Breakout Watch: Big-Box Retailer Expands Toward Buy Zone

Already one of Fortune’s 100 fastest-growing companies, flooring and accessories retailer Floor & Decor (FND) continues to expand. Meanwhile, FND stock is laying the groundwork for a fresh breakout, earning it a spot on the IBD Breakout Stocks Index.


On Aug. 18, Floor & Decor opened its 150th store in South Austin, Texas. Since then, the Atlanta-based retailer has also opened locations in Bohemia, N.Y., and Naples, Fla. The company says it has the potential to expand to about 400 stores nationwide over the next eight to 10 years.

Floor & Decor provides homeowners and professional contractors access to superstore selection at warehouse prices. It also offers design services in its large-format stores, which typically stock approximately 4,100 products.

The hardwood and tile specialist finds the design services it offers present a significant upsell opportunity. It says purchases are three times higher when customers use a designer compared to when they shop unassisted.

See Who Joins Floor & Decor On The IBD Breakout Stocks Index

Floor & Decor Earns No. 1 Rank In Industry

With the highest-possible 99 Composite Rating, Floor & Decor ranks No. 1 in the Retail/Wholesale-Building Products group. Earnings shot up 462% last quarter, bringing its average EPS growth over the last three quarters to 214%. Analysts see flat growth for Q3 but a 64% gain for the full year.

On the revenue side, Floor & Decor nailed down an 86% gain, marking a fourth straight quarter of acceleration. That performance helps the company earn an A SMR Rating, which tracks sales growth, profit margins and return on equity.

In a sign of institutional demand, FND stock made the latest list of new buys by the best mutual funds. Plus, 93 funds with an A+ rating from IBD own FND stock.

FND Stock Designing New Breakout

With some knotty points along the way, Floor & Decor has continued to rise sharply off its coronavirus lows back in March 2020. The stock has generally found support or quickly recovered above its 10-week moving average during that climb.

FND stock briefly cleared a 128.60 buy point in a flat base last week before closing just below that entry. Floor & Decor closed Tuesday’s session 1% below the buy point.

The relative strength line is within striking distance of a new high as FND stock looks to clear a fresh breakout in heavy volume.

A breakout marks an all-time high for Floor & Decor.

IBD Breakout Opportunities ETF

The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to essentially invest in the entire index in addition to or rather than buying the individual stocks. Learn more here about the ETF and Innovator funds.

Follow Matthew Galgani on Twitter at @IBD_MGalgani.


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