Floor & Decor Holdings (FND) AI Stock Analysis

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Floor & Decor Holdings

(NYSE:FND)

Select Model

Neutral 59 (OpenAI - 5.2)

Rating:59Neutral

Price Target:

$60.00

▲(5.26% Upside)

Action:ReiteratedDate:02/20/26

The score is driven primarily by solid growth and improving leverage, tempered by recent margin compression and a sharp drop in free cash flow. Technicals add pressure with the stock trading below key moving averages, while valuation (P/E ~33 with no dividend) looks demanding given current profitability and cash-conversion headwinds. Earnings call guidance was prudent/neutral, with continued expansion plans but near-term comps and cost pressures.

Positive Factors

Store expansion with lower new-store CapEx

A steady 20-store annual expansion with materially lower new-store capital requirements improves return-on-invested-capital and reduces the cash intensity of growth. Over the next 2–6 months, reduced build costs and disciplined rollouts help scale revenue without proportionate capex increases, supporting durable expansion optionality and margin recovery potential.

High Pro customer mix and category growth

A 50% Pro customer mix provides recurring, higher-volume, contractor-driven demand that is less promotional and supports larger average tickets and project repeatability. Concurrent Spartan Surfaces growth diversifies product exposure and supports higher-margin specialty categories, strengthening durable revenue quality versus solely DIY retail cycles.

Gross margin resilience

Sustained mid-40% gross margins indicate structural pricing power and favorable product economics across a broad hard-surface assortment. Durable gross-margin improvement, supported by sourcing adjustments and merchandising, provides a buffer against SG&A pressure and cyclical volume swings, bolstering multi-quarter earnings stability.

Negative Factors

Sharp free cash flow decline

A steep decline in free cash flow reduces financial flexibility for reinvestment, debt reduction, or shareholder returns. If weak cash conversion persists, it undermines the company's ability to fund store growth efficiently and increases reliance on liquidity facilities, making capital allocation and long-term investment plans more constrained.

Net margin compression and lower ROE

Material declines in net margin and ROE signal deteriorating earnings quality versus historical levels. Lower profitability reduces capital returns and makes the business more sensitive to cost headwinds or volume declines, increasing the risk that modest top-line volatility will more quickly erode shareholder value over the medium term.

Comparable-store and transaction weakness

Sustained comp and transaction declines point to demand softness and smaller project sizes, which can persist across several quarters. Reduced traffic and fewer transactions pressure operating leverage, limit same-store revenue recovery, and make margin and cash-flow targets harder to achieve absent structural improvements in customer acquisition or product mix.

Floor & Decor Holdings (FND) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$6.15B

Dividend YieldN/A

Average Volume (3M)2.39M

Price to Earnings (P/E)43.3

Beta (1Y)1.27

Revenue Growth6.04%

EPS Growth10.26%

CountryUS

Employees10,413

SectorConsumer Cyclical

Sector Strength84

IndustryHome Improvement

Share Statistics

EPS (TTM)0.36

Shares Outstanding107,875,310

10 Day Avg. Volume2,236,921

30 Day Avg. Volume2,392,342

Financial Highlights & Ratios

PEG Ratio62.68

Price to Book (P/B)2.83

Price to Sales (P/S)1.45

P/FCF Ratio106.31

Enterprise Value/Market Cap1.55

Enterprise Value/Revenue2.03

Enterprise Value/Gross Profit4.95

Enterprise Value/Ebitda18.65

Forecast

1Y Price Target

$77.79

Price Target Upside36.47% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering17

EPS Forecast (FY)2.07

Revenue Forecast (FY)$4.99B

Floor & Decor Holdings Business Overview & Revenue Model

Company DescriptionFloor & Decor Holdings, Inc. operates as a multi-channel specialty retailer and commercial flooring distributor of hard surface flooring and related accessories. The company's stores offer tile, wood, laminate, vinyl, and natural stone flooring products, as well as decorative and installation accessories. It serves professional installers, commercial businesses, and do it yourself customers. As of May 5, 2022, the company operated 166 warehouse-format stores and five design studios in 34 states. It also sells products through its Website, FloorandDecor.com. The company was formerly known as FDO Holdings, Inc. and changed its name to Floor & Decor Holdings, Inc. in April 2017. Floor & Decor Holdings, Inc. was founded in 2000 and is headquartered in Atlanta, Georgia.

How the Company Makes MoneyFloor & Decor primarily makes money by selling merchandise to customers through its warehouse-format retail stores and online platform. Its core revenue stream is product sales of hard-surface flooring (e.g., tile, wood, laminate, vinyl, and natural stone) and complementary categories such as decorative tile, mosaics, countertops/surfaces, and finishing items. A significant additional revenue stream comes from installation-related and project-completion products (often described as installation materials and accessories), including underlayment, setting materials, grout, trim/moldings, and tools—items that tend to attach to flooring purchases and increase average ticket size. The company targets both Pro customers (contractors, installers, remodelers) and DIY/homeowner customers; Pro purchases can contribute meaningfully to sales because they may involve repeat buying and larger project volumes, supported by in-store pro services and dedicated selling efforts. Earnings are driven by gross margin on merchandise sales, influenced by product mix (premium vs. commodity items), sourcing and import programs, inventory management, pricing/markdowns, and store productivity (sales per store) as it expands its store base. If applicable, the company may also earn ancillary revenue from services and other items tied to retail operations; specific material partnerships or service-fee arrangements are null.

Floor & Decor Holdings Key Performance Indicators (KPIs)

Any

Comparable Store Sales Growth

Comparable Store Sales Growth
Measures the sales performance of existing stores over a specific period, indicating the company's ability to grow sales without expanding its store base. A key indicator of consumer demand and operational effectiveness.

Chart InsightsFloor & Decor Holdings is experiencing a challenging period with comparable store sales growth declining since 2023, reflecting broader industry headwinds such as high mortgage rates and a weak housing market. Despite these challenges, the company has shown resilience through strategic store expansion and improved product margins. The recent earnings call highlighted a 10.4% increase in EPS and a 5.5% rise in total sales, suggesting operational strength and potential for recovery. However, ongoing pressures on new store sales and regional sales challenges remain key risks to monitor.

Data provided by:

The Fly

Floor & Decor Holdings Earnings Call Summary

Earnings Call Date:Feb 19, 2026

(Q4-2025)

% Change Since: |

Next Earnings Date:Apr 30, 2026

Earnings Call Sentiment Neutral

Balanced/Neutral: The company delivered modest earnings growth, full-year revenue growth (+5.1%), gross margin expansion, record customer satisfaction and continued strategic investments (store expansion, Pro initiatives, Spartan growth, improved liquidity). However, meaningful comparable-store sales weakness, transaction declines, weather-related disruption, distribution center and tariff headwinds, SG&A deleverage and a pullback in operating cash flow temper the near-term outlook. Management provided prudent FY26 guidance that anticipates these headwinds while retaining flexibility to manage costs and invest in strategic priorities.

Q4-2025 Updates

Positive Updates

Earnings Per Share In Line and FY EPS Growth

Q4 diluted EPS of $0.36 was in line with guidance midpoint; full fiscal year diluted EPS of $1.92 vs $1.90 prior year (prior year included a $0.05 benefit). Fiscal 2026 EPS guidance is $1.98 to $2.18.

Full-Year Revenue and Gross Margin Expansion

Fiscal 2025 sales grew 5.1% to $4.684 billion; full-year gross profit increased $115.7 million or 6.0% and gross margin improved ~30 basis points to 43.6% year-over-year.

Store Footprint Expansion and Lower New-Store CapEx

Opened 20 new warehouse-format stores in FY25 (8 in Q4), ending the year with 270 stores, an 8% increase from 251. Plan to open 20 stores in FY26. New-store capital spend per store for the 2026 class expected at $7M–$8M versus $10.2M for the 2025 class, reflecting ~11% lower construction costs versus earlier cohorts.

Commercial and Pro Momentum; Connected Customers

Pro customers represented ~50% of total sales (Q4 Pro sales grew slightly and +9% for the full year). Spartan Surfaces sales rose ~13% to $243 million. Connected customer sales increased ~2% and accounted for ~18.5% of total sales, with connected average ticket growing.

Operational Improvements and Customer Satisfaction

Company achieved record Net Promoter Scores in 2025, diversified sourcing (China receipts down to 3% from 12.5% prior year), and invested in distribution center capacity (Seattle and Baltimore) to support future growth and network responsiveness.

Strong Liquidity and Reduced CapEx

Year-end unrestricted liquidity of $909.8 million (cash $249.3M + $660.5M available ABL). Fiscal 2025 capital expenditures were $300.4M, down from $376.3M in 2024, and inventory remained stable at $1.1B.

Negative Updates

Comparable Store Sales Weakness

Q4 comparable store sales declined 4.8% and full-year comps declined 1.8% (at the low end of guidance). Monthly Q4 comps were -1.5% (Oct), -6.1% (Nov) and -6.7% (Dec).

Early FY26 Disruption from Severe Weather and Q1 Pressure

January comps improved (+0.4%), but severe winter storms in February affected ~55% of stores and the Baltimore DC, creating ~200–300 basis points of quarter-to-date pressure (estimated $12M–$18M) and contributing to a fiscal 2026 Q1-to-date comp decline of ~3.5%.

Transaction Declines and Category Pressure

Q4 transactions declined 4.2% and average ticket declined 0.6%; full-year transactions declined 3.5% (avg ticket +1.8%). Vinyl/laminate faced particular sensitivity as demand shifts to lower-specification, lower-price items and smaller project sizes pressured transactional activity.

Near-Term Gross Margin Headwinds from Distribution Investments and Tariffs

Distribution center expansion created gross margin pressure (~90 basis points in Q4 and ~70 basis points for the full year). Modest tariff-related cost increases are expected to impact margin in early 2026, prompting planned modest retail pricing actions.

SG&A Deleverage and One-Time Costs

Q4 SG&A increased 4.0% to $439.2M and SG&A as a percentage of sales deleveraged to 38.9% (≈+80 bps); full-year SG&A rose 6.1% to $1.7738B and SG&A % of sales deleveraged to 37.8% (≈+30 bps). SG&A included ERP expenses (~$9M for FY25).

Operating Cash Flow Decline and Higher Tax Rate

Net cash provided by operating activities declined to $381.8M in 2025 from $603.2M in 2024, primarily due to timing of trade accounts payable and inventory receipts. Effective tax rate increased to 21.8% for FY25 (from 18.8%), adversely impacting EPS by ~$0.08.

Company Guidance

Floor & Decor’s fiscal 2026 guidance targets sales of $4.88–$5.03 billion (up ~4%–7% YoY, including a ~53rd‑week contribution of ~$65M), comps down 2% to up 1% (comp average ticket +low single digits; comp transactions down mid‑single digits to low single digits), gross margin ~43.5%–43.8%, SG&A ~37.7%–37.8% of sales (Q1 and Q4 most pressured), adjusted EBITDA $560–$590M (53rd week ~$11M), diluted EPS $1.98–$2.18 (53rd week ~$0.08) on ~109M diluted shares, net interest expense ~ $5M, tax rate ~21.5%–22.0%, depreciation & amortization ~ $245M, and planned CapEx $250–$300M (including $160–$190M for ~20 new warehouse-format stores at ~$7–$8M new‑store CapEx, ~$60–$70M for existing stores/DCs and ~$30–$40M for IT/e‑commerce); management expects second‑half comps to be stronger with Q3 as the year’s high point.

Floor & Decor Holdings Financial Statement Overview

Summary

Strong multi-year revenue growth and resilient/improving gross margin support the score, and leverage has improved. Offsetting this, net margin has compressed materially and FY2025 free cash flow fell sharply with weak cash conversion versus net income, raising near-term earnings quality risk.

Income Statement

Positive

Revenue has expanded strongly over the period (from ~$2.43B in 2020 to ~$4.68B in 2025), including a notable acceleration in 2025. Gross margin has held up well and improved versus earlier years, signaling resilient pricing and product economics. However, profitability has compressed: net margin has trended down from ~8.0% (2020) to ~4.5% (2025), and operating profitability also appears lower versus 2021–2023 levels, indicating higher cost pressure and/or investment spending. Overall: strong top-line trajectory, but weaker earnings quality and margin durability in the most recent year.

Balance Sheet

Positive

Leverage is moderate and improving: debt relative to equity has stepped down from above 1.0x in 2020–2022 to ~0.75x in 2025, supported by steady equity growth. Return on equity remains positive but has declined meaningfully (from ~18–21% in 2020–2022 to ~8.7% in 2025), consistent with the margin pressure seen in the income statement. Total assets increased overall, though they declined in 2025 versus 2024, suggesting some balance sheet tightening. Overall: healthier leverage trend, but reduced shareholder returns are a key watch item.

Cash Flow

Neutral

Cash generation has been volatile. Operating cash flow is positive in each year shown but declined in 2025 versus 2024, and free cash flow fell sharply to ~$64M in 2025 (down from ~$156M in 2024 and ~$256M in 2023). Free cash flow covers only a small portion of net income in 2025 (~17%), pointing to weaker cash conversion. The company has improved materially from the negative free-cash-flow period in 2021–2022, but the latest year still reflects pressure from working capital and/or higher investment needs. Overall: improving versus the trough, but not yet consistently strong or predictable.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	4.68B	4.46B	4.41B	4.26B	3.43B
Gross Profit	1.93B	1.93B	1.86B	1.73B	1.42B
EBITDA	510.97M	488.65M	523.30M	551.78M	457.19M
Net Income	208.65M	205.87M	245.98M	298.19M	283.23M
Balance Sheet
Total Assets	5.47B	5.05B	4.66B	4.35B	3.73B
Cash, Cash Equivalents and Short-Term Investments	249.30M	187.67M	34.38M	9.79M	139.44M
Total Debt	3.63B	1.69B	1.63B	1.74B	1.42B
Total Liabilities	3.06B	2.88B	2.73B	2.69B	2.41B
Stockholders Equity	2.41B	2.17B	1.93B	1.66B	1.32B
Cash Flow
Free Cash Flow	64.07M	156.33M	255.98M	-344.15M	-106.33M
Operating Cash Flow	381.84M	603.15M	803.59M	112.45M	301.34M
Investing Cash Flow	-317.76M	-446.83M	-564.97M	-455.64M	-471.24M
Financing Cash Flow	-2.44M	-3.04M	-214.03M	213.54M	1.57M

Floor & Decor Holdings Technical Analysis

Technical Analysis Sentiment

Negative

Last Price57.00

Price Trends

50DMA

67.97

Negative

100DMA

65.64

Negative

200DMA

72.18

Negative

Market Momentum

MACD

-3.05

Positive

RSI

31.29

Neutral

STOCH

9.98

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FND, the sentiment is Negative. The current price of 57 is below the 20-day moving average (MA) of 65.03, below the 50-day MA of 67.97, and below the 200-day MA of 72.18, indicating a bearish trend. The MACD of -3.05 indicates Positive momentum. The RSI at 31.29 is Neutral, neither overbought nor oversold. The STOCH value of 9.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FND.

Floor & Decor Holdings Risk Analysis

Floor & Decor Holdings disclosed 33 risk factors in its most recent earnings report. Floor & Decor Holdings reported the most risks in the "Production" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Floor & Decor Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LOW	68 Neutral	$133.28B	22.44	-59.21%	1.94%	0.64%	0.58%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
HVT.A	61 Neutral	$348.10M	18.64	2.79%	5.36%	-1.05%	-24.24%
FND	59 Neutral	$6.15B	43.30	8.99%	―	6.04%	10.26%
HVT	58 Neutral	$348.10M	18.64	6.32%	5.44%	-1.05%	-24.24%
ARHS	55 Neutral	$1.00B	23.45	20.38%	―	7.36%	-6.85%
TTSH	40 Underperform	$120.26M	-34.23	-3.93%	―	-3.77%	-146.47%

* Consumer Cyclical Sector Average

Performance Comparison

FND

Floor & Decor Holdings

57.00

-28.83

-33.59%

HVT.A

Haverty Furn Cl A SC

22.70

2.24

10.93%

HVT

Haverty

21.47

1.11

5.44%

LOW

Lowe's

237.59

16.20

7.32%

TTSH

Tile Shop

3.02

-3.37

-52.74%

ARHS

Arhaus

7.10

-2.21

-23.74%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Feb 20, 2026