Floor & Decor (NYSE:FND) reported second-quarter fiscal 2026 adjusted diluted earnings per share of $0.58, unchanged from a year earlier, as the company managed expenses and generated free cash flow despite continued softness in large discretionary flooring projects.
Total sales increased 3% year over year to $1.25 billion, while comparable-store sales declined 2.1%. The comparable-sales decline improved from a 3.7% decrease in the first quarter and narrowed through the second quarter, with comps down 5.1% in April, 1.3% in May and 0.3% in June.
Professional Sales and Category Trends
Sales to professional customers rose about 4% from the prior-year period and accounted for approximately 55% of total sales. Comparable transactions declined 2.9%, improving from a 5.5% decline in the first quarter, while average ticket increased 0.8% year over year.
Paulsen said the company’s net promoter scores remained high and helped support improved customer conversion. He also cited sequential improvement in comparable square-footage sales.
Installation materials, tile and wood outperformed the company’s overall comparable-sales result. Installation materials benefited from the company’s efforts to expand its share of wallet with professional customers and advance its supply-house strategy. Tile sales were supported by collections including Vetta Elements, while wood benefited from share gains in engineered and unfinished wood, acoustic wall panels and bulk-out strategies.
Comparable sales and comparable square-footage sales in vinyl improved sequentially, aided by merchandising, pricing and value-oriented initiatives. However, Paulsen said slowing vinyl demand and excess industry supply continue to pressure the category and could persist into 2027.
“The category’s been devalued,” Paulsen said during the question-and-answer session, describing a market in which products previously positioned as mid-tier offerings are being priced more like entry-level products. Floor & Decor has responded with targeted pricing, opportunity buys and changes to its everyday assortment, he said.
The company launched NatureMatch in June, a private-label collection spanning nearly 100 SKUs across porcelain tile, luxury vinyl plank and waterproof laminate. Paulsen said the collection is intended to offer the appearance of natural wood and stone at a more accessible price point.
Store Growth and Digital Investments
Floor & Decor opened 11 warehouse-format stores during the first half of fiscal 2026, including five in the second quarter. The second-quarter openings were in Syracuse, New York; Portland, Oregon; Mount Vernon, New York; Houston, Texas; and Schererville, Indiana.
Approximately 55% of planned 2026 locations have now opened, compared with 35% by the same point last year. The company expects the balance of its 2026 openings to be weighted toward the fourth quarter. The 2026 store class is expected to average roughly 55,000 square feet, a smaller format than the company’s legacy footprint that Floor & Decor said enables entry into higher-density markets.
Online sales represented 20.3% of total sales in the second quarter, up from 18.6% a year earlier and 110 basis points from the first quarter. The company is undertaking an 18- to 24-month transformation intended to modernize digital capabilities and connect its online and store experiences more closely.
For professional customers, the company plans to launch a new pro app next year that will combine purchasing, loyalty rewards, pricing and project-management functions. Floor & Decor also expanded its regional commercial account manager team to 80 associates and said its focus is now shifting toward productivity, training, analytics and scalable processes.
Tariff Refunds, Margins and Capital Structure
Chief Financial Officer Bryan Langley said second-quarter results included a $45.2 million net pre-tax benefit related to IEEPA tariff refunds, as well as a $1.3 million pre-tax loss related to debt extinguishment from refinancing the company’s credit facilities. Together, the items created a net after-tax benefit of $32.9 million, or $0.31 per diluted share.
GAAP diluted EPS was $0.89, while adjusted diluted EPS was $0.58. The company filed for $87 million in total IEEPA tariff refunds and has received substantially all of the cash, Langley said.
Floor & Decor recognized a $56 million one-time gross-profit benefit from refunds related to inventory already sold. It also recorded a $28 million inventory reduction for goods still on hand; approximately $6 million of that benefit was recognized during the second quarter, with most of the remainder expected to be recognized in the second half as inventory is sold.
Adjusted gross margin declined 20 basis points year over year to 43.7%. Adjusted EBITDA rose 1.2% to $152 million, while adjusted EBITDA margin declined to 12.2% from 12.4% a year earlier.
The company refinanced its credit facilities during the quarter, entering a $200 million term loan maturing in June 2033 and an $800 million asset-based lending facility maturing in June 2031. Floor & Decor ended the quarter with $942.4 million in unrestricted liquidity, including $320.6 million in cash and cash equivalents.
For the first 26 weeks of fiscal 2026, cash provided by operating activities was $278.4 million, compared with $155.3 million in the prior-year period. Floor & Decor repurchased 1.3 million shares during the second quarter and had $334.3 million remaining under its $400 million share-repurchase authorization.
Updated 2026 Outlook
Floor & Decor raised its fiscal 2026 earnings outlook following its better-than-expected second quarter and the expected effect of share repurchases. Its guidance assumes that consumers remain cautious amid subdued existing-home sales, affordability constraints, inflation and potential tariff changes.
- Sales of $4.77 billion to $4.99 billion, representing growth of 1.8% to 6.5% from fiscal 2025.
- Comparable-store sales ranging from flat to down 4%.
- Adjusted gross margin of approximately 43.6% to 43.8%.
- Adjusted EBITDA of approximately $550 million to $585 million.
- Adjusted diluted EPS of approximately $1.88 to $2.13.
- Capital expenditures of approximately $240 million to $275 million.
The fiscal year includes a 53rd week in the fourth quarter, which the company expects to add approximately $65 million in sales, $11 million in adjusted EBITDA and $0.08 in adjusted diluted EPS.
Comparable-store sales were down 2.2% quarter to date in the third quarter, although Paulsen said trends improved in late July and early August. Management said it remains confident in reaching the midpoint of its sales guidance if the macroeconomic environment remains consistent with current conditions.
About Floor & Decor (NYSE:FND)
Founded in 2000 and headquartered in Atlanta, Floor & Decor Holdings Inc is a specialty retailer focused on hard surface flooring and related accessories in the United States. The company serves both professional installers and do-it-yourself customers through a growing network of warehouse-format stores and a comprehensive e-commerce platform.
Floor & Decor’s product offering spans ceramic and porcelain tile, engineered and solid hardwood, laminate, luxury vinyl plank and tile, natural stone and a full suite of installation materials such as grout, mortars and underlayment.
