FND

As Lowe's Companies, Inc. LOW prepares to unveil its second-quarter fiscal 2026 earnings on Aug. 19, before the opening bell, investors are eager to see if the company can beat market expectations. The Zacks Consensus Estimate for revenues stands at $26.14 billion, implying 9.1% growth from the prior year. Meanwhile, the consensus mark for earnings per share has fallen by a penny to $4.22 over the past seven days, which suggests a 2.5% decline from the year-ago period.LOW has a trailing four-quarter earnings surprise of 2.3%, on average. In the last reported quarter, this Mooresville, NC-based company’s bottom line outperformed the Zacks Consensus Estimate by a margin of 2.4%. Image Source: Zacks Investment Research As investors prepare for Lowe’s second-quarter results, the question looms regarding an earnings beat or miss. Our proven model does not conclusively predict an earnings beat for Lowe’s 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. Lowe’s has a Zacks Rank #4 (Sell) and an Earnings ESP of -0.91%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Lowe's Companies, Inc. price-consensus-eps-surprise-chart | Lowe's Companies, Inc. Quote Lowe’s second-quarter performance is likely to have benefited from sustained demand, backed by focused merchandising and promotional execution. The company entered the quarter with strength in lawn and garden and other outdoor categories and planned to keep value and innovation at the center of its offers. A broad assortment of leading brands, healthy in-stock positions and convenient delivery options may have helped Lowe’s convert seasonal traffic across stores and digital channels. Management also highlighted the continued rollout of workwear and pet assortments, which could have provided an incremental sales opportunity during the quarter.We believe continued momentum in Lowe’s Total Home strategy may also have supported the quarter. The Pro business remained a key area of strength, with small- and medium-sized professional customers continuing to engage in repair and maintenance projects despite the difficult housing backdrop. Investments in Pro Extended Aisle, localized assortments, improved fulfillment and digital tools have expanded the company’s ability to serve these customers while simplifying the purchasing process. At the same time, enhancements to online shopping, same-day delivery and the MyLowe’s loyalty platforms are likely to have encouraged customers.Home services and operational improvements may have provided another layer of support. Lowe’s continued to gain traction with installation and replacement projects, particularly in categories where customers value speed, convenience and professional service. Appliances also remained well positioned because of the company’s broad brand assortment, omnichannel capabilities and fast delivery and installation network. Productivity initiatives across stores and the supply chain — including AI-enabled associate tools, faster replenishment and efforts to improve product availability — may have helped Lowe’s maintain service levels and capture demand more efficiently. The integration of Foundation Building Materials and Artisan Design Group also offered opportunities for procurement efficiencies and cross-selling while extending Lowe’s reach with professional and construction customers.That said, Lowe’s is likely to have continued to face pressure from the broader home improvement environment. Elevated interest rates, high housing costs and subdued housing turnover have kept DIY demand under strain, particularly for larger discretionary projects, while lower-income consumers have remained cautious. These demand challenges were compounded by cost pressures, including higher transportation expenses and inflation in fuel and commodity-based products. Lowe’s, which competes with The Home Depot, Inc. HD and Floor & Decor Holdings, Inc. FND, has seen its shares decline 0.6% over the past three months against the industry’s rise of 9.6%. Shares of Home Depot and Floor & Decor Holdings have advanced 12.1% and 28%, respectively. Image Source: Zacks Investment Research Lowe’s valuation remains discounted relative to the industry. The stock currently trades at a forward 12-month P/E multiple of 16.64, below the industry average of 19.63. LOW is also trading below its own 12-month median P/E of 18.66, suggesting that the stock remains attractively valued relative to the industry and its recent historical range.Lowe’s is trading at a discount to Home Depot (with a forward 12-month P/E ratio of 21.59) and Floor & Decor (26.24). Image Source: Zacks Investment Research Lowe’s enters the second-quarter earnings release with a mixed setup. Strength in Pro, online, home services and ongoing productivity initiatives could support sales, while its relatively attractive valuation may appeal to long-term investors. However, persistent weakness in discretionary DIY demand, housing-market pressures and elevated operating costs remain meaningful concerns. More importantly, the current earnings setup does not point convincingly toward an earnings beat, which limits the case for taking an aggressive position ahead of the report. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report The Home Depot, Inc. (HD) : Free Stock Analysis Report Floor & Decor Holdings, Inc. (FND) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Somnigroup International Inc. SGI lowered its 2026 earnings outlook after second-quarter results reflected weaker bedding demand, Mattress Firm profitability pressures and commodity cost inflation. While the company delivered adjusted earnings growth and continued to generate synergies from the Mattress Firm acquisition, softer industry trends have reduced near-term earnings visibility. Somnigroup reported second-quarter 2026 adjusted earnings of 58 cents per share, up 9.4% year over year and in line with the consensus estimate. Sales declined 3% to $1.82 billion and missed the consensus mark of $1.9 billion, with Mattress Firm weakness weighing on consolidated results. Somnigroup International Inc. price-consensus-eps-surprise-chart | Somnigroup International Inc. Quote The company’s gross margin expanded year over year, supported by acquisition synergies, operating efficiencies and product mix. Adjusted operating income, however, declined 3.5% to $216.6 million, highlighting the impact of ongoing cost pressures. Mattress Firm remains a key focus for investors following the quarter. The segment generated sales of $922.2 million, down 2.8% year over year, primarily due to store closures. Adjusted gross margin declined 240 basis points to 33.3%, while adjusted operating margin fell 130 basis points to 6.5%. The margin decline reflected higher consumer financing costs, store investments, deleverage and product mix changes. Somnigroup is continuing store refresh and brand wall initiatives, with $75 million of 2026 capital expenditures allocated toward those programs. While these investments could support future sales, they may weigh on near-term profitability if demand remains weak. Management lowered its 2026 adjusted EPS guidance to $2.85-$3.15 from the previous range of $3.00-$3.40. The company now expects the global bedding industry to decline by a mid-single-digit percentage in 2026 compared with its earlier expectation for a flat to slightly down market. Image Source: Zacks Investment Research The revised outlook assumes low-single-digit like-for-like sales growth in Tempur Sealy North America, low-single-digit international growth and a slight decline in Mattress Firm like-for-like sales. Adjusted EBITDA is expected at approximately $1.39 billion at the midpoint of the guidance range. Management cited weaker-than-expected industry trends and challenges in the U.K. Dreams business as factors behind the guidance revision. The company noted that the U.S. bedding market was weaker than anticipated during the second quarter, although Mattress Firm same-store sales returned near the prior trend after the July 4 holiday period. Investors evaluating Somnigroup can also compare the company with other players in the home furnishings and bedding industry, including Floor & Decor Holdings, Inc. FND and Leggett & Platt, Incorporated LEG. Commodity costs affected profitability as input and freight inflation increased before pricing actions took effect. Management estimated roughly $90 million of annualized commodity inflation and said the timing gap created an approximately $10 million one-time headwind to Tempur Sealy profits in the second quarter. Somnigroup implemented pricing actions after the July 4 promotional period and expects those increases to offset the inflation impact in the second half of 2026. Still, management noted that pricing actions designed to neutralize commodity inflation can be margin dilutive. Somnigroup currently carries a Zacks Rank of 5 (Strong Sell). The stock has a VGM Score of C, with a Value Score of D, Growth Score of B and Momentum Score of C. Zacks Style Scores provide investors with separate measures of value, growth and momentum characteristics that complement the Zacks Rank. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The company’s growth profile remains a relative strength, supported by Mattress Firm synergies, international expansion and improving cash generation. Tempur Sealy North America generated approximately $30 million of net sales and cost synergy benefits in the second quarter, while management expects Tempur Sealy brands and private labels to represent a mid-60s percentage of Mattress Firm sales and contribute an incremental $65 million of adjusted EBITDA benefit in 2026 versus 2025. However, weaker bedding demand, Mattress Firm margin pressures and commodity-related uncertainty remain key factors shaping SGI’s near-term earnings outlook. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Somnigroup International Inc. (SGI) : Free Stock Analysis Report Leggett & Platt, Incorporated (LEG) : Free Stock Analysis Report Floor & Decor Holdings, Inc. (FND) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

In the past week, Floor & Decor Holdings, Inc. reported second-quarter 2026 results showing sales of US$1,250.27 million and net income of US$95.87 million, alongside updated full-year guidance calling for US$4.77 billion–US$4.99 billion in net sales and diluted EPS of US$2.20–US$2.45. Management highlighted stronger contributions from pro customers, higher earnings per share, and increased share repurchases, paired with an improved earnings outlook that underscores confidence in the company’s cash generation and capital allocation plans. With Floor & Decor lifting its full-year earnings guidance, we’ll now assess how this revised outlook affects the existing investment narrative. The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 16 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. To own Floor & Decor, you need to believe its big-box warehouse model and growing pro customer base can support healthy sales and earnings, even if large discretionary projects stay soft. The immediate catalyst remains execution on store growth and pro penetration, while the biggest risk is continued housing and remodeling caution that keeps comparable sales under pressure. The latest quarter supports management’s confidence, but does not remove the demand risk tied to housing activity. The most relevant update here is the raised 2026 EPS guidance to US$2.20–US$2.45, supported by stronger pro sales and US$65.7 million of buybacks in the quarter. That reinforces the near term catalyst around earnings growth and capital returns, but it also raises the bar: if housing-related demand stays muted or new stores underperform, the gap between guidance and actual results could quickly become a key risk for shareholders. However, investors should also weigh how weaker remodeling demand or prolonged pressure on big-ticket projects could affect Floor & Decor’s ability to... Read the full narrative on Floor & Decor Holdings (it's free!) Floor & Decor Holdings' narrative projects $5.6 billion revenue and $241.5 million earnings by 2029. Uncover how Floor & Decor Holdings' forecasts yield a $56.95 fair value, a 9% downside to its current price. Some of the lowest ranked analysts were assuming only about 5.5 percent annual revenue growth to roughly US$5.5 billion and earnings of about US$201.8 million by 2029, so if you are worried about slower household formation or a shrinking remodeling customer base, this more cautious view on Floor & Decor’s outlook might feel closer to your own than the consensus. Explore 4 other fair value estimates on Floor & Decor Holdings - why the stock might be worth less than half the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Floor & Decor Holdings research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision. Our free Floor & Decor Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Floor & Decor Holdings' overall financial health at a glance. Early movers are already taking notice. See the stocks they're targeting before they've flown the coop: This technology could replace computers: discover 26 stocks that are working to make quantum computing a reality. The future of work is here. Discover the 36 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. Uncover the next big thing with 19 elite penny stocks that balance risk and reward. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FND. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Mohawk Industries, Inc. MHK presents investors with a clear trade-off between improving profitability and a still-challenging housing cycle.Better execution, cash generation and restructuring benefits support the recovery case. A higher valuation and uncertain residential demand make the stock less compelling as an outright buy. Mohawk’s second-quarter 2026 adjusted earnings increased 32.5% year over year to $3.67 per share and exceeded the Zacks Consensus Estimate by 42.8%. Adjusted operating income rose across all three business segments, supported by volume growth, pricing, favorable product mix, productivity and tariff refunds. Mohawk Industries, Inc. price-consensus-chart | Mohawk Industries, Inc. Quote The Zacks Consensus Estimate calls for earnings of $9.78 per share in 2026 and $10.70 in 2027. That projected increase suggests the earnings recovery can extend beyond the latest quarter, though the pace will depend on demand and Mohawk’s ability to offset inflation. Mohawk continues to simplify operations, realign its organization, consolidate warehouses and optimize capacity. Restructuring programs initiated since 2022 are expected to generate about $360 million in annualized benefits.Additional projects announced in the second quarter could lower annual costs by another $60 million after completion, with most actions scheduled by the end of 2027. These permanent reductions should support profitability during weak demand periods and provide stronger operating leverage when residential markets recover. Free cash flow reached $236 million during the first six months of 2026, up from $41 million a year earlier. Net debt was about $1.07 billion, while net debt-to-adjusted EBITDA stood at 0.8X at the end of the second quarter.The company repurchased about $125 million of shares during the first half and plans roughly $460 million of capital spending in 2026. Most of that spending is directed toward cost reduction, innovation and maintenance, giving Mohawk room to invest without stretching its balance sheet. Home resale activity remained near multi-decade lows in the second quarter, while new construction and residential remodeling stayed soft. Management expects flooring conditions to remain difficult in the third quarter, with commercial demand outperforming residential activity.Floor & Decor Holdings, Inc. FND reported a 2.1% decline in second-quarter comparable-store sales and said demand for larger discretionary flooring projects remained uneven. That performance supports Mohawk’s cautious view of residential spending.Interface, Inc. TILE offers a contrasting industry signal. The commercial flooring producer reported 6.8% currency-neutral sales growth in the first quarter, led by corporate office and health care demand, illustrating why commercial exposure may provide more support than residential markets. MHK trades at 14.4X forward 12-month earnings, close to the sub-industry multiple of 14.5X but above its five-year median of 10.8X. The current price also sits near the $140 price target from the Aug. 3 closing level of $132.99.That valuation reflects improving execution but leaves less room for error. If inflation persists, pricing becomes harder to realize or housing weakness lasts longer than expected, the stock could struggle to deliver meaningful upside. MHK currently carries a Zacks Rank #3 (Hold). It also has a VGM Score of A, with a Value Score of B, Growth Score of B and Momentum Score of C. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The VGM, Value and Growth readings support the longer-term recovery case. Still, Style Scores are designed to complement the Zacks Rank, and the Hold designation argues for patience rather than aggressive buying.A 0.4% decline in the current-year earnings estimate over the past four weeks and the Momentum Score of C add to the case for waiting. Existing shareholders may have reasons to stay invested, but new investors may want clearer evidence of durable demand improvement before building a position. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mohawk Industries, Inc. (MHK) : Free Stock Analysis Report Interface, Inc. (TILE) : Free Stock Analysis Report Floor & Decor Holdings, Inc. (FND) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, July 30, 2026 at 5:00 p.m. ET Senior Vice President of Investor Relations - Wayne Hood Chief Executive Officer - Brad Paulsen Executive Vice President and Chief Financial Officer - Bryan Langley Operator: Greetings, welcome to the Floor & Decor Holdings second quarter 2026 conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Wayne Hood, Senior Vice President of Investor Relations. Please go ahead. Wayne Hood: Thank you, operator, good afternoon, everyone. Welcome to Floor & Decor's fiscal 2026 second quarter earnings conference call. Joining me today are Brad Paulsen, Chief Executive Officer, and Bryan Langley, Executive Vice President and Chief Financial Officer. Before we begin, I want to remind everyone of the company's safe harbor language. Comments made during this call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statement that refers to expectations, projections, or other characterizations of future events, including financial projections or future market conditions, is a forward-looking statement. These statements are subject to risk and uncertainties that could cause actual results to differ materially from those expressed in these forward-looking statements for any reason, including those listed at the end of the earnings release and in the company's SEC filings. Floor & Decor assumes no obligation to update any such forward-looking statements. Please also note that past performance or market information is not a guarantee of future results. During this conference call, the company will discuss certain non-GAAP financial measures. We believe these measures enable investors to better understand our core operating performance on a comparable basis between periods. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP financial measures can be found in the earnings press release, which is available on our investor relations website at ir.flooranddecor.com. A recorded replay of this call and related materials will be available on our investor relations website. Let me now turn the call over to Brad. Brad Paulsen: Thank you, Wayne, thanks to everyone for joining us on our fiscal 2026 second quarter earnings call. I'll start by reviewing our second quarter performance and the key drivers behind our results. After that, Brian will share our perspective on the remainder of 2026, including how we're navigating the current environment while continuing to invest in our strategic priorities and long-term growth opportunities. Turning to our fiscal 2026 second quarter results, we are pleased to have delivered adjusted diluted earnings per share of $0.58, unchanged from the prior year period, despite a 2.1% decline in comparable store sales driven by continued softness in large discretionary flooring projects. I was pleased with how our team stayed focused on the factors within our control, delivering compelling value to our pros and homeowners, providing an exceptional customer experience, executing our merchandising and operational initiatives, and maintaining disciplined expense management. Those efforts enabled us to maintain earnings per share in line with the prior year, while generating strong free cash flow, which provided the flexibility to repurchase $65.7 million in common stock during the quarter. I want to thank our approximately 14,000 associates for their commitment and hard work throughout the quarter. Their focus and disciplined execution demonstrated the resilience of our operating model and position us to continue creating long-term value for our shareholders. Now, let's take a deeper look at our second quarter results. Total sales increased 3% to $1,250.3 million, compared to $1,214.2 million in the prior year period. Sales to pros continued to outperform the company and grew approximately 4% from the same period last year, accounting for about 55% of sales. Comparable store sales declined 2.1%, an improvement from the 3.7% decline reported in the first quarter, reflecting steady sequential improvement throughout the quarter. Comparable store sales declined 5.1% in April, declined 1.3% in May, and declined 0.3% in June. The improvement in comparable store sales reflected improving trends across several key metrics. First, our net promoter scores remained high, driving a sequential improvement in customer conversion. This is one proof point in how our store associates are highly engaged in this environment to win every sale. Second, comparable transactions also improved, declining 2.9%, compared with a 5.5% decline in the first quarter. Lastly, average ticket grew 0.8% year-over-year, despite lapping last year's strongest quarterly growth rate of 3.8%. Both ticket and transactions were aided by a sequential improvement in comparable square footage sales from the first quarter. Demand softened around the Fourth of July holiday period while the housing market remained constrained by subdued existing home sales activity. Third quarter to date comparable store sales declined 2.2%. Encouragingly, sales trends improved in late fiscal July and early fiscal August. Geographically, our comparable store sales improvement broadened during the second quarter. Our west region continued to outperform the company and delivered positive comparable store sales, excluding cannibalization, and encouragingly, our east region also turned positive on that basis. Furthermore, among our 16 districts, eight reported positive comparable store sales excluding cannibalization. From a merchandising category perspective, three departments outperformed the company's comparable store sales performance during the quarter: installation materials, tile, and wood. Installation materials continue to deliver strong year-over-year growth as we expanded our share of wallet with pros and further strengthened our position in the market. We continue to execute our supply house strategies and expand our store base, we believe we are becoming an increasingly convenient and reliable destination for pros to purchase installation materials. Tile remained a standout performer, supported by the continued success of key initiatives, including the Vetta Elements Collection, which continues to resonate with both pro and homeowner customers. Growth in the wood category was driven by market share gains in engineered and unfinished wood, acoustic wall panels, and the success of our bulk out strategies. We expect to build on this momentum in the second half of 2026 with new SKUs and opportunity buys. In the vinyl flooring category, comparable store sales and comparable square footage sales sequentially improved during the quarter, supported by a combination of merchandising, pricing, and value-focused initiatives that we will continue to build on in the second half of 2026. The combination of slowing demand for vinyl and excess industry supply continues to put pressure on the category, which could continue into 2027. Importantly, sales penetration of our better and best offerings increased both sequentially and year-over-year, reflecting sustained customer adoption of our higher-value offerings and reinforcing the effectiveness and resilience of our strategy despite ongoing macroeconomic pressures. In June, we are excited to launch NatureMatch, a new private label collection that brings the authentic look and feel of natural wood and stone to consumers at a more accessible price point. Spanning nearly 100 SKUs across porcelain tile, luxury vinyl plank, and waterproof laminate, NatureMatch reflects our ongoing commitment to technology, product innovation, and value. In a challenging home improvement market, differentiated collections such as NatureMatch continue to drive customer engagement, support conversion, and create incremental cross-category selling opportunities. By combining premium design, strong performance, and a compelling value proposition, we are expanding our appeal across customer segments while continuing to gain market share. As we look to drive sales in what we expect will remain a challenging demand environment through the second half of 2026, our marketing strategy is focused on reaching high-intent customers at key decision points in their purchase journey through more targeted, higher return tactics. We are aligning our marketing efforts across stores and digital channels. Let me turn to our new warehouse store expansion. Through the first half of fiscal 2026, we opened 11 new warehouse format stores, including five in the second quarter. Syracuse, New York, Portland, Oregon, Mount Vernon, New York, Houston, Texas, and Schererville, Indiana. With approximately 55% of our planned 2026 locations now open, compared with 35% in the prior year period, the front-loaded cadence we outlined at the start of the year is progressing in line with our expectations. These locations extend our presence in tier 1 and tier 2 markets, where household units, population density, and home improvement activity support the long-term demand profile we target in site selection. We continue to expect the class of 2026 new stores to average approximately 55,000 sq ft, a format that, while smaller than our legacy footprint, allows us to enter higher density markets without sacrificing sales productivity. We expect the balance of our 2026 store openings to be weighted through the fourth quarter. Let me spend a moment on our omnichannel strategy and the digital capabilities we are building to support it. In the second quarter, online sales penetration reached 20.3% of total sales, up from 18.6% in the prior year period and up 110 basis points from the first quarter. This continued improvement reflects the progress we are making to enhance the customer experience across both digital and store channels. We believe delivering a best-in-class omnichannel experience represents one of our largest opportunities to accelerate growth, gain market share, and achieve our long-term sales objectives. As customer expectations have evolved, particularly around digital engagement and convenience, we have recognized the need to strengthen our capabilities and are taking action. We have launched a comprehensive 18 to 24-month transformation to enhance the customer experience, modernize our digital capabilities, and create a more seamless connection between our online and in-store experiences. Through targeted investments in talent, technology, and operating capabilities, we are building a stronger foundation for long-term growth. Importantly, our strategy is centered on the distinct needs of our two core customer segments, pros and homeowners. For homeowners, flooring is a highly researched and project-driven purchase. Our research shows that about 70%-80% of customers search online before visiting stores. Customers seek inspiration, education, project guidance, and confidence before making a buying decision. Our objective is to support them throughout that journey from initial project discovery to final installation. For pros, the priorities are different. They value speed, convenience, pricing, transparency, inventory visibility, and tools that help them manage their businesses more efficiently. Our focus is on creating a seamless experience across every touch point, making it easier for pros to do business with us, whether they are planning a project, purchasing materials, managing rewards, or picking up an order. A key component of that strategy will be the launch of our new pro app next year, which will serve as the connective tissue across our pro ecosystem. By bringing together purchasing, loyalty rewards, pricing, and project management capabilities in one place, we are building a differentiated pro value proposition, particularly when compared with independent flooring retailers. While there is meaningful work ahead, we are encouraged by the progress we are seeing. We believe a stronger digital foundation and a more seamless omni-channel experience will increasingly drive customer acquisition, engagement, conversion, market share gains, and ultimately, long-term shareholder value creation. Let me spend a moment on our regional commercial account managers, or RAMs, who operate in partnership with our warehouse stores. We continue to see meaningful opportunities to drive growth and have expanded our team of RAMs to 80 associates, significantly increasing our ability to serve customers, develop relationships, and pursue non-specified commercial product growth opportunities. As we look at the remainder of the year, our focus will now shift from adding RAMs to increasing productivity. We plan to further strengthen the infrastructure, training, analytics, and operating processes needed to support long-term scalable growth. Our objective is to build a commercial organization that is increasingly productive, repeatable, and scalable. While we remain early in these initiatives, we are encouraged by the progress we are seeing. Turning to Spartan Surfaces, the second quarter represented an early inflection point for the business, with results improving sequentially from the first quarter and momentum building throughout the period. Second quarter sales increased 2% year-over-year, driven by strong shipment activity from the conversion of backlog into revenue. June was one of the strongest months for written sales in the company's history. While commercial end markets remain mixed, particularly in multi-family housing, customer backlogs are beginning to recover from the lows experienced in the second half of 2025. Encouragingly, sampling activity improved late in the quarter. Average quoted project value increased, leading to a very strong project backlog at the end of the second quarter. Taken together, these indicators provide visibility and support our expectation for continued improvement through the second half of the year. As we turn the page on the first half of 2026, we remain focused on driving sales, managing expenses, and delivering value to our customers. We believe these actions are resonating with customers and position us well when demand conditions improve. I continue to believe that this environment creates an opportunity for us to accelerate our market share gains through world-class leadership and disciplined execution. With that, I'll turn the call over to Bryan. Bryan Langley: Thanks, Brad. Before turning to our financial results, I'd like to add my thanks to our associates across the organization. As I reflect on the second quarter, what stands out most is our ability to stay focused on the factors within our control. The quarter reinforced one of the strengths of our company, our ability to execute consistently across a range of operating environments. We managed expenses prudently, advanced key merchandising and operational initiatives, and maintained a strong focus on free cash flow and capital allocation. These efforts enabled us to deliver adjusted diluted earnings per share of $0.58, which was above our expectations, generate strong free cash flow, and return $65.7 million to our shareholders through the repurchase of common stock during the quarter. Before moving to our underlying operating performance, let me discuss two items affecting comparability during the second quarter. First, we recognized a $45.2 million net pre-tax benefit related to the IEEPA tariff refunds, which affected gross margin, SG&A, and interest income. Second, we recognized a $1.3 million pre-tax loss on debt extinguishment associated with the refinancing of our credit facilities. Collectively, these items resulted in a net after-tax benefit of $32.9 million, contributing $0.31 to diluted earnings per share. Our second quarter GAAP diluted earnings per share was $0.89, and excluding these items, adjusted diluted earnings per share was $0.58, flat to the prior year period. A reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measures is included in today's earnings release, and additional information regarding these items is provided in our Form 10-Q. Turning to our underlying operating performance, our gross profit increased $70.4 million, or 13.2%, compared to the same period last year, driven primarily by a $56 million one-time benefit from IEEPA tariff refunds related to inventory we have previously sold through. The remaining amount of tariff refunds was recognized as a reduction to inventories net related to previously capitalized amounts and will be recognized as we sell through the inventory. Excluding the IEEPA tariff refunds benefit, adjusted gross profit increased $14.3 million, or 2.7%, compared to the same period last year. Adjusted gross margin for the quarter was 43.7%, a decrease of 20 basis points year-over-year, which was within our range of expected outcomes. SG&A expenses increased $28.3 million, or 6.3%, in the second quarter compared with the prior year period. The increase was driven primarily by the 24 stores opened since the second quarter of fiscal 2025, as well as higher incentive compensation related to the recognition of IEEPA tariff refunds. SG&A for non-comparable stores increased $26.7 million, while SG&A for comparable stores declined $13.7 million, reflecting our ongoing focus on expense management and productivity initiatives. As a percentage of sales, SG&A deleveraged 120 basis points to 38.3% from 37.1% in the prior year period. The one-time expenses related to IEEPA tariff refunds contributed approximately 110 basis points of the deleverage in the second quarter. Adjusted EBITDA increased 1.2% to $152.0 million from the same period last year. Our second quarter adjusted EBITDA margin was 12.2%, compared with 12.4% in the prior year period. Our second quarter net interest income was $2.3 million, compared to net interest expense of $1.1 million in the same period last year. The year-over-year change was primarily driven by a one-time benefit of approximately $2.8 million in statutory interest on our IEEPA tariff refunds, along with higher interest income from larger cash balances. Additionally, we incurred $1.3 million of debt extinguishment costs associated with the refinancing of our credit facilities. Our second quarter income tax expense was $29.1 million compared to $17.6 million during the same period last year. The effective tax rate was 23.3%, up from 21.8% in the same period last year, primarily due to a decrease in federal tax credits. Excluding the tax impacts related to the IEEPA tariff refunds and the loss on extinguishment of debt, our effective tax rate was 22.3% for the second quarter of 2026. Let me turn to our balance sheet and free cash flow, both of which remain strong. During the second quarter, we completed a comprehensive refinancing of our credit facilities that further strengthened our balance sheet and enhanced our financial flexibility. We entered into a new $200 million term loan facility maturing June 2033 and used the proceeds to repay the remaining $197.1 million outstanding under our prior facility that was scheduled to mature February 2027. In addition, we entered into a new $800 million ABL facility maturing June 2031, replacing the current facility that was scheduled to mature August 2027. Collectively, these transactions extend our debt maturity profile, preserve ample borrowing base capacity, and further enhance the flexibility of our capital structure. We ended the quarter with $942.4 million of unrestricted liquidity, consisting of $320.6 million in cash and cash equivalents and $621.8 million of available capacity under our ABL facility. During the 26 weeks ended June 25th, 2026, we generated $278.4 million of cash provided by operating activities, compared with $155.3 million in the prior year period. We continue to make progress on our working capital and inventory productivity initiatives, as evidenced by total inventory increasing only 0.7% to $1.1 billion compared with December 25th, 2025. Our net cash used in investing activities was $136.7 million, leading to significant excess free cash flow. Supported by our free cash flow and financial position, we began executing against the $400 million share repurchase authorization announced on our first quarter earnings call. During the second quarter, we repurchased 1.3 million shares of common stock and returned $65.7 million to our shareholders and ended the quarter with $334.3 million remaining under the share repurchase authorization. Let me now turn to the macroeconomic considerations informing our outlook for the remainder of fiscal 2026. The demand environment for large discretionary home improvement flooring projects remains choppy, consistent with what we're seeing in housing market activity and broader macroeconomic conditions. Although existing home sales improved modestly during the spring selling season, the recovery has yet to gain meaningful traction, with June activity remaining near historically low levels of approximately 4 million annualized units. In addition, housing affordability continues to be challenged, and persistent inflationary pressures, as well as potential changes in tariffs, continue to influence consumer behavior. As a result, our outlook assumes that consumers will remain cautious and project demand will continue to be influenced by the pace and sustainability of any improvement in housing market activity. Following our better-than-expected second quarter earnings and the anticipated greater impact from the repurchase of common stock, we have increased our fiscal 2026 earnings per share outlook. As a reminder, fiscal 2026 includes a 53rd week, which will be reported in the fourth quarter. I will highlight the expected contribution from the 53rd week as a part of our guidance. Sales are expected to be in the range of $4,770 million-$4,990 million, or increase by 1.8%-6.5% from fiscal 2025. The 53rd week is expected to contribute approximately $65 million to sales. Comparable store sales are estimated to be flat to down 4%. Comp average ticket is estimated to be flat to up low single digits, and comp transactions is estimated to be down low to mid-single digits. Adjusted gross margin is expected to be approximately 43.6%-43.8%. The first quarter gross margin of 44.0% is likely to represent the high point for the year. SG&A, as a percentage of sales, is estimated to be approximately 38%. From a quarterly perspective, the first and fourth quarters will be the most pressured from new stores if you exclude the one-time cost associated with IEEPA tariff refunds in the second quarter. Interest income expense net is expected to be approximately zero. This includes approximately $2.8 million of statutory interest benefit from tariff refunds. Tax rate is expected to be approximately 23%. Depreciation and amortization expense is expected to be approximately $250 million. Adjusted EBITDA is expected to be approximately $550 million-$585 million. The 53rd week is expected to contribute approximately $11 million to adjusted EBITDA. Diluted earnings per share is estimated to be approximately $2.20-$2.45. Adjusted diluted earnings per share is estimated to be approximately $1.88-$2.13. The 53rd week is expected to contribute approximately $0.08 to adjusted diluted EPS, which implies our 52-week adjusted diluted EPS to be $1.80-$2.05. Diluted weighted average shares outstanding are estimated to be approximately 107 million shares. CapEx is estimated to be approximately $240 million-$275 million. Operator, we would like to now take questions. Operator: Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question is from Seth Sigman with Barclays. Seth Sigman: Hey, everybody. Nice progress in the quarter. I wanted to start with the tariff refunds. You had this $45 million net benefit this quarter. What's that number on a full year basis? What's embedded here? Can you talk a little bit about how you've started to deploy those dollars, I guess, either in Q2 or in Q3? To what extent do you think that has contributed to the improvement that you saw in June? Thank you. Bryan Langley: Hi, Seth, and thanks for the question. I assumed that was going to be the first question. I want to just start off and say, really from the onset of tariffs last year through the refund, our team has executed at a really high level. Obviously, we've got multiple years of experience with this, and I would consider it an established capability at this point. What Bryan and I thought we would do, we're going to hand it over to him. He can unpack all things tariff for the folks on the call, and then I'll have a comment or two at the end to wrap it up. Bryan, why don't you walk them through it? Yep. Thanks, Brad. From the mechanics of it, you'll see in the 10-Q today, you've got a little bit more detail there as well if you want to refer to that. We filed for $87 million in total IEEPA tariff refunds, and we've received substantially all of it subsequent to the end of the quarter. We've got all of the cash in at this point. We recorded a $56 million one-time benefit in gross profit related to inventory that we had previously sold through. We recorded a $28 million reduction to inventory for product that was still on hand at that point in time. We'll recognize the benefit of that $28 million as we sell through the inventory, which I would anticipate the majority of that will be recognized in the back half, given that we turn slightly over two times per year. In Q2, the benefit that we recorded from that $28 million was approximately $6 million, that we saw in Q2 in gross profit from the sell-through of that reduced inventory. I think it's important for us to point out for that $6 million that Bryan just referenced for the second quarter. We obviously assumed some inflationary headwinds coming into the business. We had a set of actions that we were prepared to deploy. Once we knew that we were getting the tariff refund, we elected not to deploy those actions and instead use the tariff refunds to offset that inflation. As we pivot into the second half of the year, obviously, a number of different things that we can do with the refund money. I think there are three big buckets that I would share with all of you. The first one, I just talked about it with the second quarter. We'll continue to use those funds to offset the inflationary impacts from both oil and supply chain. Number two, where it makes sense, and making sense means where we see elasticity, we'll selectively invest in price to drive market share gains. Number three, we're going to execute our capital allocation framework. Big buckets on that are invest in stores, other growth initiatives, think commercial and other things like that. Third would be any type of excess cash that we would have, we would send back to our investors through a share repurchase program. Seth Sigman: Very helpful.[crosstalk] Bryan Langley: Hey, Seth. Sorry, just to clarify for you, the difference in the $56 million and the $45 million that you see in the adjusted EBITDA add back or the net income add back is we had $2.7 million of statutory interest that we also received. You'll see that's part of the add back. The rest of it really is just cost associated with the IEEPA tariffs as it rolls through SG&A, through incentive comp and other things. Seth Sigman: Okay. Got it. I was just going to follow up and ask about the comp guidance for the rest of the year in that context. It implies a pretty wide range, -5% to +3%. You're running better than that at the low end right now. Comparisons get easier. Can you maybe talk about some of the scenarios to consider here? In that context, you also mentioned the broadening of performance that you've seen across regions, maybe tie that in. Thanks so much. Brad Paulsen: Bryan and I will tag team this question as well. I'll start out with the second quarter. Definitely pleased with the sequential improvement that we saw through the quarter. A two key drivers. There are three drivers that I'll talk about. First was in the script. Service continues to be really, really high. Every month, we set record levels, and I think that's a reflection, one of the culture that we have and the team that we have in the field. Second, just all things pro. Pro continues to outpace the performance of the rest of the business. A lot of inputs into that pro performance. We talked about installation materials, we talked about the performance in tile, and certainly getting some improvement in laminate and vinyl, which is something that we talked about on our first quarter call. The other piece is we're starting to see some nice traction from our digital business. Still very much early in that process, but starting to see some real benefit from that team. We talked about July. July was a really interesting month. The start of the month was really, really choppy around the Fourth of July. Had some pretty ugly days that we hadn't seen in a while. As we said in the prepared remarks, really, really pleased with how we ended the month and certainly how that has continued into August. I'd say more in line with the run rate that we saw in both May and June, which is certainly encouraging. The one piece that I'll say and underline, Bryan will probably do the same when I turn it over to him, still feel really good about our guidance. In the first quarter, we said, "Hey, we're going to go a little bit wider than normal, given the uncertainty that's in the market." We went flat to -4% on the sales guidance. Had some conversations about changing that coming into this call, still feel like there's too much uncertainty out there. Feel good with the flat to -4%, but do have a level of confidence, high level of confidence, that we're on track to hit the midpoint of that sales guidance. Bryan Langley: Yeah, I think that's spot on, Brad. We would have liked to have tightened the range. We intentionally left it a little wider just because of the uncertainty. I think when you're thinking about just the cadence in the back half, a 2-year stack gets noisy because of all of the Hurricane Helene and Hurricane Milton benefits and everything associated with the storms. If you just look at it on a 3-year stack comp, just to help you guys model, we would expect the high end and the midpoint to increase sequentially from Q2. At the low end, there'd be a slight decrease sequentially from Q2 just to kind of get those. It is a little bit wider of a range than we would typically do at the end of Q2. To Brad's point, there's still a lot of uncertainty in the macro environment that we see today. Great. Thanks, guys. We feel really good about midpoint, and that is our guidance philosophy too. You guys will always see that with us is if things continue on the path that they are right now and the macro environment stays where it is today, we have great visibility to kind of achieving at the midpoint. Seth Sigman: Okay, thank you. Operator: Our next question is from Simeon Gutman with Morgan Stanley. Simeon Gutman: Hey, guys. One quick follow-up on the tariff. The $28 million, I think I got that number right, that's unrecognized, that will happen as you sell the inventory. I guess it's not huge on a basis points basis, I haven't done the math, but you held or you're basically not changing your gross margin guide. Sorry for the naivety, does this mean that when you sell through that product, there should be a higher gross margin on it going forward? And is that in the guidance? Did that help you keep the gross margin guide, or does that provide an upside lever, if I understood it right? Bryan Langley: Hey, look. We put $28 million back into inventory for items that we still had on hand. Of that $28 million, $6 million flowed through in Q2, to help offset some of the inflationary measures that we were seeing with higher oil costs. We're now starting to see higher domestic supply chain costs due to trucking capacity, issues that we see across the industry. We're fine from a capacity standpoint, but we're starting to see some rate changes, as well as reinvesting into select pricing changes as well. What Brad talked about with laminate and vinyl and a couple other select pricing changes that we may try to go after and be more aggressive in market share. All of that said, our adjusted gross margin guidance of 43.6%-43.8% incorporates the back half being benefited. Like I said, the majority of the residual $22 million within that $28 will flow through, it allows us, again, in this environment, to be a little more aggressive and not have to take further actions. As we exit 2026 into 2027, we've got a lot of things that we can do as a company. Again, we have a lot more to talk about. Whenever we think about 2027, we're not going to give you guys any clarity on that today. We've got a ton that we can do as a company when these tariff benefits do subside. Again, it just gives us a lot of flexibility and optionality in 2026 to be able to take more market share. Simeon Gutman: Okay, thanks for that explanation. One follow-up on the sales environment, more to Brad, and related to the last comment. We've had a couple of, I don't want to say false starts, but early reads of industry bottoming, especially your business. It sounds like we're going through another one, and it felt a little more emphatic, I thought the language this time. Anything you can point to that this is demand stabilizing, turning more from replacement demand outside of your initiatives, or how do you assess, could this be another false start? Brad Paulsen: Yeah, I'm going to be really careful here because I don't want to be the initiator of a false start, I'll give you my perspective. Like I said, certainly pleased with the sequential improvement through the quarter. One of the things that we called out in the script is if you look at our business ex cannibalization, we had two regions, two of our three regions deliver a positive comp, which to me, is a really, really strong story. We saw some improved traction on our commercial business. All that being said, where you sense the more emphatic approach from us is, we've said that we came into 2026 saying that we need to assume the environment's going to look a lot like 2025, that we are going to build a stack of initiatives that we felt like could deliver accelerated market share gains. We do have a level of confidence around the execution of our initiatives and feel like that's paying off. Probably, at least from my perspective, amateur perspective, too early to tell if things are truly bottoming. We're going to assume that's going to continue to be the case and do everything we can to deliver a great customer experience and take as much share as possible. Simeon Gutman: Okay. Thanks a lot. Good luck. Brad Paulsen: Thank you. Operator: Our next question is from Steven Zaccone with Citigroup. Steven Zaccone: Great. Good afternoon. Thanks very much for taking my question. Can we talk a little about the laminate vinyl category? It sounds like you're expecting that weakness to continue into 2027. That sounded like a new comment. Maybe, what are you seeing there? Elaborate a little bit more on the pricing environment in that category as well. Brad Paulsen: Sure, I'll rewind the tape a little bit with my answer. Laminate and vinyl, it's our second-largest category. It's the only category that we sell where we're seeing any type of downward pressure, and we believe that downward pressure is a result of excess supply in the market. The term that Ersan and I have used is the category's been devalued. What we mean by that is a SKU that used to be considered a better in a good, better, best lineup is now considered and priced as a good SKU. That obviously puts pressure on all parts of that category, and it is the vinyl part of laminate and vinyl. We were really clear on our first quarter call to say we're going to play offense, we're going to be thoughtful around pricing, we're going to have aggressive opportunity buys, and we're going to add new SKUs to our assortment to make sure we're hitting the mark with the customers that are interested in that category. We did see improvement, and we're going to continue to push for more improvement for the remainder of the year. When we say, "Hey, we think that pressure is going to bleed over into 2027," that's consistent with what we talked about at the first quarter. We're just trying to get a sense of how quickly this excess inventory will dissipate. Tough thing to tell. I trust Ersan. He's been in the business a long time. Our sense is it's going to run through at least the first half of next year. Again, our perspective is it's an opportunity for us to take share and make that comp performance better, certainly than it was in the first quarter. Steven Zaccone: Okay. Understood. The follow-up I had, bearing in mind some of the tariff commentary and then in this category in particular, how do you think about the pricing environment and expectations and comps for the second half of the year? Has that changed versus your original thinking? Brad Paulsen: I'll go first. Bryan, if you want to add anything, feel free. The term that I have used pretty consistently since the start of tariff is the market's been rational. I'll add a few more words in that. I'm not seeing anything disruptive from a pricing perspective outside of what I just explained on laminate and vinyl. We've got two sets of competitors. You have independents who do a terrific job around service, really thoughtful pricing approach, and have a sticky relationship with that pro customer. Then you've got big box. For us, as a reminder, big box, we compete on opening price point in good, in a good, better, best in installation materials. We haven't seen anything that would say that the environment is becoming overly aggressive or overly promotional. We've been really consistent in saying that we will continue to take modest increases. The nature of our business, because we do have a really unique pricing model, there's always a little bit of up and a little bit of down, but it'll net out to a modest increase across our categories. Bryan Langley: This is Bryan. Our guidance from last quarter to this quarter is the same, with average ticket expected to be kind of flat to up low single digits. The pressure in laminate and vinyl does put pressure on our average ticket because it's a much bigger project when somebody decides to take that on. Just overall, it's putting pressure on average ticket. No change from last quarter and what we think is going to be embedded for the guide or assumed in the guide. Steven Zaccone: Okay. Thanks very much. Best of luck. Brad Paulsen: Thank you. Operator: Our next question is from Michael Lasser with UBS. Michael Lasser: Good evening. Thank you so much for taking my question. Do you think the industry saw the same inflection that Floor & Decor has seen over the last few months, or has your initiatives kicked in such that your market share has accelerated? This is a part of that, why is there such a divergence between your pro performance in the quarter versus your DIY performance in the quarter? Brad Paulsen: The second two questions are a lot easier to answer than the first. I think we're going to know more as some of our public competitors and manufacturers report their results. Obviously, it's a tough question to answer just because, by our measure, 60% of our space is still independents, all private. Really hard to get a gauge on how they're performing. Ersan does a nice job of kind of triangulating through conversations with both manufacturers and our supplier partners. Our sense is, I'll now get into your second question, is our initiatives are paying off. We feel like we're focused on the right things. Some initiatives are a little bit further down the path and make more sense in this environment, and that is the pro piece. Going back to this idea that as a team, we said 2026 is going to look a lot like 2025. In order for us to deliver positive comp sales, we knew we had to do that through increased share of wallet gains through the pro customer. Why is that important? That customer is in our store every single day. We reported in the second quarter, that customer is 55% of our sales. We think they influence up to 20% of the remaining 45% of sales. Really, really important customer. The thing, Michael, that I would point out, really pleased with installation materials. That is a driver of footsteps. The opportunity that we have, and why we're excited about the pro initiative, is we clearly have a hook when it comes to installation materials. Now we have a great opportunity to sell the rest of the categories that we sell. One other thing that's really important is we continue to open new stores and become even more convenient for our pro customers. I think we're going to drive traffic there. Really excited again and feel good about our initiatives. Still somewhat early in the process, but already seeing some dividends from them. Michael Lasser: Okay. My follow-up question is, can you help calibrate the relationship between Floor & Decor same store sales growth and an eventual inflection in existing home sales? It's hard to necessarily use the historic relationship because Floor & Decor, throughout much of the 2010s, was seeing a benefit from the new stores ramping to maturity, the increase in vinyl, as well as less cannibalization. It seems like those are going to be no longer benefits to your same store sales as the market recovers. Is it best to think instead of maybe a high single-digit comp in a good case scenario as the market recovers, a mid-single-digit comp is the most realistic outcome in light of some of those factors? Brad Paulsen: Listen, it's a great question. We are bouncing versions of that around the hallways here on what our business looks like at different points in the cycle. We still think existing home sales is the metric for us, strongly correlated to our performance. Historically, we have said as existing home sales improve, that it's generally a two to three-month flash to bang before you see it in our business. In an environment, though, I'll say this kind of current cycle, where you're just flirting with 4 million homes, kind of a little bit above it, a little bit below it. You do see outsized impact on our initiatives in different parts of the country. If you think about the West, we've consistently said, "Hey, the West is outperforming the rest of the country." One, that's a part of the business that is generally dealing with less cannibalization and has less density than other parts of the U.S. You're naturally going to get more traction and more benefit from some of the things that we're focused on. As far as how we're forecasting what the business looks like from a organic growth perspective in kind of mid trough or kind of a more normal environment, not going to get into that level of detail on this call. Michael Lasser: Understood. Good luck. Thank you so much. Brad Paulsen: Thank you. Operator: In the interest of time, we ask that participants limit themselves to one question. Our next question is from Kate McShane with Goldman Sachs. Kate McShane: Hi, good afternoon. Thanks for taking our question. We wanted to speak a little bit more about the competitive environment, just in terms of what behavior you're seeing, more from the home improvement competitors versus the independents, and how they acted throughout the quarter. I do know that it seems like at least one of the larger scale home improvement retailers seems to be partnering more with Mohawk and there's a lot more initiative there it seems, even more recently. Can you just talk about that piece of the competitive set and again, just maybe tie it back to how you're thinking about the tariff refunds and how it can play a role in pricing relative to that? Brad Paulsen: For me, big box retailers, amazing companies, like I said, have incredible locations. For our customer, hard surface flooring, that provides a level of convenience. They're always investing in their assortment. Generally speaking, where we compete with them is on opening price point, good, and installation materials. If you think about where we sell, it's primarily in the better invest. I think that's a really important distinction when you think about our model versus the big box retailers and where we overlap. Absolutely overlap, and we watch them very closely. As I said earlier, don't see anything at this point that would be disruptive that would lead me to think that there's accelerated share gains from either one of them. That's speculation because I haven't obviously heard their results. We generally feel really good about the model that we have and how it competes against big box retail. Operator: Our next question is from Steven Forbes with Guggenheim Securities. Steven Forbes: Good afternoon. Brad, maybe just following up on laminate and vinyl, I think it was the Cohn's question before. Revisiting the improvement, I think you guys talked about some merchandising initiatives within that department, that you were rolling out regionally and nationally. Curious, maybe you could just remind us where those initiatives are in terms of breadth and scope, and if there's any other merchandising initiatives in the pipeline, particularly for laminate and vinyl that could maybe be a self-help story as it relates to getting that category back to growth. Brad Paulsen: Yeah. Great question. Three areas that we really leaned into. The quickest reaction, as you would expect, was rethinking our pricing strategy. Credit to Ersan and team. We moved really quickly. We put more aggressive pricing in the market where we saw elasticity. We watched it, we refined it, and we're in a spot now where we feel really comfortable about the investment that we've made from a price perspective to drive more market share into that business. That's step 1. Step 2, and this is kind of in order of how they hit the stores, were opportunity buys. We knew we had a gap as far as our everyday current assortment relative to where customers were shopping. We quickly leveraged the supplier partnerships we had across the U.S. and across the world to get really aggressive opportunity buys into our stores at the right inventory levels. Those were a huge win. And that's a matter of weeks from when we identified the opportunity. The third piece is we really rethought our everyday assortment and plugged those holes that the opportunity buys served as a band-aid on. Feel really good about how we operated. We use the term micro-merchandising a lot, with all of you and certainly inside of our business, and I think this is a great example on how nimble we can be when we find a situation where the market has shifted a little bit, where some of our other competitors may struggle to have that type of speed to market. As far as where it's at, 2 and 3 opportunity buys in the resetting the assortment, that's national. From a pricing perspective, like I said, we're a little bit more surgical there, that's not national. That's in the markets, where we really need to win in laminate and vinyl. Steven Forbes: Thank you. Operator: Our next question is from Christopher Horvers with JPMorgan. Christopher Horvers: Good evening. Thanks for taking my question. A two-parter. Just taking the other side of it and trying to think about what drove the slowdown on July 4th. Obviously, July 4th happens every year. Is there something that you point to and you say, "Well, that was just an anomaly, and that wasn't the improvement in the later part of July, really like the past two to three weeks, isn't just a normalization of demand relative to earlier in July?" A follow-up question on the pricing side. Most of your independents don't buy directly. What is your impression of what the wholesalers are doing? Are they lowering prices as tariff refunds come in and such that the independent market could see prices come down, and is that already happening? Thanks so much. Brad Paulsen: Chris, great question on July, and, as you can imagine, a lot of discussion here trying to dissect what actually happened in the first couple of weeks. We have three or four thoughts, but nothing that we're willing to share publicly. The great news, again, back half of July, we returned more to that kind of May, June performance and comp run rate, which is really encouraging. Right now, I'm going to say those two weeks were an anomaly. If for whatever reason we see a return to that two-week performance, then certainly we're going to have more concrete answers. It didn't continue, which again, for us is really, really encouraging. From an independent perspective, you're right. For the most part, their sourcing model is a two-step sourcing model. One, when you think about tariff refunds, because they're not the importer of record, unlikely that they're going to get those tariff refunds and be able to reinvest into their business, which because of that, I think would prevent them from getting too aggressive around price or promotion in the second half of the year. Everything that we have seen, generally speaking, has been prices going up and certainly not going down. Operator: Our next question is from Keith Hughes with Truist Securities. Keith Hughes: Thank you. We've talked a good bit about your laminate and LVP product on the call, and it's been underperforming the group average. You have other products overperforming. Is this just the consumer changing its preference for one product over the other versus real category issues? Brad Paulsen: Yeah. Again, great questions. I had made some notes on the laminate and vinyl question, my last bullet point that I continue to ignore is there is category shift we believe happening, both into wood and to tile. Certainly that's an element of the conversation. Of all the reasons why we're seeing pressure there, Keith, it's probably the least impactful, it's certainly a part of the conversation. Keith Hughes: Is the tile sell a better sell for Floor & Decor? How it uses more accessories than LVT? Brad Paulsen: Well, we like all of our categories. Tile is our largest category. It's in the center of the store. As we take both kind of customer feedback and associate feedback, that's the one that there's kind of universal confidence around, having the right products, having the right inventory, always being trend right. We love our Tile category, and we believe that's a category that we'll continue to lean into and will continue to grow for us. Bryan Langley: Hey, Keith, Tile also, you're right, has more attachments when that happens. We still get attachment when Laminate and Vinyl is sold, but there tends to be more when Tile is sold, and IM is actually one of our best performing categories, and that's just winning more with pro. I know there was an earlier question on the outperformance within pro, and you see that within IM, just our supply house strategies are working. Operator: Our next question is from Peter Keith with Piper Sandler. Peter Keith: Thank you very much. Nice to see the sequential improvement. Brad, you did speak in the prepared remarks around your own sequential performance in conversion. I guess I was curious if, is there something you're doing at the store level that you can speak to that is driving better execution? Is the consumer behaving differently? Just hoping you could unpack that comment a bit. Brad Paulsen: This is a play that the team continues to execute. If you go back three years ago, one of the things that we pointed to is just really strong service. The thing that's amazed all of us, it's continued to improve. The one area that I think we continue to dial in is making sure there's a consistency around what plays we're calling and the level of execution on the play, particularly with our Pro customer. We have a level of confidence that we could go into every one of our stores at this point and ask that team, "Hey, how are you growing Pro share wallet?" All of our stores would have the same answer. They would have the data to support those efforts, to understand the customer, where the opportunity is. Then, like I hinted at around service, we've got great teams. We've got great teams that are passionate about taking care of our customers, love helping them navigate the journey of selecting a hard surface floor. We are well-positioned around service and really refining that conversion or the inputs to driving that conversion improvement that we talked about. Peter Keith: Thank you. Operator: Our next question is from Max Rakhlenko with TD Cowen. Max Rakhlenko: Hey, guys. Thanks a lot. Can you provide more color on the work that your new pricing team is doing? What's ahead, and how could we see your portfolio approach to pricing evolve in the medium term? Brad Paulsen: Yeah. When we talk about evolving our business, we talk a lot about digital. We talk about supply chain, and pricing is certainly an element that is front and center. Ersan has built a world-class merchandising team that has always been top-notch when it comes to pricing. The other piece that's unique about our business is we have a bottom-up kind of feedback process where there are decision rights at our stores to ensure that we're appropriately positioned from a pricing perspective in every geography in which we operate. At the same time, massive improvement around technology and tools that you can use to get really scientific around pricing. We've invested in team, in talent, in process. We're on the cusp of a technology investment. I only expect that capability to get better and better and stronger and stronger for Floor & Decor. As far as the portfolio approach, there isn't meaningful changes ahead. I think we've got that pretty locked in. As we introduce different categories down the road, certainly that might be a different conversation, but we feel pretty locked in when it comes to our portfolio approach. Operator: Our last question is from Jonathan Matuszewski with Jefferies. Jonathan Matuszewski: Great. Good evening, and thanks for squeezing me in. Brad, can you update us on what you're hearing from your Pros during roundtable sessions, maybe just regarding project backlogs? Some of the data out there is talking to kind of rising cancellation rates or postponement rates among homeowners for remodeling projects. Are your Pro roundtables revealing anything in that regard regarding project deferrals or anything along those lines? Thanks. Brad Paulsen: We have not heard anything that would signal a change to that behavior versus what we experienced in the first quarter. We did talk on the commercial side a little bit about delays in the first quarter driving some of the challenges they saw there. That obviously improved into the second quarter, and we don't expect any type of project delays unless the macro changes meaningfully in the second half of the year. Short answer is no, we haven't heard any change to that from what's previously been discussed with our Pros. Operator: Thank you. We have reached the end of our question and answer session. This does conclude today's conference. We thank you again for your participation. You may now disconnect your lines. Before you buy stock in Floor & Decor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Floor & Decor wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Floor & Decor (FND) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Mohawk Industries, Inc. MHK delivered a sizable second-quarter earnings beat as pricing, productivity and product execution improved despite weak residential flooring markets.The next test is whether wider margins can persist without the same level of tariff-refund support. Higher input costs and seasonal sales pressure make the third-quarter outlook especially important. Adjusted earnings rose 32.5% year over year to $3.67 per share and exceeded the Zacks Consensus Estimate by 42.8%. Net sales increased 6.8% to $2.99 billion and topped the consensus mark by 5.8%. Mohawk Industries, Inc. price-consensus-chart | Mohawk Industries, Inc. Quote Higher volumes, favorable product mix, pricing and tariff refunds supported the quarter. The refunds contributed about 63 cents per share, making it necessary to separate operating improvement from benefits that may not recur at the same level. Adjusted gross margin increased 100 basis points to 27.4%, while adjusted operating margin expanded to 9.7% from 8% a year earlier. Adjusted selling, general and administrative expenses also declined as a percentage of sales.Flooring North America posted the largest improvement. Its adjusted operating margin rose to 11.4% from 7.3%, while Global Ceramic and Flooring Rest of the World also delivered year-over-year margin gains. Restructuring and productivity contributed $43 million to adjusted operating income during the quarter and helped offset underlying inflation. Programs initiated since 2022 are expected to generate about $360 million in annualized benefits.Additional projects could lower annual costs by about $60 million after completion, with most actions scheduled by the end of 2027. Operational simplification, warehouse consolidation and capacity optimization provide a more durable source of support than tariff refunds.Floor & Decor Holdings, Inc. FND offers a useful demand comparison as a specialty retailer of hard-surface flooring. Its second-quarter comparable-store sales declined 2.1%, showing that stronger company execution can coexist with uneven spending on larger flooring projects. Tariff refunds materially lifted second-quarter earnings and partly offset $77 million of underlying inflation. The company received about $49 million of tariff-refund benefits during the period.Only about 12 cents per share of tariff-refund support is included in the third-quarter outlook. Investors should therefore focus on pricing, mix and productivity when judging whether the latest margin improvement represents sustainable earnings power.Interface, Inc. TILE, a global producer of carpet tile and resilient flooring, provides another relevant industry reference. Its broader commercial exposure illustrates why demand conditions can differ across flooring categories even when manufacturers face similar cost and pricing pressures. Management expects third-quarter adjusted earnings of $2.50-$2.60 per share. Excluding tariff refunds, the outlook falls to $2.38-$2.48 per share.Sales are expected to decline seasonally from the second quarter, while higher labor, material, energy and transportation costs may pressure profitability. Pricing and productivity are expected to offset inflation under current conditions, but competitive markets could delay price realization. The bottom line is that Mohawk showed genuine operating progress, but temporary refund benefits amplified the quarter. The third quarter should provide a cleaner test of whether restructuring, pricing and mix can protect margins as sales soften and costs rise.MHK currently carries a Zacks Rank #3 (Hold). It also has a VGM Score of A, with a Value Score of B, Growth Score of B and Momentum Score of C. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The favorable VGM, Value and Growth readings support investors who emphasize those characteristics. Still, Style Scores complement the Zacks Rank, and the Hold designation reflects a measured near-term stance. The Momentum Score of C reinforces the case for distinguishing structural operating gains from one-time earnings support. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mohawk Industries, Inc. (MHK) : Free Stock Analysis Report Interface, Inc. (TILE) : Free Stock Analysis Report Floor & Decor Holdings, Inc. (FND) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Floor & Decor Holdings, Inc.? Here are five stocks we like better. Second-quarter sales rose 3% to $1.25 billion, while comparable-store sales declined 2.1%, improving steadily from April through June. Adjusted diluted EPS was $0.58, unchanged year over year, supported by expense discipline and strong cash generation. Tariff refunds materially benefited reported results: the quarter included a $45.2 million pre-tax IEEPA refund benefit, while adjusted gross margin declined 20 basis points to 43.7%. Floor & Decor ended the quarter with $942.4 million in unrestricted liquidity and repurchased $65.7 million of stock. Management raised its fiscal 2026 outlook to $4.77 billion-$4.99 billion in sales and adjusted diluted EPS of $1.88-$2.13, despite cautious consumers and continued softness in discretionary flooring. Growth initiatives include new stores, rising digital sales, the NatureMatch private-label collection and expanded professional-customer services. Home Depot Stock Keeps Falling—Analysts Say the Upside Is Still There Floor & Decor (NYSE:FND) reported second-quarter fiscal 2026 adjusted diluted earnings per share of $0.58, unchanged from a year earlier, as the company managed expenses and generated free cash flow despite continued softness in large discretionary flooring projects. Total sales increased 3% year over year to $1.25 billion, while comparable-store sales declined 2.1%. The comparable-sales decline improved from a 3.7% decrease in the first quarter and narrowed through the second quarter, with comps down 5.1% in April, 1.3% in May and 0.3% in June. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Why Warren Buffett Is Selling: A Look at His Latest Market Moves Chief Executive Officer Brad Paulsen said the company’s performance reflected a focus on value, customer service, merchandising, operations and expense discipline. The company repurchased $65.7 million of common stock during the quarter. Sales to professional customers rose about 4% from the prior-year period and accounted for approximately 55% of total sales. Comparable transactions declined 2.9%, improving from a 5.5% decline in the first quarter, while average ticket increased 0.8% year over year. → Microsoft Just Flipped the AI Spending Narrative Overnight Retail Sector Comeback Plays: SPDR S&P Retail ETF, FND, and SHAK Paulsen said the company’s net promoter scores remained high and helped support improved customer conversion. He also cited sequential improvement in comparable square-footage sales. Installation materials, tile and wood outperformed the company’s overall comparable-sales result. Installation materials benefited from the company’s efforts to expand its share of wallet with professional customers and advance its supply-house strategy. Tile sales were supported by collections including Vetta Elements, while wood benefited from share gains in engineered and unfinished wood, acoustic wall panels and bulk-out strategies. → Carrier Earnings Could Send the Stock to a New All-Time High Comparable sales and comparable square-footage sales in vinyl improved sequentially, aided by merchandising, pricing and value-oriented initiatives. However, Paulsen said slowing vinyl demand and excess industry supply continue to pressure the category and could persist into 2027. “The category’s been devalued,” Paulsen said during the question-and-answer session, describing a market in which products previously positioned as mid-tier offerings are being priced more like entry-level products. Floor & Decor has responded with targeted pricing, opportunity buys and changes to its everyday assortment, he said. The company launched NatureMatch in June, a private-label collection spanning nearly 100 SKUs across porcelain tile, luxury vinyl plank and waterproof laminate. Paulsen said the collection is intended to offer the appearance of natural wood and stone at a more accessible price point. Floor & Decor opened 11 warehouse-format stores during the first half of fiscal 2026, including five in the second quarter. The second-quarter openings were in Syracuse, New York; Portland, Oregon; Mount Vernon, New York; Houston, Texas; and Schererville, Indiana. Approximately 55% of planned 2026 locations have now opened, compared with 35% by the same point last year. The company expects the balance of its 2026 openings to be weighted toward the fourth quarter. The 2026 store class is expected to average roughly 55,000 square feet, a smaller format than the company’s legacy footprint that Floor & Decor said enables entry into higher-density markets. Online sales represented 20.3% of total sales in the second quarter, up from 18.6% a year earlier and 110 basis points from the first quarter. The company is undertaking an 18- to 24-month transformation intended to modernize digital capabilities and connect its online and store experiences more closely. For professional customers, the company plans to launch a new pro app next year that will combine purchasing, loyalty rewards, pricing and project-management functions. Floor & Decor also expanded its regional commercial account manager team to 80 associates and said its focus is now shifting toward productivity, training, analytics and scalable processes. Chief Financial Officer Bryan Langley said second-quarter results included a $45.2 million net pre-tax benefit related to IEEPA tariff refunds, as well as a $1.3 million pre-tax loss related to debt extinguishment from refinancing the company’s credit facilities. Together, the items created a net after-tax benefit of $32.9 million, or $0.31 per diluted share. GAAP diluted EPS was $0.89, while adjusted diluted EPS was $0.58. The company filed for $87 million in total IEEPA tariff refunds and has received substantially all of the cash, Langley said. Floor & Decor recognized a $56 million one-time gross-profit benefit from refunds related to inventory already sold. It also recorded a $28 million inventory reduction for goods still on hand; approximately $6 million of that benefit was recognized during the second quarter, with most of the remainder expected to be recognized in the second half as inventory is sold. Adjusted gross margin declined 20 basis points year over year to 43.7%. Adjusted EBITDA rose 1.2% to $152 million, while adjusted EBITDA margin declined to 12.2% from 12.4% a year earlier. The company refinanced its credit facilities during the quarter, entering a $200 million term loan maturing in June 2033 and an $800 million asset-based lending facility maturing in June 2031. Floor & Decor ended the quarter with $942.4 million in unrestricted liquidity, including $320.6 million in cash and cash equivalents. For the first 26 weeks of fiscal 2026, cash provided by operating activities was $278.4 million, compared with $155.3 million in the prior-year period. Floor & Decor repurchased 1.3 million shares during the second quarter and had $334.3 million remaining under its $400 million share-repurchase authorization. Floor & Decor raised its fiscal 2026 earnings outlook following its better-than-expected second quarter and the expected effect of share repurchases. Its guidance assumes that consumers remain cautious amid subdued existing-home sales, affordability constraints, inflation and potential tariff changes. Sales of $4.77 billion to $4.99 billion, representing growth of 1.8% to 6.5% from fiscal 2025. Comparable-store sales ranging from flat to down 4%. Adjusted gross margin of approximately 43.6% to 43.8%. Adjusted EBITDA of approximately $550 million to $585 million. Adjusted diluted EPS of approximately $1.88 to $2.13. Capital expenditures of approximately $240 million to $275 million. The fiscal year includes a 53rd week in the fourth quarter, which the company expects to add approximately $65 million in sales, $11 million in adjusted EBITDA and $0.08 in adjusted diluted EPS. Comparable-store sales were down 2.2% quarter to date in the third quarter, although Paulsen said trends improved in late July and early August. Management said it remains confident in reaching the midpoint of its sales guidance if the macroeconomic environment remains consistent with current conditions. Founded in 2000 and headquartered in Atlanta, Floor & Decor Holdings Inc is a specialty retailer focused on hard surface flooring and related accessories in the United States. The company serves both professional installers and do-it-yourself customers through a growing network of warehouse-format stores and a comprehensive e-commerce platform. Floor & Decor’s product offering spans ceramic and porcelain tile, engineered and solid hardwood, laminate, luxury vinyl plank and tile, natural stone and a full suite of installation materials such as grout, mortars and underlayment. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Floor & Decor Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Image source: The Motley Fool. Thursday, July 30, 2026 at 5:00 p.m. ET Senior Vice President of Investor Relations - Wayne Hood Chief Executive Officer - Brad Paulsen Executive Vice President and Chief Financial Officer - Bryan Langley Operator: Greetings, welcome to the Floor & Decor Holdings second quarter 2026 conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Wayne Hood, Senior Vice President of Investor Relations. Please go ahead. Wayne Hood: Thank you, operator, good afternoon, everyone. Welcome to Floor & Decor's fiscal 2026 second quarter earnings conference call. Joining me today are Brad Paulsen, Chief Executive Officer, and Bryan Langley, Executive Vice President and Chief Financial Officer. Before we begin, I want to remind everyone of the company's safe harbor language. Comments made during this call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statement that refers to expectations, projections, or other characterizations of future events, including financial projections or future market conditions, is a forward-looking statement. These statements are subject to risk and uncertainties that could cause actual results to differ materially from those expressed in these forward-looking statements for any reason, including those listed at the end of the earnings release and in the company's SEC filings. Floor & Decor assumes no obligation to update any such forward-looking statements. Please also note that past performance or market information is not a guarantee of future results. During this conference call, the company will discuss certain non-GAAP financial measures. We believe these measures enable investors to better understand our core operating performance on a comparable basis between periods. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP financial measures can be found in the earnings press release, which is available on our investor relations website at ir.flooranddecor.com. A recorded replay of this call and related materials will be available on our investor relations website. Let me now turn the call over to Brad. Brad Paulsen: Thank you, Wayne, thanks to everyone for joining us on our fiscal 2026 second quarter earnings call. I'll start by reviewing our second quarter performance and the key drivers behind our results. After that, Brian will share our perspective on the remainder of 2026, including how we're navigating the current environment while continuing to invest in our strategic priorities and long-term growth opportunities. Turning to our fiscal 2026 second quarter results, we are pleased to have delivered adjusted diluted earnings per share of $0.58, unchanged from the prior year period, despite a 2.1% decline in comparable store sales driven by continued softness in large discretionary flooring projects. I was pleased with how our team stayed focused on the factors within our control, delivering compelling value to our pros and homeowners, providing an exceptional customer experience, executing our merchandising and operational initiatives, and maintaining disciplined expense management. Those efforts enabled us to maintain earnings per share in line with the prior year, while generating strong free cash flow, which provided the flexibility to repurchase $65.7 million in common stock during the quarter. I want to thank our approximately 14,000 associates for their commitment and hard work throughout the quarter. Their focus and disciplined execution demonstrated the resilience of our operating model and position us to continue creating long-term value for our shareholders. Now, let's take a deeper look at our second quarter results. Total sales increased 3% to $1,250.3 million, compared to $1,214.2 million in the prior year period. Sales to pros continued to outperform the company and grew approximately 4% from the same period last year, accounting for about 55% of sales. Comparable store sales declined 2.1%, an improvement from the 3.7% decline reported in the first quarter, reflecting steady sequential improvement throughout the quarter. Comparable store sales declined 5.1% in April, declined 1.3% in May, and declined 0.3% in June. The improvement in comparable store sales reflected improving trends across several key metrics. First, our net promoter scores remained high, driving a sequential improvement in customer conversion. This is one proof point in how our store associates are highly engaged in this environment to win every sale. Second, comparable transactions also improved, declining 2.9%, compared with a 5.5% decline in the first quarter. Lastly, average ticket grew 0.8% year-over-year, despite lapping last year's strongest quarterly growth rate of 3.8%. Both ticket and transactions were aided by a sequential improvement in comparable square footage sales from the first quarter. Demand softened around the Fourth of July holiday period while the housing market remained constrained by subdued existing home sales activity. Third quarter to date comparable store sales declined 2.2%. Encouragingly, sales trends improved in late fiscal July and early fiscal August. Geographically, our comparable store sales improvement broadened during the second quarter. Our west region continued to outperform the company and delivered positive comparable store sales, excluding cannibalization, and encouragingly, our east region also turned positive on that basis. Furthermore, among our 16 districts, eight reported positive comparable store sales excluding cannibalization. From a merchandising category perspective, three departments outperformed the company's comparable store sales performance during the quarter: installation materials, tile, and wood. Installation materials continue to deliver strong year-over-year growth as we expanded our share of wallet with pros and further strengthened our position in the market. We continue to execute our supply house strategies and expand our store base, we believe we are becoming an increasingly convenient and reliable destination for pros to purchase installation materials. Tile remained a standout performer, supported by the continued success of key initiatives, including the Vetta Elements Collection, which continues to resonate with both pro and homeowner customers. Growth in the wood category was driven by market share gains in engineered and unfinished wood, acoustic wall panels, and the success of our bulk out strategies. We expect to build on this momentum in the second half of 2026 with new SKUs and opportunity buys. In the vinyl flooring category, comparable store sales and comparable square footage sales sequentially improved during the quarter, supported by a combination of merchandising, pricing, and value-focused initiatives that we will continue to build on in the second half of 2026. The combination of slowing demand for vinyl and excess industry supply continues to put pressure on the category, which could continue into 2027. Importantly, sales penetration of our better and best offerings increased both sequentially and year-over-year, reflecting sustained customer adoption of our higher-value offerings and reinforcing the effectiveness and resilience of our strategy despite ongoing macroeconomic pressures. In June, we are excited to launch NatureMatch, a new private label collection that brings the authentic look and feel of natural wood and stone to consumers at a more accessible price point. Spanning nearly 100 SKUs across porcelain tile, luxury vinyl plank, and waterproof laminate, NatureMatch reflects our ongoing commitment to technology, product innovation, and value. In a challenging home improvement market, differentiated collections such as NatureMatch continue to drive customer engagement, support conversion, and create incremental cross-category selling opportunities. By combining premium design, strong performance, and a compelling value proposition, we are expanding our appeal across customer segments while continuing to gain market share. As we look to drive sales in what we expect will remain a challenging demand environment through the second half of 2026, our marketing strategy is focused on reaching high-intent customers at key decision points in their purchase journey through more targeted, higher return tactics. We are aligning our marketing efforts across stores and digital channels. Let me turn to our new warehouse store expansion. Through the first half of fiscal 2026, we opened 11 new warehouse format stores, including five in the second quarter. Syracuse, New York, Portland, Oregon, Mount Vernon, New York, Houston, Texas, and Schererville, Indiana. With approximately 55% of our planned 2026 locations now open, compared with 35% in the prior year period, the front-loaded cadence we outlined at the start of the year is progressing in line with our expectations. These locations extend our presence in tier 1 and tier 2 markets, where household units, population density, and home improvement activity support the long-term demand profile we target in site selection. We continue to expect the class of 2026 new stores to average approximately 55,000 sq ft, a format that, while smaller than our legacy footprint, allows us to enter higher density markets without sacrificing sales productivity. We expect the balance of our 2026 store openings to be weighted through the fourth quarter. Let me spend a moment on our omnichannel strategy and the digital capabilities we are building to support it. In the second quarter, online sales penetration reached 20.3% of total sales, up from 18.6% in the prior year period and up 110 basis points from the first quarter. This continued improvement reflects the progress we are making to enhance the customer experience across both digital and store channels. We believe delivering a best-in-class omnichannel experience represents one of our largest opportunities to accelerate growth, gain market share, and achieve our long-term sales objectives. As customer expectations have evolved, particularly around digital engagement and convenience, we have recognized the need to strengthen our capabilities and are taking action. We have launched a comprehensive 18 to 24-month transformation to enhance the customer experience, modernize our digital capabilities, and create a more seamless connection between our online and in-store experiences. Through targeted investments in talent, technology, and operating capabilities, we are building a stronger foundation for long-term growth. Importantly, our strategy is centered on the distinct needs of our two core customer segments, pros and homeowners. For homeowners, flooring is a highly researched and project-driven purchase. Our research shows that about 70%-80% of customers search online before visiting stores. Customers seek inspiration, education, project guidance, and confidence before making a buying decision. Our objective is to support them throughout that journey from initial project discovery to final installation. For pros, the priorities are different. They value speed, convenience, pricing, transparency, inventory visibility, and tools that help them manage their businesses more efficiently. Our focus is on creating a seamless experience across every touch point, making it easier for pros to do business with us, whether they are planning a project, purchasing materials, managing rewards, or picking up an order. A key component of that strategy will be the launch of our new pro app next year, which will serve as the connective tissue across our pro ecosystem. By bringing together purchasing, loyalty rewards, pricing, and project management capabilities in one place, we are building a differentiated pro value proposition, particularly when compared with independent flooring retailers. While there is meaningful work ahead, we are encouraged by the progress we are seeing. We believe a stronger digital foundation and a more seamless omni-channel experience will increasingly drive customer acquisition, engagement, conversion, market share gains, and ultimately, long-term shareholder value creation. Let me spend a moment on our regional commercial account managers, or RAMs, who operate in partnership with our warehouse stores. We continue to see meaningful opportunities to drive growth and have expanded our team of RAMs to 80 associates, significantly increasing our ability to serve customers, develop relationships, and pursue non-specified commercial product growth opportunities. As we look at the remainder of the year, our focus will now shift from adding RAMs to increasing productivity. We plan to further strengthen the infrastructure, training, analytics, and operating processes needed to support long-term scalable growth. Our objective is to build a commercial organization that is increasingly productive, repeatable, and scalable. While we remain early in these initiatives, we are encouraged by the progress we are seeing. Turning to Spartan Surfaces, the second quarter represented an early inflection point for the business, with results improving sequentially from the first quarter and momentum building throughout the period. Second quarter sales increased 2% year-over-year, driven by strong shipment activity from the conversion of backlog into revenue. June was one of the strongest months for written sales in the company's history. While commercial end markets remain mixed, particularly in multi-family housing, customer backlogs are beginning to recover from the lows experienced in the second half of 2025. Encouragingly, sampling activity improved late in the quarter. Average quoted project value increased, leading to a very strong project backlog at the end of the second quarter. Taken together, these indicators provide visibility and support our expectation for continued improvement through the second half of the year. As we turn the page on the first half of 2026, we remain focused on driving sales, managing expenses, and delivering value to our customers. We believe these actions are resonating with customers and position us well when demand conditions improve. I continue to believe that this environment creates an opportunity for us to accelerate our market share gains through world-class leadership and disciplined execution. With that, I'll turn the call over to Bryan. Bryan Langley: Thanks, Brad. Before turning to our financial results, I'd like to add my thanks to our associates across the organization. As I reflect on the second quarter, what stands out most is our ability to stay focused on the factors within our control. The quarter reinforced one of the strengths of our company, our ability to execute consistently across a range of operating environments. We managed expenses prudently, advanced key merchandising and operational initiatives, and maintained a strong focus on free cash flow and capital allocation. These efforts enabled us to deliver adjusted diluted earnings per share of $0.58, which was above our expectations, generate strong free cash flow, and return $65.7 million to our shareholders through the repurchase of common stock during the quarter. Before moving to our underlying operating performance, let me discuss two items affecting comparability during the second quarter. First, we recognized a $45.2 million net pre-tax benefit related to the IEEPA tariff refunds, which affected gross margin, SG&A, and interest income. Second, we recognized a $1.3 million pre-tax loss on debt extinguishment associated with the refinancing of our credit facilities. Collectively, these items resulted in a net after-tax benefit of $32.9 million, contributing $0.31 to diluted earnings per share. Our second quarter GAAP diluted earnings per share was $0.89, and excluding these items, adjusted diluted earnings per share was $0.58, flat to the prior year period. A reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measures is included in today's earnings release, and additional information regarding these items is provided in our Form 10-Q. Turning to our underlying operating performance, our gross profit increased $70.4 million, or 13.2%, compared to the same period last year, driven primarily by a $56 million one-time benefit from IEEPA tariff refunds related to inventory we have previously sold through. The remaining amount of tariff refunds was recognized as a reduction to inventories net related to previously capitalized amounts and will be recognized as we sell through the inventory. Excluding the IEEPA tariff refunds benefit, adjusted gross profit increased $14.3 million, or 2.7%, compared to the same period last year. Adjusted gross margin for the quarter was 43.7%, a decrease of 20 basis points year-over-year, which was within our range of expected outcomes. SG&A expenses increased $28.3 million, or 6.3%, in the second quarter compared with the prior year period. The increase was driven primarily by the 24 stores opened since the second quarter of fiscal 2025, as well as higher incentive compensation related to the recognition of IEEPA tariff refunds. SG&A for non-comparable stores increased $26.7 million, while SG&A for comparable stores declined $13.7 million, reflecting our ongoing focus on expense management and productivity initiatives. As a percentage of sales, SG&A deleveraged 120 basis points to 38.3% from 37.1% in the prior year period. The one-time expenses related to IEEPA tariff refunds contributed approximately 110 basis points of the deleverage in the second quarter. Adjusted EBITDA increased 1.2% to $152.0 million from the same period last year. Our second quarter adjusted EBITDA margin was 12.2%, compared with 12.4% in the prior year period. Our second quarter net interest income was $2.3 million, compared to net interest expense of $1.1 million in the same period last year. The year-over-year change was primarily driven by a one-time benefit of approximately $2.8 million in statutory interest on our IEEPA tariff refunds, along with higher interest income from larger cash balances. Additionally, we incurred $1.3 million of debt extinguishment costs associated with the refinancing of our credit facilities. Our second quarter income tax expense was $29.1 million compared to $17.6 million during the same period last year. The effective tax rate was 23.3%, up from 21.8% in the same period last year, primarily due to a decrease in federal tax credits. Excluding the tax impacts related to the IEEPA tariff refunds and the loss on extinguishment of debt, our effective tax rate was 22.3% for the second quarter of 2026. Let me turn to our balance sheet and free cash flow, both of which remain strong. During the second quarter, we completed a comprehensive refinancing of our credit facilities that further strengthened our balance sheet and enhanced our financial flexibility. We entered into a new $200 million term loan facility maturing June 2033 and used the proceeds to repay the remaining $197.1 million outstanding under our prior facility that was scheduled to mature February 2027. In addition, we entered into a new $800 million ABL facility maturing June 2031, replacing the current facility that was scheduled to mature August 2027. Collectively, these transactions extend our debt maturity profile, preserve ample borrowing base capacity, and further enhance the flexibility of our capital structure. We ended the quarter with $942.4 million of unrestricted liquidity, consisting of $320.6 million in cash and cash equivalents and $621.8 million of available capacity under our ABL facility. During the 26 weeks ended June 25th, 2026, we generated $278.4 million of cash provided by operating activities, compared with $155.3 million in the prior year period. We continue to make progress on our working capital and inventory productivity initiatives, as evidenced by total inventory increasing only 0.7% to $1.1 billion compared with December 25th, 2025. Our net cash used in investing activities was $136.7 million, leading to significant excess free cash flow. Supported by our free cash flow and financial position, we began executing against the $400 million share repurchase authorization announced on our first quarter earnings call. During the second quarter, we repurchased 1.3 million shares of common stock and returned $65.7 million to our shareholders and ended the quarter with $334.3 million remaining under the share repurchase authorization. Let me now turn to the macroeconomic considerations informing our outlook for the remainder of fiscal 2026. The demand environment for large discretionary home improvement flooring projects remains choppy, consistent with what we're seeing in housing market activity and broader macroeconomic conditions. Although existing home sales improved modestly during the spring selling season, the recovery has yet to gain meaningful traction, with June activity remaining near historically low levels of approximately 4 million annualized units. In addition, housing affordability continues to be challenged, and persistent inflationary pressures, as well as potential changes in tariffs, continue to influence consumer behavior. As a result, our outlook assumes that consumers will remain cautious and project demand will continue to be influenced by the pace and sustainability of any improvement in housing market activity. Following our better-than-expected second quarter earnings and the anticipated greater impact from the repurchase of common stock, we have increased our fiscal 2026 earnings per share outlook. As a reminder, fiscal 2026 includes a 53rd week, which will be reported in the fourth quarter. I will highlight the expected contribution from the 53rd week as a part of our guidance. Sales are expected to be in the range of $4,770 million-$4,990 million, or increase by 1.8%-6.5% from fiscal 2025. The 53rd week is expected to contribute approximately $65 million to sales. Comparable store sales are estimated to be flat to down 4%. Comp average ticket is estimated to be flat to up low single digits, and comp transactions is estimated to be down low to mid-single digits. Adjusted gross margin is expected to be approximately 43.6%-43.8%. The first quarter gross margin of 44.0% is likely to represent the high point for the year. SG&A, as a percentage of sales, is estimated to be approximately 38%. From a quarterly perspective, the first and fourth quarters will be the most pressured from new stores if you exclude the one-time cost associated with IEEPA tariff refunds in the second quarter. Interest income expense net is expected to be approximately zero. This includes approximately $2.8 million of statutory interest benefit from tariff refunds. Tax rate is expected to be approximately 23%. Depreciation and amortization expense is expected to be approximately $250 million. Adjusted EBITDA is expected to be approximately $550 million-$585 million. The 53rd week is expected to contribute approximately $11 million to adjusted EBITDA. Diluted earnings per share is estimated to be approximately $2.20-$2.45. Adjusted diluted earnings per share is estimated to be approximately $1.88-$2.13. The 53rd week is expected to contribute approximately $0.08 to adjusted diluted EPS, which implies our 52-week adjusted diluted EPS to be $1.80-$2.05. Diluted weighted average shares outstanding are estimated to be approximately 107 million shares. CapEx is estimated to be approximately $240 million-$275 million. Operator, we would like to now take questions. Operator: Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question is from Seth Sigman with Barclays. Seth Sigman: Hey, everybody. Nice progress in the quarter. I wanted to start with the tariff refunds. You had this $45 million net benefit this quarter. What's that number on a full year basis? What's embedded here? Can you talk a little bit about how you've started to deploy those dollars, I guess, either in Q2 or in Q3? To what extent do you think that has contributed to the improvement that you saw in June? Thank you. Bryan Langley: Hi, Seth, and thanks for the question. I assumed that was going to be the first question. I want to just start off and say, really from the onset of tariffs last year through the refund, our team has executed at a really high level. Obviously, we've got multiple years of experience with this, and I would consider it an established capability at this point. What Bryan and I thought we would do, we're going to hand it over to him. He can unpack all things tariff for the folks on the call, and then I'll have a comment or two at the end to wrap it up. Bryan, why don't you walk them through it? Yep. Thanks, Brad. From the mechanics of it, you'll see in the 10-Q today, you've got a little bit more detail there as well if you want to refer to that. We filed for $87 million in total IEEPA tariff refunds, and we've received substantially all of it subsequent to the end of the quarter. We've got all of the cash in at this point. We recorded a $56 million one-time benefit in gross profit related to inventory that we had previously sold through. We recorded a $28 million reduction to inventory for product that was still on hand at that point in time. We'll recognize the benefit of that $28 million as we sell through the inventory, which I would anticipate the majority of that will be recognized in the back half, given that we turn slightly over two times per year. In Q2, the benefit that we recorded from that $28 million was approximately $6 million, that we saw in Q2 in gross profit from the sell-through of that reduced inventory. I think it's important for us to point out for that $6 million that Bryan just referenced for the second quarter. We obviously assumed some inflationary headwinds coming into the business. We had a set of actions that we were prepared to deploy. Once we knew that we were getting the tariff refund, we elected not to deploy those actions and instead use the tariff refunds to offset that inflation. As we pivot into the second half of the year, obviously, a number of different things that we can do with the refund money. I think there are three big buckets that I would share with all of you. The first one, I just talked about it with the second quarter. We'll continue to use those funds to offset the inflationary impacts from both oil and supply chain. Number two, where it makes sense, and making sense means where we see elasticity, we'll selectively invest in price to drive market share gains. Number three, we're going to execute our capital allocation framework. Big buckets on that are invest in stores, other growth initiatives, think commercial and other things like that. Third would be any type of excess cash that we would have, we would send back to our investors through a share repurchase program. Seth Sigman: Very helpful.[crosstalk] Bryan Langley: Hey, Seth. Sorry, just to clarify for you, the difference in the $56 million and the $45 million that you see in the adjusted EBITDA add back or the net income add back is we had $2.7 million of statutory interest that we also received. You'll see that's part of the add back. The rest of it really is just cost associated with the IEEPA tariffs as it rolls through SG&A, through incentive comp and other things. Seth Sigman: Okay. Got it. I was just going to follow up and ask about the comp guidance for the rest of the year in that context. It implies a pretty wide range, -5% to +3%. You're running better than that at the low end right now. Comparisons get easier. Can you maybe talk about some of the scenarios to consider here? In that context, you also mentioned the broadening of performance that you've seen across regions, maybe tie that in. Thanks so much. Brad Paulsen: Bryan and I will tag team this question as well. I'll start out with the second quarter. Definitely pleased with the sequential improvement that we saw through the quarter. A two key drivers. There are three drivers that I'll talk about. First was in the script. Service continues to be really, really high. Every month, we set record levels, and I think that's a reflection, one of the culture that we have and the team that we have in the field. Second, just all things pro. Pro continues to outpace the performance of the rest of the business. A lot of inputs into that pro performance. We talked about installation materials, we talked about the performance in tile, and certainly getting some improvement in laminate and vinyl, which is something that we talked about on our first quarter call. The other piece is we're starting to see some nice traction from our digital business. Still very much early in that process, but starting to see some real benefit from that team. We talked about July. July was a really interesting month. The start of the month was really, really choppy around the Fourth of July. Had some pretty ugly days that we hadn't seen in a while. As we said in the prepared remarks, really, really pleased with how we ended the month and certainly how that has continued into August. I'd say more in line with the run rate that we saw in both May and June, which is certainly encouraging. The one piece that I'll say and underline, Bryan will probably do the same when I turn it over to him, still feel really good about our guidance. In the first quarter, we said, "Hey, we're going to go a little bit wider than normal, given the uncertainty that's in the market." We went flat to -4% on the sales guidance. Had some conversations about changing that coming into this call, still feel like there's too much uncertainty out there. Feel good with the flat to -4%, but do have a level of confidence, high level of confidence, that we're on track to hit the midpoint of that sales guidance. Bryan Langley: Yeah, I think that's spot on, Brad. We would have liked to have tightened the range. We intentionally left it a little wider just because of the uncertainty. I think when you're thinking about just the cadence in the back half, a 2-year stack gets noisy because of all of the Hurricane Helene and Hurricane Milton benefits and everything associated with the storms. If you just look at it on a 3-year stack comp, just to help you guys model, we would expect the high end and the midpoint to increase sequentially from Q2. At the low end, there'd be a slight decrease sequentially from Q2 just to kind of get those. It is a little bit wider of a range than we would typically do at the end of Q2. To Brad's point, there's still a lot of uncertainty in the macro environment that we see today. Great. Thanks, guys. We feel really good about midpoint, and that is our guidance philosophy too. You guys will always see that with us is if things continue on the path that they are right now and the macro environment stays where it is today, we have great visibility to kind of achieving at the midpoint. Seth Sigman: Okay, thank you. Operator: Our next question is from Simeon Gutman with Morgan Stanley. Simeon Gutman: Hey, guys. One quick follow-up on the tariff. The $28 million, I think I got that number right, that's unrecognized, that will happen as you sell the inventory. I guess it's not huge on a basis points basis, I haven't done the math, but you held or you're basically not changing your gross margin guide. Sorry for the naivety, does this mean that when you sell through that product, there should be a higher gross margin on it going forward? And is that in the guidance? Did that help you keep the gross margin guide, or does that provide an upside lever, if I understood it right? Bryan Langley: Hey, look. We put $28 million back into inventory for items that we still had on hand. Of that $28 million, $6 million flowed through in Q2, to help offset some of the inflationary measures that we were seeing with higher oil costs. We're now starting to see higher domestic supply chain costs due to trucking capacity, issues that we see across the industry. We're fine from a capacity standpoint, but we're starting to see some rate changes, as well as reinvesting into select pricing changes as well. What Brad talked about with laminate and vinyl and a couple other select pricing changes that we may try to go after and be more aggressive in market share. All of that said, our adjusted gross margin guidance of 43.6%-43.8% incorporates the back half being benefited. Like I said, the majority of the residual $22 million within that $28 will flow through, it allows us, again, in this environment, to be a little more aggressive and not have to take further actions. As we exit 2026 into 2027, we've got a lot of things that we can do as a company. Again, we have a lot more to talk about. Whenever we think about 2027, we're not going to give you guys any clarity on that today. We've got a ton that we can do as a company when these tariff benefits do subside. Again, it just gives us a lot of flexibility and optionality in 2026 to be able to take more market share. Simeon Gutman: Okay, thanks for that explanation. One follow-up on the sales environment, more to Brad, and related to the last comment. We've had a couple of, I don't want to say false starts, but early reads of industry bottoming, especially your business. It sounds like we're going through another one, and it felt a little more emphatic, I thought the language this time. Anything you can point to that this is demand stabilizing, turning more from replacement demand outside of your initiatives, or how do you assess, could this be another false start? Brad Paulsen: Yeah, I'm going to be really careful here because I don't want to be the initiator of a false start, I'll give you my perspective. Like I said, certainly pleased with the sequential improvement through the quarter. One of the things that we called out in the script is if you look at our business ex cannibalization, we had two regions, two of our three regions deliver a positive comp, which to me, is a really, really strong story. We saw some improved traction on our commercial business. All that being said, where you sense the more emphatic approach from us is, we've said that we came into 2026 saying that we need to assume the environment's going to look a lot like 2025, that we are going to build a stack of initiatives that we felt like could deliver accelerated market share gains. We do have a level of confidence around the execution of our initiatives and feel like that's paying off. Probably, at least from my perspective, amateur perspective, too early to tell if things are truly bottoming. We're going to assume that's going to continue to be the case and do everything we can to deliver a great customer experience and take as much share as possible. Simeon Gutman: Okay. Thanks a lot. Good luck. Brad Paulsen: Thank you. Operator: Our next question is from Steven Zaccone with Citigroup. Steven Zaccone: Great. Good afternoon. Thanks very much for taking my question. Can we talk a little about the laminate vinyl category? It sounds like you're expecting that weakness to continue into 2027. That sounded like a new comment. Maybe, what are you seeing there? Elaborate a little bit more on the pricing environment in that category as well. Brad Paulsen: Sure, I'll rewind the tape a little bit with my answer. Laminate and vinyl, it's our second-largest category. It's the only category that we sell where we're seeing any type of downward pressure, and we believe that downward pressure is a result of excess supply in the market. The term that Ersan and I have used is the category's been devalued. What we mean by that is a SKU that used to be considered a better in a good, better, best lineup is now considered and priced as a good SKU. That obviously puts pressure on all parts of that category, and it is the vinyl part of laminate and vinyl. We were really clear on our first quarter call to say we're going to play offense, we're going to be thoughtful around pricing, we're going to have aggressive opportunity buys, and we're going to add new SKUs to our assortment to make sure we're hitting the mark with the customers that are interested in that category. We did see improvement, and we're going to continue to push for more improvement for the remainder of the year. When we say, "Hey, we think that pressure is going to bleed over into 2027," that's consistent with what we talked about at the first quarter. We're just trying to get a sense of how quickly this excess inventory will dissipate. Tough thing to tell. I trust Ersan. He's been in the business a long time. Our sense is it's going to run through at least the first half of next year. Again, our perspective is it's an opportunity for us to take share and make that comp performance better, certainly than it was in the first quarter. Steven Zaccone: Okay. Understood. The follow-up I had, bearing in mind some of the tariff commentary and then in this category in particular, how do you think about the pricing environment and expectations and comps for the second half of the year? Has that changed versus your original thinking? Brad Paulsen: I'll go first. Bryan, if you want to add anything, feel free. The term that I have used pretty consistently since the start of tariff is the market's been rational. I'll add a few more words in that. I'm not seeing anything disruptive from a pricing perspective outside of what I just explained on laminate and vinyl. We've got two sets of competitors. You have independents who do a terrific job around service, really thoughtful pricing approach, and have a sticky relationship with that pro customer. Then you've got big box. For us, as a reminder, big box, we compete on opening price point in good, in a good, better, best in installation materials. We haven't seen anything that would say that the environment is becoming overly aggressive or overly promotional. We've been really consistent in saying that we will continue to take modest increases. The nature of our business, because we do have a really unique pricing model, there's always a little bit of up and a little bit of down, but it'll net out to a modest increase across our categories. Bryan Langley: This is Bryan. Our guidance from last quarter to this quarter is the same, with average ticket expected to be kind of flat to up low single digits. The pressure in laminate and vinyl does put pressure on our average ticket because it's a much bigger project when somebody decides to take that on. Just overall, it's putting pressure on average ticket. No change from last quarter and what we think is going to be embedded for the guide or assumed in the guide. Steven Zaccone: Okay. Thanks very much. Best of luck. Brad Paulsen: Thank you. Operator: Our next question is from Michael Lasser with UBS. Michael Lasser: Good evening. Thank you so much for taking my question. Do you think the industry saw the same inflection that Floor & Decor has seen over the last few months, or has your initiatives kicked in such that your market share has accelerated? This is a part of that, why is there such a divergence between your pro performance in the quarter versus your DIY performance in the quarter? Brad Paulsen: The second two questions are a lot easier to answer than the first. I think we're going to know more as some of our public competitors and manufacturers report their results. Obviously, it's a tough question to answer just because, by our measure, 60% of our space is still independents, all private. Really hard to get a gauge on how they're performing. Ersan does a nice job of kind of triangulating through conversations with both manufacturers and our supplier partners. Our sense is, I'll now get into your second question, is our initiatives are paying off. We feel like we're focused on the right things. Some initiatives are a little bit further down the path and make more sense in this environment, and that is the pro piece. Going back to this idea that as a team, we said 2026 is going to look a lot like 2025. In order for us to deliver positive comp sales, we knew we had to do that through increased share of wallet gains through the pro customer. Why is that important? That customer is in our store every single day. We reported in the second quarter, that customer is 55% of our sales. We think they influence up to 20% of the remaining 45% of sales. Really, really important customer. The thing, Michael, that I would point out, really pleased with installation materials. That is a driver of footsteps. The opportunity that we have, and why we're excited about the pro initiative, is we clearly have a hook when it comes to installation materials. Now we have a great opportunity to sell the rest of the categories that we sell. One other thing that's really important is we continue to open new stores and become even more convenient for our pro customers. I think we're going to drive traffic there. Really excited again and feel good about our initiatives. Still somewhat early in the process, but already seeing some dividends from them. Michael Lasser: Okay. My follow-up question is, can you help calibrate the relationship between Floor & Decor same store sales growth and an eventual inflection in existing home sales? It's hard to necessarily use the historic relationship because Floor & Decor, throughout much of the 2010s, was seeing a benefit from the new stores ramping to maturity, the increase in vinyl, as well as less cannibalization. It seems like those are going to be no longer benefits to your same store sales as the market recovers. Is it best to think instead of maybe a high single-digit comp in a good case scenario as the market recovers, a mid-single-digit comp is the most realistic outcome in light of some of those factors? Brad Paulsen: Listen, it's a great question. We are bouncing versions of that around the hallways here on what our business looks like at different points in the cycle. We still think existing home sales is the metric for us, strongly correlated to our performance. Historically, we have said as existing home sales improve, that it's generally a two to three-month flash to bang before you see it in our business. In an environment, though, I'll say this kind of current cycle, where you're just flirting with 4 million homes, kind of a little bit above it, a little bit below it. You do see outsized impact on our initiatives in different parts of the country. If you think about the West, we've consistently said, "Hey, the West is outperforming the rest of the country." One, that's a part of the business that is generally dealing with less cannibalization and has less density than other parts of the U.S. You're naturally going to get more traction and more benefit from some of the things that we're focused on. As far as how we're forecasting what the business looks like from a organic growth perspective in kind of mid trough or kind of a more normal environment, not going to get into that level of detail on this call. Michael Lasser: Understood. Good luck. Thank you so much. Brad Paulsen: Thank you. Operator: In the interest of time, we ask that participants limit themselves to one question. Our next question is from Kate McShane with Goldman Sachs. Kate McShane: Hi, good afternoon. Thanks for taking our question. We wanted to speak a little bit more about the competitive environment, just in terms of what behavior you're seeing, more from the home improvement competitors versus the independents, and how they acted throughout the quarter. I do know that it seems like at least one of the larger scale home improvement retailers seems to be partnering more with Mohawk and there's a lot more initiative there it seems, even more recently. Can you just talk about that piece of the competitive set and again, just maybe tie it back to how you're thinking about the tariff refunds and how it can play a role in pricing relative to that? Brad Paulsen: For me, big box retailers, amazing companies, like I said, have incredible locations. For our customer, hard surface flooring, that provides a level of convenience. They're always investing in their assortment. Generally speaking, where we compete with them is on opening price point, good, and installation materials. If you think about where we sell, it's primarily in the better invest. I think that's a really important distinction when you think about our model versus the big box retailers and where we overlap. Absolutely overlap, and we watch them very closely. As I said earlier, don't see anything at this point that would be disruptive that would lead me to think that there's accelerated share gains from either one of them. That's speculation because I haven't obviously heard their results. We generally feel really good about the model that we have and how it competes against big box retail. Operator: Our next question is from Steven Forbes with Guggenheim Securities. Steven Forbes: Good afternoon. Brad, maybe just following up on laminate and vinyl, I think it was the Cohn's question before. Revisiting the improvement, I think you guys talked about some merchandising initiatives within that department, that you were rolling out regionally and nationally. Curious, maybe you could just remind us where those initiatives are in terms of breadth and scope, and if there's any other merchandising initiatives in the pipeline, particularly for laminate and vinyl that could maybe be a self-help story as it relates to getting that category back to growth. Brad Paulsen: Yeah. Great question. Three areas that we really leaned into. The quickest reaction, as you would expect, was rethinking our pricing strategy. Credit to Ersan and team. We moved really quickly. We put more aggressive pricing in the market where we saw elasticity. We watched it, we refined it, and we're in a spot now where we feel really comfortable about the investment that we've made from a price perspective to drive more market share into that business. That's step 1. Step 2, and this is kind of in order of how they hit the stores, were opportunity buys. We knew we had a gap as far as our everyday current assortment relative to where customers were shopping. We quickly leveraged the supplier partnerships we had across the U.S. and across the world to get really aggressive opportunity buys into our stores at the right inventory levels. Those were a huge win. And that's a matter of weeks from when we identified the opportunity. The third piece is we really rethought our everyday assortment and plugged those holes that the opportunity buys served as a band-aid on. Feel really good about how we operated. We use the term micro-merchandising a lot, with all of you and certainly inside of our business, and I think this is a great example on how nimble we can be when we find a situation where the market has shifted a little bit, where some of our other competitors may struggle to have that type of speed to market. As far as where it's at, 2 and 3 opportunity buys in the resetting the assortment, that's national. From a pricing perspective, like I said, we're a little bit more surgical there, that's not national. That's in the markets, where we really need to win in laminate and vinyl. Steven Forbes: Thank you. Operator: Our next question is from Christopher Horvers with JPMorgan. Christopher Horvers: Good evening. Thanks for taking my question. A two-parter. Just taking the other side of it and trying to think about what drove the slowdown on July 4th. Obviously, July 4th happens every year. Is there something that you point to and you say, "Well, that was just an anomaly, and that wasn't the improvement in the later part of July, really like the past two to three weeks, isn't just a normalization of demand relative to earlier in July?" A follow-up question on the pricing side. Most of your independents don't buy directly. What is your impression of what the wholesalers are doing? Are they lowering prices as tariff refunds come in and such that the independent market could see prices come down, and is that already happening? Thanks so much. Brad Paulsen: Chris, great question on July, and, as you can imagine, a lot of discussion here trying to dissect what actually happened in the first couple of weeks. We have three or four thoughts, but nothing that we're willing to share publicly. The great news, again, back half of July, we returned more to that kind of May, June performance and comp run rate, which is really encouraging. Right now, I'm going to say those two weeks were an anomaly. If for whatever reason we see a return to that two-week performance, then certainly we're going to have more concrete answers. It didn't continue, which again, for us is really, really encouraging. From an independent perspective, you're right. For the most part, their sourcing model is a two-step sourcing model. One, when you think about tariff refunds, because they're not the importer of record, unlikely that they're going to get those tariff refunds and be able to reinvest into their business, which because of that, I think would prevent them from getting too aggressive around price or promotion in the second half of the year. Everything that we have seen, generally speaking, has been prices going up and certainly not going down. Operator: Our next question is from Keith Hughes with Truist Securities. Keith Hughes: Thank you. We've talked a good bit about your laminate and LVP product on the call, and it's been underperforming the group average. You have other products overperforming. Is this just the consumer changing its preference for one product over the other versus real category issues? Brad Paulsen: Yeah. Again, great questions. I had made some notes on the laminate and vinyl question, my last bullet point that I continue to ignore is there is category shift we believe happening, both into wood and to tile. Certainly that's an element of the conversation. Of all the reasons why we're seeing pressure there, Keith, it's probably the least impactful, it's certainly a part of the conversation. Keith Hughes: Is the tile sell a better sell for Floor & Decor? How it uses more accessories than LVT? Brad Paulsen: Well, we like all of our categories. Tile is our largest category. It's in the center of the store. As we take both kind of customer feedback and associate feedback, that's the one that there's kind of universal confidence around, having the right products, having the right inventory, always being trend right. We love our Tile category, and we believe that's a category that we'll continue to lean into and will continue to grow for us. Bryan Langley: Hey, Keith, Tile also, you're right, has more attachments when that happens. We still get attachment when Laminate and Vinyl is sold, but there tends to be more when Tile is sold, and IM is actually one of our best performing categories, and that's just winning more with pro. I know there was an earlier question on the outperformance within pro, and you see that within IM, just our supply house strategies are working. Operator: Our next question is from Peter Keith with Piper Sandler. Peter Keith: Thank you very much. Nice to see the sequential improvement. Brad, you did speak in the prepared remarks around your own sequential performance in conversion. I guess I was curious if, is there something you're doing at the store level that you can speak to that is driving better execution? Is the consumer behaving differently? Just hoping you could unpack that comment a bit. Brad Paulsen: This is a play that the team continues to execute. If you go back three years ago, one of the things that we pointed to is just really strong service. The thing that's amazed all of us, it's continued to improve. The one area that I think we continue to dial in is making sure there's a consistency around what plays we're calling and the level of execution on the play, particularly with our Pro customer. We have a level of confidence that we could go into every one of our stores at this point and ask that team, "Hey, how are you growing Pro share wallet?" All of our stores would have the same answer. They would have the data to support those efforts, to understand the customer, where the opportunity is. Then, like I hinted at around service, we've got great teams. We've got great teams that are passionate about taking care of our customers, love helping them navigate the journey of selecting a hard surface floor. We are well-positioned around service and really refining that conversion or the inputs to driving that conversion improvement that we talked about. Peter Keith: Thank you. Operator: Our next question is from Max Rakhlenko with TD Cowen. Max Rakhlenko: Hey, guys. Thanks a lot. Can you provide more color on the work that your new pricing team is doing? What's ahead, and how could we see your portfolio approach to pricing evolve in the medium term? Brad Paulsen: Yeah. When we talk about evolving our business, we talk a lot about digital. We talk about supply chain, and pricing is certainly an element that is front and center. Ersan has built a world-class merchandising team that has always been top-notch when it comes to pricing. The other piece that's unique about our business is we have a bottom-up kind of feedback process where there are decision rights at our stores to ensure that we're appropriately positioned from a pricing perspective in every geography in which we operate. At the same time, massive improvement around technology and tools that you can use to get really scientific around pricing. We've invested in team, in talent, in process. We're on the cusp of a technology investment. I only expect that capability to get better and better and stronger and stronger for Floor & Decor. As far as the portfolio approach, there isn't meaningful changes ahead. I think we've got that pretty locked in. As we introduce different categories down the road, certainly that might be a different conversation, but we feel pretty locked in when it comes to our portfolio approach. Operator: Our last question is from Jonathan Matuszewski with Jefferies. Jonathan Matuszewski: Great. Good evening, and thanks for squeezing me in. Brad, can you update us on what you're hearing from your Pros during roundtable sessions, maybe just regarding project backlogs? Some of the data out there is talking to kind of rising cancellation rates or postponement rates among homeowners for remodeling projects. Are your Pro roundtables revealing anything in that regard regarding project deferrals or anything along those lines? Thanks. Brad Paulsen: We have not heard anything that would signal a change to that behavior versus what we experienced in the first quarter. We did talk on the commercial side a little bit about delays in the first quarter driving some of the challenges they saw there. That obviously improved into the second quarter, and we don't expect any type of project delays unless the macro changes meaningfully in the second half of the year. Short answer is no, we haven't heard any change to that from what's previously been discussed with our Pros. Operator: Thank you. We have reached the end of our question and answer session. This does conclude today's conference. We thank you again for your participation. You may now disconnect your lines. Before you buy stock in Floor & Decor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Floor & Decor wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,081!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,166,221!* That performance is why people listen. 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Floor & Decor (FND) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Adjusted Diluted EPS: $0.58, unchanged from the prior year period. Total Sales: Increased 3% to $1,250.3 million, up from $1,214.2 million in the prior year period. Comparable Store Sales: Declined 2.1%, an improvement from the 3.7% decline in the first quarter. Pro Sales: Grew approximately 4% year-over-year, accounting for about 55% of sales. Comparable Transactions: Declined 2.9%, compared with a 5.5% decline in the first quarter. Average Ticket: Grew 0.8% year-over-year. Adjusted Gross Margin: 43.7%, a decrease of 20 basis points year-over-year. SG&A Expenses: Increased $28.3 million or 6.3% year-over-year; as a percentage of sales, deleveraged 120 basis points to 38.3%. Adjusted EBITDA: Increased 1.2% to $152.0 million; margin was 12.2% compared with 12.4% in the prior year period. GAAP Diluted EPS: $0.89, including a $0.31 net after-tax benefit from IEPA tariff refunds and debt extinguishment costs. Free Cash Flow: Generated $278.4 million of cash from operating activities during the 26 weeks ended June 25, 2026, compared with $155.3 million in the prior year period. Share Repurchases: Repurchased 1.3 million shares for $65.7 million during the quarter. New Stores: Opened 11 new warehouse format stores in the first half of fiscal 2026, including five in the second quarter. Online Sales Penetration: Reached 20.3% of total sales, up from 18.6% in the prior year period. Fiscal 2026 Guidance: Sales expected in the range of $4,770 million to $4,990 million; adjusted diluted EPS estimated at $1.88 to $2.13. Warning! GuruFocus has detected 5 Warning Signs with FND. Is FND fairly valued? Test your thesis with our free DCF calculator. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Adjusted diluted EPS of $0.58 was flat year-over-year despite a 2.1% decline in comparable store sales, demonstrating the resilience of the operating model. Comparable store sales improved sequentially throughout the quarter, from a 5.1% decline in April to a 0.3% decline in June, indicating a positive trend. Sales to Pros grew approximately 4% year-over-year and accounted for 55% of total sales, with installation materials delivering strong growth. The company received a $45.2 million net pre-tax benefit from IEPA tariff refunds, providing flexibility to offset inflation and invest in pricing to gain market share. Strong free cash flow generation enabled the repurchase of $65.7 million in common stock during the quarter, with $334.3 million remaining under the authorization. Online sales penetration reached 20.3% of total sales, up from 18.6% in the prior year, reflecting progress in the omnichannel strategy. The company opened 11 new warehouse stores in the first half of 2026, with the front-loaded cadence progressing in line with expectations. Comparable store sales declined 2.1% in the second quarter, driven by continued softness in large discretionary flooring projects. Demand softened around the 4th of July holiday period, with third quarter-to-date comparable store sales declining 2.2%. The vinyl flooring category continues to face pressure from slowing demand and excess industry supply, which could persist into 2027. Housing market activity remains constrained, with existing home sales near historically low levels of approximately 4 million annualized units. SG&A expenses increased 6.3% year-over-year, deleveraging 120 basis points as a percentage of sales, partly due to one-time costs related to IEPA tariff refunds. The company maintained a wide comparable store sales guidance range of flat to down 4% for fiscal 2026, reflecting ongoing macroeconomic uncertainty. Adjusted gross margin declined 20 basis points year-over-year to 43.7%, within the expected range but still under pressure. Q: Can you discuss the mechanics of the IEPA tariff refunds, the full-year impact, and how you plan to deploy those funds to drive growth or offset costs?A: Brad Paulsen (CEO) and Bryan Langley (CFO) detailed that the company filed for $87 million in total IEPA tariff refunds and has received substantially all of it. They recorded a $56 million one-time benefit in gross profit for inventory already sold and a $28 million reduction to inventory on hand, with the benefit recognized as it sells through. The funds will be used to offset inflationary impacts from oil and supply chain, selectively invest in price to gain market share where elasticity exists, and execute their capital allocation framework, including share repurchases. Q: What drove the sequential improvement in comparable store sales through the quarter, and how should we think about the guidance for the rest of the year given the current momentum?A: Brad Paulsen (CEO) attributed the improvement to record-high net promoter scores, strong Pro sales outperformance, and early traction from digital initiatives. He noted that July was choppy around the 4th of July holiday but improved in late July and early August, aligning with May and June run rates. Bryan Langley (CFO) added that they intentionally kept the comp guidance wide (flat to down 4%) due to macro uncertainty but have high confidence in achieving the midpoint, with the three-year stack comp expected to improve sequentially from Q2. Q: Is the pressure in the laminate and vinyl category a result of consumer preference shifts or category-specific issues, and what is your strategy to address it?A: Brad Paulsen (CEO) explained that the pressure is due to excess industry supply, which has "devalued" the category, and this is expected to continue into 2027. He noted a slight category shift toward wood and tile but said it's the least impactful factor. The company is playing offense with aggressive pricing where elasticity exists, securing opportunity buys, and resetting the everyday assortment to win market share. Q: Do you believe the industry is seeing the same inflection as Floor & Decor, or are your initiatives driving accelerated market share gains?A: Brad Paulsen (CEO) stated that while it's difficult to gauge the private independent market, he believes their initiatives are paying off, particularly with the Pro customer, who represents 55% of sales and influences up to 20% more. The focus on installation materials is driving foot traffic, and as they open more stores, they become more convenient for Pros, which should drive further gains. Q: How should we calibrate the relationship between Floor & Decor's same-store sales and an eventual recovery in existing home sales?A: Brad Paulsen (CEO) reiterated that existing home sales is the key metric, with a two-to-three-month lag before impacting their business. He noted that in the current environment of ~4 million annualized units, their initiatives have an outsized impact, particularly in the West region, which has less cannibalization and density. He declined to provide specific long-term organic growth forecasts. Q: What are you seeing in the competitive environment, particularly from big box retailers and independents, and how does the tariff refund factor into your pricing strategy?A: Brad Paulsen (CEO) said big box retailers compete on opening price points and installation materials, while Floor & Decor focuses on better and best products. He hasn't seen disruptive pricing behavior. Regarding independents, he noted they are unlikely to receive tariff refunds as they aren't importers of record, which may prevent them from getting aggressive on price, and he's generally seen prices going up, not down. Q: Can you provide more color on the work of your new pricing team and how your portfolio approach to pricing will evolve?A: Brad Paulsen (CEO) highlighted that the merchandising team has always been top-notch on pricing, with a bottom-up feedback process giving stores decision rights to ensure competitive positioning. They are investing in technology, talent, and processes to become more scientific about pricing. He stated there are no meaningful changes to the portfolio approach ahead, as it's locked in for current categories. Q: What are you hearing from your Pros regarding project backlogs and any signs of rising cancellation or postponement rates?A: Brad Paulsen (CEO) said they haven't heard any change in behavior versus the first quarter. While there were commercial project delays in Q1, that improved in Q2, and they don't expect further delays unless the macro environment changes meaningfully. The short answer is no change in sentiment from their Pro roundtables. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was anchored by the Pro segment, which grew 4% and now accounts for 55% of total sales, significantly outperforming the broader business. Sequential comparable store sales improvement throughout the quarter was driven by record-high net promoter scores and improved customer conversion rates. The West and East regions both delivered positive comparable store sales excluding cannibalization, indicating a broadening of geographic performance stability. Installation materials and tile categories outperformed, benefiting from the 'supply house' strategy that positions stores as convenient hubs for professional contractors. The vinyl category remains pressured by industry-wide excess supply and devalued pricing, a trend management expects could persist into early 2027. Strategic focus on 'better and best' product tiers resulted in increased sales penetration for higher-value offerings despite macroeconomic headwinds. Spartan Surfaces reached an inflection point with 2% year-over-year growth, supported by a recovery in project backlogs and strong written sales in June. Fiscal 2026 guidance assumes a continued choppy demand environment for large discretionary projects, influenced by historically low existing home sales. Management maintains a wide sales guidance range of flat to -4% due to macro uncertainty, though they expressed high confidence in reaching the midpoint. A comprehensive 18-to-24-month digital transformation is underway to modernize omnichannel capabilities, including a new pro-focused app launching next year. The company plans to utilize $87 million in total IEEPA tariff refunds to offset inflationary pressures in supply chain and selectively invest in price to gain market share. New store openings remain front-loaded, with 55% of the 2026 class already open, focusing on a 55,000 square foot format for higher-density market penetration. Recognized a $45.2 million net pre-tax benefit from IEEPA tariff refunds, which significantly impacted gross margin and SG&A comparability. Completed a comprehensive refinancing of credit facilities, extending debt maturities to 2031 and 2033 to enhance long-term financial flexibility. Executed $65.7 million in share repurchases during the quarter, supported by strong free cash flow generation of $278.4 million year-to-date. The 53rd week in fiscal 2026 is expected to contribute approximately $65 million to total sales and $0.08 to adjusted diluted EPS. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management received substantially all of the $87 million in cash subsequent to the quarter's end. Funds are being deployed to offset rising domestic trucking costs and oil-related inflation rather than implementing broad price increases. Excess cash from refunds will be funneled into the capital allocation framework, prioritizing store growth and share repurchases. Management characterized the early July slowdown as an 'anomaly' that did not persist into late July or early August. While hesitant to declare a market bottom, they noted that internal initiatives in the Pro segment are driving market share gains independent of housing trends. Regional performance in the West remains a leading indicator of how the business performs as cannibalization pressures ease. The vinyl market is currently 'devalued' due to excess supply, leading management to aggressively reset assortments and use 'opportunity buys' to fill pricing gaps. Management noted that the pricing environment remains rational among independents and big-box retailers, with no signs of disruptive promotional activity. Independents are unlikely to match Floor & Decor's pricing flexibility as they lack the direct-import scale to benefit from tariff refunds.

Net sales of $1,250.3 million increased 3.0% from the second quarter of fiscal 2025 Comparable store sales decreased 2.1% Diluted EPS of $0.89; Adjusted diluted EPS* of $0.58 Opened five new warehouse stores Returned $65.7 million to shareholders through share repurchases ATLANTA, July 30, 2026--(BUSINESS WIRE)--Floor & Decor Holdings, Inc. (NYSE: FND) ("We," "Our," the "Company," or "Floor & Decor") announces its financial results for the second quarter of fiscal 2026, which ended June 25, 2026. Brad Paulsen, Chief Executive Officer, stated, "We are pleased with our second-quarter earnings, which exceeded our expectations and reflected both the resilience of our business model and the disciplined execution of our teams. While demand for larger discretionary home improvement flooring projects remains uneven, we saw sequential improvement throughout the quarter, with comparable store sales improving from a 5.1% decline in April to nearly flat in June. As we turn the page on the first half of 2026, we remain focused on driving sales, managing expenses, and delivering value to our customers. We believe these actions are resonating with customers and position us well when demand conditions normalize." Please see "Comparable Store Sales" below for information on how the Company calculates period-over-period changes in comparable store sales. For the Thirteen Weeks Ended June 25, 2026 Net sales of $1,250.3 million increased 3.0% from $1,214.2 million in the second quarter of fiscal 2025. Comparable store sales decreased 2.1%. We opened five new warehouse stores, ending the quarter with 281 warehouse stores and five design studios. Operating income of $124.0 million increased 51.4% from $81.9 million in the second quarter of fiscal 2025. Operating margin of 9.9% increased 310 basis points from the second quarter of fiscal 2025. Net income of $95.9 million increased 51.7% from $63.2 million in the second quarter of fiscal 2025. Diluted earnings per share ("EPS") of $0.89 increased 53.4% from $0.58 in the second quarter of fiscal 2025. Adjusted net income* of $63.0 million decreased 0.3% from $63.2 million in the second quarter of fiscal 2025. Adjusted diluted EPS* of $0.58 was flat compared to the second quarter of fiscal 2025. Gross margin of 48.2% increased 430 basis points from 43.9% in the second quarter of fiscal 2025. Adjusted gross margin* of 43.7% decreased 20 basis points from 43.9% in the second quarter of fiscal 2025. Adjusted EBITDA* of $152.0 million increased 1.2% from $150.2 million in the second quarter of fiscal 2025. For the Twenty-six Weeks Ended June 25, 2026 Net sales of $2,402.5 million increased 1.2% from $2,374.9 million in the same period of fiscal 2025. Comparable store sales decreased 2.9%. We opened 11 new warehouse stores. Operating income of $176.4 million increased 20.7% from $146.1 million in the same period of fiscal 2025. Operating margin of 7.3% increased 110 basis points from the same period of fiscal 2025. Net income of $135.6 million increased 21.0% from $112.1 million in the same period of fiscal 2025. Diluted EPS of $1.25 increased 21.4% from $1.03 in the same period of fiscal 2025. Adjusted net income* of $102.7 million decreased 8.3% from $112.1 million in the same period of fiscal 2025. Adjusted diluted EPS* of $0.95 decreased 7.8% from $1.03 in the same period of fiscal 2025. Gross margin of 46.2% increased 240 basis points from 43.8% in the same period of fiscal 2025. Adjusted gross margin* of 43.9% increased 10 basis points from 43.8% in the same period of fiscal 2025. Adjusted EBITDA* of $273.5 million decreased 2.3% from $280.0 million in the same period of fiscal 2025. *Non-GAAP financial measure. Please see "Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Financial Measures" below for more information. Updated Outlook for the Fiscal Year Ending December 31, 2026: The Company will report 53 weeks of operating results in fiscal 2026 and provides the following guidance for fiscal 2026: Net sales of approximately $4,770 million to $4,990 million Comparable store sales of approximately (4.0)% to flat Diluted EPS of approximately $2.20 to $2.45 Adjusted diluted EPS* of approximately $1.88 to $2.13 Adjusted EBITDA* of approximately $550 million to $585 million Depreciation and amortization expense of approximately $250 million Interest (income) expense, net of approximately zero Tax rate of approximately 23% Diluted weighted average shares outstanding of approximately 107 million shares Open 20 new warehouse stores Capital expenditures of approximately $240 million to $275 million *Non-GAAP financial measure. Please see "Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Financial Measures" below for more information. Conference Call Details A conference call to discuss the second quarter fiscal 2026 financial results is scheduled for today, July 30, 2026, at 5:00 p.m. Eastern Time. A live audio webcast of the conference call, together with related materials, will be available online at ir.flooranddecor.com. A recorded replay of the conference call will be available approximately three hours after the conclusion of the call and can be accessed both online at ir.flooranddecor.com and by dialing 844-512-2921 (international callers please dial 412-317-6671). The pin number to access the telephone replay is 13761392. The replay will be available until August 6, 2026. About Floor & Decor Holdings, Inc. Floor & Decor is a multi-channel specialty retailer of hard surface flooring and related accessories and seller of commercial surfaces. As of June 25, 2026, the Company operated 281 warehouse-format stores and five design studios across 39 states. The Company offers a broad in-stock assortment of laminate and vinyl, tile, wood, and natural stone flooring and installation materials and decorative accessories, as well as adjacent categories, at everyday low prices. The Company was founded in 2000 and is headquartered in Atlanta, Georgia. Comparable Store Sales Comparable store sales refer to period-over-period comparisons of our net sales at the time of sale among the comparable store base. A store is included in the comparable store sales calculation on the first day of the thirteenth full fiscal month following a store’s opening, which is when we believe comparability has been achieved. Changes in our comparable store sales between two periods are based on net sales at the time of sale for stores that were in operation during both of the two periods. Any change in the square footage of an existing comparable store, including for remodels and relocations within the same primary trade area of the existing store being relocated, does not eliminate that store from inclusion in the calculation of comparable store sales. Stores that are closed for a full fiscal month or longer are excluded from the comparable store sales calculation for each full fiscal month that they are closed. Since our e-commerce, regional account manager, and design studio sales are fulfilled by individual stores, they are included in comparable store sales only to the extent the fulfilling store meets the above mentioned store criteria. Sales through our Spartan Surfaces, LLC ("Spartan") subsidiary do not involve our stores and are therefore excluded from the comparable store sales calculation. When a fiscal year includes a 53rd week, we exclude the 53rd week of sales from our calculation. Non-GAAP Financial Measures Adjusted net income, Adjusted diluted EPS, Adjusted gross profit, Adjusted gross margin, EBITDA, and Adjusted EBITDA (which are shown in the reconciliations below) are supplemental measures of financial performance that are not required by or presented in accordance with accounting principles generally accepted in the United States ("GAAP"). We define Adjusted net income as net income adjusted to eliminate the impact of certain items that we do not consider indicative of our core operating performance and the tax effect related to those items. We define Adjusted diluted EPS as Adjusted net income divided by diluted weighted average shares outstanding. We define Adjusted gross profit as gross profit adjusted to eliminate the impact of certain items that we do not consider indicative of our core operating performance. We define Adjusted gross margin as Adjusted gross profit divided by net sales. We define EBITDA as net income before interest, loss on extinguishment of debt, taxes, and depreciation and amortization. We define Adjusted EBITDA as net income before interest, loss on extinguishment of debt, taxes, and depreciation and amortization adjusted to eliminate the impact of non-cash stock-based compensation expense and certain items that we do not consider indicative of our core operating performance. Reconciliations of these measures to the most directly comparable GAAP financial measure are set forth in the tables below. Adjusted net income, Adjusted diluted EPS, Adjusted gross profit, Adjusted gross margin, EBITDA, and Adjusted EBITDA are key metrics used by management and our Board of Directors to assess our financial performance and enterprise value. We believe that Adjusted net income, Adjusted diluted EPS, Adjusted gross profit, Adjusted gross margin, EBITDA, and Adjusted EBITDA are useful measures, as they eliminate certain items that are not indicative of our core operating performance and facilitate comparisons on a consistent basis from period to period. We also use Adjusted EBITDA as a basis to determine covenant compliance with respect to our term loan and asset-based loan ("ABL") facilities, to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. Adjusted net income, Adjusted diluted EPS, Adjusted gross profit, Adjusted gross margin, EBITDA, and Adjusted EBITDA are also frequently used by analysts, investors, and other interested parties as performance measures to evaluate companies in our industry. Adjusted net income, Adjusted diluted EPS, Adjusted gross profit, Adjusted gross margin, EBITDA, and Adjusted EBITDA are non-GAAP measures of our financial performance and should not be considered as alternatives to net income as a measure of financial performance or any other performance measure derived in accordance with GAAP, and they should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Additionally, Adjusted net income, Adjusted diluted EPS, Adjusted gross profit, Adjusted gross margin, EBITDA, and Adjusted EBITDA are not intended to be measures of liquidity or free cash flow for management’s discretionary use. In addition, these non-GAAP measures exclude certain non-recurring and other charges. Each of these non-GAAP measures has its limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. In evaluating Adjusted net income, Adjusted diluted EPS, Adjusted gross profit, Adjusted gross margin, EBITDA, and Adjusted EBITDA, you should be aware that in the future we may incur expenses or realize benefits that are the same as or similar to items eliminated in calculating these non-GAAP measures, such as stock-based compensation expense, fair value adjustments related to contingent earn-out liabilities, tariff refunds, and other adjustments. Definitions and calculations of Adjusted net income, Adjusted diluted EPS, Adjusted gross profit, Adjusted gross margin, EBITDA, and Adjusted EBITDA differ among companies in the retail industry, and therefore these non-GAAP measures disclosed by us may not be comparable to the metrics disclosed by other companies. Please see "Reconciliation of GAAP to Non-GAAP Financial Measures" below for reconciliations of non-GAAP financial measures used in this release to their most directly comparable GAAP financial measures. The Company does not provide a reconciliation of forward-looking measures where it believes such a reconciliation would imply a degree of precision and certainty that could be confusing to investors and the Company is unable to reasonably predict certain items contained in these measures without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred and are out of the Company’s control or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures. Forward-Looking Statements This release and the associated webcast/conference call contain forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact contained in this release and the associated webcast/conference call, including statements regarding the Company’s future operating results and financial position, business strategy and plans, and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "seeks," "intends," "targets," "projects," "contemplates," "believes," "estimates," "predicts," "budget," "potential," or "continue" or the negative of these terms or other similar expressions. The forward-looking statements contained in this release and the associated webcast/conference call are based on our current expectations, assumptions, estimates, and projections regarding the Company’s business, the economy, and other future conditions. These statements involve known and unknown risks, uncertainties, and other important factors that may cause the Company’s actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Although the Company believes that the expectations reflected in the forward-looking statements in this release and the associated webcast/conference call are reasonable, the Company cannot guarantee future events, results, performance or achievements. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements in this release or the associated webcast/conference call, including, without limitation, (1) macroeconomic headwinds, including high interest rates and weak home sales, (2) our failure to successfully manage new store growth or higher than expected costs, (3) our ability to manage our comparable store sales, (4) our inability to lease or acquire new store locations on acceptable terms, renew or replace our current store leases, or make payments under our leases, (5) our failure to maintain and enhance our brand image and awareness, (6) our failure to successfully anticipate and manage trends, consumer preferences, and demand, (7) our inability to successfully manage increased competition, (8) adverse changes in global trade policies, tariffs, or import enforcement actions, any of which could impact our ability to import from foreign suppliers, raise our costs, or disrupt our supply chain, (9) our inability to manage our inventory, including the impact of inventory obsolescence, shrink, and damage, (10) any disruption in our distribution capabilities, supply chain, and our related planning and control processes, including carrier capacity constraints, blocked trade lanes, port congestion, strike, or shut down, and other supply chain costs or product shortages, (11) any increases in wholesale prices of products, materials, and transportation costs beyond our control, including increases in costs due to inflation or tariffs, (12) the resignation, incapacitation, or death of any key personnel, including our executive officers, (13) our inability to attract, hire, train, and retain highly qualified managers and staff, (14) the impact of any labor activities, (15) our dependence on foreign imports for the products we sell, including risks associated with obtaining products from abroad, (16) any failure by any of our suppliers to supply us with quality products on attractive terms and prices or to adhere to the quality standards that we set for our products, (17) our inability to locate sufficient suitable natural products, (18) the effects of weather conditions, natural disasters, or other unexpected events, including public health crises, that may disrupt our operations, (19) personal injury, product liability and warranty claims and related governmental investigations, (20) any allegations, investigations, lawsuits, or violations of laws and regulations applicable to us, our products, or our suppliers, (21) our inability to adequately protect the privacy and security of information related to our customers, us, our associates, our suppliers, and other third parties, (22) any material disruption in our information systems, including our website, (23) our inability to maintain sufficient levels of cash flow or liquidity to fund our expanding business and service our existing indebtedness, (24) new or changing laws or regulations, including tax laws and trade policies and regulations, (25) payments-related risks, (26) any failure to protect our intellectual property rights or disputes regarding our intellectual property or the intellectual property of third parties, (27) the impact of any future strategic transactions, (28) restrictions imposed by our indebtedness on our current and future operations, including risks related to our variable rate debt, (29) our implementation, continuation, or suspension of share repurchases, and (30) our ability to manage risks related to corporate social responsibility. Additional information concerning these and other factors are described in "Forward-Looking Statements," Item 1, "Business," Item 1A, "Risk Factors," and Item 1C, "Cybersecurity" of Part I and Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and Item 9A, "Controls and Procedures" of Part II of the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2025, filed with the Securities and Exchange Commission (the "SEC") on February 19, 2026 (the "Annual Report") and elsewhere in the Annual Report, as well as those described in Item 2, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 25, 2026 (the "10-Q") and elsewhere in the 10-Q, and those described in the Company’s other filings with the SEC. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The forward-looking statements contained in this release or the associated webcast/conference call speak only as of the date hereof. New risks and uncertainties arise over time, and it is not possible for the Company to predict those events or how they may affect the Company. If a change to the events and circumstances reflected in the Company’s forward-looking statements occurs, the Company’s business, financial condition, and operating results may vary materially from those expressed in the Company’s forward-looking statements. Except as required by applicable law, the Company does not plan to publicly update or revise any forward-looking statements contained herein or in the associated webcast/conference call, whether as a result of any new information, future events, or otherwise. View source version on businesswire.com: https://www.businesswire.com/news/home/20260730864089/en/ Contacts Investor Contact: Wayne HoodSenior Vice President of Investor [email protected]

Floor & Dcor (FND) came out with quarterly earnings of $0.58 per share, beating the Zacks Consensus Estimate of $0.57 per share. This compares to earnings of $0.58 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +1.75%. A quarter ago, it was expected that this company would post earnings of $0.42 per share when it actually produced earnings of $0.37, delivering a surprise of -11.9%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Floor & Dcor, which belongs to the Zacks Retail - Home Furnishings industry, posted revenues of $1.25 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.18%. This compares to year-ago revenues of $1.21 billion. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Floor & Dcor shares have lost about 8.4% since the beginning of the year versus the S&P 500's gain of 6.9%. While Floor & Dcor has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Floor & Dcor was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.58 on $1.23 billion in revenues for the coming quarter and $1.94 on $4.85 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Retail - Home Furnishings is currently in the bottom 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Haverty Furniture (HVT), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 4. This residential furniture and accessories retailer is expected to post quarterly earnings of $0.23 per share in its upcoming report, which represents a year-over-year change of +43.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Haverty Furniture's revenues are expected to be $189.28 million, up 4.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Floor & Decor Holdings, Inc. (FND) : Free Stock Analysis Report Haverty Furniture Companies, Inc. (HVT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research