Floor & Decor Gears Up For Secondary Offering

Floor & Décor Holdings, Inc. (FND) filed with the Securities and Exchange Commission (SEC) for a secondary offering. The company intends to sell nine million shares in the offering with an over-allottment option for 1.35 million shares. At the most recent closing price, the entire offering would be valued up to $408.51 million. Keep in mind the company has a market cap of $3.7 billion.

The underwriters for the offering are Merrill Lynch, Barclays, Credit Suisse, UBS Investment Bank, Goldman Sachs, Jefferies, Piper Jaffray, Wells Fargo, and Houlihan Lokey.

The Smyrna, Georgia-based company is a high-growth, multi-channel specialty retailer of hard surface flooring and related accessories with 74 warehouse-format stores across 17 states. Management believes the company offers the industry’s broadest in-stock assortment of tile, wood, laminate and natural stone flooring, along with decorative and installation accessories.

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Floor & Décor tries to appeal to a variety of customers, including professional installers and commercial businesses, do it yourself customers and those who buy the products for professional installation.

In the filing, Floor & Décor highlighted a few of its financial highlights:

  • Eight consecutive years of double-digit comparable store sales growth averaging 15.3% per year (and averaging 16.5% per year for fiscal 2012 to fiscal 2016), with a 19.4% increase in fiscal 2016; comparable store sales growth was 12.8% for the 13 weeks ended March 30, 2017 compared with 22.4% for the 13 weeks ended March 31, 2016.

  • Store base expansion from 30 warehouse-format stores at the end of fiscal 2012 to 69 at the end of fiscal 2016, representing a CAGR of 23.1%; we added 12 warehouse-format stores during fiscal 2016, which was a 21.1% growth in units compared to fiscal 2015; we added three warehouse-format stores and relocated one warehouse-format store during the 13 weeks ended March 30, 2017, ending with 72 warehouse-format stores, which was a 20.0% unit growth rate compared to March 31, 2016.

  • Total net sales growth from $336.7 million to $1,050.8 million from fiscal 2012 to fiscal 2016, representing a CAGR of 32.9%; total net sales were $307.3 million for the 13 weeks ended March 30, 2017, an increase of 30.6% over the 13 weeks ended March 31, 2016.

  • Net income growth from $12.8 million to $43.0 million from fiscal 2012 to fiscal 2016, representing a CAGR of 35.3%; net income was $11.1 million for the 13 weeks ended March 30, 2017, an increase of 56.7% over the 13 weeks ended March 31, 2016.