Floor & Decor Holdings, Inc. Announces Second Quarter Fiscal 2021 Financial Results
Floor & Decor Holdings, Inc. (“We,” “Our,” the “Company,” or “Floor & Decor”) announces record financial results for the second quarter of fiscal 2021, which ended July 1, 2021.
– Net sales increased 86.0% from the second quarter of fiscal 2020 to $860.1 million.
– Comparable store sales increased 68.4% from the second quarter of fiscal 2020.
– Diluted earnings per share (“EPS”) increased 156.7% to $0.77 from $0.30 in the second quarter of fiscal 2020; Adjusted diluted EPS* increased 461.5% to $0.73 from $0.13 in the second quarter of fiscal 2020.
– Completed acquisition of Spartan Surfaces, Inc.
Tom Taylor, Chief Executive Officer, stated, “We are thrilled with our record fiscal 2021 second-quarter and year-to-date financial results. We believe that our strong execution and growing brand awareness coupled with the favorable economic environment drove record sales and profitability in our year-to-date fiscal 2021 results. We are excited about being on a path towards delivering our 13th consecutive year of positive comparable store sales growth in fiscal 2021, driven by both new and returning customers. We are particularly pleased that our strong year-to-date fiscal 2021 results enabled us to reinvest back into our associates with a broad market wage increase that benefited many of our store associates. We continue to believe that sharing our success with our associates and providing them with clear paths of growth is essential to the success of our company.”
Mr. Taylor continued, “Year-to-date, we have successfully opened 14 new warehouse stores and intend to open six new warehouse stores in the third quarter of fiscal 2021 towards our planned 27 new warehouse store openings in fiscal 2021, representing 20.3% growth from fiscal 2020. Our strong results in fiscal 2021 reinforce our belief that the new store classes of 2020 and 2021 will likely represent the strongest first-year sales and profit classes in our history.”
Please see “Comparable Store Sales” below for information on how the Company calculates its comparable store sales growth.
For the Thirteen Weeks Ended July 1, 2021
– Net sales increased 86.0% to $860.1 million from $462.4 million in the second quarter of fiscal 2020.
– Comparable store sales increased 68.4%.
– We opened seven new warehouse-format stores during the second quarter of fiscal 2021, ending the quarter with 147 warehouse-format stores and two design studios.
– Operating income increased 367.3% to $98.6 million from $21.1 million in the second quarter of fiscal 2020. Operating margin increased 690 basis points to 11.5%.
– Net income increased 159.1% to $82.9 million compared to $32.0 million in the second quarter of fiscal 2020. Diluted EPS was $0.77 compared to $0.30 in the second quarter of fiscal 2020, an increase of 156.7%.
– Adjusted net income* increased 485.5% to $78.3 million compared to $13.4 million in the second quarter of fiscal 2020. Adjusted diluted EPS* was $0.73 compared to $0.13 in the second quarter of fiscal 2020, an increase of 461.5%.
– Adjusted EBITDA* increased 200.8% to $137.0 million compared to $45.6 million in the second quarter of fiscal 2020.
For the Twenty-six Weeks Ended July 1, 2021
– Net sales increased 61.5% to $1,642.6 million from $1,017.3 million in the same period of fiscal 2020.
– Comparable store sales increased 48.1%.
– We opened fourteen new stores during the twenty-six weeks ended July 1, 2021.
– Operating income increased 187.0% to $194.5 million from $67.8 million in the same period of fiscal 2020. Operating margin increased 510 basis points to 11.8%.
– Net income increased 129.8% to $158.7 million compared to $69.1 million in the same period of fiscal 2020. Diluted EPS was $1.48 compared to $0.65 in the same period of fiscal 2020, an increase of 127.7%.
– Adjusted net income* increased 203.9% to $151.0 million compared to $49.7 million in the same period of fiscal 2020. Adjusted diluted EPS* was $1.41 compared to $0.47 in the same period of fiscal 2020, an increase of 200.0%.
– Adjusted EBITDA* increased 122.5% to $264.1 million compared to $118.7 million in the same period of fiscal 2020.
On June 4, 2021, we completed our acquisition of Spartan Surfaces, Inc. (“Spartan”), a commercial specialty hard-surface flooring distribution company. Spartan’s results of operations, financial position, and cash flows have been consolidated in the Company’s consolidated financial statements since the date of acquisition. Net sales and net earnings for fiscal 2021 attributable to Spartan since the completion of the acquisition were immaterial. Results of operations would not be materially different as a result of the acquisition and therefore pro forma information is not presented.
*Non-GAAP financial measures. Please see “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below for more information.
The COVID-19 Pandemic Impact on Floor & Decor’s Business
The COVID-19 pandemic had a material negative impact on our financial results during the first half of fiscal 2020. While our financial results during the second half of fiscal 2020 and the first half of fiscal 2021 have been strong, the full impact that the pandemic could have on our business remains highly uncertain.
We continue to monitor the impact of the COVID-19 pandemic on our associates, customers, business partners, and supply chain. However, given the evolving nature of the pandemic and uncertainty regarding its potential severity and duration, the full financial impact of the COVID-19 pandemic on our business cannot be reasonably estimated at this time. The extent of the impact of the COVID-19 pandemic on our business and financial results will depend on future developments, including the duration of the COVID-19 pandemic, the success of vaccination programs, the spread of COVID-19 within the markets in which we operate, the impact to countries from which we source inventory, fixed assets, and other supplies, the effect of the pandemic on consumer confidence and spending, and actions taken by government entities in response to the pandemic, all of which are highly uncertain. Due to the continued uncertainty regarding the ongoing impacts of the COVID-19 pandemic and the associated complexity of forecasting, we are updating select annual guidance for new store openings and certain other financial measures that we believe we can reasonably forecast.
Updated Outlook for the Fiscal Year Ending December 30, 2021:
– Depreciation and amortization expense of approximately $115 million to $117 million
– Interest expense, net of approximately $5 million
– Tax rate of approximately 24%
– Diluted weighted average shares outstanding of approximately 107 million shares
– Open 27 new warehouse-format stores and two small design studios
– Capital expenditures in the range of approximately $455 million to $475 million
Comparable Store Sales
Comparable store sales refer to period-over-period comparisons of our net sales among the comparable store base and are based on when the customer obtains control of the product, which is typically at the time of sale. A store is included in the comparable store sales calculation on the first day of the thirteenth full fiscal month following a store’s opening, which is when we believe comparability has been achieved. Changes in our comparable store sales between two periods are based on net sales for stores that were in operation during both of the two periods. Any change in the square footage of an existing comparable store, including for remodels and relocations within the same primary trade area of the existing store being relocated, does not eliminate that store from inclusion in the calculation of comparable store sales. Stores that are closed for a full fiscal month or longer are excluded from the comparable store sales calculation for each full fiscal month that they are closed. Since our e-commerce, regional account manager, and design studio sales are fulfilled by individual stores, they are included in comparable store sales only to the extent the fulfilling store meets the above mentioned store criteria. Sales through our Spartan subsidiary do not involve our stores and are therefore excluded from the comparable store sales calculation.
For the full second quarter results, click here.
About Floor & Decor Holdings, Inc.
Floor & Decor is a multi-channel specialty retailer and commercial flooring distributor operating 147 warehouse-format stores and two design studios across 33 states at the end of the second quarter of fiscal 2021. The Company offers a broad assortment of in-stock hard-surface flooring, including tile, wood, laminate, vinyl, and natural stone along with decorative and installation accessories, at everyday low prices. The Company was founded in 2000 and is headquartered in Atlanta, Georgia.
Jennifer Greenberg – firstname.lastname@example.org – (678) 505-3906
Source: Floor & Decor Holdings, Inc.