Floor and Décor (FND) shares have reversed into positive territory after the company reported strong fourth quarter results that were initially met with selling pressure due to soft guidance for fiscal 2018.
Fourth quarter net sales rose 40% to $390 million and adjusted net income rose to $0.19 per share from $0.11 last year. In January, the company preannounced comparable store sales up 24% versus 17-19% guidance. The company raised fourth quarter EPS guidance to $0.17-0.78 from $0.14-0.16 and sales guidance to $387-389 million from $362-370 million.
The company said that the very impressive 24.4% comparable sales growth included an estimated eight percentage point benefit from post-hurricane demand in Houston.
F&D called for Q1 earnings and sales above Wall Street estimates, with comps up 14-15% versus a 12.8% gain in the first quarter of last year.
The company's guidance for fiscal 2018 was a little lower than expectations, calling for EPS of $0.91-1.00 on sales of $1.69-1.73 billion, up 23%. Comparable store sales guidance of 8.5-11.5% was mostly in-line with estimates.
A stock that trades at 45x earnings doesn't usually respond well to soft guidance, but the stock has rebounded intraday as the outlook is likely being seen as conservative.
Chief executive Tom Taylor: "Our investments in our people, innovative products, a connected customer experience, visual inspiration in-store and online, along with our unique large format stores and in-stock inventory model, continue to resonate with both consumers and professional customers. Fiscal 2017 marks our ninth consecutive year of double-digit comparable store sales growth, averaging 15% per year... Given the strong backdrop and the fundamental strength of our business, we are going to use the benefits from tax reform to accelerate our strategic investments, which we believe will improve our competitive advantages and drive our planned net income growth for 2018 and beyond."