- Full-Year Sales Growth Revenues rose 5.1% to $4.684 billion, despite a 1.8% decline in comparable store sales.
- Gross Profit Expansion Gross profit increased by 2% to $115.7 million, with a 30 basis point margin improvement to 43.6%.
- 2026 Store Expansion Plans to open 20 new warehouse-format stores, aiming to reduce cannibalization and boost new store productivity.
- 2026 Earnings Guidance Sales projected between $4.88 billion and $5.03 billion, with adjusted EBITDA expected to reach $560 million–$590 million.
- SG&A Efficiency SG&A expenses grew 6.1% to $1.7738 billion but deleveraged by 30 basis points to 37.8% of sales for the full year.
Financial Performance
The company's financial performance was marked by a 2% increase in gross profit to $115.7 million. The effective tax rate increased to 24.0% in Q4 and 21.8% in FY, primarily due to a decrease in excess tax benefits related to stock-based compensation awards. The company's net cash provided by operating activities was $381.8 million in FY, and inventory totaled $1.1 billion as of December 25, 2025.
Guidance and Outlook
For FY 2026, the company expects sales to be in the range of $4.880 billion to $5.03 billion, with comps expected to be down 2% to up 1%. Gross margin is expected to be approximately 43.5% to 43.8%, with SG&A as a percentage of sales estimated to be approximately 37.7% to 37.8%. Adjusted EBITDA is expected to be approximately $560 million to $590 million, and diluted earnings per share is estimated to be approximately $1.98 to $2.18.
Valuation
With a P/E Ratio of 35.63 and an EV/EBITDA of 21.27, the market appears to be pricing in significant growth expectations for Floor & Decor. The company's ROE of 8.99% and ROIC of 7.17% suggest a relatively healthy return on equity and invested capital. However, the Net Debt / EBITDA ratio of 6.65 indicates a significant debt burden.
Operational Highlights
Brad Paulsen, the company's CEO, highlighted the importance of improving new store performance, digital experience, and supply chain productivity. The company is focused on getting the core of its business growing again and is committed to delivering meaningful improvement in these areas. The company saw a broad-based improvement in January, with all categories showing year-over-year improvement except for laminate and vinyl.
Cost Management
The company has taken out $67 million in comp store expenses over the last 3 years, with $24.8 million of that coming in the past year. Bryan Langley mentioned that the company has levers in place to optimize the business, with 70% of its fleet able to flex with transactions and only 30% on minimum hours. The company will continue to reduce G&A and start to annualize the benefits from recent moves.