The pandemic has turned the world upside-down. It’s forced Americans to spend more time at home and, as a result, it’s shifting spending on travel and entertainment toward home renovations, explains Tony Sagami, editor of Weiss Ultimate Portfolio.
In fact, one of the most powerful pandemic trends has been a tidal wave of spending on home improvement projects, such as the installation of hardwood floors.
Floor & Decor Holdings (FND) is a category-killer home improvement business model not seen since Home Depot (HD) with a four prong strategy:
1) Rapid store expansion;
2) Rising same-store sales;
3) Free design services; and
4) Heavy investments in relationships with professional installers.
The flooring industry may sound boring, but it’s a very profitable and rapidly growing. American tastes have completely changed from soft floor (carpet) coverings to hard surfaces. Carpet’s market share has dropped from 53% in 2012 to 45% today.
American homeowners are spending more than ever on premium hard flooring and Floor & Decor, which only sells hard floor coverings, is ready to meet that demand.
Floor & Decor has 153 warehouse-type stores in 31 states and sells a broad range of hard surface flooring: hardwood, laminate, tile and natural stone, along with decorative accessories at everyday low prices.
In the last month, FND has opened new stores in the cities of Austin, Texas, Bohemia, NY, Naples, Fla. and Waltham, Mass. And that national footprint is far from finished. FND plans to reach 400 stores over the next eight to 10 years.
The strong housing market, combined with record-low mortgage rates, has spurred refinancing, freeing up dollars to be reinvested in renovations. As a result, sales and profits are soaring at Floor & Decor. Floor & Decor is growing like a weed, and I want to be a part of that growth.
