Floor & Decor: FY2022 Results Review, Valuation Update

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Yellow Browser

Written by DEPKES.ORG March 2023

Floor & Decor (NYSE:FND) reported solid FY2022 results. Investors with shorter holding horizons might be disappointed with the store counts guided down.

1. Floor & Decor's primer

Floor & Decor is a hard-flooring warehouse retailer with a 9% market share operating 191 stores across the US. It has a compelling expansion plan that destines to win more market share. 

2. Solid FY2022 results

Revenue came in at $4.2B, up 24% YoY, and operating income was nearly $400M, up 17% YoY. Growth was driven by both solid store expansion and growing comparable sales.

3. Expansion plans are slower than expected

Management plan to open new stores in the range of 32 to 35 in fiscal 2023 and to be primarily in existing markets and weighted towards the year's second half.

4  Valuation

With more information on the FY2023 stores number, same-store sales, and better-than-expected sales performance, I revise my valuation and see FND as just as attractive as before.

5. Sleep Well Investments Scorecard

Inspired by Nassim Taleb's anti-fragile concept and studies from various reputable investors, it divides investment criteria into three groups in order of importance: Business quality, Competitive position and risks, Valuation.

5. Boating crash

Shortly after 2:20 a.m., a distraught Connor Cook called 911. "We're in a boat crash on Archer's Creek … There's six of us and one is missing."