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On Friday, Telsey Advisory Group adjusted its outlook on Floor & Decor Holdings, Inc. (NYSE:FND), reducing the 12-month price target from $115.00 to $100.00. Despite this change, the firm maintained its Outperform rating on the company’s stock. The revision comes in response to the company’s lowered guidance, which Telsey acknowledged as slightly disappointing but did not alter their positive long-term view on Floor & Decor’s market position and growth potential.
Telsey’s analysis highlights several key growth drivers for Floor & Decor, including a significant expansion plan with a long-term goal of operating at least 500 stores, up from the current 254 locations reported in the first quarter of 2025. The firm also points to the company’s wide range of innovative products, expansion of high-margin offerings, new regional commercial managers to boost new home sales, and increased penetration in the commercial flooring market through Spartan Surface.
The decision to lower the price target reflects a change in the applied P/E multiple, which has been adjusted to approximately 40 times from the previous 43 times. This adjustment is based on Telsey’s revised 2026 earnings per share (EPS) estimate, which is now set at $2.45, down from the earlier estimate of $2.68. Telsey attributed the lower valuation multiple to recent market volatility, particularly concerns related to tariffs, which have influenced trading conditions.
Despite the reduced price target, Telsey’s outlook for Floor & Decor remains optimistic. The firm emphasizes the company’s disruptive presence in the flooring industry and its opportunities to enhance sales and profitability moving forward. Telsey’s continued Outperform rating indicates their confidence in the company’s ability to navigate the current market challenges and capitalize on its growth strategies.
In other recent news, Floor & Decor Holdings Inc. reported its first-quarter 2025 earnings, with results meeting analyst expectations. The company announced an earnings per share (EPS) of $0.45, matching forecasts, and revenue of $1.161 billion, reflecting a 5.8% year-over-year increase. Despite economic challenges, the company experienced a 100 basis point improvement in gross margin, reaching 43.8%. Analysts noted the stable performance, with the revenue and EPS aligning perfectly with projections, indicating investor confidence. The company also discussed its strategic focus on mitigating tariff impacts and diversifying its sourcing strategy, aiming to reduce reliance on Chinese products. Floor & Decor plans to open 20 new warehouse format stores in 2025, adjusting from an initial plan of 25 due to potential economic slowdowns. The company’s executives emphasized their strategic flexibility in navigating the volatile economic environment and maintaining gross margins.
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