Floor & Decor Sales Flat in Q4, Income Down 46%

February 23, 2024, from Floor Focus FloorDaily News

 

Atlanta, GA, February 23, 2024 – Floor & Décor announced net sales of $1 billion, flat with Q4 2022. Comparable store sales decreased 9.4%.

Net income for Q4 2023 was $37.1 million, a decline of 46% from $69.2 million in Q4 2022. The company opened 14 new warehouse stores, ending the quarter with 221 warehouse stores and five design studios.

For 2023, net sales of $4.4 billion increased 3.5% from $4.3 billion in 2022. Comparable store sales decreased 7.1%.

Net income for 2023 was  $246.0 million, a 17.5% decline from $298.2 million in 2022.

Tom Taylor, Chief Executive Officer, stated, “We are pleased to deliver better-than-expected fiscal 2023 fourth-quarter diluted earnings per share of $0.34, primarily due to comparable store sales that were better than anticipated. We are proud of how our teams are collaborating to successfully execute our sales-driving initiatives, prudently manage expenses without sacrificing customer service, and strategically grow our gross margin rate. We are particularly proud of accomplishing these results when existing home sales are at record lows, and flooring industry sales continue to contract. As we look to 2024, we remain focused on growing our market share by continuing to capitalize 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 are fortunate that our strong balance sheet and cash flow enable us to invest in new store growth during an industry downturn. We opened 14 new warehouse format stores in the fourth quarter and 31 new warehouse stores in fiscal 2023, ending fiscal 2023 with 221 warehouse format stores and five design studios across 36 states. After the end of our fiscal 2023, we opened a warehouse store in Mansfield, Texas, on December 29, 2023, bringing our calendar warehouse stores to 222. We continue to expect to open 30 to 35 new warehouse stores in fiscal 2024 toward our plan of operating 500 warehouse stores in the United States over time.”

According to Truist, “FND had sourced about 50% of its products from China in 2018 but this has changed substantially. China tariffs and anti-dumping moves, along with company-specific risk mitigation moves have altered this dramatically. In 2023, the China represented 25% of product point of origination, down from 29% of in 2022, showing this decline. We suspect a substantial amount of the China sourced product is LVT. Even more interesting, U.S.-produced material now represents 23% of sales and, in our view, will surpass China in a few years. We would note that using more domestic product will decrease inventory to levels needed and allow for faster response from sales, although coming at somewhat higher costs.

“By product, wood was the strongest category, up 6.1% y/y, with tile up 0.5% y/y. Declines were seen in natural stone, down 6.0% and a notable decline in laminate/LVP, which was down 7.3% y/y. This follows an 8.5% decline last quarter in laminate/LVP.”