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."