Floor & Decor Holdings, Inc. (FND): A Bull Case Theory

We came across a bullish thesis on Floor & Decor Holdings, Inc. on Speedwell Memos’s Substack by Speedwell Research. In this article, we will summarize the bulls’ thesis on FND. Floor & Decor Holdings, Inc.'s share was trading at $64.43 as of December 2nd. FND’s trailing and forward P/E were 31.81 and 28.99 respectively according to Yahoo Finance.

Floor & Decor (FND) reported a mixed quarter, with revenue up 5.5% y/y but comparable sales declining 1.2%, reflecting continued pressure from the weak housing market following tariff-driven delays in rate cut expectations. Same-store sales worsened through the quarter, with September down 2.2%, and early Q4 trends showing a similar decline. Customer transactions fell 3%, partially offset by a 1.8% increase in average ticket size. Gross margins held steady at 43.4%, while operating margins improved slightly to 6.1%, supported by cost discipline despite limited operating leverage and new distribution center costs.

Management has focused on reducing store buildout costs through smaller footprints, built-out locations, and lower construction expenses—resulting in $1.5 million less investment per new store versus 2023. New store cohorts are achieving first-year sales of ~$11 million, below the $14–16 million long-term target, but consistent with performance in a contracting industry. CEO Tom Taylor will transition to Executive Chairman, with President Bradley Paulsen assuming the CEO role, signaling continuity in leadership despite prolonged industry headwinds.

The company remains committed to opening 20 stores annually and expanding offerings in kitchen cabinets, outdoor products, and design services, which management views as a key moat. While comps remain negative, Floor & Decor continues to gain share against struggling peers like LL Flooring and The Tile Shop, supported by strong service scores and a resilient pro customer base. Investors must weigh the timing of a housing recovery against FND’s structural advantages, disciplined cost management, and long-term goal of 500 stores generating $25–30 million in mature annual sales.

Previously we covered a bullish thesis on Costco Wholesale Corporation (COST) by FluentInQuality in March 2025, which highlighted its membership-based model, cost leadership, and operational efficiency driving long-term growth. The stock has depreciated approximately 11.34% since our coverage as retail sentiment softened. The thesis still stands as Costco remains resilient. Speedwell Research shares a similar view, emphasizing cost efficiency and scalability in specialty retail through Floor & Decor.

Floor & Decor Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 46 hedge fund portfolios held FND at the end of the second quarter which was 44 in the previous quarter. While we acknowledge the potential of FND as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.