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

We came across a bullish thesis on Floor & Decor Holdings, Inc. on Elevator Pitches’s Substack by Editor, Elevator Pitches. In this article, we will summarize the bulls’ thesis on FND. Floor & Decor Holdings, Inc.'s share was trading at $71.84 as of January 27th. FND’s trailing and forward P/E were 35.49 and 32.36, respectively according to Yahoo Finance.

Floor & Decor Holdings (FND) is a leading retailer of hard surface flooring products, including wood, tiles, and luxury vinyl plank, with a business model that has consistently outperformed peers. Founded in 2000, FND has grown comparable store sales at nearly 11% per year over the past 14 years, with revenue and adjusted EBITDA rising 24% and 25% per year, respectively, from 2011 to 2024. The company’s advantage lies not in what it sells, but how it sells: large-format warehouse stores averaging 75,000 square feet allow FND to stock 2,350+ SKUs in job-ready quantities, roughly four times the in-stock depth of competitors.

This approach is particularly appealing to Pro customers—professional flooring installers—who represent half of FND’s sales, up from 40% in early 2022. The company’s PRO Premier Rewards Program further deepens engagement, increasing Pro spend threefold relative to non-enrolled Pros. FND complements this with an Everyday Low Price (EDLP) strategy, which stabilizes pricing, improves operational efficiency, and drives a virtuous cycle of higher volumes and lower costs, further enhancing its competitive moat.

The company continues to expand its footprint, targeting 500 stores from 262 as of Q3 2025, creating high-confidence reinvestment opportunities with strong incremental returns. While FND’s returns on capital have recently softened, this is largely attributable to macroeconomic headwinds, including normalization of home sales after the COVID-era demand surge, leaving the company in a temporary growth air pocket.

With housing activity expected to recover and new stores still ramping, FND has significant potential to reaccelerate comparable store sales. After a meaningful earnings multiple de-rating from 70x to 32x, the stock now offers a rare combination of high-quality fundamentals and attractive risk/reward, with the potential for a 2.2x to 3.5x upside over the next two years.

Previously, we covered a bullish thesis on Costco Wholesale Corporation (COST) by FluentInQuality in March 2025, highlighting its membership-driven revenue, operational efficiency, and volume growth via bulk retail and strategic loss-leaders. COST’s stock has depreciated by approximately 7.31% since our coverage due to normalized consumer spending. Elevator Pitches shares a similar perspective but emphasizes Floor & Decor’s (FND) warehouse model, Pro customer focus, and store rollout strategy.

Floor & Decor Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held FND at the end of the third quarter which was 46 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.