Floor & Decor (FND) is up 10% after the company reported a blow-out quarter and raised guidance for the third time since its IPO in April.
Floor & Decor is an Atlanta, Georgia-based multi-channel specialty retailer of hard surface flooring and related accessories, offering a broad in-stock assortment of tile, wood, laminate and natural stone flooring along with decorative and installation accessories. The company has 83 warehouses across the US and plans to open up 14 this year.
Third quarter adjusted EPS grew 42% to $0.17 versus the $0.12-0.14 guidance, comparable store sales rose a massive 13.5% versus +9-11% guidance and net sales were up 27% to $344 million.
Chief Executive Officer Tom Taylor said: "Our third quarter comparable same store sales continued to perform above our expectations at 13.5% despite experiencing over 150 days of full or partial store closures as a result of hurricanes Harvey and Irma. Prior to these hurricanes, our comparable same store sales were 15.9% through the first two months of the quarter, but as a result of the store closures our comparable same store sales slowed to 9.9% for the month of September."
So the quarter would've been even stronger if it wasn't for the natural disasters in the South in September. However, that should serve as a tailwind going forward as repairs are needed across Florida and in the Houston area. The strong housing market is another huge tailwind for the company.
F&D also raised guidance for the full year across the board and guided Q4 above consensus. F&D raised adjusted EPS guidance to $0.64-0.65 from $0.57-0.60. Even more impressive, the company raised comparable store sales guidance to +14.5-15.0% from 10-12% and guided for a whopping 17-19% fourth quarter comp.
The stock is not cheap, currently trading at ~60x adjusted earnings estimates or ~50x next year's earnings estimates with a ~$4.2 billion market cap. The tiny ~17 million share float could be a headwind when supply of the stock increases in the future. The company announced a secondary offering from early investors and management in July, which priced at $40/share.