What Happened?
Shares of specialty flooring retailer Floor & Decor (NYSE:FND) fell 2.6% in the afternoon session after it gave back a portion of the previous day's gains that followed a strong third-quarter earnings report. The company's stock had initially jumped 6.2% after it beat analysts' profit expectations and announced a positive turn in a key sales metric. For the quarter, Floor & Decor posted revenue of $1.18 billion, meeting expectations, while its GAAP profit of $0.53 per share comfortably beat the consensus estimate of $0.46. Importantly, same-store sales grew 1.2% year-on-year, a significant turnaround that investors initially cheered. The subsequent drop suggests that despite the solid performance and upbeat guidance, which included an increased full-year EPS forecast, some investors may be taking profits amid broader market caution or reacting to more tempered analyst outlooks following the report.
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What Is The Market Telling Us
Floor And Decor’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock dropped 14.5% on the news that President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10%. From clothing brands and electronics makers to the e-commerce sites that move their goods, companies built on global supply chains took the biggest hit. Stocks with heavy exposure to Asia were especially hard-hit, as the new tariffs threatened the growth and profits of firms with factories in the region. Vietnam, central to many companies' production plans, faced a 46% tariff. Cambodia and Indonesia were also in the crosshairs, with tariff rates of 49% and 32%. These measures could significantly erode the competitiveness of goods produced in those regions. For example, reduced production volumes would negatively affect the sales growth of all companies benefiting from these manufacturing hubs.
Floor And Decor is down 35.5% since the beginning of the year, and at $62.95 per share, it is trading 47.2% below its 52-week high of $119.22 from November 2024. Investors who bought $1,000 worth of Floor And Decor’s shares 5 years ago would now be looking at an investment worth $841.47.
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