Floor & Decor's Q1 Earnings: Can Strong Growth Outweigh Supply Chain Headwinds?

Floor & Decor (FND) is set to report its first-quarter 2025 earnings after the market closes on May 1, 2025, with a conference call to follow. Investors will be watching closely as the home improvement retailer navigates a mix of expansion optimism and lingering supply chain challenges. Here’s what to expect—and why the results could matter for the stock’s trajectory.

Analyst Estimates: A Modest Revenue Beat, But EPS Under Pressure

The consensus calls for $1.16 billion in revenue, a 6.1% year-over-year increase, with estimates ranging from $1.15 billion to $1.18 billion. For earnings, analysts project $0.45 per share, a 2.2% decline from Q1 2024. The EPS forecast has been stable for 30 days, suggesting little movement in sentiment.

However, FND has a history of exceeding expectations. Over the past four quarters, it averaged an 18.2% earnings surprise, including a stunning 50% beat in Q4 2023. Will that trend continue?

Key Growth Drivers: Expansion and New Product Lines

FND’s strategy hinges on new warehouse stores and online initiatives, which have driven consistent revenue growth. The company has also ventured into adjacent categories, such as semi-custom cabinets, now available in 40 stores. These moves aim to capitalize on the DIY home improvement boom.

Yet recent data raises a red flag: comparable store sales fell 1.7% in Q1, per February 2025 reports. This decline could signal softening demand or inventory mismatches. Management will need to address whether this is a temporary issue or a warning sign.

Risks: Tariffs and a Neutral Earnings Outlook

Despite reducing reliance on Chinese imports—from 50% in 2018 to 18% in 2024—tariffs remain a headwind. The Zacks Earnings Model assigns FND a Hold rating (#3) and a neutral Earnings ESP of 0%, suggesting skepticism about an outright beat.

The Bigger Picture: 2025 Guidance Looks Strong, But…

Analysts are bullish on FND’s long-term prospects. For fiscal 2025, they project EPS growth to $2.39, a 32% jump from 2024’s $1.81, with revenue rising to $4.82 billion (up 8% annually). This optimism assumes FND can execute on its expansion and product initiatives while managing costs.

Conclusion: A Stock Walking a Tightrope Between Potential and Pressure

Floor & Decor is in a precarious but promising position. Its expansion strategy and new product lines—particularly semi-custom cabinets—offer long-term growth avenues. Historically, the company has delivered surprising upside, which could again materialize in Q1.

However, the comparable store sales decline and lingering tariff costs pose near-term risks. If FND’s results align with or exceed the $0.45 EPS estimate, investors might reward the stock, especially given its 32% EPS growth forecast for 2025.

For now, the May 1 earnings report will be a litmus test: Can FND prove that its growth story remains intact, or will supply chain and demand headwinds force a reassessment? Investors should listen closely to management’s commentary on store performance and cost controls during the conference call.

With the stock’s historical earnings surprise rate and the company’s ambitious 2025 targets, there’s room for optimism—if the numbers hold up.