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Floor & Decor (FND) to Post Q2 Earnings: Factors to Note

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As Floor & Decor Holdings, Inc. (FND - Free Report) prepares to announce its second-quarter 2024 earnings on Aug 1 after market close, investors are keenly watching for insights into the company’s performance and strategic direction. 

The Zacks Consensus Estimate for second-quarter revenues stands at $1,151 million, which indicates an increase of 1.3% from the prior-year reported figure.

However, the bottom line of this multi-channel specialty retailer and commercial flooring distributor is expected to have declined year over year. Over the past seven days, the Zacks Consensus Estimate for earnings per share has dropped by a couple of cents to 50 cents, which suggests a fall of 24.2% from the year-ago quarter.

Floor & Decor has a trailing four-quarter earnings surprise of 10.4%, on average. In the last reported quarter, the company outperformed the Zacks Consensus Estimate by a margin of 4.6%.

Factors to Consider

Floor & Decor Holdings has strategically focused on expanding its market share through the introduction of new warehouse-format stores. By leveraging everyday low prices and value-driven options, the company aims to attract a larger customer base and increase sales volume. Offering trend-right product assortments and maintaining ample stock are key to meeting customer demand efficiently.

The company is also investing in enhancing the omnichannel experience, including improvements in website speed and search functionality to better attract and retain customers. Furthermore, Floor & Decor is deepening relationships with professional customers through advanced CRM tools and educational events, which is likely to have contributed to revenue growth.

However, Floor & Decor faces challenges due to weak demand for hard surface flooring. The company’s first-quarter results reflected this trend, with comparable store sales dropping by 11.6% year over year. This decline was accompanied by a reduction in the average ticket size and transaction volume, highlighting decreased customer spending and smaller project sizes. If demand for hard surface flooring remains subdued, it could have impacted the company’s performance.

It is essential to acknowledge the presence of the aforementioned headwinds, which may pose challenges to Floor & Decor. Additionally, margins remain a critical area to monitor, with potential concerns stemming from any deleverage in the selling and store operating expenses. In the first quarter, selling and store operating expenses deleveraged by 340 basis points to 30.5% of sales.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Floor & Decor this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.

Floor & Decor currently has a Zacks Rank #4 (Sell) and an Earnings ESP of -4.52%, thus making the surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

3 Stocks With the Favorable Combination

Here are three companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Burlington Stores (BURL - Free Report) has an Earnings ESP of +5.62% and currently carries a Zacks Rank of 2. BURL's top line is anticipated to advance year over year when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.41 billion, which suggests an 11% increase from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is expected to register an increase in the bottom line. The consensus estimate for Burlington Stores’ fiscal second-quarter earnings is pegged at 93 cents a share, up 55% from the year-ago quarter. BURL has a trailing four-quarter earnings surprise of 21.7%, on average.

Amazon.com, Inc. (AMZN - Free Report) currently has an Earnings ESP of +4.58% and a Zacks Rank of 2. The company is likely to register an increase in the bottom line when it reports second-quarter 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $1.03 implies a surge of 63.5% from the year-ago reported number. 

Amazon’s top line is expected to have ascended year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $148.6 billion, which suggests an increase of 10.6% from the prior-year quarter. AMZN has a trailing four-quarter earnings surprise of 48.2%, on average.

Costco Wholesale Corporation (COST - Free Report) currently has an Earnings ESP of +1.23% and a Zacks Rank of 2. The company is expected to register top and bottom-line growth when it reports fourth-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for COST’s quarterly revenues is pegged at $80 billion, which implies a rise of 1.3% from the year-ago quarter’s reported figure.

The consensus estimate for Costco’s earnings has increased by a penny in the past 30 days to $5.02 per share. The consensus estimate for earnings suggests a jump of 3.3% from the year-ago quarter’s reported figure. COST delivered an earnings beat of 2.3%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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