digital and design services. Developments in housing market activity and tariff policy will remain critical external factors.
Floor And Decor currently trades at $75.70, up from $72.31 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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