Welcome to Floor and Decor's fiscal 2025 fourth quarter and full year earnings conference call. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP financial measure can be found in the earnings press release, which is available on our investor relations website at ir.flooranddecor.com. During today's conference call, Brad, Bryan, and I will be walking through the key highlights from the quarter and the full year. Then Bryan will share how we're approaching fiscal 2026 and the priorities that are shaping our outlook.
We're pleased to deliver fiscal 2025 fourth quarter diluted earnings per share of $0.36, which was in line with the midpoint of our earnings guidance provided on our third quarter earnings conference call. For the full fiscal year, diluted earnings per share was $1.92, compared with $1.90 in the prior year. For the full fiscal year, sales grew 5.1% to $4.684 billion, and comparable store sales declined 1.8%, which was near the low end of our expectations. We are proud to have achieved record Net Promoter Scores in 2025, which underscore and validate our associates' efforts.
To further strengthen our supply house value proposition, we are piloting enhancements to PRO pricing, supported by an improved delivery offering for this customer segment. Together, these and other initiatives build long-term capabilities that are expected to significantly increase switching costs and deepen our strategic advantage with PRO customers. Maintaining strong gross margin performance will continue to be a priority in fiscal 2026. We are prepared to take modest retail pricing actions to help offset the expected impact of tariffs and to manage both margin rate and dollars.
| Metric | Period | Current guidance |
|---|---|---|
| New warehouse format store openings | FY2026 | 20 stores (unchanged) |
| Comparable store sales cadence | FY2026 | second half better than first half, Q3 the high mark, sequential improvement each quarter at low and high ends |
| Average ticket comp | FY2026 | up low single digits, consistent across quarters |
| Gross margin rate cadence | FY2026 | first half to outperform second half; modest tariff-driven cost increases building through first half |
| Capital spending per store (2026 class) | FY2026 | expected to benefit from further cost reductions and more second-use sites (lower) |
| Metric | YoY | Note |
|---|---|---|
| Full year diluted EPS | +$0.02 to $1.92 | Earnings growth despite comp pressure, against a prior year that included a $0.05 litigation settlement benefit. |
| Full year sales | +5.1% to $4.684B | 20 new store openings offsetting a 1.8% comparable store sales decline. |
| Q4 comparable store sales | -4.8% | Soft existing home sales, smaller projects, and lapping the ~110 bps hurricane benefit. |
| Full year gross margin | +30 bps to 43.6% | Favorable product margin from lower supply chain costs, partially offset by ~70 bps of distribution center costs. |
| Q4 SG&A | +4.0% to $439.2M (deleverage ~80 bps) | Primarily the eight new stores opened in the quarter; comparable store SG&A decreased $14.2 million. |
| Stores greater than five years old | approximately $21M in sales (from ~$22M) | Soft demand environment, though still generating about 23% EBITDA. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Pro loyalty and pricing | EDLP-only model | Designing Pro Loyalty 2.0 for early 2027 relaunch; piloting Pro pricing enhancements to increase switching costs | New initiative |
| Commercial / RAM expansion | Stable RAM count | 67 regional commercial account managers at year-end; planned phased expansion into metros starting with New York City and Dallas | Expanding |
| New store first-year productivity | Recent classes below target | 2026 class weighted to tier-one/tier-two markets and first-half openings (>50% vs 35% prior year) for stronger first-year volume | Improving |
| Cannibalization | Higher with 30-32 store openings | Expected to decrease in 2026 with fewer (20) openings | Improving |
| Tariffs | Minimal 2025 impact | Modest cost increases assumed for 2026, building through first half and fully embedded in second half | Building |
| Expense presentation | Separate selling/store and G&A lines | Consolidated into a single SG&A line to conform to peers | Changed |