Research

Doesn’t Sound Like This Is The Floor - 8/13/2025

The Floor & Décor business model is likely of the best in the retail industry, and we would even go so far to generally agree with management’s statement this quarter that “we do like to think ourselves kind of Costco”. However, there were many other statements that we found both perplexing and inconsistent with history. We dug into many of those statements and came away much more skeptical of the bullish narrative than we have ever been before. Starting with their commentary towards mature store productivity, which has vast implications towards the phase of the cycle we are in (peak to trough) as well as the future benefit we should expect from the new store maturity curve. The current narrative towards product pricing has many question marks that could indicate trends worsen as pre-tariff inventory turns, and the company is forced to raise prices like the rest of the industry. Lastly, we provide commentary from an independent seller/installer that casts doubt on the success of industry price increases to date and could be an early warning sign towards consumer elasticity issues in the back half of the year. Our consensus earnings analysis leads us to believe the reasonable range of EPS outcomes this year is $1.70 to $1.85.