Loading...
01/11 16:17
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call shows mixed signals: sales and gross profit increased, but diluted EPS slightly decreased. The company is facing economic uncertainties and profitability risks, with no share repurchase program announced. The Q&A reveals management's cautious outlook and unclear responses on certain risks. Despite strong sales guidance and diversified sourcing, the lack of a repurchase program and economic pressures temper optimism. Consequently, the stock price is expected to remain stable, leading to a neutral rating.
Diluted Earnings Per Share (EPS) $0.45, down from $0.46, a decrease of 2.2% year-over-year.
Total Sales $1.161 billion, an increase of 5.8% from $1.97 billion in the same period last year.
Gross Profit Increased by 8.1% year-over-year, driven by a 5.8% increase in sales and a 100 basis point increase in gross margin rate to 43.8%.
Selling and Store Operating Expenses Increased by 10.3% to $368.8 million, primarily due to $38.5 million for new stores, partially offset by a decrease of $5.0 million at comparable stores.
General and Administrative Expenses Increased by 3.5% to $69.1 million, attributed to investments in store growth, including a $2.9 million increase in personnel expenses.
Pre-opening Expenses Decreased by 37.5% compared to the same period last year, due to a decrease in the number of future stores being prepared for opening.
Interest Expense Net Decreased by 20.8% from the same period last year, due to lower average interest rates and lower average outstanding borrowings.
Effective Tax Rate Increased to 22.0% from 12.8% year-over-year, primarily due to a decrease in excess tax benefits related to stock-based compensation awards.
Adjusted EBITDA Increased by 5.5% to $129.8 million, driven by a 5.8% increase in sales and a 100 basis point increase in gross margin rate.
Unrestricted Liquidity $949.8 million, consisting of $186.9 million in cash and cash equivalents, and $762.9 million available for borrowing.
Inventory Increased by 5% to $1.2 billion from December 26, 2024.
New Product Offerings: Expanded merchandise offering with a high-quality, semi-custom cabinet program available in approximately 42 warehouse stores and online.
Product Innovations: New designs, colors, textures, and enhanced realism on tile and vinyl products that closely mimic natural products.
Cabinet Expansion: Expansion of XL slab program and introduction of fully assembled semi-custom cabinets.
Market Expansion: Opened four new warehouse-format stores in Q1 2025 and plans to open two more in Q2 2025.
Store Closures: Closed the oldest and smallest store in Austin, Texas, to optimize market potential.
Store Opening Plans: Plans to open 20 new warehouse-format stores in fiscal 2025, reduced from 25 due to economic conditions.
Operational Efficiencies: Implemented a Tariff Steering Committee to manage complexities and maintain operational agility.
Sourcing Diversification: Continued sourcing diversification strategies to find high-quality products at competitive prices.
Cost Management: Managed gross margin effectively, achieving a gross margin rate of 43.8%.
Strategic Shifts: Adapting to economic uncertainty with flexible store opening plans and proactive vendor negotiations.
Market Positioning: Positioned as the second largest retailer of hard surface flooring in the U.S., focusing on maintaining competitive pricing.
Economic Environment: The company is operating in an economic environment marked by high volatility, uncertainty, and the potential for a recession, which could impact consumer spending for the remainder of fiscal 2025.
Tariff Management: Managing today's tariffs and the associated complexities may be more challenging for competitors in the hard surface flooring industry, necessitating the establishment of a Tariff Steering Committee to address these issues.
Supply Chain Challenges: The company is actively negotiating with vendors to mitigate higher incremental tariffs and is implementing sourcing diversification strategies to maintain product quality and pricing.
Store Openings: The company has reduced its planned new warehouse store openings from 25 to 20 due to potential slowing economic growth, with the flexibility to further reduce openings if conditions worsen.
Commercial Market Uncertainty: Economic uncertainty is pressuring the commercial market, particularly in the multifamily segment, leading to a cautious outlook for new projects and quotes in fiscal 2025.
Consumer Spending: Housing affordability challenges, driven by higher mortgage rates and elevated home prices, continue to pose obstacles to sustained growth in existing home sales, which could further impact consumer spending.
Profitability Risks: The gross margin rate is expected to be adversely impacted by new distribution centers, which could affect overall profitability.
Market Share Growth Strategies: The company intends to employ strategies to grow market share and protect profitability amid economic uncertainty, similar to strategies used during previous tariff increases.
Tariff Steering Committee: A Tariff Steering Committee has been organized to ensure focus on executing top priorities and remaining agile in operational plans.
Sourcing Diversification: The company is actively negotiating with vendors to mitigate higher tariffs and is diversifying sourcing to find high-quality products at competitive prices.
Warehouse and Store Growth: The company plans to open 20 new warehouse-format stores in fiscal 2025, down from a prior expectation of 25, with flexibility to further reduce openings if economic conditions worsen.
Connected Customer Growth: The company is enhancing its online offerings and design services to improve customer experience and brand affinity.
Commercial Business Focus: Spartan Surfaces will diversify away from multifamily projects and focus on healthcare, education, senior living, and hospitality sectors.
Total Sales Guidance: Total sales are expected to be in the range of $4,660 million to $4,800 million, representing a 5% to 8% increase from fiscal 2024.
Comparable Store Sales Guidance: Comparable store sales are estimated to decline by 2% to increase by 1%.
Gross Margin Rate Guidance: Gross margin rate is expected to be approximately 43.5% to 43.8%.
Adjusted EBITDA Guidance: Adjusted EBITDA is expected to be approximately $520 million to $560 million.
Capital Expenditures Guidance: Fiscal 2025 capital expenditures are planned to be in the range of $310 million to $360 million.
Diluted Earnings Per Share Guidance: Diluted earnings per share is estimated to be in the range of $1.70 to $2.00.
Share Repurchase Program: The company has not announced any share repurchase program during the call.
The earnings call summary presents a mixed sentiment. The guidance for fiscal 2025 indicates modest growth, but comparable store sales are flat to slightly down. While the company is performing better than competitors, challenges persist in high-volume markets. The Q&A reveals optimism for Q4 and strategic initiatives, but management's unclear responses on key issues and flat comps temper positive sentiment. Overall, the sentiment is neutral, reflecting balanced positive and negative factors.
The earnings call summary reveals mixed signals: modest price increases and well-managed tariffs are positive, but the company's cautious stance on 2026 guidance and reduced store openings indicate uncertainty. The Q&A session highlights management's focus on mitigating tariff impacts and strategic growth, but also reveals concerns about macroeconomic challenges. The sentiment is further balanced by potential market share gains and commercial growth. Overall, the insights suggest a neutral sentiment, with no strong catalysts for significant stock price movement.
The earnings call shows mixed signals: sales and gross profit increased, but diluted EPS slightly decreased. The company is facing economic uncertainties and profitability risks, with no share repurchase program announced. The Q&A reveals management's cautious outlook and unclear responses on certain risks. Despite strong sales guidance and diversified sourcing, the lack of a repurchase program and economic pressures temper optimism. Consequently, the stock price is expected to remain stable, leading to a neutral rating.
The earnings call presents mixed signals: strong EPS and gross profit growth, but declining comparable store sales and weak guidance. The Q&A reveals management's cautious stance on future demand and lack of clarity on immigration policy impacts. Despite some positive aspects like competitor closings and market share gains, the absence of a share buyback or dividend program, coupled with commercial sector weakness, balances the positive factors, leading to a neutral stock price prediction.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
