Does Floor & Decor (FND) Have Potential for Better Store-Level Sales And Profit Margins?

In its first-quarter 2026 capitalist letter, Argosy Investors highlighted stocks specified arsenic Floor & Decor Holdings, Inc. (NYSE:FND). Floor & Decor Holdings, Inc. (NYSE:FND) is simply a multi-channel specialty retailer of hard aboveground flooring and related accessories. On June 5, 2026, Floor & Decor Holdings, Inc. (NYSE:FND) closed astatine $47.41 per share. One-month instrumentality of Floor & Decor Holdings, Inc. (NYSE:FND) was -2.77%, and its shares mislaid 36.46% implicit the past 52 weeks. Floor & Decor Holdings, Inc. (NYSE:FND) has a marketplace capitalization of $5.12 billion.

Argosy Investors stated the pursuing regarding Floor & Decor Holdings, Inc. (NYSE:FND) successful its Q1 2026 capitalist letter:

"Finally, I added to Floor & Decor Holdings, Inc. (NYSE:FND). FND is truly absorbing to maine due to the fact that it’s been a banal marketplace darling during COVID wherever it was assumed that they would get to their mature footprint of 500 stores (up from 270 astatine YE 2025) sooner than expected and execute amended store level income and nett margins sooner arsenic well. Of course, the precocious location income enactment during COVID has receded significantly, galore of the company’s caller stores look ill-advised based connected aboriginal income results, and the achievability of the company’s semipermanent income and EBIT margins look successful doubt. I could not disagree more. The institution inactive continues to instrumentality stock from bequest flooring providers and portion the Home Depots and Lowe’s of the satellite person made competitory responses successful flooring, they volition ne'er travel adjacent to the breadth and enactment FND provides. I deliberation it’s wholly imaginable the institution generates $14B successful income a decennary from present (up from $4.7B successful 2025) and $1.4B nett income (up from $209MM today). While the institution has 108MM shares outstanding today, the institution volition statesman to make excess currency successful the adjacent fewer years, allowing for meaningful stock repurchases, and portion astir intolerable to forecast avg. stock prices implicit a decade, immoderate tenable mathematics suggests shares outstanding could beryllium ~85MM successful a decade’s clip if each excess currency is utilized connected stock repurchases. It’s not highly hard to spot prices astatine multiples of today’s prices successful a fewer years time, and with a somewhat amended macro environment."