Why Sands Capital Select Growth Fund Dumped Floor & Decor

Ladies and gentlemen, let me tell you something: the market is a fickle beast, and it's always on the move. Today, we're diving into why Sands Capital Select Growth Fund decided to exit Floor & Decor Holdings, Inc. (FND). This is a story of financial performance, market conditions, and the relentless pursuit of growth. So, buckle up and get ready for the ride!

First things first, let's talk about the numbers. Floor & Decor's financial performance has been a rollercoaster ride, and not the fun kind. Net sales increased by a measly 0.9% to $1,117.9 million, while comparable store sales plummeted by 6.4%. That's a red flag right there! Diluted earnings per share (EPS) dropped by 21.3% to $0.48. Ouch! That's not the kind of growth that gets investors excited.

Now, let's talk about profitability. Operating income decreased by 21.8% to $66.3 million, and the operating margin shrank by 180 basis points to 5.9%. Net income also took a hit, decreasing by 21.6% to $51.7 million. And let's not forget about adjusted EBITDA, which decreased by 5.7% to $132.9 million. These numbers are a nightmare for any growth fund, and Sands Capital is no exception.

But it's not just about the numbers. The market conditions have been challenging, to say the least. The CEO, Tom Taylor, mentioned that demand for large project discretionary home improvement and hard surface flooring spending remained challenging. That's a fancy way of saying that people aren't buying as much flooring as they used to. And in a market where stability and predictability are key, that's a big problem.

Now, let's talk about the fund's investment philosophy. Sands Capital Select Growth Fund is all about stability, predictability, and consistent growth. They believe that, over time, stock prices will reflect the earnings power and growth of the underlying businesses. But Floor & Decor's financial performance and market conditions just didn't cut it. The fund needed to make a move, and fast.

So, what does this mean for you? If you're holding Floor & Decor, it might be time to re-evaluate your position. The market is always changing, and you need to be ready to adapt. Stay away from stocks that aren't delivering the growth you need, and focus on companies that are poised for success.

In conclusion, Sands Capital Select Growth Fund exited Floor & Decor Holdings, Inc. (FND) because the company's financial performance and market conditions didn't align with the fund's investment philosophy. The numbers don't lie, and neither does the market. So, keep your eyes on the prize, and don't be afraid to make the tough calls. That's how you win in this game!