Financial Analysis

Commitments and Contingencies Lease Commitments The Company accounts for leases in accordance with ASC 842, Leases . The majority of the Companys long-term operating lease agreements are for its retail locations, distribution centers, and corporate office, which expire in various years through 2055. Most of these agreements are retail leases wherein both the land and building are leased. The Company also has ground leases in which only the land is leased. The initial lease terms for the Companys retail locations, distribution centers, and corporate office typically range from 10-20 years. The majority of the Companys leases also include options to extend, which are factored into the recognition of their respective assets and liabilities when appropriate based on managements assessment of the probability that the options will be exercised. When readily determinable, the rate implicit in the lease is used to discount lease payments to present value; however, substantially all of the Companys leases do not provide a readily determinable implicit rate. If the rate implicit in the lease is not readily determinable, the Company uses a third party to assist in the determination of a secured incremental borrowing rate, determined on a collateralized basis, to discount lease payments based on information available at lease commencement. The secured incremental borrowing rate is estimated based on yields obtained from Bloomberg for U.S. consumers with a BB credit rating and is adjusted …

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Debt On June 24, 2026, the Company refinanced its senior secured term loan credit facility due February 14, 2027 (2016 Term Loan Facility) by entering into a new $200.0 million senior secured term loan credit facility due June 24, 2033 (2026 Term Loan Facility). Proceeds from the 2026 Term Loan Facility were used to repay the remaining $197.1 million outstanding under the 2016 Term Loan Facility. The 2026 Term Loan Facility includes an incremental facility feature that allows the Company, under certain circumstances, to increase the size of the facility by an amount up to the sum of (i) the greater of (x) $530.0 million or (y) 100% of Consolidated EBITDA (as defined in the 2026 Term Loan Facility), plus (ii) an additional amount based on certain leverage incurrence conditions, in each case, subject to certain additional adjustments. In connection with the refinancing of the 2016 Term Loan Facility, the Company recognized a $1.1 million loss on extinguishment of debt during the thirteen weeks ended June 25, 2026. The Company incurred $4.7 million of debt issuance costs and original issue discounts related to the 2026 Term Loan Facility. On June 24, 2026, the Company refinanced its senior secured asset-based loan (ABL) facility maturing on August 4, 2027 (2016 ABL Facility) by entering into a new senior secured ABL facility maturing on June 24, 2031 (2026 ABL Facility). The aggregate revolving commitments under the 2026 ABL Facility remain the same as under the 2016 ABL Facilit …

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The following tables present the net sales of each major product category: Thirteen Weeks Ended June 25, 2026 June 26, 2025 dollars in thousands Net Sales % of Net Sales Net Sales % of Net Sales Tile $ 293,139 24 % $ 276,544 23 % Laminate and vinyl 285,976 23 299,781 25 Installation materials and tools 267,221 21 244,819 20 Decorative accessories and wall tile 204,247 16 200,363 17 Wood 92,971 8 85,929 7 Natural stone 53,721 4 53,523 4 Adjacent categories 26,986 2 29,942 2 Other (1) 26,009 2 23,249 2 Total $ 1,250,270 100 % $ 1,214,150 100 % Twenty-six Weeks Ended June 25, 2026 June 26, 2025 dollars in thousands Net Sales % of Net Sales Net Sales % of Net Sales Tile $ 568,523 24 % $ 538,746 23 % Laminate and vinyl 547,105 23 591,084 25 Installation materials and tools 515,627 22 476,926 20 Decorative accessories and wall tile 405,342 17 396,475 17 Wood 176,303 7 168,422 7 Natural stone 103,995 4 104,029 4 Adjacent categories 53,136 2 60,550 2 Other (1) 32,517 1 38,658 2 Total $ 2,402,548 100 % $ 2,374,890 100 % (1) Other includes delivery, sample, and other product revenue and adjustments for deferred revenue, sales returns reserves, and other revenue related adjustments that are not allocated on a product-category basis.

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Stockholders Equity In accordance with ASC 718, Compensation Stock Compensation , the Company measures compensation cost for all stock-based awards at fair value on the date of grant and recognizes compensation expense, net of forfeitures, using the straight-line method over the requisite service period of awards expected to vest, which for each of the awards is the service vesting period. Stock-based compensation expense within the Companys Condensed Consolidated Statements of Operations and Comprehensive Income for the twenty-six weeks ended June 25, 2026 and June 26, 2025 was $15.9 million and $15.5 million, respectively. Stock Options The table below summarizes stock option activity for the twenty-six weeks ended June 25, 2026: Stock Options Shares Weighted Average Exercise Price Outstanding at December 26, 2025 988,971 $ 32.03 Exercised (213,456) $ 21.74 Forfeited or expired (11,314) $ 76.86 Outstanding at June 25, 2026 764,201 $ 34.23 Vested and exercisable at June 25, 2026 764,201 $ 34.23 Restricted Stock Units The Company periodically grants restricted stock units (RSUs), each of which represents an unfunded, unsecured right to receive a share of the Companys Class A common stock upon vesting. During the twenty-six weeks ended June 25, 2026, the Company granted RSUs to certain employees, executive officers, and non-employee directors comprised of service-based RSUs and performance-based RSUs. Service-based RSUs vest based on the grantees continued service through the …

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Fair Value Measurements As of June 25, 2026 and December 25, 2025, the Company had certain financial assets and liabilities on its Condensed Consolidated Balance Sheets that were required to be measured at fair value on a recurring or non-recurring basis. The estimated fair values of financial assets and liabilities such as cash and cash equivalents, receivables, prepaid expenses and other current assets, other assets, accounts payable, and accrued expenses and other current liabilities approximate their respective carrying values as reported within the Condensed Consolidated Balance Sheets. See Note 3, Debt for discussion of the fair value of the Companys debt. Contingent Earn-out Liability As of December 25, 2025, the Companys remaining contingent earn-out liability was $0.8 million, which was paid during the twenty-six weeks ended June 25, 2026. Interest Rate Cap Contract Changes in interest rates impact the Companys results of operations. From time to time, the Company may enter into derivative contracts to manage exposure to this risk and may adjust its derivative portfolio as market conditions change. The Companys interest rate cap contract, which was designated as a cash flow hedge, matured in April 2026. The contract had a notional value of $150.0 million and effectively capped SOFR-based interest payments on a portion of the Companys 2016 Term Loan Facility at 5.50%. As of December 25, 2025, the fair value of the interest rate cap was less than $0.1 million and was i …

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Income Taxes Effective tax rates for the thirteen and twenty-six weeks ended June 25, 2026 and June 26, 2025 were based on the Companys forecasted annualized effective tax rates and were adjusted for discrete items that occurred within each period. The Companys effective income tax rate was 23.3% and 21.8% for the thirteen weeks ended June 25, 2026 and June 26, 2025, respectively. The effective tax rate increase during the thirteen weeks ended June 25, 2026 was primarily due to a decrease in federal tax credits. The Companys effective income tax rate was 23.1% and 21.9% for the twenty-six weeks ended June 25, 2026 and June 26, 2025, respectively. The effective tax rate increase during the twenty-six weeks ended June 25, 2026 was primarily due to a decrease in excess tax benefits related to stock-based compensation awards. …

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Recently Adopted Accounting Pronouncements The Company did not adopt any new accounting pronouncements during the twenty-six weeks ended June 25, 2026 that had a material impact on the Companys financial position, results of operations, or cash flows. Recently Issued Accounting Pronouncements There were no significant changes in the recently issued accounting pronouncements from those disclosed in Note 1, Summary of Significant Accounting Policies in Part II, Item 8, Financial Statements and Supplementary Data of our Annual Report. Recently issued accounting pronouncements not disclosed in this Quarterly Report or in the Annual Report are either not applicable to the Company or are not expected to have a material impact to the Company. …

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Revenue Net sales consist of revenue associated with contracts with customers for the sale of goods and services in amounts that reflect the consideration the Company is entitled to receive in exchange for those goods and services. Deferred Revenue & Contract Liabilities In accordance with ASC 606, Revenue from Contracts with Customers , the Company recognizes revenue when the customer obtains control of the inventory. Amounts in deferred revenue at period-end reflect orders for which the inventory was not yet ready for physical transfer to customers. Contract liabilities within the Condensed Consolidated Balance Sheets primarily consisted of deferred revenue as well as amounts in accrued expenses and other current liabilities related to our Pro Premier Rewards loyalty program and unredeemed gift cards. As of June 25, 2026, contract liabilities totaled $82.9 million and included $59.5 million of loyalty program liabilities, $13.4 million of deferred revenue, and $10.0 million of unredeemed gift cards. As of December 25, 2025, contract liabilities totaled $77.9 million and included $57.9 million of loyalty program liabilities, $10.7 million of deferred revenue, and $9.3 million of unredeemed gift cards. Of the contract liabilities outstanding as of December 25, 2025, approximately $14.8 million was recognized in revenue during the twenty-six weeks ended June 25, 2026. Disaggregated Revenue The Company has one reportable segment. The following tables present the net sales o …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Segment Reporting Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (CODM) for purposes of allocating resources and evaluating financial performance. The Companys CODM, its Chief Executive Officer, reviews financial information about the Companys two operating segments, Floor & Decor Retail (Retail) and Spartan, for purposes of allocating resources and evaluating financial performance. The Retail segment sells hard surface flooring and related accessories through retail stores located in the United States and through its website. The Spartan segment, which engages in selling commercial surfaces and is entirely comprised of the Companys Spartan subsidiary, does not meet the materiality criteria of ASC 280, Segment Reporting , and is therefore not disclosed separately as a reportable segment. The Company does not report capital expenditures or assets at the segment level as that information is not regularly provided to the CODM. The Company does not have intersegment sales. The following tables show the Companys segment information for the periods presented: Thirteen Weeks Ended June 25, 2026 June 26, 2025 in thousands Retail Other (1) Consolidated Retail Other (1) Consolidated Net sales $ 1,185,713 $ 64,557 $ 1,250,270 $ 1,150,986 $ 63,164 $ 1,214,150 Less: Cost of sales 602,776 638,419 Personnel expense (2) 214,332 195,086 Property cost (3) 1 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing