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 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.

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 281 warehouse-format stores and five small-format standalone design studios across 39 states as of June 25, 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.

Previous wording

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.

Current wording

During the twenty-six weeks ended June 25, 2026, we opened 11 new warehouse-format stores, ending the quarter with 281 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 26, 2026 and March 27, 2025, 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 25, 2026 and June 26, 2025, respectively.

Previous wording

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.

Current wording

Net sales during the thirteen weeks ended June 25, 2026 increased $36.1 million, or 3.0%, compared to the corresponding prior year period primarily due to sales from the 24 new warehouse-format stores that we opened since June 26, 2025, partially offset by a decrease in comparable store sales of 2.1%. The comparable store sales decline during the period of 2.1%, or $24.4 million, was due to a 2.9% decrease in comparable transactions, partially offset by a 0.8% increase in comparable average ticket. Non-comparable sales increased $60.5 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 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.

Current wording

We estimate that retail sales during the thirteen and twenty-six weeks ended June 25, 2026 were approximately 45% from homeowners and 55% from Pros compared to approximately 50% from homeowners and 50% from Pros during the thirteen and twenty-six weeks ended June 26, 2025.

Previous wording

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.

Current wording

Gross profit during the thirteen weeks ended June 25, 2026 increased $70.4 million, or 13.2%, compared to the corresponding prior year period. Gross margin increased to 48.2%, up approximately 430 basis points from 43.9% in the corresponding prior year period. The increase in gross profit and gross margin was primarily driven by a $56.2 million, or 450 basis points, one-time benefit from the recognition of IEEPA tariff refunds. The remaining increase in gross profit was primarily attributable to the 3.0% increase in net sales.

Previous wording

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.

Current wording

SG&A expenses during the thirteen weeks ended June 25, 2026 increased $28.3 million, or 6.3%, compared to the corresponding prior year period. The increase in SG&A expenses was primarily driven by the 24 new stores that we opened since June 26, 2025, which increased compensation and occupancy costs. The increase also reflects higher incentive compensation related to the recognition of IEEPA tariff refunds. SG&A expenses for non-comparable stores increased $26.7 million and for comparable stores decreased $13.7 million. As a percentage of net sales, SG&A expenses increased by approximately 120 basis points to 38.3% from 37.1% in the corresponding prior year period. This increase was primarily attributable to incentive compensation related to the recognition of IEEPA tariff refunds, as well as the addition of new stores and deleverage from a decrease in comparable store sales.

Previous wording

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.

Current wording

Income tax expense was $29.1 million during the thirteen weeks ended June 25, 2026 compared to $17.6 million during the thirteen weeks ended June 26, 2025. The effective tax rate was 23.3% for the thirteen weeks ended June 25, 2026 compared to 21.8% in the corresponding prior year period. The effective tax rate increase during the thirteen weeks ended June 25, 2026 was primarily due to a decrease in federal tax credits.

Previous wording

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.

Current wording

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 2026 ABL Facility and 2026 Term Loan Facility (together, the “2026 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.

Previous wording

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.

Current wording

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, loss on extinguishment of debt, taxes, and depreciation and amortization. We define Adjusted EBITDA as net income before interest, loss on extinguishment of debt, 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.

Previous wording

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.

Current wording

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 or realize benefits that are the same as or similar to items eliminated in calculating EBITDA and Adjusted EBITDA, such as stock-based compensation expense, fair value adjustments related to contingent earn-out liabilities, tariff refunds, 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.

Previous wording

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

Current wording

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

Previous wording

(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.

Current wording

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

Previous wording

(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.

Current wording

(5)Other adjustments include amounts management does not consider indicative of our core operating performance. The amount for the twenty-six weeks ended June 26, 2025 relates to the change in the fair value of the contingent earn-out liability.

Previous wording

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.

Current wording

Liquidity is provided primarily by cash flows from operations and our $800.0 million 2026 ABL Facility. Unrestricted liquidity as of June 25, 2026 was $942.4 million, consisting of $320.6 million in cash and cash equivalents and $621.8 million immediately available for borrowing under the 2026 ABL Facility without violating any covenants thereunder. Our liquidity is generally not seasonal.

Previous wording

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.

Current wording

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 2026 Credit Facilities, and if necessary, additional funding through other forms of external financing, will be sufficient to meet liquidity requirements, anticipated capital expenditures, discretionary share repurchases, and payments due under our 2026 Credit Facilities for the next twelve months and the foreseeable future.

Previous wording

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):

Current wording

Total capital expenditures in fiscal 2026 are planned to be between approximately $240 million to $275 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):

Previous wording

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

Current wording

•invest approximately $140 million to $165 million to open 20 warehouse-format stores, relocate stores, and begin construction on stores opening after fiscal 2026;

Previous wording

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

Current wording

•invest approximately $60 million to $65 million in existing stores and new and existing distribution centers; and

Previous wording

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

Current wording

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

Previous wording

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.

Current wording

On April 23, 2026, the Company’s Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $400.0 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. As of June 25, 2026, the Company had remaining authorization under the share repurchase program of $334.3 million. For additional information related to the Company’s share repurchase program, refer to Note 6, “Stockholders’ Equity” to our condensed consolidated financial statements included in this Quarterly Report.

Previous wording

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.

Current wording

Net cash provided by operating activities during the twenty-six weeks ended June 25, 2026 and June 26, 2025 was $278.4 million and $155.3 million, respectively. The increase in net cash provided by operating activities was primarily driven by changes in inventory and trade accounts payable, partially offset by an increase in receivables, net.

Previous wording

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.

Current wording

Net cash used in investing activities during the twenty-six weeks ended June 25, 2026 and June 26, 2025 was $136.7 million and $160.8 million, respectively. The decrease in net cash used in investing activities was due to a decrease in capital expenditures primarily driven by changes in the type of new store construction and store size optimization.

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

Current wording

Financing activities consist primarily of borrowings and related repayments under our term loan and ABL facilities, payments for repurchase of common stock, 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 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.

Current wording

Net cash used in financing activities during the twenty-six weeks ended June 25, 2026 and June 26, 2025 was $70.5 million and $5.2 million, respectively. The increase in net cash used in financing activities was primarily driven by repurchases of common stock.

Previous wording

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.

Current wording

As of June 25, 2026, total 2026 Term Loan Facility debt outstanding was $200.0 million, and no amounts were outstanding under our 2026 ABL Facility. For additional information regarding our 2026 Term Loan Facility and 2026 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

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.

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 2025, the U.S. government imposed significant additional tariffs on products from most countries where we source products. On February 20, 2026, the U.S. Supreme Court invalidated tariffs imposed under the authority of IEEPA. On March 4, 2026, the U.S. Court of International Trade ordered CBP to begin refunding all tariffs imposed under IEEPA. On April 20, 2026, CBP launched a formal process for submitting IEEPA refund claims, through which the Company filed its refund claims. As of June 25, 2026, the Company had received approximately $7 million in tariff refund payments. Subsequent to June 25, 2026, the Company has received substantially all expected IEEPA tariff refunds. For additional information regarding these tariff refunds, please refer to Note 5, “Commitments and Contingencies” to our condensed consolidated financial statements included in this Quarterly Report.

Previous wording

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.

Current wording

As a result of the Supreme Court IEEPA 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 the elimination of IEEPA tariffs has had a favorable impact on gross margin, the imposition of additional tariffs may offset such benefits and could adversely affect our financial results. Furthermore, the impact of increased tariffs on the economy, as well as the broader geopolitical environment, including 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.