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Floor & Decor (FND) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Consumer Discretionary· Jul 30, 2026

Source: earnings call transcript

Executive summary

Floor & Decor Q2 FY26 — Strong EPS and Market Share Gains Amidst Choppy Demand

Floor & Decor delivered flat adjusted EPS in Q2 FY26, demonstrating resilience through disciplined expense management and strategic initiatives despite a 2.1% comparable store sales decline. The company saw sequential improvement in sales trends, driven by strong Pro performance and digital engagement, and is leveraging tariff refunds to offset inflation and selectively invest in pricing. Management remains focused on market share acceleration amidst a challenging and uncertain macroeconomic environment.

Highlights

5

  • Adjusted diluted EPS of $0.58, unchanged year-over-year despite comparable store sales decline.

  • Total sales increased 3% to $1,250.3 million.

  • Sales to Pros grew approximately 4% and accounted for about 55% of total sales.

  • Comparable store sales improved sequentially, declining 2.1% in Q2 compared to 3.7% in Q1, with June declining only 0.3%.

  • Generated strong free cash flow and repurchased $65.7 million in common stock.

Concerns

5

  • Comparable store sales declined 2.1% due to continued softness in large discretionary flooring projects.

  • Demand softened around the 4th of July holiday period, with Q3-to-date comparable store sales declining 2.2%.

  • Laminate and vinyl flooring category continues to face pressure from slowing demand and excess industry supply, expected to continue into 2027.

  • SG&A as a percentage of sales deleveraged 120 basis points to 38.3%.

  • Housing market remains constrained by subdued existing home sales activity, near historically low levels of approximately 4 million annualized units.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Sales
$4.770 billion to $4.990 billion
high materiality
High
Full-year 2026 Comparable Store Sales
flat to down 4%
high materiality
High
Full-year 2026 Comp Average Ticket
flat to up low single digits
medium materiality
High
Full-year 2026 Comp Transactions
down low to mid-single digits
medium materiality
High
Full-year 2026 Adjusted Gross Margin
approximately 43.6% to 43.8%
high materiality
High
Full-year 2026 SG&A as a percentage of sales
approximately 38%
medium materiality
High
Full-year 2026 Interest Income/Expense Net
approximately 0
low materiality
High
Full-year 2026 Tax Rate
approximately 23%
low materiality
High
Full-year 2026 Depreciation and Amortization
approximately $250 million
low materiality
High
Full-year 2026 Adjusted EBITDA
approximately $550 million to $585 million
high materiality
High
Full-year 2026 Diluted Earnings Per Share
approximately $2.20 to $2.45
high materiality
High
Full-year 2026 Adjusted Diluted Earnings Per Share
approximately $1.88 to $2.13
high materiality
High
Full-year 2026 Diluted Weighted Average Shares Outstanding
approximately 107 million shares
low materiality
High
Full-year 2026 Capital Expenditure
approximately $240 million to $275 million
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Spartan Surfaces
The second quarter represented an early inflection point for the business with results improving sequentially from the first quarter and momentum building throughout the period. Driven by strong shipment activity from the conversion of backlog. June was one of the strongest months for written sales in the company's history. Customer backlogs are beginning to recover from the lows experienced in the second half of 2025. Average quoted project value increased, leading to a very strong project backlog at the end of the second quarter.
increased 2% year-over-year2%——

FND operating KPIs by quarter

FND operating KPIs stated on its earnings calls, by fiscal quarter
KPI Mar 2026 Q1 FY26This call Jun 2026 Q2 FY26Change vs prior quarter
Employees
14K+ I want to begin by thanking our more than 14,000 associates across the company. Source: earnings call transcript
~14K I want to thank our approximately 14,000 associates for their commitment and hard work throughout the quarter. Source: earnings call transcript
—
New stores opened
6 In the first quarter, we opened 6 new warehouse-format stores compared with 4 stores last year, including Staten Island, New York; Dallas, Texas; Detroit, Michigan; Pittsburgh, Pennsylvania; Vacaville, California; and Fayetteville, North Carolina. Source: earnings call transcript
5 Through the first half of fiscal 2026, we opened 11 new warehouse format stores, including 5 in the second quarter. Source: earnings call transcript
-16.7%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

ProductTypeDetails
NatureMatchlaunch

Deals & partnerships

Not applicable (internal refinancing) Refinancing of credit facilities to strengthen balance sheet and enhance financial flexibility. New $200M term loan facility; new $800M ABL Facility Term loan maturing June 2033; ABL maturing June 2031

Entered into a new $200 million term loan facility maturing June 2033 and used proceeds to repay remaining $197.1 million outstanding under prior facility (scheduled to mature February 2027). Entered into a new $800 million ABL Facility maturing June 2031, replacing current facility (scheduled to mature August 2027).

Risks & headwinds

Continued softness in large discretionary flooring projects Remainder of fiscal 2026

Comparable store sales declined 2.1% in Q2 FY26. Q3-to-date comparable store sales declined 2.2%.

Mitigation:Focus on factors within control: compelling value, customer experience, merchandising, operational initiatives, disciplined expense management.

Pressure in laminate and vinyl flooring category Expected to continue into 2027

Category experiencing downward pressure due to excess supply in the market.

Mitigation:Merchandising, pricing, and value-focused initiatives; aggressive opportunity buys, new SKUs.

Housing market constraints Remainder of fiscal 2026

Subdued existing home sales activity, near historically low levels of approximately 4 million annualized units.

Mitigation:Outlook assumes cautious consumers, focus on market share gains through initiatives.

Potential changes in tariffs Ongoing

Not quantified for future impact, but current IEEPA tariff refunds provided $45.2 million net pretax benefit.

Mitigation:Leveraging tariff refunds to offset inflationary impacts, selectively invest in price.

Increased SG&A as a percentage of sales Q1 and Q4 FY26 expected to be most pressured from new stores

SG&A deleveraged 120 basis points to 38.3% in Q2 FY26.

Mitigation:Ongoing focus on expense management and productivity initiatives.

What to watch in Q3 FY26

Comparable Store Sales Trend

Next quarter (Q3 FY26 results)
Current Q3-to-date -2.2%, with improvement late July/early August
Target Continued sequential improvement, moving towards midpoint of flat to -4% full-year guidance

Why it matters

Indicates whether the demand environment is stabilizing and if the company's initiatives are effectively driving market share gains.

As a result, third quarter-to-date comparable store sales declined 2.2%. Encouragingly, sales trends improved in late fiscal July and early fiscal August.

Find out whether FND delivers this. Inve re-checks your case every morning.

Q&A highlights

What is the full-year tariff refund benefit, and how are the funds being deployed to impact Q2/Q3 performance and the June improvement?

The company filed for $87M in IEEPA tariff refunds, receiving substantially all of it. $56M was a one-time gross profit benefit for previously sold inventory, and $28M was a reduction to inventory for product on hand, with $6M of that flowing through in Q2. Funds are used to offset inflation, selectively invest in pricing for market share, and for capital allocation (stores, growth, share repurchase).

“We'll continue to use those funds to offset the inflationary impacts from both oil and supply chain. Number two, where it makes sense and making sense means where we see elasticity, we'll selectively invest in price to drive market share gains.”

asked by Seth Sigman · answered by Bradley Paulsen

2 min read 7 chapters

Detailed narrative

Q2 Performance and Sequential Improvement

Floor & Decor reported Q2 FY26 adjusted diluted EPS of $0.58, flat year-over-year, on total sales of $1,250.3 million, up 3%. Comparable store sales declined 2.1%, an improvement from the 3.7% decline in Q1, with trends improving sequentially from -5.1% in April to -0.3% in June. This improvement was driven by high Net Promoter Scores, better customer conversion, and improved comparable transactions.

Pro Customer Outperformance

Sales to Pros continued to outperform the company, growing approximately 4% year-over-year and accounting for about 55% of total sales. The company's focus on Pro initiatives, including installation materials, tile, and wood categories, contributed to this strength. The expansion of Regional Commercial Account Managers (RAMs) to 80 associates further supports Pro engagement, with a shift in focus to increasing their productivity.

Tariff Refunds and Strategic Allocation

The company recognized a $45.2 million net pretax benefit from IEEPA tariff refunds, including a $56 million one-time gross profit benefit for previously sold inventory and a $28 million reduction to inventory for product still on hand. These funds are being strategically deployed to offset inflationary impacts from oil and supply chain, selectively invest in pricing for market share gains, and support capital allocation priorities like new stores and growth initiatives.

Omnichannel and Digital Transformation

Online sales penetration reached 20.3% of total sales, up from 18.6% in the prior year and 110 basis points from Q1. The company is undertaking a comprehensive 18-24 month transformation to enhance digital capabilities and create a seamless omnichannel experience. This includes the planned launch of a new Pro app next year, designed to integrate purchasing, loyalty, rewards, pricing, and project management capabilities.

Laminate and Vinyl Category Headwinds

The laminate and vinyl flooring category, the company's second-largest, continues to experience downward pressure due to slowing demand and excess industry supply, which is expected to persist into 2027. Despite this, the company saw sequential improvement in the category through aggressive pricing, opportunity buys, and new SKUs, including the launch of the NatureMatch private label collection.

New Store Expansion and Format

Floor & Decor opened 11 new warehouse format stores in H1 FY26, including 5 in Q2, representing 55% of the planned 2026 locations. The new stores average approximately 55,000 square feet, a smaller format designed to enter higher-density markets without sacrificing sales productivity. The balance of 2026 openings is weighted towards Q4.

Spartan Surfaces Momentum

Spartan Surfaces, the commercial business, showed an early inflection point in Q2 with sales increasing 2% year-over-year. This growth was driven by strong shipment activity from the conversion of backlog. June saw strong written sales, and a robust project backlog at quarter-end provides visibility for continued improvement in the second half of the year, despite mixed commercial end markets.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.