#Floor and decor hours free

In addition, the company sells decorative accessories and flooring installation accessories, such as underlayment, grout, and tools. The stores are large, averaging 76,000 square feet, and unique, offering an unparalleled selection of tile, wood, laminate, and natural stone flooring.

#Floor and decor hours free

With still plenty of store growth runway, a 4% free cash flow yield on 2026 FCF numbers gives a $22.5B market capitalization, compared to $9.7B today, an 18% IRR for 5 years.įND operates 133 warehouse-format stores across 30 states.

In the next five years, I believe Floor and Decor will be a company generating $9B in net sales with 10% free cash flow margins. In the next decade, the company should be able to 4x store count, grow same store sales (SSS) by 10% per year, and significantly increase EBITDA margins as its stores mature and it spreads its expenses across a larger store base. These structural characteristics will allow FND to continue to take market share from both big box home improvement retailers (Home Depot, Lowe’s) and small independent flooring companies for years to come. Operating on the Everyday Low Price (EDLP) model, FND is razor-focused on providing a superior customer experience via better selection, lower prices, larger in-stock inventory, and better service than its competitors. Their unique supply chain, impressive scale, and relentless customer focus allow them to be the hardwood flooring industry’s low-price leader, inventory leader, and sourcing leader. The company is a category-killer with a differentiated business model, talented management team, and long reinvestment runway.įounded in 2000, FND occupies a single digit percentage (8%) of the highly fragmented and growing $24B hardwood flooring industry. One exceptionally high-quality company I like in this space, due to its long growth runway, increasing market dominance, and significant scale advantages, is Floor and Decor (FND).įloor and Decor is a niche retailer of hard-surface flooring and related accessories. Additionally, the installed base of homes is always growing – or at the very least, not shrinking – which provides a favorable backdrop for companies specializing in home improvement niches. One physical retail sector that has been especially resilient to the threat of e-commerce has been the home improvement industry, as projects tend to require technical knowledge, materials are bulky and difficult to ship, and customers prefer to see and touch the products in real life before making a purchase decision. Nevertheless, there is a small subset of physical retailers with structural characteristics that allow them to thrive in an era otherwise dominated by e-commerce.

In the past five years, however, Amazon and e-commerce has disrupted the physical retailing business and driven countless brick-and-mortar retailers out of business. When scalable physical retail concepts work well, the returns can be remarkable given the high ROIC per store, the ability to use vendor payables to finance working capital, and the inherent leverage that occurs when you spread supply chain and SG&A costs over a larger store base.