• Diluted Earnings Per Share: $0.45, compared to $0.46 in the same period last year.
• Total Sales: Increased by 5.8% to $1.161 billion from $1.97 billion in the same period last year.
• Comparable Store Sales: Decreased by 1.8% from the same period last year.
• Gross Margin Rate: Increased by 100 basis points to 43.8% from the same period last year.
• Selling and Store Operating Expenses: Increased by 10.3% to $368.8 million.
• Adjusted EBITDA: Increased 5.5% to $129.8 million.
• New Store Openings: Four new warehouse-format stores opened; plan to open 20 new stores in fiscal 2025.
• Inventory: Increased by 5% to $1.2 billion as of March 27, 2025.
• Liquidity: $949.8 million of unrestricted liquidity, including $186.9 million in cash and cash equivalents.
• Fiscal 2025 Sales Guidance: Expected to be in the range of $4,660 million to $4,800 million, an increase of 5% to 8% from fiscal 2024.
• Fiscal 2025 Capital Expenditures: Planned to be in the range of $310 million to $360 million.

• Warning! GuruFocus has detected 3 Warning Sign with FND.

Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Floor & Decor Holdings Inc (NYSE:FND) reported a 5.8% increase in total sales for the first quarter of fiscal 2025, reaching $1.161 billion.
• The company achieved a gross margin rate of 43.8%, a 100 basis point increase from the same period last year, primarily due to lower supply chain costs.
• FND successfully diversified its sourcing, reducing its dependency on China from 18% to mid-single digits by the end of fiscal 2025.
• The company opened four new warehouse-format stores in the first quarter and plans to open 20 new stores in fiscal 2025, demonstrating continued expansion.
• Sales to professional customers (PROs) accounted for approximately 50% of total sales, showing strong engagement and growth in this segment.

Negative Points

• Comparable store sales decreased by 1.8% in the first quarter of fiscal 2025, at the low end of the company's expectations.
• The company revised its fiscal 2025 earnings guidance due to increased economic uncertainty and potential recession risks.
• FND reduced its planned new store openings from 25 to 20 for fiscal 2025, reflecting caution amid uncertain macroeconomic conditions.
• The company's first quarter fiscal 2025 selling and store operating expenses increased by 10.3%, leading to a 130 basis point increase as a percentage of net sales.
• The effective tax rate for the first quarter increased to 22.0% from 12.8% in the same period last year, impacting net earnings.

Q & A Highlights

Q: Can you confirm the tariff impact on guidance and how you're managing it? A: Thomas Taylor, CEO: We have experience dealing with tariffs and have made progress in diversifying away from China. We anticipate modest price increases to offset tariff impacts, maintaining our market position. Bradley Paulsen, President: Our guidance includes universal tariffs, and we believe we can maintain our margin rate through vendor negotiations and strategic pricing.

Q: How are you managing the transition away from China in terms of product availability and margins? A: Thomas Taylor, CEO: We feel confident in our diversification efforts and do not anticipate significant product gaps. Bryan Langley, CFO: Diversifying has allowed us to maintain or improve product specifications and costs, supporting our gross margin.

Q: Why did you reduce your store opening plan to 20 new stores, and could it go lower? A: Bryan Langley, CFO: We chose 20 based on current conditions and believe in the long-term potential of these locations. If business deteriorates beyond our guidance, we may reduce further, but current trends do not indicate that need.

Q: How are you maintaining gross margin amid tariffs, and what strategies are in place? A: Thomas Taylor, CEO: We are leveraging better cost yields, consumer buying trends, supply chain efficiencies, and design services to maintain margins. Pricing adjustments will be a last resort if necessary.

Q: How does your sourcing strategy compare to competitors, and is it a competitive advantage? A: Bradley Paulsen, President: Our diversified sourcing from multiple countries gives us flexibility and a competitive edge. Thomas Taylor, CEO: Our direct sourcing model is a significant advantage, especially as the market faces challenges.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.