Floor & Decor Holdings, Inc.

Previous wording

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 254 warehouse-format stores and five small-format standalone design studios across 38 states as of March 27, 2025. 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.

Current wording

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 257 warehouse-format stores and five small-format standalone design studios across 38 states as of June 26, 2025. 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.

Previous wording

During the thirteen weeks ended March 27, 2025, we opened four new warehouse-format stores and closed one warehouse-format store, ending the quarter with 254 warehouse-format stores and five design studios.

Current wording

During the twenty-six weeks ended June 26, 2025, we opened seven new warehouse-format stores and closed one warehouse-format store, ending the quarter with 257 warehouse-format stores and five design studios.

Previous wording

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 27, 2025 and March 28, 2024, respectively.

Current wording

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 and twenty-six weeks ended June 26, 2025 and June 27, 2024, respectively.

Previous wording

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, trade policy, and geopolitical instability, among others, may have on our results of operations and overall financial performance for future periods.

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

Net sales during the thirteen weeks ended March 27, 2025 increased $63.5 million, or 5.8%, compared to the corresponding prior year period primarily due to sales from the 30 new warehouse-format stores that we opened since March 28, 2024, partially offset by a decrease in comparable store sales of 1.8%. The comparable store sales decline during the period of 1.8%, or $18.5 million, was due to a 3.8% decrease in comparable transactions, which we believe was largely driven by the impact of lower existing home sales, partially offset by a 2.1% increase in comparable average ticket, which was primarily due to change in sales mix. Non-comparable sales of $82.0 million during the same period were primarily driven by new stores.

Current wording

Net sales during the twenty-six weeks ended June 26, 2025 increased $144.5 million, or 6.5%, compared to the corresponding prior year period primarily due to sales from the 28 new warehouse-format stores that we opened since June 27, 2024, partially offset by a decrease in comparable store sales of 0.7%. The comparable store sales decline during the period of 0.7%, or $14.0 million, was due to a 3.5% decrease in comparable transactions, partially offset by a 3.0% increase in comparable average ticket. Non-comparable sales increased $158.5 million from the corresponding prior year period primarily driven by new stores.

Previous wording

We estimate that retail sales during the thirteen weeks ended March 27, 2025 were approximately 50% from homeowners and 50% from Pros compared to approximately 55% from homeowners and 45% from Pros during the thirteen weeks ended March 28, 2024.

Current wording

We estimate that retail sales during both the thirteen weeks ended June 26, 2025 and June 27, 2024 were approximately 50% from homeowners and 50% from Pros. We estimate that retail sales during the twenty-six weeks ended June 26, 2025 were approximately 50% from homeowners and 50% from Pros compared to approximately 55% from homeowners and 45% from Pros during the twenty-six weeks ended June 27, 2024.

Previous wording

Gross profit during the thirteen weeks ended March 27, 2025 increased $38.1 million, or 8.1%, compared to the corresponding prior year period. The increase in gross profit was primarily driven by the 5.8% increase in net sales and an increase in gross margin to 43.8%, up approximately 100 basis points from 42.8% in the same period a year ago primarily driven by a decrease in supply chain costs.

Current wording

Gross profit during the thirteen weeks ended June 26, 2025 increased $41.7 million, or 8.5%, compared to the corresponding prior year period. The increase in gross profit was primarily driven by the 7.1% increase in net sales and an increase in gross margin to 43.9%, up approximately 60 basis points from 43.3% in the corresponding prior year period.

Previous wording

Selling and store operating expenses during the thirteen weeks ended March 27, 2025 increased $34.5 million, or 10.3%, compared to the corresponding prior year period. The increase in selling and store operating expenses was primarily driven by $38.5 million for new stores, partially offset by a decrease of $5.0 million at our comparable stores. As a percentage of net sales, selling and store operating expenses increased by approximately 130 basis points to 31.8% from 30.5% in the corresponding prior year period. The increase in selling and store operating expenses in total and as a percentage of net sales was primarily attributable to the addition of new stores and deleverage from a decrease in comparable store sales.

Current wording

Selling and store operating expenses during the twenty-six weeks ended June 26, 2025 increased $69.3 million, or 10.3%, compared to the corresponding prior year period. The increase in selling and store operating expenses was primarily driven by $72.3 million for new stores, partially offset by a decrease of $4.4 million at our comparable stores. As a percentage of net sales, selling and store operating expenses increased by approximately 110 basis points to 31.4% from 30.3% in the corresponding prior year period. The increase in selling and store operating expenses in total and as a percentage of net sales was primarily attributable to the addition of new stores and deleverage from a decrease in comparable store sales.

Previous wording

General and administrative expenses during the thirteen weeks ended March 27, 2025 increased $2.4 million, or 3.5%, compared to the corresponding prior year period. The increase in general and administrative expenses was primarily driven by an increase of $2.9 million in personnel expenses. Our general and administrative expenses as a percentage of net sales decreased by approximately 10 basis points to 6.0% from 6.1% in the corresponding prior year period.

Current wording

General and administrative expenses during the thirteen weeks ended June 26, 2025 increased $1.8 million, or 2.6%, compared to the corresponding prior year period. Our general and administrative expenses as a percentage of net sales decreased by approximately 30 basis points to 5.7% from 6.0% in the corresponding prior year period.

Previous wording

Pre-opening expenses during the thirteen weeks ended March 27, 2025 decreased $3.6 million, or 37.5%, compared to the corresponding prior year period. The decrease in pre-opening expenses during the thirteen weeks ended March 27, 2025 primarily resulted from a decrease in the number of future stores that we were preparing to open compared to the corresponding prior year period.

Current wording

The decreases in pre-opening expenses during the thirteen and twenty-six weeks ended June 26, 2025 primarily resulted from decreases in the number of stores that we opened and were preparing to open compared to the corresponding prior year period.

Previous wording

Income tax expense was $13.8 million during the thirteen weeks ended March 27, 2025 compared to $7.3 million during the thirteen weeks ended March 28, 2024. The effective tax rate was 22.0% for the thirteen weeks ended March 27, 2025 compared to 12.8% in the corresponding prior year period. The effective tax rate increase during the thirteen weeks ended March 27, 2025 was primarily due to a decrease in excess tax benefits related to stock-based compensation awards.

Current wording

Income tax expense was $17.6 million during the thirteen weeks ended June 26, 2025 compared to $14.0 million during the thirteen weeks ended June 27, 2024. The effective tax rate was 21.8% for the thirteen weeks ended June 26, 2025 compared to 19.8% in the corresponding prior year period.

Previous wording

(3) Other adjustments include amounts management does not consider indicative of our core operating performance. Amounts for both the thirteen weeks ended March 27, 2025 and March 28, 2024 relate to changes in the fair value of contingent earn-out liabilities.

Current wording

(3) Other adjustments include amounts management does not consider indicative of our core operating performance. Amounts for the twenty-six weeks ended June 26, 2025 and the thirteen and twenty-six weeks ended June 27, 2024 relate to changes in the fair value of contingent earn-out liabilities.

Previous wording

Liquidity is provided primarily by cash flows from operations and our $800.0 million ABL Facility. Unrestricted liquidity as of March 27, 2025 was $949.8 million, consisting of $186.9 million in cash and cash equivalents and $762.9 million immediately available for borrowing under the ABL Facility without violating any covenants thereunder. Our liquidity is generally not seasonal.

Current wording

Liquidity is provided primarily by cash flows from operations and our $800.0 million ABL Facility. Unrestricted liquidity as of June 26, 2025 was $876.9 million, consisting of $176.9 million in cash and cash equivalents and $700.0 million immediately available for borrowing under the ABL Facility without violating any covenants thereunder. Our liquidity is generally not seasonal.

Previous wording

Total capital expenditures in fiscal 2025 are planned to be between approximately $310 million to $360 million and are expected to be funded primarily by cash generated from operations and borrowings under the ABL Facility. 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 2025 (projected amounts are based on the gross costs that we expect to accrue for these investments on the Condensed Consolidated Balance Sheets in fiscal 2025, which may include amounts incurred but not yet settled in cash during the period):

Current wording

Total capital expenditures in fiscal 2025 are planned to be between approximately $280 million to $320 million and are expected to be funded primarily by cash generated from operations and borrowings under the ABL Facility. 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 2025 (projected amounts are based on the gross costs that we expect to accrue for these investments on the Condensed Consolidated Balance Sheets in fiscal 2025, which may include amounts incurred but not yet settled in cash during the period):

Previous wording

•invest approximately $200 million to $235 million to open 20 warehouse-format stores, relocate stores, and begin construction on stores opening after fiscal 2025;

Current wording

•invest approximately $180 million to $205 million to open 20 warehouse-format stores, relocate stores, and begin construction on stores opening after fiscal 2025;

Previous wording

•invest approximately $50 million to $55 million in existing stores and distribution centers; and

Current wording

•invest approximately $45 million to $50 million in existing stores and distribution centers; and

Previous wording

•invest approximately $40 million to $45 million in information technology infrastructure, e-commerce, and other store support center initiatives.

Current wording

•invest approximately $35 million to $40 million in information technology infrastructure, e-commerce, and other store support center initiatives.

Previous wording

Net cash provided by operating activities during the thirteen weeks ended March 27, 2025 and March 28, 2024 was $71.2 million and $147.5 million, respectively. The decrease in net cash provided by operating activities was primarily driven by the change in inventory, which was partially offset by an increase in trade accounts payable.

Current wording

Net cash provided by operating activities during the twenty-six weeks ended June 26, 2025 and June 27, 2024 was $155.3 million and $341.5 million, respectively. The decrease in net cash provided by operating activities was primarily driven by changes in inventory and trade accounts payable.

Previous wording

Net cash used in investing activities during the thirteen weeks ended March 27, 2025 and March 28, 2024 was $66.7 million and $111.7 million, respectively. The decrease in net cash used in investing activities was due to a decrease in capital expenditures driven by a decrease in new stores under construction compared to the corresponding prior year period.

Current wording

Net cash used in investing activities during the twenty-six weeks ended June 26, 2025 and June 27, 2024 was $160.8 million and $225.6 million, respectively. The decrease in net cash used in investing activities was due to a decrease in capital expenditures primarily driven by a decrease in new stores under construction compared to the corresponding prior year period.

Previous wording

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 share purchase program, and payments of contingent earn-out consideration.

Current wording

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.

Previous wording

Net cash used in financing activities during the thirteen weeks ended March 27, 2025 and March 28, 2024 was $5.2 million and $12.8 million, respectively. The decrease in net cash used in financing activities was primarily driven by a decrease in payments of contingent earn-out liabilities and tax payments for stock-based compensation awards.

Current wording

Net cash used in financing activities during the twenty-six weeks ended June 26, 2025 and June 27, 2024 was $5.2 million and $12.2 million, respectively. The decrease in net cash used in financing activities was primarily driven by a decrease in payments of contingent earn-out liabilities and tax payments for stock-based compensation awards.

Previous wording

As of March 27, 2025, total Term Loan Facility debt outstanding was $199.8 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.

Current wording

As of June 26, 2025, total Term Loan Facility debt outstanding was $199.2 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.

Previous wording

In fiscal 2024, approximately 73% of the products we sold were produced outside of the U.S., including around 18% from China. 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 early 2025, the U.S. imposed significant additional tariffs on products from most countries where we source products, with further tariffs being considered. Although some of those tariffs were subsequently paused, it is unclear whether the pause will remain in place, and if so, for how long. Additionally, certain countries where we source products, such as China, either have imposed or are considering imposing new tariffs on U.S. products in response, resulting in potentially escalating tariffs from both the U.S. and its trading partners.

Current wording

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 early 2025, the U.S. imposed significant additional tariffs on products from most countries where we source products, with further tariffs being considered. Although some of those tariffs were subsequently paused, it is unclear whether the pause will remain in place, and if so, for how long. Additionally, certain countries where we source products either have imposed or are considering imposing new tariffs and other trade measures on U.S. products in response, resulting in potentially escalating tariffs and trade conflict between the U.S. and its trading partners.

Previous wording

As we continue to manage the impact these tariffs may have on our business and the complexities of the various trade policy actions, we continue taking steps to mitigate some of the cost increases through negotiations with our vendors, sourcing from alternative countries, and increasing retail pricing as we deem appropriate. We also intend to continue to significantly decrease the amount of our products that are sourced from China. While we continue 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 may result in increased retail prices and may adversely impact sales. Furthermore, the broader impact of increased tariffs on the economy may negatively impact consumer demand, which may also have an adverse impact on sales.

Current wording

As we continue to manage the impact these tariffs may have on our business and the complexities of the various trade policy actions, we continue taking steps to mitigate some of the cost increases through negotiations with our vendors, sourcing from alternative countries, and increasing retail pricing as we deem appropriate. While we continue 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 may result in increased retail prices and may adversely impact sales. Furthermore, the broader impact of increased tariffs on the economy may negatively impact consumer demand, which may also have an adverse impact on sales.