Earnings call transcript: Floor & Decor Q2 2025 beats EPS forecast

Floor & Decor Holdings Inc. (FND) reported its second-quarter results for fiscal 2025, surpassing earnings per share (EPS) expectations with a reported $0.58, compared to the forecasted $0.56. Revenue came in line with expectations at $1.21 billion. Following the earnings release, the company’s stock saw a slight decline of 2.17% in regular trading but rose by 1.26% in after-hours trading, reflecting mixed investor sentiment.

Key Takeaways

• Floor & Decor’s EPS exceeded expectations by 3.57%.
• Revenue met forecasts at $1.21 billion, marking a 7.1% increase year-over-year.
• Comparable store sales rose for the first time since 2022, up 0.4%.
• The company opened three new stores and plans further expansion.
• Stock showed volatility, with a post-earnings dip followed by an after-hours recovery.

Company Performance

Floor & Decor demonstrated robust performance in Q2 2025, with a notable increase in EPS and revenue compared to the previous year. The company’s focus on expanding its product range and store count contributed to these positive results. Despite challenges in the housing market, Floor & Decor’s strategic initiatives, such as enhancing its product assortment and expanding its store network, have positioned it well against competitors.

Financial Highlights

• Revenue: $1.21 billion, up 7.1% year-over-year
• Earnings per share: $0.58, up from $0.52 in the previous year
• Gross profit increased by 8.5%, with a 60 basis points improvement in gross margin
• Adjusted EBITDA reached $150.2 million, a 9.7% increase from last year

Earnings vs. Forecast

Floor & Decor’s actual EPS of $0.58 surpassed the forecast of $0.56, marking a 3.57% positive surprise. This performance aligns with the company’s historical trend of exceeding earnings expectations, reflecting effective cost management and strategic growth initiatives.

Market Reaction

The company’s stock experienced a 2.17% decline during regular trading hours, closing at $78.34. However, in after-hours trading, the stock rebounded by 1.26%, reaching $79.33. This mixed reaction highlights investor uncertainty amid broader market conditions and interest rate concerns. The stock remains within its 52-week range, with a low of $66.01 and a high of $124.68.

Outlook & Guidance

Floor & Decor has provided a fiscal 2025 sales guidance of $4.66-$4.75 billion, expecting a growth rate of 5-7%. The company anticipates diluted EPS in the range of $1.75-$2.00 and plans to open over 20 new stores in fiscal 2026, contingent on market conditions. This guidance reflects confidence in continued growth despite potential challenges in the housing market.

Executive Commentary

CEO Tom Taylor expressed satisfaction with the results, stating, "We are pleased to report that for 2025, our diluted earnings per share increased by 11.5% to $0.58." He also noted the company’s strategic focus on driving homeowner interest and navigating tariff challenges, which could impact independent competitors.

Risks and Challenges

• Housing market constraints, with existing home sales at a nine-month low
• High mortgage rates, affecting consumer spending on big-ticket items
• Tariff pressures impacting industry dynamics
• Potential supply chain disruptions affecting product availability
• Economic uncertainties influencing consumer confidence and spending

Q&A

During the earnings call, analysts inquired about Floor & Decor’s tariff mitigation strategies and potential market share gains. The company emphasized its diversified global sourcing network and competitive pricing strategies as key advantages. Analysts also probed into the demand environment and growth potential of the commercial business, Spartan Surfaces, signaling interest in the company’s strategic initiatives.

Full transcript - Floor & Decor Holdings Inc (FND) Q2 2025:

Conference Operator: Greetings and welcome to the Flora and Decor Holdings Second Quarter twenty twenty five Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note that this call is being recorded. I will now turn the conference over to your host, Wayne Hood, Senior Vice President of Investor Relations.

Thank you. You may begin.

Wayne Hood, Senior Vice President of Investor Relations, Floor and Decor: Thank you, operator, and good afternoon, everyone. Welcome to Floor and Decor’s fiscal twenty twenty five second quarter earnings conference call. Joining me on our call today are Tom Taylor, Chief Executive Officer Brad Paulson, President and Brian Langley, Executive Vice President and Chief Financial Officer. Before we start, I want to remind everyone of the company’s Safe Harbor language. Comments made during this call contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Any statement that refers to expectations, projections or other characterizations of future events, including financial projections or future market conditions is a forward looking statement. These statements are subject to risks and uncertainties that could cause actual future results to differ materially from those expressed in these forward looking statements for any reason, including those listed at the end of the earnings release and in the company’s SEC filings. Floor and Decor assumes no obligation to update any such forward looking statements. Please also note that past performance or market information is not a guarantee of future results. During this call, the company will discuss certain non GAAP financial measures.

We believe these measures enable investors to understand better our core operating performance on a comparable basis between periods. A reconciliation of each of these non GAAP measures to the most directly comparable GAAP financial measure can be found in the earnings release, which is available on our Investor Relations website at ir.laurentecor.com. A recorded replay of this call and related materials will be available on our Investor Relations website. Let me now turn the call over to Tom.

Tom Taylor, Chief Executive Officer, Floor and Decor: Thank you, Wayne, and everyone for joining us on our fiscal twenty twenty five second quarter earnings conference call. During today’s conference call, Brad, Brian and I will discuss some of our second quarter earnings highlights. Then Brian will share our thoughts about the remainder of fiscal twenty twenty five. We are pleased to report that for the 2025, our diluted earnings per share increased by 11.5% to $0.58 compared to $0.52 in the same period last year, reaching the high end of our expectations. Sales for the quarter rose by 7.1 to $1,214,000,000 Comparable store sales increased by 0.4% marking the first quarterly increase since the 2022.

These results reflect the strength of our business fundamentals and the steadfast dedication of our associates. In a period marked by continued economic uncertainty, heightened complexity and shifting market conditions, our team rose to the challenge. They remain focused and executing our strategic priorities with unwavering discipline and resolve. We are truly grateful for their contributions. Let me now discuss our new warehouse format store growth.

In the 2025, we opened three new warehouse format stores in Kissimmee, Florida San Antonio, Texas and Chula Vista, California. We are especially pleased to have opened in Chula Vista as it marks our first warehouse format store to open in California in close to three years. Year to date, we have opened seven new warehouse format stores ending the second quarter with two fifty seven locations, up approximately 12% from two thirty stores in the same period last year. We have a busy second half of the year new warehouse format store opening schedule with most openings scheduled for the late third quarter and early fourth quarter. We remain on track to open 20 new warehouse format stores in fiscal twenty twenty five primarily across large and mid sized existing markets.

Looking ahead to fiscal twenty twenty six, we currently anticipate opening at least 20 new warehouse format stores. As previously discussed, our company is well positioned to support the opening of more than 20 new warehouse format stores annually once housing market conditions improve. That said, we remain committed to a disciplined and agile growth strategy. Should the housing market or broader economic environment underperform relative to our expectations, we are prepared to adjust our expansion plans accordingly to ensure prudent capital allocation and long term value creation. As you are aware, one of the most consequential challenges we and others across our industry continue to face is mitigating the impact of tariffs on our products.

To assist with our execution in an uncertain and complex environment, we have continued to rely on our dedicated Tariff Steering Committee. This committee is tasked with guiding alignment on our top priorities and maintain agility and discipline in our operational planning. This committee builds on our proven track record of managing prior tariffs and duties, leveraging both our experience and scale and flexibility of our operations to position us to navigate today’s uncertainty and complexity, which we believe is significantly better than many of our competitors. With that context in mind, I’d like to take a minute to outline and update the key actions we’re taking to mitigate universal, reciprocal and sectoral tariffs to position the business for continued growth. First, we continue to actively negotiate and collaborate with our vendors to mitigate the higher incremental tariffs on the products we sell as we have successfully done with prior tariff increases.

Second, we continue to execute our product diversification and sourcing strategies with strong momentum. This includes a broad range of products we sell as well as the countries in which we source them. Our direct global sourcing network spans over two forty vendors across 26 countries, enabling us to secure the highest quality products at the most competitive prices. In fiscal twenty twenty five, we continue to onboard more suppliers, factories and products further enhancing our agility and supply chain resilience. We believe our scale and direct global sourcing model provides a significant competitive advantage particularly over the independent flooring retailers and distributors.

Third, we continue to apply a balanced portfolio approach to product price while effectively managing our gross margin rate and overall profitability. As we noted on our first quarter conference call, we’ve seen some independent retailers and distributors implement high single digit or even higher price increases in response to tariffs. We believe tariffs will continue to pressure independents who are already contending with weak industry fundamentals that have persisted over the past three years. Amid the challenging market environment, we have also observed the shift among some retailers towards emphasizing opening price point products, which often featured lower product specifications compared to our offerings. As discussed during our first quarter earnings conference call, we will continue to adjust our retail prices both upward and downward as needed to help mitigate the impact of tariffs and competition.

That said, we remain committed to maintaining our pricing gaps and reinforcing our everyday low price message. It is important to note that our broad and diverse merchandise assortments provide customers with more pricing options than our competitors, further strengthening our market position. Put simply, we believe our competitive moat is enhanced when we combine price leadership and other key business attributes such as broad assortments, in stock job lot quantities, inspirational new products, service offerings and knowledgeable associates that meet the evolving needs of our customers. And finally, as we mentioned in our first quarter earnings call, customers are asking for products produced in The United States and we have already taken action to identify American made products in our stores. The United States is now our largest country of manufacture accounting for approximately 27% of the products we sold in fiscal twenty twenty four, up from approximately 20% in fiscal twenty eighteen.

Let me now turn

Brad Paulson, President, Floor and Decor: the call over to Brad. Thanks, Tom. I’d like to take a moment to express my sincere appreciation to our entire team for their strong performance in the second quarter. These results are a clear reflection of the disciplined execution of our growth strategies, the agility of our operations and the unwavering commitment of our associates. I’m especially proud of how we’ve navigated the challenges posed by tariffs and a global supply chain shift.

We believe that our proactive approach and operational flexibility continue to set us apart in the industry. Let me now discuss our second quarter sales. As Tom mentioned, our second quarter comparable store sales increased 0.4% year over year, which was at the midpoint of our expectations and an improvement from the 1.8% decline in the first quarter. Second quarter comparable transactions declined 3.3 and comparable average ticket increased 3.8% from the same period last year. By month, our comparable store sales increased by 1.7% in April, 0.6% in May and declined 0.8% in June.

From a regional perspective, store sales in the West Division continue to outperform the company for the quarter and year to date. We estimate the second quarter benefit to our comparable store sales from Hurricane Helene and Milton was approximately 40 basis points compared with 100 basis points in the first quarter and 110 basis points in the 2024. Our fiscal twenty twenty five third quarter to date comparable store sales have declined by 1%. In the second quarter, we saw the strongest relative sales growth across several merchandise categories including wood, installation materials and adjacent categories. We are pleased that customers continue to gravitate towards our better and best tier products where our value proposition is most compelling and our price advantage is most evident.

As we look ahead to the remainder of fiscal twenty twenty five, we’re excited to continue introducing a range of innovative products and programs tailored to meet the evolving needs of our customers. These include new designs, expanded color palettes, enhanced textures and products with heightened realism that closely replicate the look and feel of natural materials. Our largest initiatives this year remain unchanged and include the continued rollout of kitchen cabinets, the expansion of our outdoor product assortment and the growth of our XL Slab program. These efforts reflect our commitment to delivering differentiated high quality solutions that inspire customers and drive long term growth. Turning to our Connected Customer and Design Services pillars of growth.

In the 2025, Connected Customer sales rose by 2% year over year, now accounting for approximately 19% of sales. We’re encouraged by our key engagement metrics including healthy growth in weekly active users, a notable increase in organic traffic and conversions and a sequential improvement in our comparable average ticket. Our design services continues to be a standout performer in the second quarter delivering strong sequential and year over year sales growth. Year to date both total and comparable store sales also significantly outpaced the company average fueled by a sharp increase in customer transactions. This performance highlights the strength of our design services model combining expert in store designers, personalized customer experience and collaboration with pros on complex projects.

These elements are driving deeper engagement and higher value outcomes. When our designers are involved, the impact is clear. The average ticket is significantly higher and gross margin rates rise substantially. This reinforces the strategic importance of design services and elevating our brand and driving profitable growth. We’re excited to build on this momentum by continuing to invest in our design talent and convert more high value opportunities both in store and online.

Turning my comments to Pro. We’re pleased to report that in the 2025, total comparable store sales to PROS once again outpaced the company’s overall growth accounting for approximately 50% of sales. This strong performance was fueled by increases in both transactions and average ticket size. A key driver of this momentum is our commitment to delivering a consistent best in class Pro experience at the Pro desk, which contributed to a significant year over year increase in our Pro Net Promoter Score during the quarter. Furthermore, our Pro service managers are actively engaging Pros in the field, expanding into new zip codes to better understand their needs and provide tailored solutions.

We’re also deepening Pro loyalty through community events and partnerships with trade associations with a strong focus on education. In the second quarter alone, we hosted 43 in store educational events, part of our broader plan to hold 155 events in fiscal twenty twenty five, reinforcing our commitment to supporting pros with valuable resources and expertise. To further build brand awareness and drive engagement, we’re executing targeted pro marketing blitzes and leveraging lead generation tools supported by cost efficient advertising platforms that help us attract and retain new pros. These efforts are delivering results as we continue to see the benefits of our focus on high quality lead generation and strengthening relationships with both new and existing PROs. Finally, let me discuss our commercial business.

Spartan Surfaces delivered stronger than expected sales and EBIT results for the second quarter fiscal twenty twenty five with sales rising approximately 7% year over year. Notably June marked the strongest month in the company’s history. Spartan continues to build momentum by focusing on establishing a strong national presence in high specification sectors such as healthcare, education, hospitality and senior living. These sectors offer compelling long term growth and profitability potential characterized by higher quote to conversion rates, recurring revenue streams and more attractive margins. We’re also encouraged by the growing success of Spartan’s private label brands, which is leading to increased quotes and orders.

To support long term growth, Spartan is making targeted investments in expanding its sales force across key verticals and markets as well as in its leadership team. These investments combined with ongoing economic uncertainty may result in fiscal twenty twenty five EBIT remaining roughly flat compared to fiscal twenty twenty four. This outlook is consistent with our previous expectations. We continue to believe that Spartan’s strategic priorities position the company for growth and long term value creation. In closing, we remain focused on driving market share growth and long term shareholder value as we navigate an extended bottom in the housing market.

We believe the momentum we built in the 2025 positions us well for the remainder of the year and beyond. Let me now turn the call over to Brian.

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: Thank you, Brad and Tom. As Tom highlighted, we are very pleased with our second quarter financial performance. We believe this performance speaks to the strength and execution of our growth strategies and our continued focus on cost discipline. These efforts contributed to us reporting second quarter comparable store sales growth of 0.4%, our first positive comparable store sales since the 2022 and diluted earnings per share of $0.58 up 11.5% from last year. The second quarter is a clear demonstration of how we believe our team is driving value to increase our market share in a challenging macro environment that we expect will continue for the remainder of 2025.

Let me now discuss some of the changes among the significant line items in our second quarter income statement, balance sheet and statement of cash flows as well as our updated outlook for fiscal twenty twenty five. We continue to be pleased with how we are managing and expanding our gross margin rate. In the second quarter, gross profit rose by 8.5% compared to the same period last year. The growth in gross profit was primarily driven by a 7.1% increase in sales and approximately 60 basis points improvement in the gross margin rate which rose to 43.9% primarily due to lower supply chain costs. Second quarter selling and store operating expenses of $376,200,000 increased by 10.2% from the same period last year.

The increase in selling and store operating expenses was primarily driven by $33,800,000 for new stores. As a percentage of sales selling and store operating expenses increased by approximately 90 basis points to 31% from the same period last year. The expense deleverage was primarily attributable to the addition of new stores. Second quarter general and administrative expenses of $69,400,000 increased 2.6% from the same period last year. The increase was primarily attributed to the investments we continue to make to support our store growth including a $3,500,000 increase in personnel expenses partially offset by a $2,100,000 decrease in other operating expenses.

As a percentage of sales, general and administrative expenses decreased by approximately 30 basis points to 5.7% reflecting both a decline in other operating expenses and the leverage of our G and A cost on higher sales volume. ERP related expenses totaled $2,200,000 for the quarter in line with our expectation. Second quarter pre opening expenses to a reduction in a number of stores opened and future stores that we were preparing to open compared to the same period last year. Second quarter net interest expense of $1,100,000 increased $400,000 or 62.3% from the same period last year. The increase was due to a decrease in interest capitalized partially offset by higher interest income as a result of higher cash balances.

The second quarter effective tax rate increased to 21.8% from 19.8% in the same period last year. The effective tax rate increase was primarily due to a decrease in the excess tax benefits related to stock based compensation awards. Second quarter adjusted EBITDA of $150,200,000 increased 9.7% from the same period last year. Our second quarter adjusted EBITDA margin rate was 12.4%, an increase of approximately 30 basis points from the same period last year. The growth was primarily due to higher sales and an increase in our gross margin rate.

Moving on to our balance sheet. At the end of the second quarter, inventory increased by 7% to $1,200,000,000 compared to 12/26/2024. On a year over year basis inventory was up 17% primarily driven by the timing of receipts and the need to support the opening of our Seattle distribution center. Looking ahead, we expect inventory to be up modestly at the end of fiscal twenty twenty five compared to last year. In terms of liquidity, we ended the quarter with $876,900,000 in unrestricted liquidity consisting of $176,900,000 in cash and cash equivalents and $700,000,000 available under our ABL facility.

Turning to our fiscal twenty twenty five outlook. The U. S. Consumer remains broadly resilient supported by a solid labor market, low unemployment and steady job growth, sustaining household incomes, while personal consumption expenditures on services continue to show resilience, spending on discretionary big ticket durables and large projects remains challenged amid ongoing economic uncertainty, elevated mortgage rates and persistent housing affordability headwinds. Affordability remains a major constraint as mortgage rates continue to hover above 6.6% and home prices are at all time highs discouraging both first time and existing buyers.

Existing home sales sequentially fell 2.7% in June to a seasonally adjusted annual rate of 3,930,000 units marking the lowest level in nine months. Looking ahead, we do not expect significant changes in consumer behavior or housing activity for the remainder of 2025. The labor market is likely to remain a stabilizing force and while inflation and policy uncertainty may continue to weigh on sentiment, the underlying fundamentals point to a steady if cautious consumer and housing market. Our guidance reflects the impact of all negotiated tariffs and for countries not finalized, we incorporated universal tariffs. Let me now discuss our updated fiscal twenty twenty five earnings guidance.

Total sales are expected to be in the range of $4,660,000,000 to $4,750,000,000 or increased by 5% to 7% from fiscal twenty twenty four. We are planning to open 20 new warehouse format stores. Comparable store sales are estimated to be down 2% to flat. Average ticket comp is estimated to be up low to mid single digits. Transaction comp is estimated to be down low to mid single digits.

The gross margin rate is expected to be approximately 43.5% to 43.7%. As a reminder, our gross margin rate is expected to be adversely impacted by approximately 60 to 70 basis points from the two new distribution centers, which is incorporated into our guidance. We estimate that our second quarter gross margin rate of 43.9% will represent the high quarter for the year. Selling and store operating expenses as a percentage of sales are estimated to be approximately 31.5% to 32%. The high end of our guidance assumes our first quarter and fourth quarters are the most pressured from a rate perspective due to the timing of new stores.

General and administrative expenses as a percentage of sales are estimated to be approximately 6%. General and administrative expenses include approximately $9,000,000 related to the finance and merchandising ERP implementation. Pre opening expenses as a percentage of sales are estimated to be approximately 0.6%. Interest expense net is expected to be approximately $5,000,000 Our tax rate is expected to be approximately 21% to 22%. Depreciation and amortization expense is expected to be approximately $245,000,000 adjusted EBITDA is expected to be approximately $520,000,000 to $550,000,000 diluted earnings per share is estimated to be in the range of $1.75 to $2 Diluted weighted average shares outstanding is estimated to be approximately 109,000,000 shares.

Moving on to capital expenditures. Our fiscal twenty twenty five capital expenditures are planned to be in the range of $280,000,000 to $320,000,000 including capital expenditures accrued. We intend to open 20 warehouse format stores and begin construction on stores opening in fiscal twenty twenty six. Collectively, these investments are expected to require approximately $180,000,000 to $2.00 $5,000,000 We plan to invest approximately $20,000,000 to $25,000,000 in new distribution centers in Seattle and Baltimore. We intend to invest approximately $45,000,000 to $50,000,000 in existing stores and existing distribution centers.

And finally, we plan to continue to invest in information technology infrastructure, e commerce and other store sports center initiatives using approximately $35,000,000 to $40,000,000 Additionally, we anticipate incurring approximately $20,000,000 in deferred SaaS ERP implementation costs, which are not included in capital expenditures. Before I close, I want to extend a heartfelt thank you to our store associates across the country. Your dedication, hard work and daily commitment to serving our customers are what drive our results. We’re incredibly grateful for everything you do to support our business and our customers. Thank you.

Operator, we would now like to take questions.

Conference Operator: Thank you. And at this time, we’ll conduct our question and answer And our first question comes from Christopher Horvers with JPMorgan. Please state your question.

Bharat Rao, Analyst, JPMorgan: Hi, It’s Bharat Rao on for Chris. Thanks for taking the question. So ticket was up nicely during the quarter. Curious on how much of that was tariff induced pricing increases versus any sort of trade up to better and best, as you mentioned? And then going off of that, it seems like the narrative so far has been low to mid single price increases with the expectation to go higher as the year goes on.

How are you thinking about price throughout the year given your inventory cycle? And any chance to come in higher than the low to

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: mid single digit ticket comp? Thank you.

Tom Taylor, Chief Executive Officer, Floor and Decor: A lot of questions in there. This is Tom. I will do my best. If I miss something, one of the team will jump in. I would say for the second quarter that we just finished, much of the benefit that came in average ticket came from mix.

Our best performing department is wood, which carries in higher average ticket. So that effect helped us. Additionally, the price changes that we did in the second quarter were not material. We took some prices up, took some prices down. So I would say between wood and between better and best and minor price increase would have affected ticket in the second quarter.

We will take some price in the back half of the year. We don’t believe it will be that modest with what we know today. Things could change, but with what we know today about tariffs, we think we’ve done a good job and mitigating a lot of it through moving SKUs and through negotiating with our vendors will take some modest price increases, but we think we’ll be able to manage it fairly well. And this

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: is Brian. Mean, in the prepared remarks, our average ticket comp is assumed to be up low single digits to mid single digit. So that helps kind of put the framework around what we believe through initiatives as well as modest price increases. And just as a heads up, Q4 will be the most pressured because we’ll be lapping hurricanes Milton and Helene from last year. So that’ll put a little bit of pressure on our ticket in Q4.

That should help give you a sense of magnitude of what we haven’t been.

Brad Paulson, President, Floor and Decor: And maybe we just go three for three here. But I think an important piece just to think about our philosophy in the second half. We talked a lot about our merchandising team and how proud we are what they do first day in and day out. And I think they’ve really earned their stripes through this process. When I think about how we’re going to handle pricing, the first thing is we’ve invested in pricing tests really certainly in the first half and going back into 2024.

So we understand the elasticity of both categories and also the line structure inside a category. So I think we’re well positioned to understand how price moves are going to impact customer demand. And then the second piece to it that I think is really important is, we’re not doing a peanut butter spread here. Because we have that level of intelligence, we can be very surgical. And as we’ve said in the prepared remarks, we can have that balanced portfolio approach to how we’re going to tackle the pricing that’s in front of us.

Bharat Rao, Analyst, JPMorgan: Great. Thank you, guys.

Conference Operator: And your next question comes from Simeon Gutman with Morgan Stanley. Please state your question.

Simeon Gutman, Analyst, Morgan Stanley: Hey, good afternoon, guys. Two parts to my first question. The second half implied negative and I think Brian you just clarified a little bit on the fourth quarter. Curious if you’d be willing to react to a consensus number for ’26. I know it’s early.

I think the consensus is showing four. And thinking about the macro, maybe not changing or getting better tariffs, which should help and then immature stores, just thinking about the natural curve of the progression of this business, how you’d react to that 4% number that’s out there right now? Thanks.

Tom Taylor, Chief Executive Officer, Floor and Decor: So this is Tom. I guess this one’s for me. Yes, all right. So it’s a little too early to react to 2026. We continue to hope that we see some improvement in existing home sales.

I mean, we’re just not seeing that yet. If you look at the last release on existing home sales at $3,930,000 annualized, rates continue to hover between 6.66.9%, making household affordability and turnover a bit of a challenge. So it’s too early to know. You’re right, we’ll get some benefit out of our new store maturing. Those things will work in our favor.

We’ll be lapping easier numbers. Those things work in our favor. We’ll have to take some price because of tariff. Those things work in our favor. But all that said, it’s too little too early to react to next year’s guide.

Next year’s guide, next year’s consensus.

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: Yes. I mean, thinking about this year, I alluded to some of it that you had, but you’re right. The midpoint of our guidance assumes that we stay at the current trends. So we’re kind of bouncing around the bottom. The high end would assume things get slightly better.

Obviously, the low end would assume things get slightly worse. The high end from a comp perspective would assume the second half are up low single digit positive with Q3 being the peak. As I mentioned before, we will be lapping both the hurricane benefit and EHS that picked up in Q4 of last year. So we have both of those and then the low end would assume that we sequentially decline each quarter as you guys are kind of modeling now.

Tom Taylor, Chief Executive Officer, Floor and Decor: I think the only thing I’d probably add Simeon that we didn’t mention, we were not this is a really difficult macro that we’re facing and that affects the category, but we’re not sitting still. We are doing other things to try to drive sales. We’re continuing to add newness within the categories. We’re continuing to add things to our adjacent category assortments. We’ve got outdoor rolling out hopefully by the end of this year, it will be in closer to 70 stores and outdoor program that really we’re not doing, we haven’t done before and then just really improving our design experience.

So, we’re doing everything we can to kind of while we’re bouncing along this bottom of existing home sales and the challenges that puts it on us. Not sitting still, we’re trying to uncover every stone to drive that top line.

Simeon Gutman, Analyst, Morgan Stanley: Yes, that’s fair. And just tied within that follow-up is the spread between immature versus mature, is that how is that changing? Is it getting better? Is it getting worse? And could that alone be the driver?

And I know you’re not reacting to that 4% number, but could that alone be the biggest driver next year assuming the macro doesn’t change much?

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: Simeon, this is Brian. The waterfall comp is still intact as we’ve kind of mentioned. It hasn’t gotten really better or worse over the last twelve months. I would say it’s compressed a little bit from historical trends. Obviously you would expect that but our newer stores are outperforming our most mature stores as you would expect and so we will get a benefit from the stores we’re opening and I think you heard us say this, a lot of those stores will open kind of September, October, November, so late Q3, early Q4.

So we’ll start lapping those, but we will get comp benefit from the class of ’24 as those are maturing into 2026 as well once they come into the comp base. So will get a pickup from that. Again, not ready to commit to anything in 2020 We

Tom Taylor, Chief Executive Officer, Floor and Decor: should do like as things if and when as the existing home sales get better too, you get some benefit of the stores open in the last three years, because they were softer openings and they should ramp it at nice level as things get better.

Simeon Gutman, Analyst, Morgan Stanley: Okay. Thanks. Good luck.

Conference Operator: Your next question comes from Michael Lasser with UBS. Please state your question.

Michael Lasser, Analyst, UBS: Good evening. Thank you so much for taking my question. Throughout this conversation and up until now the messaging has been Floor and Decor and the Flooring market has been bouncing along the bottom. We continue to debate the timing and magnitude of a recovery. But what if this is simply the new norm where interest rates remain elevated, existing home sales remain subdued?

How do you approach running the business differently? And how do you approach creating shareholder value differently?

Tom Taylor, Chief Executive Officer, Floor and Decor: So I would say that if things were to continue to run at this rate and if this was norm because of what we’re lapping our business should start to grow over the course of time. I would say that we’ve continued to invest in our in store experience to get more out of our stores. We’ve got lots of commercial opportunities that we’re excited about what’s going on commercially now. We would continue to invest in our commercial space. Brad’s coming in has found additional opportunities of ways we can get better and we will put investment behind that.

But it is a possibility that we could bounce along at this rate of existing home sales for time, but because we’re bouncing along at this rate, it’s not getting worse. Our promise has been getting worse over the last few years. So if we stabilize here, we think we got enough initiatives that we can continue to grow.

Michael Lasser, Analyst, UBS: Got you. And what does that translate to Tom from a volume basis meaning sales per store? How does that look right now? And what is that if you assume that you grow simply by bouncing along the bottom? And what does that look like for in terms of the profitability of the business over time?

Tom Taylor, Chief Executive Officer, Floor and Decor: So I think, look our job is to continue to grow our earnings and to continue to improve our in store productivity. So we have lots of initiatives that will help kind of enhance that. So not exactly sure I can predict the point of inflection when things get better, but if they don’t get better, I think we’ve demonstrated where we have the ability to improve our gross margin rates. We have the ability to get sales from some of the new stuff riding within the store. We keep leaving no stone unturned.

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: Michael, just to give you a sense of magnitude, our stores that are five years and older are averaging approximately $22,000,000 today. But from a profitability, they’re still at 23% EBITDA. And so the stores are doing incredibly well from a flow through perspective and from an earnings perspective. To Tom’s point, we have a ton of internal initiatives where we’ll continue to take market share. So even if things bounce around the bottom, we should be able to continue to put pressure on the competition, continue to take market share, we should be able to grow as long as things stabilize exactly to Tom’s point.

So I mean, there’s a lot that we’re doing internal to do that and we’ll keep a focus on cost as well. So longer term, we still believe in that goal of mid teens EBITDA. That’s we’re still on that path.

Michael Lasser, Analyst, UBS: And Brian, that’s very helpful. If you could provide a frame of reference to where that cohort stood in 2019 or prior to this downturn, just to give some relative sense for those financial metrics today versus where they’ve been in the past? Thank you very much.

Conference Operator: I’ll turn it over.

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: Michael. I mean, if you’re looking for peak to trough and those kind of things, I mean, at peak those stores were doing about $28,000,000 in volume. Today they’re doing 22,000,000 Back in 2019, it was somewhere in between. And so without giving specifics, because we’ve quoted in the past what that was. So peak to trough, I mean, we hope we’re bouncing along the bottom, right.

I mean, we just hit 3,900,000 units over the past twelve to eighteen months, it’s been somewhere around four, four point one, 3.9 just keeps kind of bouncing along and we’re still at 22 and that’s with the impact of cannibalization, strategic cannibalization as well. And so when we look at our stores, we do think that we are bouncing along the bottom of the ’22 at peak again back post 2022 kind of late twenty twenty two I think on a trailing twelve months they were right around 28,000,000.

Michael Lasser, Analyst, UBS: Thank you very much and good luck.

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: Yes, sir.

Conference Operator: Your next question comes from Seth Sigman with Barclays. Please state your question.

Seth Sigman, Analyst, Barclays: Thanks. Hey, everybody. I wanted to focus on pricing and market share maybe as a follow-up there. You talked about seeing high single digit price increases across the industry. It seems like you’ve been more patient or perhaps able to raise just less than others.

How do you see price gaps changing right now? And any signs that your market share could be accelerating on the back of this? Obviously, we see those gains in wood, but maybe outside of that. Thank you.

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: Yes. I mean, think when

Tom Taylor, Chief Executive Officer, Floor and Decor: you look at our market share perspective, as we look at the industry, our total sales grew over 7% in the second quarter and we had a positive same store sales increase and looking across spectrum of publicly traded flooring companies and people that sell our category, we feel like we’re doing better and we feel like we are taking share. I do think that the independent channels have taken price earlier, quicker And we’re able because the way we turn this is when the benefit of slow turning inventories beneficial, we were able to hold off and take less price increase. So I think that gap is probably widened a bit and we feel good about that. And what was the

Brad Paulson, President, Floor and Decor: I would just reinforce the point that I made earlier about the understanding around the elasticity that we have in our categories. I think if you pair that with the micro pricing efforts that we have in local market, it gives us a really good sense of how the customer is responding to our moves. And collectively from the get go as we entered this tariff environment, we felt like we were going to be better positioned than our competition to navigate through this environment and we absolutely view this as a market share gain opportunity. Now it’s a very fluid environment and again because of that micro process that we have in place, we think we can react to changes at the local level while while maintaining a really good perspective here in Atlanta through our merchant team.

Tom Taylor, Chief Executive Officer, Floor and Decor: Yeah. And I’d I’d say that the other thing too, the one thing with gain market share when you kind of look at how we compete with others in the market whether it’s the independent flowing stores or the big boxes, price is one part of our mode. Our mode expands into service. Our service scores are at an all time high. When you look at our assortments, our assortments are still larger than everyone else’s and we’ve continued to do PLRs and bring in new products across every category that we sell.

Our in stock is at an all time high. We’ve got plenty of inventory. So the other pieces of the moat are improving versus the competition. And while we’ve and our prices improved, but if it gets more competitive, we’re in a really good place.

Seth Sigman, Analyst, Barclays: Okay, great. Very helpful. And then just from a margin perspective, as I think about tariffs, you talked about a lot of the mitigation efforts, but also how timing helps this year just based on the inventory turns. So I’m curious when you look at the incremental tariffs today and what’s changed versus even just three months ago, how does that change your view on what the impact could potentially be next year? Thank you.

Tom Taylor, Chief Executive Officer, Floor and Decor: So I’ll start Brian and then you can weigh in. So our margin, we’ve been able to manage it really well over the last couple of years through the tariff environment. We are going to have some challenges with distribution centers coming online. There’s a cost that will impact our gross margin and make it more of a challenge, but those are one time costs and we burn those off over the course of time. So I believe with what we know today with tariffs, we’re going to do all we can to try to protect our rate and feel like confident we can do that with the exception of having to deal with our distribution centers.

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: Yes. As we said on the last call, if it was just universal tariffs in the 10%, we felt very confident in maintaining the rate. We knew reciprocal tariffs have put into place and put a little bit of pressure, but because of the job that Brad and Tom have talked about from our merchandising team, we’ve been able to mitigate a lot of that exposure. And so there may be slight pressure, but it’s going to be very minimal pressure on gross margin rate from tariffs. More of it’s going to come from what Tom talked about with some of the step investments that we have with the two new distribution centers coming online.

Michael Lasser, Analyst, UBS: Okay. Thanks guys. Nice job.

Conference Operator: Your next question comes from Steven Forbes with Guggenheim Securities. Please state your question.

Steven Forbes, Analyst, Guggenheim Securities: Good evening everyone. Tom, I was and Brad maybe I was hoping to maybe just explore the company’s reach from an income demographic standpoint, right? And the thought here is, how far up do the income bands go based on the model that you guys put into market today? Is the design studio format really giving you access to a new customer? And if it’s not, right, like how do you guys think about potentially evolving the format, the assortment, right, and or just other growth opportunities to make sure that you’re drawing that higher income consumer into the brand in an environment, right, where the higher income consumer may lead us out of whatever we’re in today?

Tom Taylor, Chief Executive Officer, Floor and Decor: Yes. I think there’s two sides. We don’t one is we don’t talk about the studios much, but we are in the middle of revisiting our studio strategy. We’re excited about kind of how they’re performing and we’ve got a new leader. We took one of our top merchants and put them in charge of our design in store design experience and our studios.

And more to come on that as we get closer to the end of this year, we’ll give you more of an update on kind of how we’re thinking about the studios. Our stores do attract all different income levels of customers. We’ve over the course of the last ten years, we’ve continued to drift into better and best category that appeals to all income levels. We’ve got stores in very expensive zip codes and we’ve got stores in very modest income levels zip codes and they do well. I think we’re going to continue to push the envelope and better invest and more of that is because in every market that we serve irregardless of income level, that’s what the customers are buying.

If they elect to do a project at hard surface, they’re stepping up within the category. So we’ll continue to push that envelope. I do think we do like to think ourselves kind of with Costco, kind of we appeal to higher end customers. We are income levels do slant higher. And if you walk in the store today, see the type of product that would appeal to very expensive homes.

So, we’ll continue to push it. We are thinking differently about the studios, more to come on that. That will even appeal to even a higher end customer, but we’ll fill you on that when we get more work done around it.

Steven Forbes, Analyst, Guggenheim Securities: And then maybe just a follow-up. You mentioned commercial sort of being excited about various things to come. So maybe a two part question on that. The first is if we just revisit the Spartan profitability pressure confirming that that is all investment. And then second, can you give us any teasers on sort of the broader commercial growth plans here, the RAM strategy or what you sort of see on the horizon here as potential future uses of your capital?

Tom Taylor, Chief Executive Officer, Floor and Decor: Yes. So we’re pleased with what’s going on with Spartan. We have invested heavy in the beginning part of this year sales reps to continue to kind of grow our sales. We’re happy with the results and kind of we’re happy with the book of bids that they have that and the trajectory of the business. We’re pleased with what it’s going.

We’re pushing that team to bring us ideas to grow even faster. We slowed that back on the acquisitive side a little while ago as we were in a downturn, but we feel like we’ve got our we’ve got the ability to do more in commercial. And as we do more, you will know more. From a RAM perspective, we’ve hired in a new leader of our RAM organization. She comes with a great background.

She had been with Home Depot Supply and she had been with Grainger before that. So she comes, she’s got a great pedigree and thinks differently of how we can continue to grow the commercial space that we generate out of our stores. So, we’re going to continue to lean in that. We think they’re both huge growth vehicles for us. We think we can that we’re still in the early stages of what will be in commercial.

Michael Lasser, Analyst, UBS: Thank you.

Conference Operator: Your next question comes from Zach Fadem with Wells Fargo. Please state your question.

Wayne Hood, Senior Vice President of Investor Relations, Floor and Decor0: Hey, good afternoon. Can you level set us on how you’re mixing today across good, better and best since we know the latter has been outperforming for a while now? Tom, you also mentioned some competitors shifting downstream a bit to opening price points. Any thoughts on how your opening price points are performing and if that elevated competition is having an impact?

Tom Taylor, Chief Executive Officer, Floor and Decor: So better and best is outcombed good for the last three years or so. So, think that continues to be the case within our assortments. There’s not a material difference in how the good is performing as some of the competition is drifted into more opening price point. Even though there’s more of it and it’s more competitive, our opening price point is still better than their opening price point. We think that our features and benefits when you really look apples to apples, we feel pretty good about kind of how we compete on it.

So, while some competition both on the big box and on the independent side are leaning more and that I think they’re just desperate looking for growth in the category and trying anything. But I feel good the way we compete there and the performance of each segment is pretty consistent. Then,

Conference Operator: Got you

Tom Taylor, Chief Executive Officer, Floor and Decor: did say that’s what it’s

Wayne Hood, Senior Vice President of Investor Relations, Floor and Decor0: it. Thanks, Tom. And then is it still fair to say that better and best you’re maintaining a wider price gap relative to peers compared to good. So as you think through potential price increases, can you just talk through where you think you may have the most flexibility or opportunity? And would it be more on that better and best as opposed to good?

Tom Taylor, Chief Executive Officer, Floor and Decor: Well, we have I’ll let kind of goes back to what Brad said a little bit earlier about the way we price. We do have to try to maintain price by family. We can’t just go and go, okay, we don’t compete with someone on X tile, we’re going to price it off the moon. We want our customers to be able to logically walk up from opening price point to the next price point to the best. So, you want to add to what you said?

Brad Paulson, President, Floor and Decor: No, I think you nailed it. For us, having that surgical approach has allowed us to really make decisions where we think we’re going to drive benefit to the organization. I would say generally speaking the gaps on opening price point and good are going to be tighter than what you’d find on better and best. So, yes, you’re naturally going to have more flexibility from a dollars and cents perspective as you move up the line structure. But we’ve taken action from opening price point all the way up to best.

So, feel really good about the strategy that we’ve implemented at this point. But as I’ve said a couple of times, it’s very fluid and we’re watching both big box and independent action very closely.

Wayne Hood, Senior Vice President of Investor Relations, Floor and Decor0: Thanks for the time guys.

Conference Operator: The next question comes from Steven Sigholme with Citi. Please state your question.

Wayne Hood, Senior Vice President of Investor Relations, Floor and Decor1: Great. Good afternoon. Thanks very much for taking my question. I wanted to just understand the second half thinking a bit more because it seems like the demand environment is coming in weaker than we all kind of expected, but that’s offset by a bit better pricing, which is helping ticket. So maybe just help us understand how your view on the demand environment has changed.

And then drilling down into the third quarter versus fourth quarter, Brian, can you just help us understand the comp progression? Because 4Q does have a little bit of a tougher compare lapping the hurricane, some ticket there. So just help us think through that third quarter versus fourth quarter. Thanks very much.

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: Yes. Look, I’ll start with the latter, Steve. So I think I said it earlier, but the high end would assume that the second half comps are low single digit positive with Q3 being the peak exactly as what you just mentioned is we’re to be lapping Helene, Milton and then also stronger EHS. So if you look at our cadence, we were down 1.8% in Q1. We just finished with a positive 0.4 So the back half again would need to be positive to get to that kind of flat comp at the high end of the guide.

Down to at the low end obviously would assume that we sequentially decline each quarter. And so in the low end we have baked in some assumption around demand decay. We’re not sure the environment is still fluid as Brad is mentioning. So we’ve kind of got both bounds. But if things just stay the same from where we are, that’s right down the fairway, right down the midpoint of our guidance.

So we’re kind of saying if we bounce around the bottom we should be kind of right there in the middle of the midpoint.

Conference Operator: Thank you. And your next question comes from Peter Keith with Piper Sandler. Please go ahead.

Wayne Hood, Senior Vice President of Investor Relations, Floor and Decor2: Hey, thank you. Good afternoon, everyone. Tom, you had mentioned that you’re targeting more than 20 stores for next year and you think you can do more than 20. I guess one will say housing has stabilized. I’m trying to think about like kind longer term store opening rate.

You did peak for a couple of years there at 30. So is it fair to say you’ll probably land somewhere between 20 to 30 openings per year as we kind of look out three to five years?

Tom Taylor, Chief Executive Officer, Floor and Decor: So what I said in my script was that our plan as of today is to open 20 stores in next year and we’ve allowed ourselves flexibility if things were to get worse, we could back off that number. If things were to get better, we have the ability to increase that number. As we look out to the next years, it’s going to depend on what happens with demand. It’s going to depend on what happens with existing home sales and then we’ll make those decisions. We have the ability, there’s enough real estate pipeline and we have the talent on the team to go much faster, but we’re trying to be prudent with kind of how we’re managing our capital and want to make sure that we think about it in the right way.

But if things got better, would open more than 20 in the next couple of years. But we just have to wait and kind of get to that environment.

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: Peter, this is Brian. Yes, I mean our infrastructure is built for more than 20. Yes.

Tom Taylor, Chief Executive Officer, Floor and Decor: So when

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: things get better, can accelerate from that 20, not ready to commit to where a cap would be, it would be north of 20 and we’re built for more than 20 today if things were to be better.

Conference Operator: And your next question comes from Peter Keith, I’m sorry, Kate McShane with Goldman Sachs. Please state your question.

Wayne Hood, Senior Vice President of Investor Relations, Floor and Decor3: Hi, good afternoon. Thanks for taking our question. You did mention that 26% of your product is now made in The S. And we’ve heard anecdotally that even U. S.

Manufacturers are now starting to feel higher costs as a result of tariffs and maybe just being in a more inflationary environment. We’re just wondering if you’re seeing this at all on that particular side of product.

Wayne Hood, Senior Vice President of Investor Relations, Floor and Decor4: Hi, this is Arasan. I mean U. For S. Is 27% of our sales at this point and we have not seen the cost increases yet from The U. S.

But if that happens, I mean as we normally do with the every other country that in case of costs go up, we look at the all our options across the globe and we try to diversify. But at this point, we have not seen that.

Conference Operator: Thank you. And your next question comes from Chuck Grom with Gordon Haskett. Please go ahead with your question.

Wayne Hood, Senior Vice President of Investor Relations, Floor and Decor5: Thanks very much. You guys have done a great job framing out the gross margin line in 2025 here and notwithstanding the 60 basis to 70 basis points of pressure that probably wraps from the DC openings into next year. But can you help us think about the puts and takes beyond this year on the gross margin line and what could drive it higher? Do you want to drive it higher? Or do you feel like 44% is a good long term rate?

Thank you.

Tom Taylor, Chief Executive Officer, Floor and Decor: That is an excellent question and one that we internally debate often. So, we’ve got lots of puts and takes in gross margin. So on the good side of gross margin and how we can continue to increase it, we do believe that within the category that consumers are going to continue to gravitate upwards and they’re going to buy better and best product. That would be a benefit to gross margin. We do believe that we’re while we’re executing well on our service line, we can be even better on our design services and do even more.

And when a designer engages with a customer, it’s a benefit to the gross margin line that would be a positive. We are doing a good job as we as Ursan and his team have done a good job of moving product from one vendor to another around the world. In some cases, we’re seeing some margin benefit from that because we’re able to buy it better. So that will be a good thing. On the things that could work against us as our commercial business gets stronger that runs at a slightly lower gross margin.

So if that grows at a faster rate that would put the challenge on gross margin and some of the adjacent categories that we’re trying, We bring them in and they don’t have they don’t carry the same margin level. We’re okay with that in some cases because there’s not a heavy lift to sell them and they’re just they kind of they flow through above the store’s operating margin and we’re okay with that. So long way around of, we are running at a very high gross margin today. I don’t believe that we peaked, but I don’t know when it improves. We’ve got to burn through two distribution centers next year.

We’ve got a lot of other internal initiatives, but there’s no reason that we couldn’t go higher from where we are today. But there’ll be it’ll be we’re not ready to give an ultimate gross margin target, but I think it could be better, but there’ll be it’ll be a slow line to get there.

Conference Operator: And your next question comes from Greg Melich with Evercore ISI. Please state your question.

Brad Paulson, President, Floor and Decor: Hi, thanks. I love to follow-up on the progression of comps in the second quarter and then even more into the back half. If I just think about tariffs coming in a majority of the product, I guess sort of 300 or 400 basis points of ticket if it were to flow through. Is it fair to say that you’re expecting transactions growth or units per basket to go down to offset that with the comp trend remaining flattish?

Brian Langley, Executive Vice President and Chief Financial Officer, Floor and Decor: This is Brian. I’ll take that Greg. So, yes, mean look we’ve got a little bit of compression in our ticket assumed in the guide. We think there may be a little bit of pressure on job size, but transactions also are going to be down. You’re right.

Average ticket is still assumed to be up low single digits to that mid single digit. But within that also with a little bit of compression in basket size or project size potentially embedded in the ticket and then transactions obviously would be down low single digits to mid single digits to get to that flat to down two.

Tom Taylor, Chief Executive Officer, Floor and Decor: But remember the hurricane had a benefit to average ticket and the hurricane had a benefit to transactions and we’ll be lapping that as we get past October.

Conference Operator: And your next question comes from David Bellinger with Mizuho Securities. Please state your question.

Wayne Hood, Senior Vice President of Investor Relations, Floor and Decor6: Hey, everyone. Thanks for the time. I wanted to ask on Spartan Services. I think you mentioned in the prepared remarks that you saw one of the best months in the company’s history. That’s despite all these external pressures we’ve been talking about throughout this call.

So what’s behind that strength? Is there some new unlock that potentially enables a higher pace of growth from here? Just what’s going on with Spartan and why is that sort of outperformed despite a still slow external macro here?

Brad Paulson, President, Floor and Decor: Yes. Just to build on Tom’s comments from earlier, we are very pleased with Spartan, love that business, very strong management team. I think we’ve communicated in the past there has been a shift from a vertical prioritization. We called it out in the prepared remarks, a big focus now in education, hospitality, healthcare and senior living. We’ve moved away from multifamily or I should say less focus on multifamily, which has certainly helped.

And the second piece, we’ve added some really good talent from salesperson perspective. And while there is a ramp on that generally, are seeing nice returns from that investment.

Conference Operator: Thank you. And the last question comes from the line of Robbie Ohmes with Bank of America. Please state your question.

Wayne Hood, Senior Vice President of Investor Relations, Floor and Decor7: Thanks for fitting me in here. My question is, I was hoping you could maybe compare and contrast what you’re seeing between the homeowner customer and the pro customer. I mean, the first side would be, is there any what have you seen in pull forward overall? And is there any difference between those two sides of the business? Is there any difference in what the Pro is buying versus a homeowner in terms of that move towards better and best?

Is there any do you think it stays fifty-fifty? Or do you think the Pro is going to keep moving up? Just would love to get thoughts on that.

Tom Taylor, Chief Executive Officer, Floor and Decor: Thank God for our pros. We’re very pleased with our professional business. Our businesses when you look at it by day, the weekends are where we’re under challenge and that’s where the homeowners we need more homeowners engaged in the category. And we think existing home sales drive a lot of that homeowner interest. People fix up their home before after they sell.

So as long as that’s under pressure, negative year over year in that $3,000,000 high $3,000,000 range that customer is going to be under pressure. The behavior of the two customers is not a lot different. When you look at what a homeowner comes in to buy and even what a professional buy, they’re buying for the for a homeowner somewhere and they continue to buy in the better and best sectors of our business. So, we haven’t seen a real change in behavior. The only change in behavior we saw with the homeowner as existing home sales slow, they’re doing smaller projects.

They’re doing backsplashes versus full kitchens. They’re not doing whole house, they’re doing bathroom. So that’s it. So we’re doing everything we can to drive that homeowner interest. We’re Our marketing points towards making recreating your space, making dreams come true, showing off inspiration.

We’re putting a ton of emphasis behind our design initiative to get customers to engage in the category. But really pleased with what’s going on with Pro. Pleased with what’s going on with the homeowner. We just want more of them in the store. So with that, that is our last question.

I’d like to thank everyone for joining us on the call today for our associates who are listening to the call. Thank you for all your hard work for delivering excellent execution and really on the financial side and on the soft side and on the service side, we couldn’t be happier. So we look forward to updating you on the next call. Thank you.

Wayne Hood, Senior Vice President of Investor Relations, Floor and Decor3: Goodbye.

Conference Operator: This concludes today’s conference. All parties may disconnect. Have a good day.

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