Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 22, 2021 | Jun. 25, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38070 | ||
Entity Registrant Name | Floor & Decor Holdings, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Address, Address Line One | 2500 Windy Ridge Parkway SE | ||
Entity Address, City or Town | Atlanta | ||
Entity Address, State or Province | GA | ||
Entity Tax Identification Number | 27-3730271 | ||
Entity Address, Postal Zip Code | 30339 | ||
City Area Code | 404 | ||
Local Phone Number | 471-1634 | ||
Title of 12(b) Security | Class A Common Stock, $0.001 par value per share | ||
Trading Symbol | FND | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 5 | ||
Entity Common Stock, Shares Outstanding | 104,396,523 | ||
Documents Incorporated by Reference | Portions of the Registrant’s proxy statement for the Annual Meeting of Shareholders to be filed pursuant to Regulation 14A of the Exchange Act on or before April 30, 2021, are incorporated by reference into Part III of this Form 10-K. Except as expressly incorporated by reference, the Registrant’s proxy statement shall not be deemed to be part of this report. | ||
Entity Central Index Key | 0001507079 | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 26, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 307,772 | $ 27,037 |
Income taxes receivable | 0 | 2,868 |
Receivables, net | 50,427 | 69,301 |
Inventories, net | 654,000 | 581,865 |
Prepaid expenses and other current assets | 28,257 | 20,415 |
Total current assets | 1,040,456 | 701,486 |
Fixed assets, net | 579,359 | 456,289 |
Right-of-use assets | 916,325 | 822,256 |
Intangible assets, net | 109,269 | 109,299 |
Goodwill | 227,447 | 227,447 |
Other assets | 7,569 | 7,532 |
Total long-term assets | 1,839,969 | 1,622,823 |
Total assets | 2,880,425 | 2,324,309 |
Current liabilities: | ||
Current portion of term loan | 1,647 | 0 |
Current portion of lease liabilities | 94,502 | 74,592 |
Trade accounts payable | 417,898 | 368,459 |
Accrued expenses and other current liabilities | 162,283 | 102,807 |
Income taxes payable | 12,391 | 0 |
Deferred revenue | 10,115 | 6,683 |
Total current liabilities | 698,836 | 552,541 |
Term loans | 207,157 | 142,606 |
Lease liabilities | 941,125 | 844,269 |
Deferred income tax liabilities, net | 27,990 | 18,378 |
Other liabilities | 7,929 | 2,179 |
Total long-term liabilities | 1,184,201 | 1,007,432 |
Total liabilities | 1,883,037 | 1,559,973 |
Commitments and Contingencies (Note 9) | ||
Capital stock: | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2020 and December 26, 2019 | 0 | 0 |
Additional paid-in capital | 408,124 | 370,413 |
Accumulated other comprehensive income (loss), net | 164 | (193) |
Retained earnings | 588,996 | 394,015 |
Total stockholders’ equity | 997,388 | 764,336 |
Total liabilities and stockholders’ equity | 2,880,425 | 2,324,309 |
Common Class A | ||
Capital stock: | ||
Common stock | 104 | 101 |
Common Class B | ||
Capital stock: | ||
Common stock | 0 | 0 |
Common Class C | ||
Capital stock: | ||
Common stock | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 26, 2019 |
Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common Class A | ||
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 450,000,000 | 450,000,000 |
Common stock, shares issued (in shares) | 104,368,212 | 101,457,858 |
Common stock, shares outstanding (in shares) | 104,368,212 | 101,457,858 |
Common Class B | ||
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Common Class C | ||
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 30,000,000 | 30,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Income Statement [Abstract] | |||
Net sales | $ 2,425,788 | $ 2,045,456 | $ 1,709,848 |
Cost of sales | 1,390,896 | 1,182,442 | 1,007,580 |
Gross profit | 1,034,892 | 863,014 | 702,268 |
Operating expenses: | |||
Selling and store operating | 654,100 | 546,853 | 439,495 |
General and administrative | 144,715 | 132,386 | 105,327 |
Pre-opening | 21,498 | 24,594 | 26,145 |
Total operating expenses | 820,313 | 703,833 | 570,967 |
Operating income | 214,579 | 159,181 | 131,301 |
Interest expense, net | 8,389 | 8,801 | 8,917 |
Gain on early extinguishment of debt | (1,015) | 0 | 0 |
Income before income taxes | 207,205 | 150,380 | 122,384 |
Provision (benefit) for income taxes | 12,224 | (251) | 6,197 |
Net income | 194,981 | 150,631 | 116,187 |
Change in fair value of hedge instruments, net of tax | 357 | (379) | 391 |
Total comprehensive income | $ 195,338 | $ 150,252 | $ 116,578 |
Basic earnings per share (in dollars per share) | $ 1.90 | $ 1.51 | $ 1.20 |
Diluted earnings per share (in dollars per share) | $ 1.84 | $ 1.44 | $ 1.11 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Class A | Common Class B | Common Class C | Common stockCommon Class A | Additional paid-in capital | Accumulated other comprehensive income (loss) | Retained earnings | Retained earningsCumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Dec. 28, 2017 | 95,509,000 | |||||||||
Beginning balance at Dec. 28, 2017 | $ 442,860 | $ 7,826 | $ 96 | $ 323,419 | $ (205) | $ 119,550 | $ 7,826 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation expense | 6,514 | 6,514 | ||||||||
Exercise of stock options (in shares) | 2,069,000 | |||||||||
Exercise of stock options | 10,531 | $ 2 | 10,529 | |||||||
Issuance of restricted stock award (in shares) | 10,000 | |||||||||
Other comprehensive income gain (loss), net of tax | 391 | 391 | ||||||||
Net income | 116,187 | 116,187 | ||||||||
Ending balance (in shares) at Dec. 27, 2018 | 97,588,000 | |||||||||
Ending balance at Dec. 27, 2018 | $ 584,309 | $ (179) | $ 98 | 340,462 | 186 | 243,563 | $ (179) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | |||||||||
Stock-based compensation expense | $ 8,711 | 8,711 | ||||||||
Exercise of stock options (in shares) | 3,741,000 | |||||||||
Exercise of stock options | $ 18,798 | $ 3 | 18,795 | |||||||
Issuance of restricted stock award (in shares) | 24,000 | |||||||||
Shares issued under employee stock plan (in shares) | 104,363 | 105,000 | ||||||||
Shares issued under employee stock plans | $ 2,445 | 2,445 | ||||||||
Other comprehensive income gain (loss), net of tax | (379) | (379) | ||||||||
Net income | 150,631 | 150,631 | ||||||||
Ending balance (in shares) at Dec. 26, 2019 | 101,457,858 | 0 | 0 | 101,458,000 | ||||||
Ending balance at Dec. 26, 2019 | 764,336 | $ 101 | 370,413 | (193) | 394,015 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation expense | $ 16,115 | 16,115 | ||||||||
Exercise of stock options (in shares) | 2,485,427 | 2,485,000 | ||||||||
Exercise of stock options | $ 19,254 | $ 2 | 19,252 | |||||||
Issuance of restricted stock award (in shares) | 369,000 | |||||||||
Issuance of restricted stock awards | $ 1 | $ 1 | ||||||||
Shares issued under employee stock plan (in shares) | 56,389 | 56,000 | ||||||||
Shares issued under employee stock plans | $ 2,344 | 2,344 | ||||||||
Other comprehensive income gain (loss), net of tax | 357 | 357 | ||||||||
Net income | 194,981 | 194,981 | ||||||||
Ending balance (in shares) at Dec. 31, 2020 | 104,368,212 | 0 | 0 | 104,368,000 | ||||||
Ending balance at Dec. 31, 2020 | $ 997,388 | $ 104 | $ 408,124 | $ 164 | $ 588,996 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Operating activities | |||
Net income | $ 194,981 | $ 150,631 | $ 116,187 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 91,640 | 74,001 | 51,992 |
Gain on early extinguishment of debt | (1,015) | 0 | 0 |
Loss on asset impairments and disposals, net | 14 | 4,111 | 23 |
Amortization of tenant improvement allowances | 0 | 0 | (4,494) |
Operating lease termination | 0 | 1,926 | 0 |
Deferred income taxes | 9,614 | (10,584) | (968) |
Interest cap derivative contracts | 372 | 446 | (212) |
Stock-based compensation expense | 16,115 | 8,711 | 6,514 |
Changes in operating assets and liabilities: | |||
Receivables, net | 18,874 | (17,850) | (13,486) |
Inventories, net | (72,135) | (110,851) | (53,557) |
Trade accounts payable | 49,439 | 54,956 | 54,773 |
Accrued expenses and other current liabilities | 59,017 | 20,744 | (1,731) |
Income taxes | 15,264 | 3,894 | 6,221 |
Deferred revenue | 3,432 | 1,439 | 3,002 |
Deferred rent | 0 | 0 | 14,455 |
Tenant improvement allowances | 0 | 0 | 15,010 |
Other, net | 20,552 | 23,084 | (8,105) |
Net cash provided by operating activities | 406,164 | 204,658 | 185,624 |
Investing activities | |||
Purchases of fixed assets | (212,448) | (196,008) | (151,397) |
Net cash used in investing activities | (212,448) | (196,008) | (151,397) |
Financing activities | |||
Borrowings on revolving line of credit | 275,000 | 100,100 | 217,050 |
Payments on revolving line of credit | (275,000) | (100,100) | (258,050) |
Proceeds from term loans | 75,000 | 0 | 0 |
Payments on term loans | (2,697) | (3,500) | (3,500) |
Proceeds from exercise of stock options | 19,254 | 18,798 | 10,531 |
Debt issuance costs | (6,882) | 0 | (170) |
Proceeds from employee stock purchase plan | 2,344 | 2,445 | 0 |
Net cash provided by (used in) financing activities | 87,019 | 17,743 | (34,139) |
Net increase in cash and cash equivalents | 280,735 | 26,393 | 88 |
Cash and cash equivalents, beginning of the period | 27,037 | 644 | 556 |
Cash and cash equivalents, end of the period | 307,772 | 27,037 | 644 |
Supplemental disclosures of cash flow information | |||
Buildings and equipment acquired under operating leases | 177,932 | 277,392 | 0 |
Cash paid for interest, net of capitalized interest | 8,043 | 7,388 | 7,563 |
Cash paid for income taxes, net of refunds | 12,670 | 6,453 | 1,082 |
Fixed assets accrued at the end of the period | $ 19,987 | $ 19,527 | $ 15,120 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | . Summary of Significant Accounting Policies Nature of Business Floor & Decor Holdings, Inc. (f/k/a FDO Holdings, Inc.), together with its subsidiaries (the “Company,” “we,” “our” or “us”) is a highly differentiated, rapidly growing specialty retailer of hard surface flooring and related accessories. We offer a broad in-stock assortment of tile, wood, laminate, vinyl, and natural stone flooring along with decorative and installation accessories at everyday low prices. Our stores appeal to a variety of customers, including professional installers and commercial businesses (“Pro”), Do It Yourself customers (“DIY”), and customers who buy the products for professional installation (“Buy it Yourself” or “BIY”). We operate within one reportable segment. As of December 31, 2020, the Company, through its wholly owned subsidiary, Floor and Decor Outlets of America, Inc. (“F&D”), operates 133 warehouse-format stores, which average 78,000 square feet, and two small-format standalone design studios in 31 states, as well as four distribution centers and an e-commerce site, FloorandDecor.com . Fiscal Year The Company’s fiscal year is the 52- or 53-week period ending on the Thursday on or preceding December 31st. The fiscal year ended December 31, 2020 (fiscal "2020") includes 53 weeks, while the fiscal years ended December 26, 2019 (“fiscal 2019”) and December 27, 2018 (“fiscal 2018”) include 52 weeks. When a 53-week fiscal year occurs, we report the additional week at the end of the fiscal fourth quarter. 52-week fiscal years consist of thirteen-week periods in the first, second, third, and fourth quarters of the fiscal year. The 53-week fiscal year consists of thirteen-week periods in the first, second, and third quarters of the fiscal year and a fourteen-week period in the fourth quarter of the fiscal year. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. Impact of the COVID-19 Pandemic On March 11, 2020, the World Health Organization announced that infections of the coronavirus (COVID-19) had become a pandemic, and on March 13, 2020, the President of the United States announced a National Emergency relating to the COVID-19 pandemic . While the full impact that the COVID-19 pandemic could have on the Company's business remains highly uncertain, it had a material negative impact on the Company's operations and financial results during the first half of fiscal 2020. The following summarizes certain actions taken and impacts from the COVID-19 pandemic during and subsequent to the fiscal year ended December 31, 2020: • Beginning in late March 2020, for the health and safety of its customers and employees, the Company temporarily closed some of its stores and shifted its remaining stores to a curbside pickup model. Under this model, customers were not allowed to enter the Company's stores, resulting in a significant decline in sales compared to the same period of the prior year. • In May 2020, the Company began a phased approach to reopening its stores for in-store shopping with enhanced safety and sanitation measures such as requiring associates to wear face masks, installing social distancing markers on floors and protective shields at cash registers, and regularly sanitizing shopping carts, pin pads, design desks, and other high-traffic areas. By the end of the second quarter of fiscal 2020, all of the Company's stores were reopened for in-store shopping and have remained open other than for temporary cleaning or in response to certain weather events. Sales have recovered since reopening stores, with third and fourth quarter fiscal 2020 sales higher than in the same periods of the prior year. • To provide additional liquidity in response to the business uncertainties resulting from the evolving COVID-19 pandemic, the Company entered into a $75.0 million incremental term loan on May 18, 2020. See Note 10, "Debt" for additional information. • In response to the impact and uncertainties caused by the COVID-19 pandemic, the Company initially implemented a number of measures to minimize cash outlays, including lowering inventory purchases and related supply chain costs to align with reduced sales, temporarily reducing compensation for all executive officers and most employees, temporarily freezing new hiring, reducing or eliminating non-essential spending, reducing advertising spending, furloughing certain employees, and delaying or reducing rent payments and planned capital expenditures, including new store investments. Since the Company began to reopen stores for in-store shopping starting in May, many of these cost saving measures have been eliminated or relaxed as the Company's financial results have improved. • On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted, which includes provisions related to income taxes, the temporary deferral of the employer portion of social security taxes, and retention credits for 50% of eligible wages and health benefits paid to employees not providing services due to the COVID-19 pandemic. Refer to Note 6, "Income Taxes" for additional information. The COVID-19 pandemic remains a rapidly evolving situation. The extent of the impact of the pandemic on the Company's business and financial results will depend on future developments, including the duration of the pandemic and the spread of COVID-19 within the markets in which the Company operates as well as the related impact on consumer confidence and spending, all of which are highly uncertain. Reclassifications Within the Consolidated Statements of Cash Flows, prior period amounts for “other assets” and “other” have been combined and reclassified to the “other, net” line item to conform to the current period presentation. Cash and Cash Equivalents Cash consists of currency and demand deposits with banks. Receivables Receivables consist primarily of amounts due from credit card companies and receivables from vendors. The Company typically collects its credit card receivables within three five On November 7, 2019, the U.S. Trade Representative (“USTR”) made a ruling to grant exclusions from Section 301 tariffs for select types of flooring products imported from China, including certain “click” vinyl and engineered products that the Company has sold and continues to sell. The Section 301 tariffs from which these goods are now excluded were implemented at 10% beginning in September 2018 and increased to 25% in June 2019. In addition, on November 20, 2019, U.S. Customs and Border Protection (“U.S. Customs”) issued Chapter 99 exclusions for each unique article number identified under the November 7, 2019 USTR ruling. During fiscal 2020, additional Chapter 99 exclusions were issued for certain Bamboo and other flooring products imported from China. For the Company, some of the granted exclusions apply retroactively to tariffs paid as early as September 2018. While tariff refund claims are subject to the approval of U.S. Customs, the Company currently expects to recover a total of $24.3 million related to Section 301 tariff payments, of which $12.9 million was received in fiscal 2020. As of December 31, 2020 and December 26, 2019, receivables included $11.4 million and 19.3 million of expected tariff refunds from U.S. Customs. The tariff refund receivables outstanding as of December 31, 2020 are expected to be received during fiscal 2021. During fiscal 2020, the Company recognized a $4.5 million reduction to cost of sales and $0.6 million of interest income related to tariff refunds. Interest accrues from the date that tariff payments were originally made through the date that such payments are refunded to the Company. Of the $19.3 million of expected tariff recoveries expected as of December 26, 2019, the Company recognized a $14.0 million reduction to cost of sales related to tariff refunds during the fourth quarter of fiscal 2019. This reduction to cost of sales included $11.0 million for products that had already been sold as of the date U.S. Customs issued Chapter 99 exclusions on November 20, 2019 and $3.0 million related to products sold after November 20, 2019 through the end of fiscal 2019. In addition, the Company recognized a $5.0 million reduction to the carrying cost of inventory as of December 26, 2019 for tariff refunds related to merchandise on hand. Approximately $0.3 million of interest income was also recognized in fiscal 2019 related to anticipated tariff recoveries. Credit Program Credit is offered to the Company's customers through a proprietary credit card underwritten by third-party financial institutions at no recourse to the Company. Beginning in fiscal 2018, the Company began offering limited credit to its commercial clients. The total exposure at the end of fiscal 2020 and fiscal 2019 was $1.2 million and $1.0 million, respectively. Inventory Valuation and Shrinkage Inventories consist of merchandise held for sale and are stated at the lower of cost or net realizable value. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recorded in cost of sales in the Consolidated Statements of Operations and Comprehensive Income as a loss in the period in which it occurs. The Company determines inventory costs using the moving weighted average cost method. The Company capitalizes transportation, duties, and other costs to get product to its retail locations. The Company records reserves for estimated losses related to shrinkage and other amounts that are otherwise not expected to be fully recoverable. These reserves are calculated based on historical shrinkage, selling price, margin, and current business trends. The estimates have calculations that require management to make assumptions based on the current rate of sales, age, salability, and profitability of inventory, historical percentages that can be affected by changes in the Company's merchandising mix, customer preferences, and changes in actual shrinkage trends. These reserves totaled $5,434 thousand and $4,468 thousand as of December 31, 2020 and December 26, 2019, respectively. Physical inventory counts and cycle counts are performed on a regular basis in each store and distribution center to ensure that amounts reflected in the accompanying Consolidated Balance Sheets are properly stated. During the period between physical inventory counts in our stores, the Company accrues for estimated losses related to shrinkage on a store-by-store basis. Shrinkage is the difference between the recorded amount of inventory and the physical inventory. Shrinkage may occur due to theft or loss, among other things. Fixed Assets Fixed assets consist primarily of furniture, fixtures, and equipment, leasehold improvements (including those that are reimbursed by landlords as tenant improvement allowances), buildings and building improvements, computer software and hardware, and land. Fixed assets are stated at cost less accumulated depreciation utilizing the straight-line method over the assets’ estimated useful lives. The Company capitalizes interest on borrowings during the active construction period of certain capital projects. Leasehold improvements are amortized using the straight-line method over the shorter of (i) the original term of the lease, (ii) renewal term of the lease if the renewal is reasonably certain or (iii) the useful life of the improvement. The Company’s fixed assets are depreciated using the following estimated useful lives: Useful Life Furniture, fixtures and equipment 2 - 7 years Leasehold improvements 10 - 25 years Buildings and building improvements 10 - 40 years Computer software and hardware 3 - 7 years Land Indefinite The cost and related accumulated depreciation of assets sold or otherwise disposed are removed from the accounts, and the related gain or loss is reported in the Consolidated Statements of Operations and Comprehensive Income. . Capitalized Software Costs The Company capitalizes certain costs related to the acquisition and development of software and amortizes these costs using the straight-line method over the estimated useful life of the software. Certain development costs not meeting the criteria for capitalization are expensed as incurred. Goodwill and Other Indefinite-Lived Intangible Assets Goodwill represents the excess of purchase price over the fair value of net assets acquired. The Company does not amortize goodwill and other intangible assets with indefinite lives resulting from business combinations but, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Intangibles—Goodwill and Other , does assess the recoverability of goodwill annually in the fourth quarter of each fiscal year, or more often if events occur or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. Such circumstances could include, but are not limited to, a significant adverse change in customer demand or business climate or an adverse action or assessment by a regulator. In accordance with ASC 350, identifiable intangible assets with finite lives are amortized over their estimated useful lives. Each year, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of the single reporting unit is less than its carrying amount as a basis for determining whether it is necessary to complete quantitative impairment assessments. Impairment Assessment of Goodwill and Other Indefinite-Lived Intangible Assets The Company tests goodwill and indefinite-lived intangible assets for impairment annually in the fourth quarter of each fiscal year, or more often if events occur or changes in circumstances indicate that the carrying amount of goodwill or indefinite-lived intangible assets may not be recoverable. We assess the value of our goodwill and indefinite-lived intangible assets under either a qualitative or quantitative approach. Under a qualitative approach, the Company evaluates various market and other factors to determine whether it is more likely than not that the Company’s goodwill or indefinite-lived intangible assets have been impaired. In performing the qualitative assessment, the Company considers the carrying value of its single reporting unit compared to its fair value as well as events and changes in circumstances that could include, but are not limited to, a significant adverse change in customer demand or business climate, an adverse action or assessment by a regulator, and significant adverse changes in the price of the Company’s common stock. If such qualitative assessment indicates that impairment may have occurred, an additional quantitative assessment is performed by comparing the carrying value of the assets to their respective estimated fair values. If the recorded carrying value of goodwill or an indefinite-lived intangible asset exceeds its estimated fair value, an impairment charge is recorded to write the asset down to its estimated fair value. During the fourth quarter of fiscal 2020, the Company qualitatively assessed whether it was more likely than not that the goodwill and indefinite-lived intangible assets were impaired. Based on this assessment, the Company determined that its goodwill and indefinite-lived intangible assets were not impaired as of October 22, 2020. No events or changes in circumstances have occurred since the date of the Company's most recent annual impairment test that would more likely than not reduce the fair value of the reporting unit below its carrying amount. The estimated lives of the Company’s intangible assets are as follows: Useful Life Trade names Indefinite Vendor relationships 10 years The Company’s goodwill and other indefinite-lived intangible assets impairment loss calculations contain uncertainties because they require management to make significant judgments in estimating the fair value of the Company’s reporting unit and indefinite-lived intangible asset, including the projection of future cash flows, assumptions about which market participants are the most comparable, the selection of discount rates, and the weighting of the income and market approaches. These calculations contain uncertainties because they require management to make assumptions such as estimating economic factors, including the profitability of future business operations and, if necessary, the fair value of the reporting unit’s assets and liabilities. Further, the Company’s ability to realize the future cash flows used in its fair value calculations is affected by factors such as changes in economic conditions, changes in the Company’s operating performance, and changes in the Company’s business strategies. Significant changes in any of the assumptions involved in calculating these estimates could affect the estimated fair value of the Company’s reporting unit and indefinite-lived intangible assets and could result in impairment charges in a future period. Long-Lived Assets Long-lived assets, such as fixed assets, operating lease right-of-use assets, and intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset, significant changes or planned changes in our use of an asset, a product recall, or an adverse action by a regulator. In accordance with ASC 360, the evaluation is performed at the lowest level for which identifiable cash flows are available that are largely independent of the cash flows of other assets or asset groups. If the sum of the estimated undiscounted future cash flows is less than the carrying value of the related asset or asset group, an impairment loss is recognized equal to the difference between carrying value and fair value. Since there is typically no active market for the Company’s definite-lived intangible asset, the Company estimates fair value based on expected future cash flows at the time they are identified. When events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, the Company estimates future cash flows based on store-level historical results, current trends, and operating and cash flow projections. The definite-lived intangible asset is amortized over its estimated useful life on a straight-line basis, which the Company believes to be the amortization methodology that best matches the pattern of economic benefit that is expected from the asset. The useful life of the definite-lived intangible asset is evaluated on an annual basis. Leases The Company recognizes lease assets and corresponding lease liabilities for all operating leases on the balance sheet, excluding short-term leases (leases with terms of 12 months or less) as described under ASU No. 2016-2, “Leases (Topic 842).” The majority of our long-term operating lease agreements include options to extend, which are also factored into the recognition of their respective assets and liabilities when appropriate based on management’s assessment of the probability that the options will be exercised. Lease payments are discounted using the rate implicit in the lease, or, if not readily determinable, a third-party secured incremental borrowing rate 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 for collateralization as well as inflation. Additionally, certain of our lease agreements include escalating rents over the lease terms which, under Topic 842, results in rent being expensed on a straight-line basis over the life of the lease that commences on the date we have the right to control the property. During fiscal 2020, the Company negotiated rent deferrals or abatements for a significant number of its stores due to the impact of the COVID-19 pandemic. The Company has also delayed rent payments for some stores as negotiations are in process with landlords. Total payments delayed or deferred as of December 31, 2020 were approximately $5.5 million, of which $4.5 million was included in the current portion of lease liabilities and $1.0 million was included in lease liabilities on the Consolidated Balance Sheets. In accordance with FASB Staff Q&A - Topic 842: " Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic" issued in April 2020, the Company has elected to account for lease concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee as though enforceable rights and obligations for those concessions existed in the original lease agreements. For qualified rent deferrals, the Company has recognized a non-interest bearing accrued liability, which will be reduced when the deferred payment is made in the future. For qualifying rent abatement concessions, which are immaterial in aggregate, the Company is recognizing negative lease expense for the amount of the abatement on a straight-line basis over the term of the lease. During fiscal 2020, the Company recognized approximately $0.1 million of negative lease expense related to rent abatement concessions. Self-Insurance Reserves The Company is partially self-insured for workers’ compensation and general liability claims less than certain dollar amounts and maintains insurance coverage with individual and aggregate limits. The Company also has a basket aggregate limit to protect against losses exceeding $11.0 million (subject to adjustment and certain exclusions) for workers' compensation claims and general liability claims. The Company’s liabilities represent estimates of the ultimate cost for claims incurred, including loss adjusting expenses, as of the balance sheet date. The estimated liabilities are not discounted and are established based upon analysis of historical data, actuarial estimates, regulatory requirements, an estimate of claims incurred but not yet reported, and other relevant factors. Management utilizes independent third-party actuarial studies to help assess the liability on a regular basis. Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Asset Retirement Obligations An asset retirement obligation (“ARO”) represents a legal obligation associated with the retirement of a tangible long-lived asset that is incurred upon the acquisition, construction, development or normal operation of that long-lived asset. The Company’s AROs are primarily associated with leasehold improvements that, at the end of a lease, the Company is contractually obligated to remove in order to comply with certain lease agreements. The ARO is recorded in Other long-term liabilities on the Consolidated Balance Sheets and will be subsequently adjusted for changes in fair value. The associated estimated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset and depreciated over its useful life. Changes in (i) inflation rates and (ii) the estimated costs, timing and extent of future store closure activities each result in (a) a current adjustment to the recorded liability and related asset and (b) a change in the liability and asset amounts to be recorded prospectively. Any changes related to the assets are then recognized in accordance with our depreciation policy, which would generally result in depreciation expense being recognized prospectively over the shorter of the remaining lease term or estimated useful life. Fair Value Measurements The Company estimates fair values in accordance with ASC 820, Fair Value Measurement . ASC 820 provides a framework for measuring fair value and requires disclosures about fair value measurements. ASC 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Additionally, ASC 820 defines levels within a hierarchy based upon observable and non-observable inputs. If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the overall fair value measurement of the instrument. • Level 1: Quoted prices in active markets for identical assets or liabilities as of the reporting date; • Level 2: Inputs other than quoted prices in active markets for identical assets or liabilities that are either directly or indirectly observable as of the reporting date; and • Level 3: Unobservable inputs that reflect the reporting entity’s own estimates about the assumptions market participants would use in pricing the asset or liability. Derivative Financial Instruments The Company uses derivative financial instruments to maintain a portion of its long-term debt obligations at a targeted balance of fixed and variable interest rate debt to manage its risk associated with fluctuations in interest rates. We recognize derivative contracts at fair value on the Consolidated Balance Sheets. The fair value is calculated utilizing Level 2 inputs. Unrealized changes in the fair value of hedged derivative instruments are recorded in accumulated other comprehensive (loss) income within the stockholders’ equity section of the Consolidated Balance Sheets. The effective portion of the gain or loss on the derivatives is reported as a component of comprehensive income within the Consolidated Statements of Operations and Comprehensive Income and reclassified into earnings in the same period in which the hedged transaction affects earnings. The effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent changes in fair values of the instruments are not highly effective, the ineffective portion of the hedge is immediately recognized in earnings. We perform an assessment of the effectiveness of our derivative contracts designated as hedges, including assessing the possibility of counterparty default. If we determine that a derivative is no longer expected to be highly effective, we discontinue hedge accounting prospectively and recognize subsequent changes in the fair value of the hedge in earnings. We believe our derivative contracts, which continue to be designated as cash flow hedges, and which consist of interest rate cap contracts, will continue to be highly effective in offsetting changes in cash flow attributable to floating interest rate risk. See Note 8 "Derivatives and Risk Management" for additional information. Use of Estimates The preparation of the financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the period. Significant items subject to such estimates and assumptions include the carrying amounts of fixed assets and intangibles, asset retirement obligations, allowances for accounts receivable and inventories, reserves for workers' compensation and general liability claims incurred but not reported, and deferred income tax assets and liabilities. Actual results could differ from these estimates. Revenue Recognition As of the beginning of fiscal 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-9, “Revenue from Contracts with Customers” (“Topic 606”) using the modified retrospective transition method which requires that we recognize revenue differently pre- and post-adoption (see “Recent Accounting Pronouncements” for additional information). We recognize revenue and the related cost of sales when we satisfy the performance obligations in contracts with our customers in accordance with Topic 606. Performance obligations for our retail store sales, as well as for orders placed through our website and shipped to our customers, are satisfied at the point at which the customer obtains control of the inventory, which is typically at the point-of-sale. In some cases, merchandise is not physically ready for transfer to the customer at the point-of-sale, and revenue recognition is deferred until the customer has control of the inventory. Shipping and handling activities are accounted for as activities to fulfill the promise to transfer goods rather than as separate performance obligations as outlined within Topic 606. Payment is generally due from the customer immediately at the point-of-sale for both retail store sales and website sales. The nature of the goods offered include hard surface flooring and related accessories. We do not perform installation services, and we offer free design services in-store. The transaction price recognized in revenues represents the selling price of the products offered. Sales taxes collected are not recognized as revenue as these amounts are ultimately remitted to the appropriate taxing authorities. Our customers have the right to return the goods sold to them within a reasonable time period, typically 90 days. The right of return is an element of variable consideration as defined within Topic 606. We reserve for future returns of previously sold goods based on historical experience and various other assumptions that we believe to be reasonable. This reserve reduces sales and cost of sales as well as establishes a return asset and refund liability as defined with Topic 606. The return asset is included within prepaid expenses and other current assets, and the refund liability is included within accrued expenses and other current liabilities, each respectively on the Consolidated Balance Sheets. Merchandise exchanges of similar product and price are not considered merchandise returns and, therefore, are excluded when calculating the sales returns reserve. Gift Cards and Merchandise Credits We sell gift cards to our customers in our stores and through our website and issue merchandise credits in our stores. We account for the programs by recognizing a liability at the time the gift card is sold or the merchandise credit is issued. The liability is relieved and revenue is recognized upon redemption. Additionally, we recognize breakage income in proportion to the pattern of rights exercised by the customer when we expect to be entitled to breakage. Net sales related to the estimated breakage are included in net sales in the Consolidated Statements of Operations and Comprehensive Income. We have an agreement with an unrelated third-party who is the issuer of the Company's gift cards and also assumes the liability for unredeemed gift cards. The Company is not subject to claims under unclaimed property statutes, as the agreement effectively transfers the ownership of such unredeemed gift cards and the related future escheatment liability, if any, to the third-party. Gift card breakage is recognized based upon historical redemption patterns and represents the balance of gift cards for which the Company believes the likelihood of redemption by the customer is remote. Accordingly, in fiscal 2020, fiscal 2019, and fiscal 2018 gift card breakage income of $1.5 million, $1.2 million, and $1.6 million was recognized in net sales in the Consolidated Statements of Operations and Comprehensive Income, respectively, for such unredeemed gift cards. Loyalty Program We completed the roll out of our Pro Premier loyalty program to all stores in the second half of fiscal 2019, which allows customers to earn points through purchases in our stores and our website. Loyalty points are typically awarded at one percent of the relative standalone selling price of the merchandise sold and are recognized at the time of sale as a liability with a corresponding reduction to net sales. Additionally, loyalty breakage is recognized based on the Company’s estimate of the balance of loyalty points for which the likelihood of redemption by the customer is deem |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | . Revenues Net sales consist of revenue associated with contracts with customers for the sale of goods in amounts that reflect the consideration the Company is entitled to receive in exchange for those goods and services. Deferred Revenue & Contract Liabilities Under ASC 606, 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 Consolidated Balance Sheets as of December 31, 2020 and December 26, 2019 primarily consisted of deferred revenue as well as amounts in accrued expenses and other current liabilities related to the Pro Premier loyalty program and unredeemed gift cards. As of December 31, 2020, contract liabilities totaled $24.8 million and included $10.1 million of deferred revenue, $12.1 million of loyalty program liabilities, and $2.6 million of unredeemed gift cards. As of December 26, 2019, contract liabilities totaled $15.5 million and included $6.7 million of deferred revenue, $6.6 million of loyalty program liabilities, and $2.2 million of unredeemed gift cards. Of the contract liabilities outstanding as of December 26, 2019, $8.2 million was recognized in revenue during fiscal 2020. Deferred Revenue Under Topic 606, 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 is not currently ready for physical transfer to the customer. Gift Card Breakage Under Topic 606, gift card breakage income is recognized in proportion to the pattern of rights exercised by the customer when the Company expects to be entitled to breakage. The amount of revenue related to gift card breakage income was immaterial to the consolidated financial statements for the fiscal years ended December 31, 2020, December 26, 2019, and December 27, 2018. Disaggregated Revenue The Company has one operating segment and one reportable segment. The following table presents the net sales of each major product category for each of the last three fiscal years (in thousands): Fiscal Year Ended December 31, December 26, December 27, Product Category Net Sales % of Net Sales Net Sales % of Net Sales Net Sales % of Net Sales Tile $ 605,357 25 % $ 523,076 26 % $ 476,337 27 % Laminate/luxury vinyl plank 555,963 23 442,171 22 316,109 18 Decorative accessories/wall tile (1) 485,076 19 393,908 19 325,139 19 Installation materials and tools 403,184 17 346,356 17 272,994 16 Wood 211,307 9 202,888 10 192,087 12 Natural stone 152,665 6 127,975 6 113,565 7 Other (2) 12,236 1 9,082 — 13,617 1 Total $ 2,425,788 100 % $ 2,045,456 100 % $ 1,709,848 100 % (1) Decorative accessories/wall tile includes adjacent categories revenue totaling $20.5 million and $7.3 million for the fiscal years ended December 31, 2020 and December 26, 2019, respectively. (2) Other includes delivery and sample revenue less adjustments for deferred revenue, sales return reserves, rewards under our Pro Premier Loyalty program, and other revenue related adjustments that are not allocated on a product-level basis. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Current Liabilities | 3. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): December 31, December 26, Accrued incentive compensation $ 24,591 $ 18,635 Sales returns and allowances (1) 22,266 15,437 Sales tax payable 21,824 14,304 Accrued construction in progress new stores 20,818 10,043 Insurance reserve incurred but not reported 13,511 9,399 Wages and payroll tax payable 22,349 8,328 Loyalty program liability 12,073 6,649 Other (1) 24,851 20,012 Accrued expenses and other current liabilities $ 162,283 $ 102,807 (1) The liability for sales returns and allowances as of December 26, 2019 has been reclassified within this table from Other to Sales returns and allowances to conform to the current period presentation. |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | . Fixed Assets Fixed assets as of December 31, 2020 and December 26, 2019, consisted of the following (in thousands): December 31, December 26, Furniture, fixtures and equipment $ 259,696 $ 236,555 Leasehold improvements (1) 380,671 309,720 Computer software and hardware 138,321 113,975 Buildings and building improvements (1) 65,552 11,614 Land 30,731 8,715 Fixed assets, at cost 874,971 680,579 Less: accumulated depreciation and amortization 295,612 224,290 Fixed assets, net $ 579,359 $ 456,289 (1) Represents buildings and building improvements on land that the Company owns as well as on land that the Company is leasing through ground leases. Prior period fixed asset balances related to buildings and building improvements on ground leases have been reclassified from leasehold improvements to building and building improvements to conform to the current period presentation. Depreciation and amortization on fixed assets for the fiscal years ended December 31, 2020, December 26, 2019, and December 27, 2018, were $90.1 million, $69.9 million, and $50.5 million, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | . Intangible Assets The following summarizes the balances of identifiable intangible assets as of December 31, 2020 and December 26, 2019 (in thousands): December 31, December 26, Estimated Gross Accumulated Gross Accumulated Amortizable intangible asset: Vendor relationships 10 years $ 319 $ (319) $ 319 $ (289) Indefinite-lived intangible asset: Trade names 109,269 — 109,269 — Total $ 109,588 $ (319) $ 109,588 $ (289) Amortization expense related to amortizable intangible assets for the fiscal years ended December 31, 2020, December 26, 2019 and December 27, 2018, was $30 thousand, $31 thousand, and $32 thousand, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | . Income Taxes The components of the provision for income taxes are as follows (in thousands): Fiscal Year Ended December 31, Fiscal Year Ended December 26, Fiscal Year Ended December 27, Current (benefit) / expense: Federal $ (1,781) $ 7,975 $ 5,496 State 4,391 2,358 1,669 Total current expense 2,610 10,333 7,165 Deferred expense / (benefit): Federal 11,684 (6,522) 922 State (2,070) (4,062) (1,890) Total deferred expense / (benefit) 9,614 (10,584) (968) Provision (benefit) for income taxes $ 12,224 $ (251) $ 6,197 The following is a summary of the differences between the total provision for income taxes as shown on the financial statements and the provision for income taxes that would result from applying the federal statutory tax rate of 21% for the fiscal years ended December 31, 2020, December 26, 2019, and December 27, 2018 to income before income taxes (in thousands). Fiscal Year Ended December 31, Fiscal Year Ended December 26, Fiscal Year Ended December 27, Computed “expected” provision at statutory rate $ 43,513 $ 31,580 $ 25,700 State income taxes, net of federal income tax benefit 1,493 (1,364) (627) Permanent differences: Excess tax benefit related to options exercised (27,003) (29,441) (17,478) Other 517 543 457 Total permanent differences (26,486) (28,898) (17,021) Change in U.S. tax rate — — (573) Provision to return (150) (282) (739) Federal tax credits (920) (1,306) (685) CARES Act benefit (7,676) — — Uncertain Tax Positions 2,724 — — Other, net (274) 19 142 Provision (benefit) for income taxes $ 12,224 $ (251) $ 6,197 The permanent differences of $27.0 million, $29.4 million, and $17.5 million in fiscal 2020, fiscal 2019, and fiscal 2018, respectively, are the federal benefits due to the recognition of excess tax deductions for stock options exercised. In the table above, the 2020, 2019, and 2018 state benefits related to the recognition of excess tax benefits of $5.3 million, $5.6 million, and $3.3 million, respectively, are included in state income taxes, net of federal income tax benefit. The Tax Cuts and Jobs Act (the “Act “), which was enacted on December 22, 2017, reduced the U.S. federal corporate income tax rate from 35% to 21% and created new taxes that may apply on certain foreign sourced earnings. Staff Accounting Bulletin No. 118 ("SAB 118") allows for a measurement period that should not extend beyond one year from the Act enactment date of December 22, 2017. In accordance with SAB 118, the Company completed its accounting for the impact of the 2017 Act during the fourth quarter of fiscal 2018, before the end of the measurement period, and recorded a tax benefit of $18.5 million as a result of the remeasurement of certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. As of December 31, 2020, the measurement period is closed and any amounts that were provisional at December 26, 2019 were finalized with little to no impact to the consolidated financial statement. The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and (liabilities) are presented below (in thousands): Fiscal Year Ended December 31, Fiscal Year Ended December 26, Deferred tax assets: Accruals not currently deductible for tax purposes $ 8,293 $ 2,820 Inventories 6,941 5,283 Stock-based compensation 5,979 3,984 Other intangibles 268 313 Gift card liability 557 453 Litigation accrual 120 139 Lease liabilities 259,273 233,106 Other 10,732 3,718 Total deferred tax assets 292,163 249,816 Deferred tax liabilities: Intangible assets (27,053) (26,939) Fixed assets (62,374) (35,576) Right-of-use assets (227,166) (203,028) Other (3,560) (2,651) Total deferred tax liabilities (320,153) (268,194) Net deferred tax liabilities $ (27,990) $ (18,378) The Company generated $0.1 million and $0.7 million of tax-effected state net operating losses in fiscal 2020 and fiscal 2019, respectively; as of December 31, 2020, approximately $3.0 million of tax-effected state net operating losses were available to reduce future income taxes. The state net operating losses expire in various amounts beginning in 2032. In assessing the realization of deferred tax assets, including net operating losses, management considered whether it is more likely than not that some portion or all the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers taxable income in prior carryback periods, future reversals of existing taxable temporary differences, tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards in making this assessment, and accordingly, has concluded that no valuation allowance is necessary as of December 31, 2020 or December 26, 2019. The Company files income tax returns with the U.S. Federal government and various state jurisdictions. Prior tax years beginning in year 2018 remain open to examination by the Internal Revenue Service (“IRS”). We closed a federal audit by the IRS for the 2015 to 2017 tax years. Following is a reconciliation of the beginning and ending balance of unrecognized tax benefits for periods presented: Fiscal Year Ended December 31, Fiscal Year Ended December 26, Fiscal Year Ended December 27, Unrecognized tax benefits balance at beginning of fiscal year $ 402 $ — $ — Additions based on tax positions related to the current year 281 282 — Additions for tax positions of prior years 5,424 120 — Unrecognized tax benefits balance at end of fiscal year $ 6,107 $ 402 $ — There were $1.9 million of unrecognized tax benefits as of December 31, 2020 that, if recognized, would affect the Company's effective tax rate, while there were no such unrecognized tax benefits as of December 26, 2019 and December 27, 2018 that would affect the Company's effective tax rate in future periods. Over the next twelve months, it is reasonably possible that our unrecognized tax benefits could be reduced by $5.4 million due to audit settlements, expiration of statute of limitations, or other resolution of uncertainties. The Company's policy is to classify interest and penalties related to unrecognized tax benefits in income tax expense. The Company recognized $0.6 million of interest expense related to unrecognized tax benefits during fiscal 2020 and no such interest expense during fiscal 2019 and fiscal 2018. Coronavirus Aid, Relief, and Economic Security Act (CARES Act) The CARES Act includes, among other things, income tax provisions allowing for the temporary five-year carryback of net operating losses generated in 2018, 2019, and 2020, temporary modifications to the limitations placed on interest deductions, and technical corrections of tax depreciation methods for qualified improvement property ("QIP"), which changes 39-year property to 15-year property eligible for 100% tax bonus depreciation. In addition, the CARES Act includes provisions such as the temporary deferral of the employer portion of social security taxes incurred through the end of calendar 2020 and an employee retention credit for 50% of wages and health benefits paid to employees not providing services due to the COVID-19 pandemic. The Company has made estimates of the effect of the CARES Act and will adjust estimates, if needed, as new legislation or guidance becomes available. As a result of the faster tax depreciation methods allowed under the CARES Act for QIP and the retroactive application of those methods for QIP placed in service during fiscal 2018 and 2019, the Company incurred a fiscal 2019 net operating loss for federal income tax purposes that was carried back to prior years during which the federal tax rate was 35%, resulting in a $7.7 million income tax benefit during the second quarter of fiscal 2020. The Company received $28.4 million of cash refunds related to the accelerated QIP depreciation and the carry back of the fiscal 2019 net operating loss as of December 31, 2020. As of December 31, 2020, the Company has deferred $12.1 million of employer social security taxes, of which 50% are required to be deposited by December 2021 and the remaining 50% by December 2022. Of the deferred employer social security taxes outstanding as of December 31, 2020, approximately $6.1 million is included in accrued expenses and other current liabilities and $6.0 million is included in other liabilities within the Condensed Consolidated Balance Sheets. The Company recorded $1.7 million of employee retention credits during the fiscal year ended December 31, 2020, of which $1.5 million was recognized as an offset to selling and store operating expenses and $0.2 million was recognized as an offset to general and administrative expenses within the condensed Consolidated Statements of Operations and Comprehensive Income. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | . Fair Value Measurements As of December 31, 2020 and December 26, 2019, the Company had certain financial assets and liabilities on its 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 fair values as reported within the Consolidated Balance Sheets. Refer to Note 1, “Summary of Significant Accounting Policies” and Note 5, “Intangible Assets” for a discussion of the valuation of goodwill and intangible assets, respectively. See Note 10, “Debt” for discussion of the fair value of the Company’s debt. The Company also has outstanding interest rate cap contracts that were valued primarily using level 2 inputs based on data readily observable in public markets. The Company's interest rate cap contracts were negotiated with counterparties without going through a public exchange. Accordingly, the Company's fair value assessments for these derivative contracts gave consideration to the risk of counterparty default (as well as the Company's own credit risk). As of December 31, 2020 and December 26, 2019, the fair value of the Company's interest rate cap contract was less than $0.1 million. |
Derivatives and Risk Management
Derivatives and Risk Management | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Risk Management | . Derivatives and Risk Management Changes in interest rates impact our results of operations. In an effort to manage our exposure to this risk, we enter into derivative contracts and may adjust our derivative portfolio as market conditions change. Designated as Cash Flow Hedge For derivative contracts designated as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of Accumulated Other Comprehensive Income (“AOCI”) and reclassified into earnings in the same period in which the hedged transaction affects earnings. The effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent the change in the fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is immediately recognized in earnings. Not Designated as Accounting Hedge For derivative contracts de-designated as accounting hedges, the change in the fair value is reflected through earnings. These changes in fair value are mark-to-market adjustments (“MTM adjustments”). MTM adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period. The AOCI related to the interest rate cap prior to the de-designation is being amortized over the remaining maturity period. Derivative Position as of December 31, 2020: (in thousands) Notional Balance Final Maturity Date Other Assets AOCI, Net of Tax Designated as hedges: Interest rate cap (cash flow hedge) $ 102,500 U.S. dollars December 2021 $ — $ (89) Not designated as hedges: Interest rate cap $ 102,500 U.S. dollars December 2021 $ — $ (75) Derivative Position as of December 26, 2019: (in thousands) Notional Balance Final Maturity Other AOCI, Net Designated as hedges: Interest rate cap (cash flow hedge) $ 102,500 U.S. dollars December 2021 $ 20 $ 236 Not designated as hedges: Interest rate cap $ 102,500 U.S. dollars December 2021 $ — $ (43) Designated Hedge Gain (Losses) Gains (losses) related to our designated hedge contracts are as follows: Effective Portion Reclassified Effective Portion Recognized in Fiscal Year Ended Fiscal Year Ended (in thousands) December 31, December 26, December 27, December 31, December 26, December 27, Interest rate cap (cash flow hedge) $ — $ — $ — $ 357 $ (379) $ 391 Interest rate swaps (cash flow hedges) $ — $ — $ — $ — $ — $ — Interest Rate Risk Our exposure to market risk from adverse changes in interest rates is primarily associated with our long-term debt obligations, which carry variable interest rates. Market risk associated with our variable interest rate long-term debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates. In an effort to manage our exposure to the risk associated with our variable interest rate long term debt, we periodically enter into interest rate derivative contracts. We designate interest rate derivative contracts used to convert the interest rate exposure on a portion of our debt portfolio from a floating rate to a capped rate as cash flow hedges. Credit Risk To manage credit risk associated with our interest rate hedging program, we select counterparties based on their credit ratings and limit our exposure to any one counterparty. The counterparties to our derivative contracts are financial institutions with investment grade credit ratings. To manage our credit risk related to our derivative financial instruments, we periodically monitor the credit risk of our counterparties, limit our exposure in the aggregate and to any single counterparty, and adjust our hedging position, as appropriate. The impact of credit risk, as well as the ability of each party to fulfill its obligations under our derivative financial instruments, is considered in determining the fair value of the contracts. Credit risk has not had a significant effect on the fair value of our derivative contracts. We do not have any credit risk-related contingent features or collateral requirements with our derivative financial instruments. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Commitments In the first quarter of fiscal 2019, we adopted ASU No. 2016-02, “Leases (Topic 842),” which requires that lessees recognize lease assets and lease liabilities for all leases on the balance sheet with an option to exclude short-term leases (leases with terms of 12 months or less), which we elected. We adopted ASU No. 2016-02 using the modified retrospective approach and elected the package of practical expedients to use in transition, which permitted us not to reassess, under the new standard, our prior conclusions about lease identification and lease classification. The cumulative effect adjustment upon adoption of ASU No. 2016-02 resulted in an immaterial adjustment to retained earnings. The adoption also resulted in the addition of $620.8 million of right-of-use assets and a corresponding $683.0 million of lease liabilities to our balance sheet, while eliminating deferred rent and tenant improvement allowances. Additionally, we do not separate lease and nonlease components of contracts. The majority of our long-term operating lease agreements are for our corporate office, retail locations, and distribution centers, which expire in various years through 2041. Most of these agreements are retail leases where both the land and building are leased. For a small number of retail locations, the Company has ground leases where only the land is leased. The initial lease terms for the Company's corporate office, retail, and distribution center facilities range from 10-20 years. The majority of these leases also include options to extend, which are factored into the recognition of their respective assets and liabilities when appropriate based on management’s assessment of the probability that the options will be exercised. Lease payments used in measurement of the lease liability typically do not include executory costs, such as taxes, insurance, and maintenance, unless those costs can be reasonably estimated at lease commencement. Additionally, one building lease contains variable lease payments, which are determined based on a percentage of retail sales over a contractual level, and we sublease real estate within one distribution center to a third party. Certain of our lease agreements include escalating rents over the lease terms which, under Topic 842, results in rent being expensed on a straight-line basis over the life of the lease that commences on the date we have the right to control the property. Our lease agreements do not contain any residual value guarantees or restrictive covenants that would reasonably be expected to have a material impact on our business. When readily determinable, the rate implicit in the lease is used to discount lease payments to present value; however, substantially all of our leases do not provide a readily determinable implicit rate. If the rate implicit in the lease is not readily determinable, we use 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 for collateralization as well as inflation. As of December 31, 2020 and December 26, 2019, the Company's weighted average discount rate was 5.3% and 5.3%, respectively. As of December 31, 2020 and December 26, 2019, the Company's weighted average remaining lease term was approximately 11 years and 10 years, respectively. Lease Position The table below presents supplemental balance sheet information related to operating leases. in thousands, except lease term and discount rate Classification As of December 31, 2020 As of December 26, 2019 Assets Building Right-of-use assets $ 851,092 $ 808,989 Equipment Right-of-use assets 6,865 7,322 Land Right-of-use assets 56,708 2,378 Software Right-of-use assets 1,660 3,567 Total operating lease assets 916,325 822,256 Liabilities Current Building Current portion of lease liabilities 88,287 67,500 Equipment Current portion of lease liabilities 3,941 3,758 Land Current portion of lease liabilities 440 170 Software Current portion of lease liabilities 1,834 3,164 Total current operating lease liabilities 94,502 74,592 Noncurrent Building Lease liabilities 873,098 837,510 Equipment Lease liabilities 2,924 3,902 Land Lease liabilities 65,103 2,357 Software Lease liabilities — 500 Total noncurrent operating lease liabilities 941,125 844,269 Total operating lease liabilities $ 1,035,627 $ 918,861 Weighted-average remaining lease term 11 years 10 years Weighted-average discount rate 5.3% 5.3% Lease Costs The table below presents components of lease expense for operating leases. Fiscal Year Ended in thousands Classification December 31, 2020 December 26, 2019 (3) Fixed operating lease cost: Selling and store operating $ 105,207 $ 87,124 Cost of sales 22,672 17,132 Pre-opening 7,886 5,959 General and administrative 4,118 2,272 Total fixed operating lease cost $ 139,883 $ 112,487 Variable lease cost (1): Selling and store operating $ 34,499 $ 28,894 Cost of sales 4,860 3,570 Pre-opening 657 151 General and administrative 151 5 Total variable lease cost $ 40,167 $ 32,620 Sublease income Cost of sales (2,713) (2,414) Operating lease right-of-use asset impairment General and administrative — 4,136 Total operating lease cost (2) $ 177,337 $ 146,829 (1) Includes variable costs for common area maintenance, property taxes, and insurance on leased real estate. (2) Excludes short-term lease costs, which were immaterial for the fiscal years ended December 31, 2020 and December 26, 2019. (3) To conform to the current period presentation, the presentation of the components of operating lease expense for the fiscal year ended December 26, 2019 has been updated within this table to provide disclosure of variable lease costs and additional information related to the classification of operating lease costs within the Consolidated Statements of Operations and Comprehensive Income. Undiscounted Cash Flows Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2020, were: in thousands Amount 2021 $ 145,813 2022 141,815 2023 136,289 2024 133,866 2025 125,790 Thereafter 713,557 Total minimum lease payments (1) (2) 1,397,130 Less: amount of lease payments representing interest 361,503 Present value of future minimum lease payments 1,035,627 Less: current obligations under leases 94,502 Long-term lease obligations $ 941,125 (1) Future lease payments exclude approximately $132.9 million of legally binding minimum lease payments for operating leases signed but not yet commenced. (2) Operating lease payments include $59.3 million related to options to extend lease terms that are reasonably certain of being exercised. For the fiscal years ended December 31, 2020 and December 26, 2019, cash paid for operating leases was $131.3 million and $112.8 million. Right-of-Use Asset Impairment and Write Off During the third quarter of fiscal 2019, we began the move from our former store support center in Smyrna, Georgia to a nearby location in Atlanta, Georgia. Prior to this period, we expected to fully cover future payments under the operating lease agreement with proceeds from a sublease. As of the end of our fiscal third quarter, we no longer expected to find a sublease tenant that would fully cover these future payments and concluded that the right-of-use asset related to the operating lease was not recoverable. Therefore, we determined the fair value of the right-of-use asset based on a discounted cash flow analysis reflective of the income expected from a sublease. Based on the excess of the asset’s carrying value over fair value, we recognized an impairment of $4.1 million in the third quarter of fiscal 2019 in general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income. In addition, during the fourth quarter of fiscal 2019, we completed the move to our new location and terminated the lease for our previous store support center facility in Smyrna, Georgia. As a result, we recognized a loss of $1.9 million related to the settlement of our remaining obligations under the lease and the write off of the remaining right-of-use asset for the facility upon lease termination. This loss was recognized in general and administrative expenses on the Consolidated Statements of Operations and Comprehensive Income. Litigation On May 20, 2019, an alleged stockholder of the Company filed a putative class action lawsuit, Taylor v. Floor & Decor Holdings, Inc., et al. , No. 1:19-cv-02270-SCJ (N.D. Ga.), in the United States District Court for the Northern District of Georgia against the Company and certain of our officers, directors and stockholders. On August 14, 2019, the Court named a lead plaintiff, and the case was re-captioned In re Floor & Decor Holdings, Inc. Securities Litigation , No. 1:19-cv-02270-SCJ (N.D. Ga.). The operative complaint alleged certain violations of federal securities laws based on, among other things, purported materially false and misleading statements and omissions allegedly made by the Company between May 23, 2018 and August 1, 2018 and sought class certification, unspecified monetary damages, costs and attorneys’ fees and equitable relief. The Company denied the material allegations and moved to dismiss the lawsuit. On September 21, 2020, the District Court granted the Company’s motion to dismiss in its entirety. The plaintiff did not appeal that decision, meaning the dismissal is final. On June 18, 2020, an alleged stockholder filed a putative derivative complaint, Lincolnshire Police Pension Fund v. Taylor, et al. , No. 2020-0487-JTL, in the Delaware Court of Chancery, purportedly on behalf of the Company against certain of the Company’s officers, directors, and stockholders. The complaint alleges breaches of fiduciary duties and unjust enrichment. The factual allegations underlying these claims are similar to the factual allegations made in the In re Floor & Decor Holdings, Inc. Securities Litigation described above. The complaint seeks unspecified damages and restitution for the Company from the individual defendants and the payment of costs and attorneys’ fees. The time for the defendants to respond to the complaint has not yet expired. The Company maintains insurance that may cover any liability arising out of the above-referenced litigation up to the policy limits and subject to meeting certain deductibles and to other terms and conditions thereof. Estimating an amount or range of possible losses resulting from litigation proceedings is inherently difficult, particularly where the matters involve indeterminate claims for monetary damages and are in the stages of the proceedings where key factual and legal issues have not been resolved. For these reasons, we are currently unable to predict the ultimate timing or outcome of or reasonably estimate the possible losses or a range of possible losses resulting from the above-referenced litigation. The Company is also subject to various other legal actions, claims and proceedings arising in the ordinary course of business, which may include claims related to general liability, workers’ compensation, product liability, intellectual property and employment-related matters resulting from our business activities. As with most actions such as these, an estimation of any possible and/or ultimate liability cannot always be determined. The Company establishes reserves for specific legal proceedings when it determines that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. These various other ordinary course proceedings are not expected to have a material impact on the Company's consolidated financial position, cash flows, or results of operations, however regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | . Debt The following table summarizes the Company's long-term debt as of December 31, 2020 and December 26, 2019 (dollars in thousands): Maturity Date Interest Rate Per Annum at December 31, December 31, December 26, Credit Facilities: UBS Facility Term Loan B February 14, 2027 2.15% Variable $ 143,179 $ 145,500 UBS Facility Term Loan B-1 February 14, 2027 5.00% Variable 74,625 — Wells Facility Revolving Line of Credit February 14, 2025 3.50% Variable — — Total secured debt at par value 217,804 145,500 Less: current maturities 1,647 — Long-term debt maturities 216,157 145,500 Less: unamortized discount and debt issuance costs 9,000 2,894 Total long-term debt $ 207,157 $ 142,606 Market risk associated with the Company's fixed and variable rate long-term debt relates to the potential change in fair value and negative impact to future earnings, respectively, from a change in interest rates. The aggregate fair value of debt is based primarily on the Company's estimates of interest rates, maturities, credit risk, and underlying collateral and is classified as Level 3 within the fair value hierarchy. The following table summarizes scheduled maturities of the Company’s debt, including current maturities, as of December 31, 2020: in thousands Amount 2021 $ 1,647 2022 2,196 2023 2,196 2024 2,196 2025 2,384 Thereafter (1) 207,185 Total minimum debt payments $ 217,804 (1)Thereafter maturities are comprised of $136.3 million due under the term loan B facility and $70.9 million due under the term loan B-1 facility through February 14, 2027. Components of interest expense are as follows for the periods presented: Fiscal Year Ended in thousands December 31, December 26, December 27, Total interest costs $ 9,606 $ 8,801 $ 8,917 Interest capitalized 1,217 — — Interest expense, net $ 8,389 $ 8,801 $ 8,917 Term Loan Facility On February 14, 2020, the Company entered into a repricing and third amendment to the credit agreement governing its senior secured term loan facility (the "Term Loan B Facility") which, among other things, (a) refinanced the existing term loan B facility with a new term loan B facility in the same aggregate principal amount of approximately $144.6 million, and (b) extended the stated maturity date under the Term Loan Facility to February 14, 2027. The Term Loan Facility also includes an “accordion” feature that allows the Company, under certain circumstances, to increase the size of the Term Loan Facility by an amount up to the greater of $270.0 million and 100.0% of Consolidated EBITDA (as defined in the Term Loan Facility), plus additional amounts (x) if such increase is secured on a pari passu basis with the loans under the Term Loan Facility, up to a Consolidated First Lien Leverage Ratio (as defined in the Term Loan Facility) of 2.50:1.00, (y) if such increase is secured on a junior basis with the loans under the Term Loan Facility, up to a Consolidated Secured Leverage Ratio (as defined in the Term Loan Facility) of 3.50:1.00 and (z) if such increase is unsecured, up to a Consolidated Total Leverage Ratio (as defined in the Term Loan Facility) of 3.50:1.00, subject to certain additional adjustments, which, under certain circumstances, allow for a Consolidated Total Leverage Ratio of up to 4.50:1.00. The third amendment to the Term Loan Facility also amended the margin applied to loans under the term loan B facility to (x) in the case of ABR Loans (as defined in the Term Loan Facility), from 1.75% or 1.50% per annum (based on credit rating tests) to 1.00% per annum (subject to satisfying a leverage ratio test and subject to a leverage-based step-up to 1.25% if such leverage ratio test is exceeded), and (y) in the case of Eurodollar Loans (as defined in the Term Loan Facility), from 2.75% or 2.50% per annum (based on credit rating tests) to 2.00% per annum (subject to satisfying a leverage ratio test and subject to a leverage-based step-up to 2.25% if such leverage ratio test is exceeded) (subject to a 0.00% floor on Eurodollar Loans). The material terms of the Term Loan Facility were otherwise unchanged. On May 18, 2020, to provide additional liquidity in response to the business uncertainties resulting from the evolving COVID-19 pandemic, the Company entered into a fourth amendment to the Term Loan Facility, which, among other things, provides for a new incremental term loan facility in an aggregate principal amount of $75.0 million with a maturity date of February 14, 2027 (the “Term Loan B-1 Facility”). The Company received net proceeds of $70.5 million from the term loan B-1 facility after deducting a $4.1 million original issuance discount and $0.3 million of debt issuance costs to third parties. The Company intends to use the net proceeds to support its growth plans and for general corporate purposes. The term loan B-1 facility is a separate tranche from the Company's existing term loan B facility. The terms of loans under the term loan B facility remained unchanged as a result of the fourth amendment to the Term Loan Facility. The Term Loan Facility provides a margin for loans under the term loan B-1 facility of (x) in the case of ABR Loans (as defined in the Term Loan Facility), 3.00% per annum, and (y) in the case of Eurodollar Loans (as defined in the Term Loan Facility), 4.00% per annum (subject to a 1.00% floor on Eurodollar Loans). At December 31, 2020, the applicable interest rate for borrowings was 2.15% for the term loan B facility and 5.00% for the term loan B-1 facility. The Company entered into a fifth amendment to the Term Loan Facility on February 9, 2021 as discussed in Note 14, "Subsequent Event." All obligations under the Term Loan Facility are secured by (1) a first-priority security interest in substantially all of the property and assets of Outlets and the other guarantors under the Term Loan Facility, with certain exceptions, and (2) a second-priority security interest in the collateral securing the revolving credit facility. Gain on Debt Extinguishment During the second quarter of fiscal 2020, the Company evaluated the fourth amendment to the Term Loan Facility in accordance with ASC 470-50, "Debt - Modifications and Extinguishments," on a lender-by-lender basis and determined that the incremental term loan borrowing was provided entirely by one lender and its affiliates. As this lender held a portion of the existing Term Loan Facility debt, the Company performed the 10% cash flow test pursuant to ASC 470-50-40-10 and concluded that the results exceeded the 10% threshold. As a result, the Company accounted for this transaction as a partial extinguishment and derecognized the existing debt held by this lender and recorded the new debt at fair value. Based on the difference between the reacquisition price and carrying amount of debt, the Company recognized a $1.0 million gain on early extinguishment of debt during the second quarter of fiscal 2020, which included the original issuance discount of $4.1 million and $0.5 million of unamortized debt issuance costs related to the extinguished debt as part of the calculation. ABL Facility On February 14, 2020, the Company also entered into a repricing and general amendment to the credit agreement governing its revolving credit facility (as amended, the “ABL Facility” and together with the Term Loan Facility, the "Credit Facilities"), which, among other things, (a) increased its revolving commitments to a total aggregate principal amount of $400.0 million, and (b) extended the stated maturity date under the ABL Facility to February 14, 2025. The ABL Facility also includes an “accordion” feature that allows the Company under certain circumstances, to increase the size of the facility by an amount up to $100.0 million, or such higher amount as may be agreed to by the Required Lenders (as defined in the ABL Facility). The amendment to the ABL Facility also amended the margin applied to loans and letters of credit to (x) in the case of Base Rate Loans (as defined in the ABL Facility), from 0.25% or 0.50% per annum (based on availability) to a flat rate of 0.25% per annum, (y) in the case of LIBO Rate Loans (as defined in the ABL Facility) and letter of credit fees for standby letters of credit, from 1.25% or 1.50% per annum (based on availability) to a flat rate of 1.25% per annum (subject to a 0.00% floor on LIBO Rate Loans) and (z) in the case of letter of credit fees for commercial letters of credit, from 0.75% or 1.00% per annum (based on availability) to a flat rate of 0.75% per annum. The material terms of the ABL Facility were otherwise unchanged. As of December 31, 2020, the Company's ABL Facility had a maximum availability of $400.0 million with actual available borrowings limited to the sum, at the time of calculation, of (a) eligible credit card receivables multiplied by the credit card advance rate, plus (b) the cost of eligible inventory, net of inventory reserves, multiplied by the applicable appraisal percentage, plus (c) 85% of eligible net trade receivables, plus (d) all eligible cash on hand, plus (e) 100% of the amount for which the eligible letter of credit must be honored after giving effect to any draws, minus certain Availability Reserves (each component as defined in the ABL Facility). The ABL Facility is available for issuance of letters of credit and contains a sublimit of $50.0 million for standby letters of credit and commercial letters of credit combined. Available borrowings under the facility are reduced by the face amount of outstanding letters of credit. All obligations under the ABL Facility are secured by (1) a first-priority security interest in the cash and cash equivalents, accounts receivable, inventory, and related assets of Outlets and the other guarantors under the ABL Facility, with certain exceptions, and (2) a second-priority security interest in substantially all of the other property and assets of Outlets and the other guarantors under the Term Loan Facility. Net availability under the ABL Facility, as reduced by outstanding letters of credit of $21.3 million, was $378.7 million based on financial data as of December 31, 2020. Covenants The credit agreements governing the Term Loan Facility and ABL Facility contain customary restrictive covenants, which, among other things and with certain exceptions, limit the Company’s ability to (i) incur additional indebtedness and liens in connection with such indebtedness, (ii) pay dividends and make certain other restricted payments, (iii) effect mergers or consolidations, (iv) enter into transactions with affiliates, (v) sell or dispose of property or assets, and (vi) engage in unrelated lines of business. In addition, these credit agreements subject the Company to certain reporting obligations and require that the Company satisfy certain financial covenants, including, among other things, a requirement that if borrowings under the ABL Facility exceed 90% of availability, the Company will maintain a certain fixed charge coverage ratio (defined as Consolidated EBITDA less non-financed capital expenditures and income taxes paid to consolidated fixed charges, in each case as more fully defined in the ABL Facility). The Term Loan Facility has no financial maintenance covenants. The Company is currently in compliance with all material covenants under the credit agreements. Deferred Debt Issuance Cost and Original Issue Discount Deferred debt issuance cost related to our ABL Facility of $975 thousand and $574 thousand as of December 31, 2020 and December 26, 2019, respectively, are included in other assets on our Consolidated Balance Sheets. Deferred debt issuance cost and original issue discount related to our Term Loan Facility of $9.0 million and $2.9 million as of December 31, 2020 and December 26, 2019, respectively, are included in term loans on our Consolidated Balance Sheets. For the fiscal years ended December 31, 2020, December 26, 2019, and December 27, 2018, deferred debt issuance and original issue discount amortization expense was $1.4 million, $1.1 million, and $1.0 million, respectively. Fair Value of Debt The fair values of certain of the Company’s debt instruments have been determined by utilizing Level 3 inputs, such as available market information and appropriate valuation methodologies, including the rates for similar instruments and the discounted cash flows methodology. Market risk associated with our fixed and variable rate long-term debt relates to the potential change in fair value and negative impact to future earnings, respectively, from a change in interest rates. The aggregate fair value of debt was based primarily on discounted cash flows utilizing estimated interest rates, maturities, credit risk, and underlying collateral and is classified primarily as Level 3 within the fair value hierarchy. At December 31, 2020 and December 26, 2019, the fair values of the Company’s debt are as follows (in thousands): in thousands December 31, December 26, Total debt at par value $ 217,804 $ 145,500 Less: unamortized discount and debt issuance costs 9,000 2,894 Net carrying amount 208,804 142,606 Fair value $ 215,626 $ 145,136 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock The Company has three classes of common stock: Class A, Class B, and Class C. The holders of Class A common stock, Class B common stock, and Class C common stock are entitled to share equally, on a per share basis, in dividends or other distributions. Class A common stockholders are entitled to one vote per share held. Class B and Class C common stockholders have no voting rights, except as otherwise provided by law. In the event of the voluntary liquidation or dissolution of the Company, each class of stock will share equally, on a per share basis, in all the assets of the Company that are available for distribution to stockholders. Stock Incentive Plans On January 13, 2011, the Company adopted the 2011 Stock Option Plan (as amended, restated, supplemented or otherwise modified from time to time, the “2011 Plan”) to provide for the grant of stock options to employees (including officers), consultants and non-employee directors of the Company and its subsidiaries. Pursuant to the terms of the 2011 Plan, the Company was authorized to grant options for the purchase of up to 12,520,407 shares as of December 29, 2016 and 10,780,970 shares as of December 31, 2015. As of December 29, 2016 and December 31, 2015, there were 179,575 and 104,269 shares available for grant pursuant to awards under the 2011 Plan, respectively. We ceased granting awards under the 2011 Plan upon the implementation of the 2017 Plan (as defined below). On April 13, 2017, the board of directors approved the Floor & Decor Holdings, Inc. 2017 Stock Incentive Plan (the “2017 Plan”), which was subsequently approved by the Company’s stockholders. The 2017 Plan authorizes the Company to grant options and restricted stock awards to eligible employees (including officers), consultants, and non-employee directors up to an aggregate of 5,000,000 shares of Class A common stock. As of December 31, 2020 and December 26, 2019, there were 2,120,839 and 2,806,549 shares available for grant pursuant to awards under the 2017 Plan, respectively. Secondary Offerings On May 29, 2018, certain of the Company’s stockholders completed a secondary public offering (the “May Secondary Offering”) of an aggregate of 10,000,000 shares of common stock at a price to the public of $45.80 per share. The Company did not sell any shares in the May Secondary Offering and did not receive any proceeds from the sales of shares by the selling stockholders. On September 14, 2018, certain of the Company’s stockholders completed a secondary public offering (the “September Secondary Offering”) of an aggregate of 11,500,000 shares of common stock at a price to the public of $37.25 per share. The Company did not sell any shares in the September Secondary Offering and did not receive any proceeds from the sales of shares by the selling stockholders. On February 28, 2019, certain of the Company’s certain of the Company’s stockholders completed a secondary public offering (the “February Secondary Offering”) of an aggregate of 10,000,000 shares of common stock at a price to the public of $37.50 per share. The Company did not sell any shares in the February Secondary Offering and did not receive any proceeds from the sales of shares by the selling stockholders. On May 22, 2020, certain of the Company’s certain of the Company’s stockholders completed a secondary public offering (the “May 2020 Secondary Offering”) of an aggregate of 4,972,900 shares of common stock at a price to the public of $44.55 per share. The Company did not sell any shares in the May 2020 Secondary Offering and did not receive any proceeds from the sales of shares by the selling stockholders. On August 13, 2020, certain of the Company’s certain of the Company’s stockholders completed a secondary public offering (the “August Secondary Offering”) of an aggregate of 5,686,422 shares of common stock at a price to the public of $67.60 per share. The Company did not sell any shares in the August Secondary Offering and did not receive any proceeds from the sales of shares by the selling stockholders. Stock-based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation- Stock Compensation, which requires measurement of compensation cost for all stock awards at fair value on the date of grant and recognition of compensation, net of forfeitures, over the requisite service period for awards expected to vest. Stock-based compensation expense for the fiscal years ended December 31, 2020, December 26, 2019, and December 27, 2018 was $16.1 million, $8.7 million, and $6.5 million, respectively, and was included in general and administrative expenses on the Company’s Consolidated Statements of Operations and Comprehensive Income. Stock Options Stock options are granted with an exercise price greater than or equal to the fair market value on the date of grant, as authorized by the Company’s board of directors or compensation committee. Options granted have contractual terms of ten years and vesting provisions ranging from one year to five years. Stock options granted during fiscal 2020 vest in four four The fair value of stock option awards granted was estimated using the Black-Scholes-Merton option pricing model with the following weighted-average assumptions: Fiscal Year Ended December 31, Fiscal Year Ended December 26, Fiscal Year Ended December 27, Weighted average fair value per stock option $ 22.27 $ 20.38 $ 15.63 Risk-free interest rate 1.17% 2.06% 3.05% Expected volatility 39% 45% 45% Expected life (in years) 5.75 6.68 6.29 Dividend yield —% —% —% The Company determines the grant date fair value of stock options with assistance from a third-party valuation specialist. Expected volatility is estimated based on the historical volatility of the Company’s Class A common stock since its initial public offering in 2017 as well as the historical volatility of the common stock of similar public entities. The Company considers various factors in determining the appropriateness of the public entities used in determining expected volatility, including the entity's life cycle stage, industry, growth profile, size, financial leverage, and products offered. To determine the expected life of the options granted, the Company relied upon a combination of the observed exercise behavior of prior grants with similar characteristics and the contractual terms and vesting schedules of the current grants. The risk-free interest rate is based on the term structure of interest rates at the time of the option grant. The table below summarizes stock option activity for the fiscal year ended December 31, 2020: Options Weighted Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 26, 2019 6,037,079 $ 13.64 Granted 294,563 58.15 Exercised (2,485,427) 7.75 Forfeited or expired (105,611) 25.71 Outstanding at December 31, 2020 3,740,604 $ 20.72 5.9 $ 269,794 Vested and exercisable at December 31, 2020 2,071,137 $ 13.22 4.8 $ 164,918 The fair value of stock options vested during the fiscal years ended December 31, 2020, December 26, 2019, and December 27, 2018 was $7.5 million, $7.5 million, and $4.9 million, respectively. The aggregate intrinsic value of stock options exercised was $135.5 million, $146.6 million, and $87.2 million for the fiscal years ended December 31, 2020, December 26, 2019, and December 27, 2018, respectively. The Company’s total unrecognized compensation cost related to stock options as of December 31, 2020 was $16.0 million and is expected to be recognized over a weighted average period of 2.2 years. Restricted Stock Units During the fiscal year ended December 31, 2020, the Company granted restricted stock units to certain employees that represent an unfunded, unsecured right to receive a share of the Company’s Class A common stock upon vesting. These awards vest in four four The following table summarizes restricted stock unit activity during the fiscal year ended December 31, 2020: Restricted Stock Units Weighted Average Grant Date Fair Value Unvested at December 27, 2019 — $ — Granted 133,256 59.24 Vested — — Forfeited (5,036) 55.08 Unvested at December 31, 2020 128,220 $ 59.40 The total unrecognized compensation cost related to restricted stock units as of December 31, 2020 was $6.2 million and is expected to be recognized over a weighted average period of 3.2 years. Restricted Stock Awards During the fiscal year ended December 31, 2020, the Company issued restricted stock awards to certain executive officers and non-employee directors comprised of performance-based restricted stock, total shareholder return (“TSR”) awards, and service-based restricted stock. The performance-based restricted stock cliff vest based on (i) the Company's achievement of predetermined financial metrics at the end of a three-year performance period and (ii) the grantee’s continued service through the vesting date, which varies by grantee and ranges between approximately three three The following table summarizes restricted stock award activity during the fiscal year ended December 31, 2020: Restricted Stock Awards Service-based Performance-based TSR Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Unvested at December 27, 2019 37,032 $ 35.78 — $ — — $ — Granted 103,767 57.84 160,315 57.70 104,456 44.28 Vested (8,955) 27.23 — — — — Forfeited — — — — — — Unvested at December 31, 2020 131,844 $ 53.72 160,315 $ 57.70 104,456 $ 44.28 The fair value of performance-based and service-based restricted stock awards is based on the closing market price of the Company's Class A common stock on the date of grant. The fair value of the TSR awards is estimated on grant date using the Monte Carlo valuation method. Compensation cost for restricted stock awards is recognized using the straight-line method over the requisite service period, which for each of the awards is the service vesting period. As of December 31, 2020 and December 26, 2019, total unrecognized compensation cost related to unvested restricted stock awards was $15.2 million and $1.1 million, respectively. The unrecognized compensation cost remaining as of December 31, 2020 is expected to be recognized over a weighted average period of 2.6 years. The total fair value of restricted stock awards that vested during the fiscal years ended December 31, 2020 and December 26, 2019 was $0.5 million and $0.5 million, respectively. No restricted stock awards vested during fiscal 2018. Employee Stock Purchase Plan At our 2018 annual meeting of stockholders held on May 17, 2018, our stockholders approved the Floor & Decor Holdings, Inc. Employee Stock Purchase Plan (the “ESPP”), which became available to substantially all of our employees beginning in the third quarter of fiscal 2018. The ESPP is a tax-qualified plan under Section 423 of the Internal Revenue Code, and it permits eligible employees to purchase shares of our common stock through payroll deductions, subject to certain limitations. The Company has designated a purchase price per share of common stock acquired under the ESPP at the lesser of 90% of the lower of the fair market value of our common stock on either the first or last trading day of each six-month offering period. There are 1,500,000 shares of our Class A common stock, par value $0.001 per share, approved for issuance under the ESPP, 56,389 and 104,363 of which were issued during fiscal 2020 and fiscal 2019, respectively. During fiscal 2020, fiscal 2019, and fiscal 2018, the Company recognized $0.7 million, $0.5 million, and $0.3 million, respectively, of stock-based compensation expense related to the ESPP. Deferred Compensation Plan In October 2019, the Company adopted the 2019 Director Nonqualified Excess Plan (the “Plan”) to provide for certain employees or independent contractors of the employer (including directors) to elect to defer compensation, including restricted stock grants, until they separate from service. The Plan is intended to be a nonqualified deferred compensation plan that complies with the provisions of Section 409A of the Internal Revenue Code and is effective for compensation starting in fiscal 2020. Deferrals and related compensation expense under the Plan were immaterial in fiscal 2020. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Net Income per Common Share The Company calculates basic earnings per share by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding adjusted for the dilutive effect of share-based awards. The following table shows the computation of basic and diluted earnings per share for the periods presented: in thousands, except per share data Fiscal Year Ended December 31, Fiscal Year Ended December 26, Fiscal Year Ended December 27, Net income $ 194,981 $ 150,631 $ 116,187 Basic weighted average shares outstanding 102,690 99,435 96,770 Dilutive effect of share-based awards 3,452 5,527 7,791 Diluted weighted average shares outstanding 106,142 104,962 104,561 Basic earnings per share $ 1.90 $ 1.51 $ 1.20 Diluted earnings per share $ 1.84 $ 1.44 $ 1.11 The following potentially dilutive securities were excluded from the calculation of diluted earnings per share as a result of their anti-dilutive effect: in thousands Fiscal Year Ended December 31, Fiscal Year Ended December 26, Fiscal Year Ended December 27, Stock options 320 971 298 |
Selected Quarterly Financial In
Selected Quarterly Financial Information (unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Information (unaudited) | Selected Quarterly Financial Information (unaudited) The following tables present the Company’s unaudited quarterly results for fiscal 2020 and fiscal 2019. Fiscal 2020 (in thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 554,937 $ 462,352 $ 684,847 $ 723,652 Gross profit 236,032 196,692 294,628 307,540 Net income 37,063 32,004 68,774 57,140 Basic earnings per share 0.36 0.31 0.67 0.55 Diluted earnings per share 0.35 0.30 0.65 0.54 Fiscal 2019 (in thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 477,050 $ 520,311 $ 521,093 $ 527,002 Gross profit 201,374 217,823 213,788 230,029 Net income 30,720 43,596 40,974 35,341 Basic earnings per share 0.31 0.44 0.41 0.35 Diluted earnings per share 0.29 0.42 0.39 0.34 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Fifth Amendment to Term Loan Facility On February 9, 2021, (the “Fifth Amendment Effective Date”), the Company entered into a fifth amendment to the Term Loan Facility which among other things, (a) refinanced the existing term loan B-1 facility with a new term facility in an aggregate principal amount of $65.0 million with a maturity date of February 14, 2027 (the “Supplemental Term Loan Facility”), and has the same terms as the Term Loan B Facility and (b) provides that voluntary prepayments of the Term Loan Facility made within six (6) months after the Fifth Amendment Effective Date are subject to a 1% soft call prepayment premium. The margin applicable to the Supplemental Term Loans Facility is the same as the margin applicable to the Term Loan B Facility, which is: (x) in the case of ABR Loans (as defined in the Term Loan Facility), 1.00% per annum (subject to satisfying a leverage ratio test and subject to a leverage-based step-up to 1.25% if such leverage ratio test is exceeded), and (y) in the case of Eurodollar Loans (as defined in the Term Loan Facility), 2.00% per annum (subject to satisfying a leverage ratio test and subject to a leverage-based step-up to 2.25% if such leverage ratio test is exceeded) (subject to a 0.00% floor on Eurodollar Loans). |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fiscal Year | Fiscal YearThe Company’s fiscal year is the 52- or 53-week period ending on the Thursday on or preceding December 31st. The fiscal year ended December 31, 2020 (fiscal "2020") includes 53 weeks, while the fiscal years ended December 26, 2019 (“fiscal 2019”) and December 27, 2018 (“fiscal 2018”) include 52 weeks. When a 53-week fiscal year occurs, we report the additional week at the end of the fiscal fourth quarter. 52-week fiscal years consist of thirteen-week periods in the first, second, third, and fourth quarters of the fiscal year. The 53-week fiscal year consists of thirteen-week periods in the first, second, and third quarters of the fiscal year and a fourteen-week period in the fourth quarter of the fiscal year. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. |
Reclassifications | Reclassifications Within the Consolidated Statements of Cash Flows, prior period amounts for “other assets” and “other” have been combined and reclassified to the “other, net” line item to conform to the current period presentation. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash consists of currency and demand deposits with banks. |
Receivables | Receivables Receivables consist primarily of amounts due from credit card companies and receivables from vendors. The Company typically collects its credit card receivables within three five On November 7, 2019, the U.S. Trade Representative (“USTR”) made a ruling to grant exclusions from Section 301 tariffs for select types of flooring products imported from China, including certain “click” vinyl and engineered products that the Company has sold and continues to sell. The Section 301 tariffs from which these goods are now excluded were implemented at 10% beginning in September 2018 and increased to 25% in June 2019. In addition, on November 20, 2019, U.S. Customs and Border Protection (“U.S. Customs”) issued Chapter 99 exclusions for each unique article number identified under the November 7, 2019 USTR ruling. During fiscal 2020, additional Chapter 99 exclusions were issued for certain Bamboo and other flooring products imported from China. For the Company, some of the granted exclusions apply retroactively to tariffs paid as early as September 2018. While tariff refund claims are subject to the approval of U.S. Customs, the Company currently expects to recover a total of $24.3 million related to Section 301 tariff payments, of which $12.9 million was received in fiscal 2020. As of December 31, 2020 and December 26, 2019, receivables included $11.4 million and 19.3 million of expected tariff refunds from U.S. Customs. The tariff refund receivables outstanding as of December 31, 2020 are expected to be received during fiscal 2021. During fiscal 2020, the Company recognized a $4.5 million reduction to cost of sales and $0.6 million of interest income related to tariff refunds. Interest accrues from the date that tariff payments were originally made through the date that such payments are refunded to the Company. |
Credit Program | Credit Program Credit is offered to the Company's customers through a proprietary credit card underwritten by third-party financial institutions at no recourse to the Company. Beginning in fiscal 2018, the Company began offering limited credit to its commercial clients. The total exposure at the end of fiscal 2020 and fiscal 2019 was $1.2 million and $1.0 million, respectively. |
Inventory Valuation and Shrinkage | Inventory Valuation and Shrinkage Inventories consist of merchandise held for sale and are stated at the lower of cost or net realizable value. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recorded in cost of sales in the Consolidated Statements of Operations and Comprehensive Income as a loss in the period in which it occurs. The Company determines inventory costs using the moving weighted average cost method. The Company capitalizes transportation, duties, and other costs to get product to its retail locations. The Company records reserves for estimated losses related to shrinkage and other amounts that are otherwise not expected to be fully recoverable. These reserves are calculated based on historical shrinkage, selling price, margin, and current business trends. The estimates have calculations that require management to make assumptions based on the current rate of sales, age, salability, and profitability of inventory, historical percentages that can be affected by changes in the Company's merchandising mix, customer preferences, and changes in actual shrinkage trends. These reserves totaled $5,434 thousand and $4,468 thousand as of December 31, 2020 and December 26, 2019, respectively. Physical inventory counts and cycle counts are performed on a regular basis in each store and distribution center to ensure that amounts reflected in the accompanying Consolidated Balance Sheets are properly stated. During the period between physical inventory counts in our stores, the Company accrues for estimated losses related to shrinkage on a store-by-store basis. Shrinkage is the difference between the recorded amount of inventory and the physical inventory. Shrinkage may occur due to theft or loss, among other things. |
Fixed Assets | Fixed Assets Fixed assets consist primarily of furniture, fixtures, and equipment, leasehold improvements (including those that are reimbursed by landlords as tenant improvement allowances), buildings and building improvements, computer software and hardware, and land. Fixed assets are stated at cost less accumulated depreciation utilizing the straight-line method over the assets’ estimated useful lives. The Company capitalizes interest on borrowings during the active construction period of certain capital projects. Leasehold improvements are amortized using the straight-line method over the shorter of (i) the original term of the lease, (ii) renewal term of the lease if the renewal is reasonably certain or (iii) the useful life of the improvement. The Company’s fixed assets are depreciated using the following estimated useful lives: Useful Life Furniture, fixtures and equipment 2 - 7 years Leasehold improvements 10 - 25 years Buildings and building improvements 10 - 40 years Computer software and hardware 3 - 7 years Land Indefinite The cost and related accumulated depreciation of assets sold or otherwise disposed are removed from the accounts, and the related gain or loss is reported in the Consolidated Statements of Operations and Comprehensive Income. |
Capitalized Software Costs | . Capitalized Software Costs The Company capitalizes certain costs related to the acquisition and development of software and amortizes these costs using the straight-line method over the estimated useful life of the software. Certain development costs not meeting the criteria for capitalization are expensed as incurred. |
Goodwill and Other Indefinite-Lived Intangible Assets | Goodwill and Other Indefinite-Lived Intangible Assets Goodwill represents the excess of purchase price over the fair value of net assets acquired. The Company does not amortize goodwill and other intangible assets with indefinite lives resulting from business combinations but, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Intangibles—Goodwill and Other , does assess the recoverability of goodwill annually in the fourth quarter of each fiscal year, or more often if events occur or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. Such circumstances could include, but are not limited to, a significant adverse change in customer demand or business climate or an adverse action or assessment by a regulator. In accordance with ASC 350, identifiable intangible assets with finite lives are amortized over their estimated useful lives. Each year, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of the single reporting unit is less than its carrying amount as a basis for determining whether it is necessary to complete quantitative impairment assessments. Impairment Assessment of Goodwill and Other Indefinite-Lived Intangible Assets The Company tests goodwill and indefinite-lived intangible assets for impairment annually in the fourth quarter of each fiscal year, or more often if events occur or changes in circumstances indicate that the carrying amount of goodwill or indefinite-lived intangible assets may not be recoverable. We assess the value of our goodwill and indefinite-lived intangible assets under either a qualitative or quantitative approach. Under a qualitative approach, the Company evaluates various market and other factors to determine whether it is more likely than not that the Company’s goodwill or indefinite-lived intangible assets have been impaired. In performing the qualitative assessment, the Company considers the carrying value of its single reporting unit compared to its fair value as well as events and changes in circumstances that could include, but are not limited to, a significant adverse change in customer demand or business climate, an adverse action or assessment by a regulator, and significant adverse changes in the price of the Company’s common stock. If such qualitative assessment indicates that impairment may have occurred, an additional quantitative assessment is performed by comparing the carrying value of the assets to their respective estimated fair values. If the recorded carrying value of goodwill or an indefinite-lived intangible asset exceeds its estimated fair value, an impairment charge is recorded to write the asset down to its estimated fair value. During the fourth quarter of fiscal 2020, the Company qualitatively assessed whether it was more likely than not that the goodwill and indefinite-lived intangible assets were impaired. Based on this assessment, the Company determined that its goodwill and indefinite-lived intangible assets were not impaired as of October 22, 2020. No events or changes in circumstances have occurred since the date of the Company's most recent annual impairment test that would more likely than not reduce the fair value of the reporting unit below its carrying amount. The estimated lives of the Company’s intangible assets are as follows: Useful Life Trade names Indefinite Vendor relationships 10 years The Company’s goodwill and other indefinite-lived intangible assets impairment loss calculations contain uncertainties because they require management to make significant judgments in estimating the fair value of the Company’s reporting unit and indefinite-lived intangible asset, including the projection of future cash flows, assumptions about which market participants are the most comparable, the selection of discount rates, and the weighting of the income and market approaches. These calculations contain uncertainties because they require management to make assumptions such as estimating economic factors, including the profitability of future business operations and, if necessary, the fair value of the reporting unit’s assets and liabilities. Further, the Company’s ability to realize the future cash flows used in its fair value calculations is affected by factors such as changes in economic conditions, changes in the Company’s operating performance, and changes in the Company’s business strategies. Significant changes in any of the assumptions involved in calculating these estimates could affect the estimated fair value of the Company’s reporting unit and indefinite-lived intangible assets and could result in impairment charges in a future period. |
Long-Lived Assets | Long-Lived Assets Long-lived assets, such as fixed assets, operating lease right-of-use assets, and intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of an asset, significant changes or planned changes in our use of an asset, a product recall, or an adverse action by a regulator. In accordance with ASC 360, the evaluation is performed at the lowest level for which identifiable cash flows are available that are largely independent of the cash flows of other assets or asset groups. If the sum of the estimated undiscounted future cash flows is less than the carrying value of the related asset or asset group, an impairment loss is recognized equal to the difference between carrying value and fair value. |
Leases | Leases The Company recognizes lease assets and corresponding lease liabilities for all operating leases on the balance sheet, excluding short-term leases (leases with terms of 12 months or less) as described under ASU No. 2016-2, “Leases (Topic 842).” The majority of our long-term operating lease agreements include options to extend, which are also factored into the recognition of their respective assets and liabilities when appropriate based on management’s assessment of the probability that the options will be exercised. Lease payments are discounted using the rate implicit in the lease, or, if not readily determinable, a third-party secured incremental borrowing rate 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 for collateralization as well as inflation. Additionally, certain of our lease agreements include escalating rents over the lease terms which, under Topic 842, results in rent being expensed on a straight-line basis over the life of the lease that commences on the date we have the right to control the property. During fiscal 2020, the Company negotiated rent deferrals or abatements for a significant number of its stores due to the impact of the COVID-19 pandemic. The Company has also delayed rent payments for some stores as negotiations are in process with landlords. Total payments delayed or deferred as of December 31, 2020 were approximately $5.5 million, of which $4.5 million was included in the current portion of lease liabilities and $1.0 million was included in lease liabilities on the Consolidated Balance Sheets. In accordance with FASB Staff Q&A - Topic 842: " Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic" issued in April 2020, the Company has elected to account for lease concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee as though enforceable rights and obligations for those concessions existed in the original lease agreements. For qualified rent deferrals, the Company has recognized a non-interest bearing accrued liability, which will be reduced when the deferred payment is made in the future. For qualifying rent abatement concessions, which are immaterial in aggregate, the Company is recognizing negative lease expense for the amount of the abatement on a straight-line basis over the term of the lease. During fiscal 2020, the Company recognized approximately $0.1 million of negative lease expense related to rent abatement concessions. |
Self-Insurance Reserves | Self-Insurance Reserves The Company is partially self-insured for workers’ compensation and general liability claims less than certain dollar amounts and maintains insurance coverage with individual and aggregate limits. The Company also has a basket aggregate limit to protect against losses exceeding $11.0 million (subject to adjustment and certain exclusions) for workers' compensation claims and general liability claims. The Company’s liabilities represent estimates of the ultimate cost for claims incurred, including loss adjusting expenses, as of the balance sheet date. The estimated liabilities are not discounted and are established based upon analysis of historical data, actuarial estimates, regulatory requirements, an estimate of claims incurred but not yet reported, and other relevant factors. Management utilizes independent third-party actuarial studies to help assess the liability on a regular basis. |
Commitments and Contingencies | Commitments and Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. |
Asset Retirement Obligations | Asset Retirement Obligations An asset retirement obligation (“ARO”) represents a legal obligation associated with the retirement of a tangible long-lived asset that is incurred upon the acquisition, construction, development or normal operation of that long-lived asset. The Company’s AROs are primarily associated with leasehold improvements that, at the end of a lease, the Company is contractually obligated to remove in order to comply with certain lease agreements. The ARO is recorded in Other long-term liabilities on the Consolidated Balance Sheets and will be subsequently adjusted for changes in fair value. The associated estimated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset and depreciated over its useful life. |
Fair Value Measurements | Fair Value Measurements The Company estimates fair values in accordance with ASC 820, Fair Value Measurement . ASC 820 provides a framework for measuring fair value and requires disclosures about fair value measurements. ASC 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Additionally, ASC 820 defines levels within a hierarchy based upon observable and non-observable inputs. If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the overall fair value measurement of the instrument. • Level 1: Quoted prices in active markets for identical assets or liabilities as of the reporting date; • Level 2: Inputs other than quoted prices in active markets for identical assets or liabilities that are either directly or indirectly observable as of the reporting date; and • Level 3: Unobservable inputs that reflect the reporting entity’s own estimates about the assumptions market participants would use in pricing the asset or liability. |
Derivative Financial Instruments | Derivative Financial Instruments The Company uses derivative financial instruments to maintain a portion of its long-term debt obligations at a targeted balance of fixed and variable interest rate debt to manage its risk associated with fluctuations in interest rates. We recognize derivative contracts at fair value on the Consolidated Balance Sheets. The fair value is calculated utilizing Level 2 inputs. Unrealized changes in the fair value of hedged derivative instruments are recorded in accumulated other comprehensive (loss) income within the stockholders’ equity section of the Consolidated Balance Sheets. The effective portion of the gain or loss on the derivatives is reported as a component of comprehensive income within the Consolidated Statements of Operations and Comprehensive Income and reclassified into earnings in the same period in which the hedged transaction affects earnings. The effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent changes in fair values of the instruments are not highly effective, the ineffective portion of the hedge is immediately recognized in earnings. We perform an assessment of the effectiveness of our derivative contracts designated as hedges, including assessing the possibility of counterparty default. If we determine that a derivative is no longer expected to be highly effective, we discontinue hedge accounting prospectively and recognize subsequent changes in the fair value of the hedge in earnings. We believe our derivative contracts, which continue to be designated as cash flow hedges, and which consist of interest rate cap contracts, will continue to be highly effective in offsetting changes in cash flow attributable to floating interest rate risk. See Note 8 "Derivatives and Risk Management" for additional information. Changes in interest rates impact our results of operations. In an effort to manage our exposure to this risk, we enter into derivative contracts and may adjust our derivative portfolio as market conditions change. Designated as Cash Flow Hedge For derivative contracts designated as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of Accumulated Other Comprehensive Income (“AOCI”) and reclassified into earnings in the same period in which the hedged transaction affects earnings. The effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent the change in the fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is immediately recognized in earnings. Not Designated as Accounting Hedge For derivative contracts de-designated as accounting hedges, the change in the fair value is reflected through earnings. These changes in fair value are mark-to-market adjustments (“MTM adjustments”). MTM adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changes are not necessarily indicative of the actual settlement value of the underlying hedge in the contract settlement period. The AOCI related to the interest rate cap prior to the de-designation is being amortized over the remaining maturity period. Interest Rate Risk Our exposure to market risk from adverse changes in interest rates is primarily associated with our long-term debt obligations, which carry variable interest rates. Market risk associated with our variable interest rate long-term debt relates to the potential reduction in fair value and negative impact to future earnings, respectively, from an increase in interest rates. In an effort to manage our exposure to the risk associated with our variable interest rate long term debt, we periodically enter into interest rate derivative contracts. We designate interest rate derivative contracts used to convert the interest rate exposure on a portion of our debt portfolio from a floating rate to a capped rate as cash flow hedges. Credit Risk To manage credit risk associated with our interest rate hedging program, we select counterparties based on their credit ratings and limit our exposure to any one counterparty. The counterparties to our derivative contracts are financial institutions with investment grade credit ratings. To manage our credit risk related to our derivative financial instruments, we periodically monitor the credit risk of our counterparties, limit our exposure in the aggregate and to any single counterparty, and adjust our hedging position, as appropriate. The impact of credit risk, as well as the ability of each party to fulfill its obligations under our derivative financial instruments, is considered in determining the fair value of the contracts. Credit risk has not had a significant effect on the fair value of our derivative contracts. We do not have any credit risk-related contingent features or collateral requirements with our derivative financial instruments. |
Use of Estimates | Use of Estimates The preparation of the financial statements requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the period. Significant items subject to such estimates and assumptions include the carrying amounts of fixed assets and intangibles, asset retirement obligations, allowances for accounts receivable and inventories, reserves for workers' compensation and general liability claims incurred but not reported, and deferred income tax assets and liabilities. Actual results could differ from these estimates. |
Revenue Recognition, Gift Cards and Merchandise Credits, Loyalty Program and Sales Returns and Allowances | Revenue Recognition As of the beginning of fiscal 2018, the Company adopted Accounting Standards Update (“ASU”) No. 2014-9, “Revenue from Contracts with Customers” (“Topic 606”) using the modified retrospective transition method which requires that we recognize revenue differently pre- and post-adoption (see “Recent Accounting Pronouncements” for additional information). We recognize revenue and the related cost of sales when we satisfy the performance obligations in contracts with our customers in accordance with Topic 606. Performance obligations for our retail store sales, as well as for orders placed through our website and shipped to our customers, are satisfied at the point at which the customer obtains control of the inventory, which is typically at the point-of-sale. In some cases, merchandise is not physically ready for transfer to the customer at the point-of-sale, and revenue recognition is deferred until the customer has control of the inventory. Shipping and handling activities are accounted for as activities to fulfill the promise to transfer goods rather than as separate performance obligations as outlined within Topic 606. Payment is generally due from the customer immediately at the point-of-sale for both retail store sales and website sales. The nature of the goods offered include hard surface flooring and related accessories. We do not perform installation services, and we offer free design services in-store. The transaction price recognized in revenues represents the selling price of the products offered. Sales taxes collected are not recognized as revenue as these amounts are ultimately remitted to the appropriate taxing authorities. Our customers have the right to return the goods sold to them within a reasonable time period, typically 90 days. The right of return is an element of variable consideration as defined within Topic 606. We reserve for future returns of previously sold goods based on historical experience and various other assumptions that we believe to be reasonable. This reserve reduces sales and cost of sales as well as establishes a return asset and refund liability as defined with Topic 606. The return asset is included within prepaid expenses and other current assets, and the refund liability is included within accrued expenses and other current liabilities, each respectively on the Consolidated Balance Sheets. Merchandise exchanges of similar product and price are not considered merchandise returns and, therefore, are excluded when calculating the sales returns reserve. Gift Cards and Merchandise Credits We sell gift cards to our customers in our stores and through our website and issue merchandise credits in our stores. We account for the programs by recognizing a liability at the time the gift card is sold or the merchandise credit is issued. The liability is relieved and revenue is recognized upon redemption. Additionally, we recognize breakage income in proportion to the pattern of rights exercised by the customer when we expect to be entitled to breakage. Net sales related to the estimated breakage are included in net sales in the Consolidated Statements of Operations and Comprehensive Income. We have an agreement with an unrelated third-party who is the issuer of the Company's gift cards and also assumes the liability for unredeemed gift cards. The Company is not subject to claims under unclaimed property statutes, as the agreement effectively transfers the ownership of such unredeemed gift cards and the related future escheatment liability, if any, to the third-party. Gift card breakage is recognized based upon historical redemption patterns and represents the balance of gift cards for which the Company believes the likelihood of redemption by the customer is remote. Accordingly, in fiscal 2020, fiscal 2019, and fiscal 2018 gift card breakage income of $1.5 million, $1.2 million, and $1.6 million was recognized in net sales in the Consolidated Statements of Operations and Comprehensive Income, respectively, for such unredeemed gift cards. Loyalty Program We completed the roll out of our Pro Premier loyalty program to all stores in the second half of fiscal 2019, which allows customers to earn points through purchases in our stores and our website. Loyalty points are typically awarded at one percent of the relative standalone selling price of the merchandise sold and are recognized at the time of sale as a liability with a corresponding reduction to net sales. Additionally, loyalty breakage is recognized based on the Company’s estimate of the balance of loyalty points for which the likelihood of redemption by the customer is deemed remote. This estimate is determined with assistance from the third party servicer that manages the loyalty program and is based on the Company’s historical redemption trends, market benchmarks for the pattern of redemptions for other retail loyalty programs, and other assumptions related to the likelihood of customer redemptions. We are continuously monitoring redemption patterns and will adjust this rate, as necessary, as the program matures. In fiscal years 2020, 2019, and 2018 loyalty breakage of $1.4 million, $1.1 million, and $0.4 million respectively, was recognized as net sales in the Consolidated Statements of Operations and Comprehensive Income. Sales Returns and Allowances The Company accrues for estimated sales returns based on historical results. The allowance for sales returns at December 31, 2020 and December 26, 2019, was $22.3 million and $15.4 million, respectively. |
Cost of Sales, Vendor Rebates and Allowances | Cost of Sales Cost of sales consists of merchandise costs as well as freight, duty, and other costs to transport inventory to our distribution centers and stores. Cost of sales also includes costs for shrinkage, damaged product disposals, distribution, warehousing, sourcing, compliance, and arranging and paying for freight to deliver products to customers. The Company receives cash consideration from certain vendors related to vendor allowances and volume rebates, which is recorded as a reduction to the carrying value of inventory if the inventory is on hand and a reduction to cost of sales when the inventory is sold. Vendor Rebates and Allowances Vendor allowances consist primarily of volume rebates that are earned as a result of attaining certain inventory purchase levels and advertising allowances or incentives for the promotion of vendors' products. These vendor allowances are accrued as earned and are estimated based on annual projections. Vendor allowances earned are initially recorded as a reduction to the carrying value of inventory and a subsequent reduction in cost of sales when the related product is sold. Certain incentive allowances that are reimbursements of specific, incremental, and identifiable costs incurred to promote vendors’ products are recorded as an offset against these promotional expenses. |
Total Operating Expenses | Total Operating Expenses Total operating expenses consist primarily of store and administrative personnel wages and benefits, infrastructure expenses, supplies, fixed asset depreciation, store and corporate facility expenses, pre-opening costs, training costs, and advertising costs. Credit card fees, insurance, personal property taxes, legal expenses, and other miscellaneous operating costs are also included. |
Advertising Expenses | Advertising Expenses The Company expenses advertising costs as the advertising takes place. Advertising costs incurred during the fiscal years ended December 31, 2020, December 26, 2019, and December 27, 2018 were $66.6 million, $65.7 million, and $55.3 million, respectively, and are included in selling and store operating expenses and pre-opening expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income. |
Pre-Opening Expenses | Pre-Opening ExpensesThe Company accounts for non-capital operating expenditures incurred prior to opening a new store as "pre-opening" expenses in its Consolidated Statements of Operations and Comprehensive Income. The Company's pre-opening expenses begin on average three months to one year in advance of a store opening or relocating due to, among other things, the amount of time it takes to prepare a store for its grand opening. Pre-opening expenses primarily include: advertising, rent, staff training, staff recruiting, utilities, personnel, and equipment rental. A store is considered to be relocated if it is closed temporarily and re-opened within the same primary trade area. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for employee stock options, restricted stock, and employee stock purchase plans in accordance with ASC 718, Compensation – Stock Compensation . The Company obtains independent third-party valuation studies to assist with determining the grant date fair value of our stock price. Stock options are granted with exercise prices equal to or greater than the fair market value on the date of grant as authorized by the board of directors or compensation committee. Options granted have vesting provisions ranging from one year to five years. Stock option grants are generally subject to forfeiture if employment terminates prior to vesting. The Company has selected the Black-Scholes-Merton option pricing model for estimating the grant date fair value of stock option awards granted. The Company bases the risk-free interest rate on the yield of a zero coupon U.S. Treasury security with a maturity equal to the expected life of the option from the date of the grant. The Company estimates the dividend yield to be zero as the Company does not intend to pay dividends in the future. The Company estimates the volatility of the share price of its common stock by considering the historical volatility of the stock of similar public entities. The Company considers a number of factors in determining the appropriateness of the public entities included in the volatility assumption, including the entity's life cycle stage, growth profile, size, financial leverage, and products offered. Stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the requisite service period based on the number of years for which the requisite service is expected to be rendered. |
Income Taxes | Income Taxes The Company accounts for income taxes under the liability method in accordance with ASC 740, Income Taxes , which requires the recognition of deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts and tax basis of existing assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Changes in tax laws and rates could affect recorded deferred tax assets and liabilities in the future. The effect on deferred tax assets and liabilities of a change in tax laws or rates is recognized in the period that includes the enactment date of such a change. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the associated temporary differences became deductible. On a quarterly basis, the Company evaluates whether it is more likely than not that its deferred tax assets will be realized in the future and concludes whether a valuation allowance must be established. |
Segments | Segments The Company operates as a specialty retailer of hard surface flooring and related accessories through retail stores located in the United States and through its website. Operating segments are defined as components of an entity for which discrete financial information is available and that is regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it has one operating segment and one reportable segment as the CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. In addition, the Company concluded that economic and operating characteristics are similar across its retail operations, including the net sales, gross profit and gross margin, and operating income of its retail stores as well as the product offerings, marketing initiatives, operating procedures, store layouts, employee incentive programs, customers, methods of distribution, competitive and operating risks, and the level of shared resources across the business. |
Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Credit Losses. In June 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ,” which modifies the measurement approach for credit losses on financial assets measured on an amortized cost basis from an 'incurred loss' method to an 'expected loss' method. The amended guidance requires the measurement of expected credit losses to be based on relevant information, including historical experience, current conditions, and a reasonable and supportable forecast that affects the collectability of the related financial asset. The adoption of ASU No. 2016-13 in the first quarter of fiscal 2020 did not have a material impact on the Company’s consolidated financial statements. Implementation Costs Incurred in Cloud Computing Arrangements. In August 2018, the FASB issued ASU No. 2018-15, “ Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. ” ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. In the first quarter of fiscal 2020, the Company adopted ASU No. 2018-15 on a prospective basis for implementation costs for new or existing arrangements incurred on or after the adoption date. The adoption of ASU No. 2018-15 did not have a material impact on the Company’s consolidated financial statements. Leases. In February 2016, the FASB issued ASU No. 2016-2, “Leases (Topic 842).” ASU No. 2016-2 requires that lessees recognize lease assets and lease liabilities on the balance sheet with an option to exclude short-term leases (leases with terms of 12 months or less). The guidance also requires disclosures about the amount, timing, and uncertainty of cash flows arising from leases. We adopted ASU No. 2016-2 in the first quarter of fiscal 2019 using the modified retrospective approach. The cumulative effect adjustment upon adoption resulted in a $0.2 million opening balance sheet reduction to retained earnings. The adoption of ASU No. 2016-2 had a material impact on the Company’s Consolidated Balance Sheets but did not have a material impact on the Company’s Consolidated Statements of Operations and Comprehensive Income or Consolidated Statements of Cash Flows. See Note 9, “Commitments and Contingencies,” for additional information related to the Company’s leases. Revenue from Contracts with Customers. In May 2014, the FASB issued ASU No. 2014-9, “Revenue from Contracts with Customers (Topic 606).” ASU No. 2014-9 provides new guidance related to the core principle that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services provided. We adopted this standard in the first quarter of fiscal 2018 using the modified retrospective approach, effective December 29, 2017. The cumulative adjustment upon adoption primarily resulted in a reduction of deferred revenue and related inventories and an increase to retained earnings of $7.8 million, net of tax. The adoption of ASU No. 2014-9 did not have a material impact to the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements Reference Rate Reform. In March 2020, the FASB issued ASU No. 2020-04, “ Reference Rate Reform (Topic 848), ” which provides optional guidance to ease the potential accounting and financial reporting burden of reference rate reform, including the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The new guidance provides temporary optional expedients and exceptions for applying U.S. GAAP to transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedging relationships, and the sale or transfer of debt securities classified as held-to-maturity. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made. Unlike other topics, the provisions of this update are only available until December 31, 2022, by which time the reference rate replacement activity is expected to be completed. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures and has yet to elect an adoption date. Simplifying the Accounting for Income Taxes. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The ASU also clarifies and amends existing guidance to improve consistent application among reporting entities. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The adoption of ASU No. 2019-12 is not expected to have a material impact to the Company’s consolidated financial statements. |
Fair Value of Financial Instruments | As of December 31, 2020 and December 26, 2019, the Company had certain financial assets and liabilities on its 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 fair values as reported within the Consolidated Balance Sheets. Refer to Note 1, “Summary of Significant Accounting Policies” and Note 5, “Intangible Assets” for a discussion of the valuation of goodwill and intangible assets, respectively. See Note 10, “Debt” for discussion of the fair value of the Company’s debt.The Company also has outstanding interest rate cap contracts that were valued primarily using level 2 inputs based on data readily observable in public markets. The Company's interest rate cap contracts were negotiated with counterparties without going through a public exchange. Accordingly, the Company's fair value assessments for these derivative contracts gave consideration to the risk of counterparty default (as well as the Company's own credit risk). |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Fixed Assets Estimated Useful Lives | The Company’s fixed assets are depreciated using the following estimated useful lives: Useful Life Furniture, fixtures and equipment 2 - 7 years Leasehold improvements 10 - 25 years Buildings and building improvements 10 - 40 years Computer software and hardware 3 - 7 years Land Indefinite |
Schedule of Intangible Assets Estimated Lives | The estimated lives of the Company’s intangible assets are as follows: Useful Life Trade names Indefinite Vendor relationships 10 years |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregated Revenue | The following table presents the net sales of each major product category for each of the last three fiscal years (in thousands): Fiscal Year Ended December 31, December 26, December 27, Product Category Net Sales % of Net Sales Net Sales % of Net Sales Net Sales % of Net Sales Tile $ 605,357 25 % $ 523,076 26 % $ 476,337 27 % Laminate/luxury vinyl plank 555,963 23 442,171 22 316,109 18 Decorative accessories/wall tile (1) 485,076 19 393,908 19 325,139 19 Installation materials and tools 403,184 17 346,356 17 272,994 16 Wood 211,307 9 202,888 10 192,087 12 Natural stone 152,665 6 127,975 6 113,565 7 Other (2) 12,236 1 9,082 — 13,617 1 Total $ 2,425,788 100 % $ 2,045,456 100 % $ 1,709,848 100 % (1) Decorative accessories/wall tile includes adjacent categories revenue totaling $20.5 million and $7.3 million for the fiscal years ended December 31, 2020 and December 26, 2019, respectively. (2) Other includes delivery and sample revenue less adjustments for deferred revenue, sales return reserves, rewards under our Pro Premier Loyalty program, and other revenue related adjustments that are not allocated on a product-level basis. |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of accrued expenses | Accrued expenses and other current liabilities consist of the following (in thousands): December 31, December 26, Accrued incentive compensation $ 24,591 $ 18,635 Sales returns and allowances (1) 22,266 15,437 Sales tax payable 21,824 14,304 Accrued construction in progress new stores 20,818 10,043 Insurance reserve incurred but not reported 13,511 9,399 Wages and payroll tax payable 22,349 8,328 Loyalty program liability 12,073 6,649 Other (1) 24,851 20,012 Accrued expenses and other current liabilities $ 162,283 $ 102,807 (1) The liability for sales returns and allowances as of December 26, 2019 has been reclassified within this table from Other to Sales returns and allowances to conform to the current period presentation. |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | Fixed assets as of December 31, 2020 and December 26, 2019, consisted of the following (in thousands): December 31, December 26, Furniture, fixtures and equipment $ 259,696 $ 236,555 Leasehold improvements (1) 380,671 309,720 Computer software and hardware 138,321 113,975 Buildings and building improvements (1) 65,552 11,614 Land 30,731 8,715 Fixed assets, at cost 874,971 680,579 Less: accumulated depreciation and amortization 295,612 224,290 Fixed assets, net $ 579,359 $ 456,289 (1) Represents buildings and building improvements on land that the Company owns as well as on land that the Company is leasing through ground leases. Prior period fixed asset balances related to buildings and building improvements on ground leases have been reclassified from leasehold improvements to building and building improvements to conform to the current period presentation. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following summarizes the balances of identifiable intangible assets as of December 31, 2020 and December 26, 2019 (in thousands): December 31, December 26, Estimated Gross Accumulated Gross Accumulated Amortizable intangible asset: Vendor relationships 10 years $ 319 $ (319) $ 319 $ (289) Indefinite-lived intangible asset: Trade names 109,269 — 109,269 — Total $ 109,588 $ (319) $ 109,588 $ (289) |
Schedule of Indefinite-Lived Intangible Assets | The following summarizes the balances of identifiable intangible assets as of December 31, 2020 and December 26, 2019 (in thousands): December 31, December 26, Estimated Gross Accumulated Gross Accumulated Amortizable intangible asset: Vendor relationships 10 years $ 319 $ (319) $ 319 $ (289) Indefinite-lived intangible asset: Trade names 109,269 — 109,269 — Total $ 109,588 $ (319) $ 109,588 $ (289) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the provision for income taxes | The components of the provision for income taxes are as follows (in thousands): Fiscal Year Ended December 31, Fiscal Year Ended December 26, Fiscal Year Ended December 27, Current (benefit) / expense: Federal $ (1,781) $ 7,975 $ 5,496 State 4,391 2,358 1,669 Total current expense 2,610 10,333 7,165 Deferred expense / (benefit): Federal 11,684 (6,522) 922 State (2,070) (4,062) (1,890) Total deferred expense / (benefit) 9,614 (10,584) (968) Provision (benefit) for income taxes $ 12,224 $ (251) $ 6,197 |
Schedule of effective income tax reconciliation | The following is a summary of the differences between the total provision for income taxes as shown on the financial statements and the provision for income taxes that would result from applying the federal statutory tax rate of 21% for the fiscal years ended December 31, 2020, December 26, 2019, and December 27, 2018 to income before income taxes (in thousands). Fiscal Year Ended December 31, Fiscal Year Ended December 26, Fiscal Year Ended December 27, Computed “expected” provision at statutory rate $ 43,513 $ 31,580 $ 25,700 State income taxes, net of federal income tax benefit 1,493 (1,364) (627) Permanent differences: Excess tax benefit related to options exercised (27,003) (29,441) (17,478) Other 517 543 457 Total permanent differences (26,486) (28,898) (17,021) Change in U.S. tax rate — — (573) Provision to return (150) (282) (739) Federal tax credits (920) (1,306) (685) CARES Act benefit (7,676) — — Uncertain Tax Positions 2,724 — — Other, net (274) 19 142 Provision (benefit) for income taxes $ 12,224 $ (251) $ 6,197 |
Schedule of deferred tax assets and liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred income tax assets and (liabilities) are presented below (in thousands): Fiscal Year Ended December 31, Fiscal Year Ended December 26, Deferred tax assets: Accruals not currently deductible for tax purposes $ 8,293 $ 2,820 Inventories 6,941 5,283 Stock-based compensation 5,979 3,984 Other intangibles 268 313 Gift card liability 557 453 Litigation accrual 120 139 Lease liabilities 259,273 233,106 Other 10,732 3,718 Total deferred tax assets 292,163 249,816 Deferred tax liabilities: Intangible assets (27,053) (26,939) Fixed assets (62,374) (35,576) Right-of-use assets (227,166) (203,028) Other (3,560) (2,651) Total deferred tax liabilities (320,153) (268,194) Net deferred tax liabilities $ (27,990) $ (18,378) |
Schedule of Unrecognized Tax Benefits Roll Forward | : Fiscal Year Ended December 31, Fiscal Year Ended December 26, Fiscal Year Ended December 27, Unrecognized tax benefits balance at beginning of fiscal year $ 402 $ — $ — Additions based on tax positions related to the current year 281 282 — Additions for tax positions of prior years 5,424 120 — Unrecognized tax benefits balance at end of fiscal year $ 6,107 $ 402 $ — |
Derivatives and Risk Manageme_2
Derivatives and Risk Management (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative position | Derivative Position as of December 31, 2020: (in thousands) Notional Balance Final Maturity Date Other Assets AOCI, Net of Tax Designated as hedges: Interest rate cap (cash flow hedge) $ 102,500 U.S. dollars December 2021 $ — $ (89) Not designated as hedges: Interest rate cap $ 102,500 U.S. dollars December 2021 $ — $ (75) Derivative Position as of December 26, 2019: (in thousands) Notional Balance Final Maturity Other AOCI, Net Designated as hedges: Interest rate cap (cash flow hedge) $ 102,500 U.S. dollars December 2021 $ 20 $ 236 Not designated as hedges: Interest rate cap $ 102,500 U.S. dollars December 2021 $ — $ (43) |
Schedule of gains (losses) related to our designated hedge contracts | Gains (losses) related to our designated hedge contracts are as follows: Effective Portion Reclassified Effective Portion Recognized in Fiscal Year Ended Fiscal Year Ended (in thousands) December 31, December 26, December 27, December 31, December 26, December 27, Interest rate cap (cash flow hedge) $ — $ — $ — $ 357 $ (379) $ 391 Interest rate swaps (cash flow hedges) $ — $ — $ — $ — $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of supplemental balance sheet information related to operating leases | The table below presents supplemental balance sheet information related to operating leases. in thousands, except lease term and discount rate Classification As of December 31, 2020 As of December 26, 2019 Assets Building Right-of-use assets $ 851,092 $ 808,989 Equipment Right-of-use assets 6,865 7,322 Land Right-of-use assets 56,708 2,378 Software Right-of-use assets 1,660 3,567 Total operating lease assets 916,325 822,256 Liabilities Current Building Current portion of lease liabilities 88,287 67,500 Equipment Current portion of lease liabilities 3,941 3,758 Land Current portion of lease liabilities 440 170 Software Current portion of lease liabilities 1,834 3,164 Total current operating lease liabilities 94,502 74,592 Noncurrent Building Lease liabilities 873,098 837,510 Equipment Lease liabilities 2,924 3,902 Land Lease liabilities 65,103 2,357 Software Lease liabilities — 500 Total noncurrent operating lease liabilities 941,125 844,269 Total operating lease liabilities $ 1,035,627 $ 918,861 Weighted-average remaining lease term 11 years 10 years Weighted-average discount rate 5.3% 5.3% |
Schedule of components of lease expense | The table below presents components of lease expense for operating leases. Fiscal Year Ended in thousands Classification December 31, 2020 December 26, 2019 (3) Fixed operating lease cost: Selling and store operating $ 105,207 $ 87,124 Cost of sales 22,672 17,132 Pre-opening 7,886 5,959 General and administrative 4,118 2,272 Total fixed operating lease cost $ 139,883 $ 112,487 Variable lease cost (1): Selling and store operating $ 34,499 $ 28,894 Cost of sales 4,860 3,570 Pre-opening 657 151 General and administrative 151 5 Total variable lease cost $ 40,167 $ 32,620 Sublease income Cost of sales (2,713) (2,414) Operating lease right-of-use asset impairment General and administrative — 4,136 Total operating lease cost (2) $ 177,337 $ 146,829 (1) Includes variable costs for common area maintenance, property taxes, and insurance on leased real estate. (2) Excludes short-term lease costs, which were immaterial for the fiscal years ended December 31, 2020 and December 26, 2019. (3) To conform to the current period presentation, the presentation of the components of operating lease expense for the fiscal year ended December 26, 2019 has been updated within this table to provide disclosure of variable lease costs and additional information related to the classification of operating lease costs within the Consolidated Statements of Operations and Comprehensive Income. |
Schedule of future minimum lease payments under non cancelable operating leases | Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2020, were: in thousands Amount 2021 $ 145,813 2022 141,815 2023 136,289 2024 133,866 2025 125,790 Thereafter 713,557 Total minimum lease payments (1) (2) 1,397,130 Less: amount of lease payments representing interest 361,503 Present value of future minimum lease payments 1,035,627 Less: current obligations under leases 94,502 Long-term lease obligations $ 941,125 (1) Future lease payments exclude approximately $132.9 million of legally binding minimum lease payments for operating leases signed but not yet commenced. (2) Operating lease payments include $59.3 million related to options to extend lease terms that are reasonably certain of being exercised. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | The following table summarizes the Company's long-term debt as of December 31, 2020 and December 26, 2019 (dollars in thousands): Maturity Date Interest Rate Per Annum at December 31, December 31, December 26, Credit Facilities: UBS Facility Term Loan B February 14, 2027 2.15% Variable $ 143,179 $ 145,500 UBS Facility Term Loan B-1 February 14, 2027 5.00% Variable 74,625 — Wells Facility Revolving Line of Credit February 14, 2025 3.50% Variable — — Total secured debt at par value 217,804 145,500 Less: current maturities 1,647 — Long-term debt maturities 216,157 145,500 Less: unamortized discount and debt issuance costs 9,000 2,894 Total long-term debt $ 207,157 $ 142,606 |
Schedule of Maturities of Debt | The following table summarizes scheduled maturities of the Company’s debt, including current maturities, as of December 31, 2020: in thousands Amount 2021 $ 1,647 2022 2,196 2023 2,196 2024 2,196 2025 2,384 Thereafter (1) 207,185 Total minimum debt payments $ 217,804 (1)Thereafter maturities are comprised of $136.3 million due under the term loan B facility and $70.9 million due under the term loan B-1 facility through February 14, 2027. |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | At December 31, 2020 and December 26, 2019, the fair values of the Company’s debt are as follows (in thousands): in thousands December 31, December 26, Total debt at par value $ 217,804 $ 145,500 Less: unamortized discount and debt issuance costs 9,000 2,894 Net carrying amount 208,804 142,606 Fair value $ 215,626 $ 145,136 |
Schedule of Components of Interest Expense | Components of interest expense are as follows for the periods presented: Fiscal Year Ended in thousands December 31, December 26, December 27, Total interest costs $ 9,606 $ 8,801 $ 8,917 Interest capitalized 1,217 — — Interest expense, net $ 8,389 $ 8,801 $ 8,917 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of assumptions used to estimate the fair value of stock option awards granted | The fair value of stock option awards granted was estimated using the Black-Scholes-Merton option pricing model with the following weighted-average assumptions: Fiscal Year Ended December 31, Fiscal Year Ended December 26, Fiscal Year Ended December 27, Weighted average fair value per stock option $ 22.27 $ 20.38 $ 15.63 Risk-free interest rate 1.17% 2.06% 3.05% Expected volatility 39% 45% 45% Expected life (in years) 5.75 6.68 6.29 Dividend yield —% —% —% |
Schedule of stock option activity | The table below summarizes stock option activity for the fiscal year ended December 31, 2020: Options Weighted Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 26, 2019 6,037,079 $ 13.64 Granted 294,563 58.15 Exercised (2,485,427) 7.75 Forfeited or expired (105,611) 25.71 Outstanding at December 31, 2020 3,740,604 $ 20.72 5.9 $ 269,794 Vested and exercisable at December 31, 2020 2,071,137 $ 13.22 4.8 $ 164,918 |
Schedule of restricted stock unit activity | The following table summarizes restricted stock unit activity during the fiscal year ended December 31, 2020: Restricted Stock Units Weighted Average Grant Date Fair Value Unvested at December 27, 2019 — $ — Granted 133,256 59.24 Vested — — Forfeited (5,036) 55.08 Unvested at December 31, 2020 128,220 $ 59.40 |
Schedule of restricted stock award activity | The following table summarizes restricted stock award activity during the fiscal year ended December 31, 2020: Restricted Stock Awards Service-based Performance-based TSR Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Unvested at December 27, 2019 37,032 $ 35.78 — $ — — $ — Granted 103,767 57.84 160,315 57.70 104,456 44.28 Vested (8,955) 27.23 — — — — Forfeited — — — — — — Unvested at December 31, 2020 131,844 $ 53.72 160,315 $ 57.70 104,456 $ 44.28 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted earnings per share | The following table shows the computation of basic and diluted earnings per share for the periods presented: in thousands, except per share data Fiscal Year Ended December 31, Fiscal Year Ended December 26, Fiscal Year Ended December 27, Net income $ 194,981 $ 150,631 $ 116,187 Basic weighted average shares outstanding 102,690 99,435 96,770 Dilutive effect of share-based awards 3,452 5,527 7,791 Diluted weighted average shares outstanding 106,142 104,962 104,561 Basic earnings per share $ 1.90 $ 1.51 $ 1.20 Diluted earnings per share $ 1.84 $ 1.44 $ 1.11 |
Schedule of awards excluded from computation | The following potentially dilutive securities were excluded from the calculation of diluted earnings per share as a result of their anti-dilutive effect: in thousands Fiscal Year Ended December 31, Fiscal Year Ended December 26, Fiscal Year Ended December 27, Stock options 320 971 298 |
Selected Quarterly Financial _2
Selected Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information | The following tables present the Company’s unaudited quarterly results for fiscal 2020 and fiscal 2019. Fiscal 2020 (in thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 554,937 $ 462,352 $ 684,847 $ 723,652 Gross profit 236,032 196,692 294,628 307,540 Net income 37,063 32,004 68,774 57,140 Basic earnings per share 0.36 0.31 0.67 0.55 Diluted earnings per share 0.35 0.30 0.65 0.54 Fiscal 2019 (in thousands, except per share data) First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 477,050 $ 520,311 $ 521,093 $ 527,002 Gross profit 201,374 217,823 213,788 230,029 Net income 30,720 43,596 40,974 35,341 Basic earnings per share 0.31 0.44 0.41 0.35 Diluted earnings per share 0.29 0.42 0.39 0.34 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) ft² in Thousands | 1 Months Ended | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||||
Dec. 26, 2019USD ($) | Dec. 26, 2019USD ($) | Nov. 20, 2019USD ($) | Dec. 31, 2020USD ($)ft²storedesignCenterstatedistributionCentersegment | Dec. 26, 2019USD ($) | Dec. 27, 2018USD ($) | May 18, 2020USD ($) | Dec. 28, 2017USD ($) | |
Real Estate Properties [Line Items] | ||||||||
Number of reportable segments | segment | 1 | |||||||
Number of states with facilities | state | 31 | |||||||
Number of distribution centers | distributionCenter | 4 | |||||||
Allowance for doubtful accounts | $ 300,000 | $ 300,000 | $ 300,000 | $ 300,000 | ||||
Tariff recoveries expected | 24,300,000 | |||||||
Tariff recoveries received | 12,900,000 | |||||||
Tariff recoveries receivable | 19,300,000 | 19,300,000 | 11,400,000 | 19,300,000 | ||||
Reduction to cost of sales related to tariff refunds | 3,000,000 | 14,000,000 | $ 11,000,000 | 4,500,000 | ||||
Interest income earned on anticipated tariff recoveries | 600,000 | 300,000 | ||||||
Reduction to carrying cost of inventory related to tariff refunds | 5,000,000 | 5,000,000 | 5,000,000 | |||||
Exposure from credit program | 1,000,000 | 1,000,000 | 1,200,000 | 1,000,000 | ||||
Inventory valuation reserves | 4,468,000 | 4,468,000 | 5,434,000 | 4,468,000 | ||||
Rent payments delayed or deferred | 5,500,000 | |||||||
Negative lease expense related to rent abatement concessions | 100,000 | |||||||
Maximum loss before additional coverage applies | $ 11,000,000 | |||||||
Number of days customer may return merchandise | 90 days | |||||||
Gift card breakage income | $ 1,500,000 | 1,200,000 | $ 1,600,000 | |||||
Loyalty program award, as a percentage of selling price | 1.00% | |||||||
Loyalty program breakage income | $ 1,400,000 | 1,100,000 | 400,000 | |||||
Allowance for sales returns | 15,437,000 | 15,437,000 | 22,266,000 | 15,437,000 | ||||
Advertising expense | 66,600,000 | 65,700,000 | 55,300,000 | |||||
Pre-opening expenses | $ 21,498,000 | 24,594,000 | 26,145,000 | |||||
Number of operating segments | segment | 1 | |||||||
Cumulative effect adjustment to retained earnings upon adoption | 764,336,000 | 764,336,000 | $ 997,388,000 | 764,336,000 | 584,309,000 | $ 442,860,000 | ||
Incremental term loan | ||||||||
Real Estate Properties [Line Items] | ||||||||
Face amount of debt | $ 75,000,000 | |||||||
Operating Lease, Liability, Current | ||||||||
Real Estate Properties [Line Items] | ||||||||
Rent payments delayed or deferred | 4,500,000 | |||||||
Operating Lease, Liability, Noncurrent | ||||||||
Real Estate Properties [Line Items] | ||||||||
Rent payments delayed or deferred | 1,000,000 | |||||||
Retained earnings | ||||||||
Real Estate Properties [Line Items] | ||||||||
Cumulative effect adjustment to retained earnings upon adoption | $ 394,015,000 | $ 394,015,000 | $ 588,996,000 | $ 394,015,000 | 243,563,000 | 119,550,000 | ||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Real Estate Properties [Line Items] | ||||||||
Cumulative effect adjustment to retained earnings upon adoption | (179,000) | 7,826,000 | ||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained earnings | ||||||||
Real Estate Properties [Line Items] | ||||||||
Cumulative effect adjustment to retained earnings upon adoption | $ (179,000) | 7,826,000 | ||||||
Minimum | ||||||||
Real Estate Properties [Line Items] | ||||||||
Receivables collection period (in days) | 3 days | |||||||
Period prior to store opening or relocation that pre-opening expenses begin | 3 months | |||||||
Maximum | ||||||||
Real Estate Properties [Line Items] | ||||||||
Receivables collection period (in days) | 5 days | |||||||
Period prior to store opening or relocation that pre-opening expenses begin | 1 year | |||||||
Warehouse format store | ||||||||
Real Estate Properties [Line Items] | ||||||||
Number of stores | store | 133 | |||||||
Area of facility | ft² | 78 | |||||||
Small format store | ||||||||
Real Estate Properties [Line Items] | ||||||||
Number of stores | designCenter | 2 | |||||||
Stock options | ||||||||
Real Estate Properties [Line Items] | ||||||||
Vesting period (in years) | 4 years | |||||||
Dividend yield | 0.00% | 0.00% | 0.00% | |||||
Stock options | Minimum | ||||||||
Real Estate Properties [Line Items] | ||||||||
Vesting period (in years) | 1 year | |||||||
Stock options | Maximum | ||||||||
Real Estate Properties [Line Items] | ||||||||
Vesting period (in years) | 5 years | |||||||
Employee Stock | ||||||||
Real Estate Properties [Line Items] | ||||||||
Dividend yield | 0.00% | |||||||
Accounting Standards Update 2016-02 | Cumulative Effect, Period of Adoption, Adjustment | Retained earnings | ||||||||
Real Estate Properties [Line Items] | ||||||||
Cumulative effect adjustment to retained earnings upon adoption | $ (200,000) | |||||||
Accounting Standards Update 2014-09 | Cumulative Effect, Period of Adoption, Adjustment | Retained earnings | ||||||||
Real Estate Properties [Line Items] | ||||||||
Cumulative effect adjustment to retained earnings upon adoption | $ 7,800,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Fixed Assets Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | Furniture, fixtures and equipment | |
Property, Plant and Equipment [Line Items] | |
Useful Life, fixed assets (in years) | 2 years |
Minimum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Useful Life, fixed assets (in years) | 10 years |
Minimum | Buildings and building improvements | |
Property, Plant and Equipment [Line Items] | |
Useful Life, fixed assets (in years) | 10 years |
Minimum | Computer software and hardware | |
Property, Plant and Equipment [Line Items] | |
Useful Life, fixed assets (in years) | 3 years |
Maximum | Furniture, fixtures and equipment | |
Property, Plant and Equipment [Line Items] | |
Useful Life, fixed assets (in years) | 7 years |
Maximum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Useful Life, fixed assets (in years) | 25 years |
Maximum | Buildings and building improvements | |
Property, Plant and Equipment [Line Items] | |
Useful Life, fixed assets (in years) | 40 years |
Maximum | Computer software and hardware | |
Property, Plant and Equipment [Line Items] | |
Useful Life, fixed assets (in years) | 7 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Intangible Assets Estimated Lives (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Vendor relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life (in years) | 10 years |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 26, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Contract liabilities | $ 24,800 | $ 15,500 |
Deferred revenue | 10,115 | 6,683 |
Deferred revenue, loyalty program | 12,100 | 6,600 |
Deferred revenue, unredeemed gift cards | 2,600 | $ 2,200 |
Contract liabilities, revenue recognized | $ 8,200 |
Revenues - Disaggregated Revenu
Revenues - Disaggregated Revenue (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020USD ($) | Sep. 24, 2020USD ($) | Jun. 25, 2020USD ($) | Mar. 26, 2020USD ($) | Dec. 26, 2019USD ($) | Sep. 26, 2019USD ($) | Jun. 27, 2019USD ($) | Mar. 28, 2019USD ($) | Dec. 31, 2020USD ($)segment | Dec. 26, 2019USD ($) | Dec. 27, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | |||||||||||
Number of operating segments | segment | 1 | ||||||||||
Number of reportable segments | segment | 1 | ||||||||||
Net sales | $ 723,652 | $ 684,847 | $ 462,352 | $ 554,937 | $ 527,002 | $ 521,093 | $ 520,311 | $ 477,050 | $ 2,425,788 | $ 2,045,456 | $ 1,709,848 |
Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 1,709,848 | ||||||||||
Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 100.00% | 100.00% | |||||||||
Revenue from contract with customer, product and service benchmark | Product concentration risk | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 100.00% | ||||||||||
Tile | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 605,357 | $ 523,076 | |||||||||
Tile | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 476,337 | ||||||||||
Tile | Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 25.00% | 26.00% | |||||||||
Tile | Revenue from contract with customer, product and service benchmark | Product concentration risk | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 27.00% | ||||||||||
Laminate/luxury vinyl plank | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 555,963 | $ 442,171 | |||||||||
Laminate/luxury vinyl plank | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 316,109 | ||||||||||
Laminate/luxury vinyl plank | Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 23.00% | 22.00% | |||||||||
Laminate/luxury vinyl plank | Revenue from contract with customer, product and service benchmark | Product concentration risk | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 18.00% | ||||||||||
Decorative accessories/wall tile | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 485,076 | $ 393,908 | |||||||||
Decorative accessories/wall tile | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 325,139 | ||||||||||
Decorative accessories/wall tile | Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 19.00% | 19.00% | |||||||||
Decorative accessories/wall tile | Revenue from contract with customer, product and service benchmark | Product concentration risk | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 19.00% | ||||||||||
Installation materials and tools | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 403,184 | $ 346,356 | |||||||||
Installation materials and tools | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 272,994 | ||||||||||
Installation materials and tools | Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 17.00% | 17.00% | |||||||||
Installation materials and tools | Revenue from contract with customer, product and service benchmark | Product concentration risk | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 16.00% | ||||||||||
Wood | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 211,307 | $ 202,888 | |||||||||
Wood | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 192,087 | ||||||||||
Wood | Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 9.00% | 10.00% | |||||||||
Wood | Revenue from contract with customer, product and service benchmark | Product concentration risk | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 12.00% | ||||||||||
Natural stone | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 152,665 | $ 127,975 | |||||||||
Natural stone | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 113,565 | ||||||||||
Natural stone | Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 6.00% | 6.00% | |||||||||
Natural stone | Revenue from contract with customer, product and service benchmark | Product concentration risk | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 7.00% | ||||||||||
Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 12,236 | $ 9,082 | |||||||||
Other | Calculated under revenue guidance in effect before topic 606 | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 13,617 | ||||||||||
Other | Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 1.00% | 0.00% | 1.00% | ||||||||
Decorative accessories/wall tile adjacent categories | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 20,500 | $ 7,300 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 26, 2019 |
Accrued Liabilities, Current [Abstract] | ||
Accrued incentive compensation | $ 24,591 | $ 18,635 |
Sales return and allowances | 22,266 | 15,437 |
Sales tax payable | 21,824 | 14,304 |
Accrued construction in progress new stores | 20,818 | 10,043 |
Insurance reserve incurred but not reported | 13,511 | 9,399 |
Wages and payroll tax payable | 22,349 | 8,328 |
Loyalty program liability | 12,073 | 6,649 |
Other | 24,851 | 20,012 |
Accrued expenses and other current liabilities | $ 162,283 | $ 102,807 |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | $ 874,971 | $ 680,579 | |
Less: accumulated depreciation and amortization | 295,612 | 224,290 | |
Fixed assets, net | 579,359 | 456,289 | |
Depreciation and amortization | 90,100 | 69,900 | $ 50,500 |
Furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | 259,696 | 236,555 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | 380,671 | 309,720 | |
Computer software and hardware | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | 138,321 | 113,975 | |
Buildings and building improvements | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | 65,552 | 11,614 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | $ 30,731 | $ 8,715 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Intangible Assets [Line Items] | |||
Total | $ 109,588 | $ 109,588 | |
Accumulated Amortization | (319) | (289) | |
Amortization of intangible assets | 30 | 31 | $ 32 |
Trade names | |||
Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 109,269 | 109,269 | |
Vendor relationships | |||
Intangible Assets [Line Items] | |||
Estimated Useful Lives (in years) | 10 years | ||
Gross Carrying Amount | $ 319 | 319 | |
Accumulated Amortization | $ (319) | $ (289) |
Income Taxes - Provision (Detai
Income Taxes - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Current (benefit) / expense: | |||
Federal | $ (1,781) | $ 7,975 | $ 5,496 |
State | 4,391 | 2,358 | 1,669 |
Total current expense | 2,610 | 10,333 | 7,165 |
Deferred expense / (benefit): | |||
Federal | 11,684 | (6,522) | 922 |
State | (2,070) | (4,062) | (1,890) |
Total deferred expense / (benefit) | 9,614 | (10,584) | (968) |
Provision (benefit) for income taxes | $ 12,224 | $ (251) | $ 6,197 |
Income Taxes - Effective rate r
Income Taxes - Effective rate reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | Dec. 28, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Federal statutory tax rate (as a percent) | 21.00% | 35.00% | ||
Computed “expected” provision at statutory rate | $ 43,513 | $ 31,580 | $ 25,700 | |
State income taxes, net of federal income tax benefit | 1,493 | (1,364) | (627) | |
Excess tax benefit related to options exercised | (27,003) | (29,441) | (17,478) | |
Other | 517 | 543 | 457 | |
Total permanent differences | (26,486) | (28,898) | (17,021) | |
Change in U.S. tax rate | 0 | 0 | (573) | |
Provision to return | (150) | (282) | (739) | |
Federal tax credits | (920) | (1,306) | (685) | |
CARES Act benefit | (7,676) | 0 | 0 | |
Uncertain Tax Positions | 2,724 | 0 | 0 | |
Other, net | (274) | 19 | 142 | |
Provision (benefit) for income taxes | $ 12,224 | $ (251) | $ 6,197 |
Income Taxes - Tax Cuts and Job
Income Taxes - Tax Cuts and Jobs Act (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 27, 2018 | Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | Dec. 28, 2017 | |
Effect of Tax Cuts and Jobs Act [Abstract] | |||||
Excess tax benefit related to options exercised | $ 27,003 | $ 29,441 | $ 17,478 | ||
Federal statutory tax rate (as a percent) | 21.00% | 35.00% | |||
Adjustment to provisional amount | $ 18,500 | ||||
State and Local Jurisdiction | |||||
Effect of Tax Cuts and Jobs Act [Abstract] | |||||
Excess tax benefit related to options exercised | $ 5,300 | $ 5,600 | $ 3,300 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 26, 2019 |
Deferred tax assets: | ||
Accruals not currently deductible for tax purposes | $ 8,293 | $ 2,820 |
Inventories | 6,941 | 5,283 |
Stock-based compensation | 5,979 | 3,984 |
Other intangibles | 268 | 313 |
Gift card liability | 557 | 453 |
Litigation accrual | 120 | 139 |
Lease liabilities | 259,273 | 233,106 |
Other | 10,732 | 3,718 |
Total deferred tax assets | 292,163 | 249,816 |
Deferred tax liabilities: | ||
Intangible assets | (27,053) | (26,939) |
Fixed assets | (62,374) | (35,576) |
Right-of-use assets | (227,166) | (203,028) |
Other | (3,560) | (2,651) |
Total deferred tax liabilities | (320,153) | (268,194) |
Net deferred tax liabilities | $ (27,990) | $ (18,378) |
Income Taxes - Valuation and Un
Income Taxes - Valuation and Unrecognized (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Income Taxes [Line Items] | |||
State net operating losses | $ (207,205,000) | $ (150,380,000) | $ (122,384,000) |
Valuation allowance | 0 | 0 | |
State and Local Jurisdiction | |||
Income Taxes [Line Items] | |||
State net operating losses | 100,000 | $ 700,000 | |
Net operating losses available to reduce future income taxes | $ 3,000,000 |
Income Taxes - CARES Act (Detai
Income Taxes - CARES Act (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 25, 2020 | Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Income Taxes [Line Items] | ||||
Income tax benefit | $ (12,224) | $ 251 | $ (6,197) | |
Estimated cash refunds | 28,400 | |||
Deferred employer social security taxes | $ 12,100 | |||
Employer social security taxes required to be deposited by December 2021 | 50.00% | |||
Employer social security taxes required to be deposited by December 2022 | 50.00% | |||
Employee retention credit recorded | $ 1,700 | |||
Accrued expenses and other current liabilities | ||||
Income Taxes [Line Items] | ||||
Deferred employer social security taxes | 6,100 | |||
Other liabilities | ||||
Income Taxes [Line Items] | ||||
Deferred employer social security taxes | 6,000 | |||
Offset to selling and store operating expenses | ||||
Income Taxes [Line Items] | ||||
Employee retention credit recorded | 1,500 | |||
Offset to general and administrative expenses | ||||
Income Taxes [Line Items] | ||||
Employee retention credit recorded | $ 200 | |||
Fiscal 2019 | ||||
Income Taxes [Line Items] | ||||
Income tax benefit | $ 7,700 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits balance at beginning of fiscal year | $ 402,000 | $ 0 | $ 0 |
Additions based on tax positions related to the current year | 281,000 | 282,000 | 0 |
Additions for tax positions of prior years | 5,424,000 | 120,000 | 0 |
Unrecognized tax benefits balance at end of fiscal year | 6,107,000 | 402,000 | 0 |
Unrecognized tax benefits that would impact the effective tax rate | 1,900,000 | 0 | 0 |
Decrease in unrecognized tax benefits is reasonably possible | 5,400,000 | ||
Unrecognized tax benefits, interest on income taxes expense | $ 600,000 | $ 0 | $ 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 26, 2019 |
Recurring | Level 2 | Interest Rate Cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate cap | $ 0.1 | $ 0.1 |
Derivatives and Risk Manageme_3
Derivatives and Risk Management (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Other Comprehensive Income (Loss), before Tax [Abstract] | |||
Other comprehensive income gain (loss), net of tax | $ 357 | $ (379) | $ 391 |
Interest Rate Cap | |||
Derivative [Line Items] | |||
AOCI, Net of Tax | 0 | 0 | 0 |
Other Comprehensive Income (Loss), before Tax [Abstract] | |||
Effective Portion Reclassified From AOCI to Earnings | 0 | 0 | 0 |
Other comprehensive income gain (loss), net of tax | 357 | (379) | 391 |
Interest Rate Swap | |||
Derivative [Line Items] | |||
AOCI, Net of Tax | 0 | 0 | 0 |
Other Comprehensive Income (Loss), before Tax [Abstract] | |||
Effective Portion Reclassified From AOCI to Earnings | 0 | 0 | 0 |
Other comprehensive income gain (loss), net of tax | 0 | 0 | $ 0 |
Designated as hedging instrument | Interest Rate Cap | |||
Derivative [Line Items] | |||
Notional Balance | 102,500 | 102,500 | |
Other Assets | 0 | 20 | |
AOCI, Net of Tax | (89) | 236 | |
Other Comprehensive Income (Loss), before Tax [Abstract] | |||
Effective Portion Reclassified From AOCI to Earnings | (89) | 236 | |
Not designated as hedging instrument | Interest Rate Cap | |||
Derivative [Line Items] | |||
Notional Balance | 102,500 | 102,500 | |
Other Assets | 0 | 0 | |
AOCI, Net of Tax | (75) | (43) | |
Other Comprehensive Income (Loss), before Tax [Abstract] | |||
Effective Portion Reclassified From AOCI to Earnings | $ (75) | $ (43) |
Commitment and Contingencies -
Commitment and Contingencies - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020USD ($)distributionCenterlease | Mar. 26, 2020USD ($) | Dec. 26, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets | $ 916,325 | $ 822,256 | |
Operating lease liability | $ 1,035,627 | $ 918,861 | |
Number of leases with variable payments | lease | 1 | ||
Number of distribution centers subleased | distributionCenter | 1 | ||
Weighted average discount rate | 5.30% | 5.30% | |
Weighted average remaining lease term (in years) | 11 years | 10 years | |
Accounting Standards Update 2016-02 | |||
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets | $ 620,800 | ||
Operating lease liability | $ 683,000 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Lease term (in years) | 10 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Lease term (in years) | 20 years |
Commitments and Contingencies -
Commitments and Contingencies - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 26, 2019 | Dec. 31, 2020 | Dec. 26, 2019 | |
Lease Commitments | |||
Right-of-use assets | $ 916,325 | $ 822,256 | |
Less: current obligations under leases | 94,502 | 74,592 | |
Long-term lease obligations | 941,125 | 844,269 | |
Present value of future minimum lease payments | $ 1,035,627 | $ 918,861 | |
Weighted average remaining lease term (in years) | 11 years | 10 years | |
Weighted average discount rate | 5.30% | 5.30% | |
Lease, Cost [Abstract] | |||
Total fixed operating lease cost | $ 139,883 | $ 112,487 | |
Total variable lease cost | 40,167 | 32,620 | |
Sublease income | (2,713) | (2,414) | |
Operating lease right-of-use asset impairment | $ 4,100 | 0 | 4,136 |
Total operating lease cost | 177,337 | 146,829 | |
Selling and store operating | |||
Lease, Cost [Abstract] | |||
Total fixed operating lease cost | 105,207 | 87,124 | |
Total variable lease cost | 34,499 | 28,894 | |
Cost of sales | |||
Lease, Cost [Abstract] | |||
Total fixed operating lease cost | 22,672 | 17,132 | |
Total variable lease cost | 4,860 | 3,570 | |
Pre-opening | |||
Lease, Cost [Abstract] | |||
Total fixed operating lease cost | 7,886 | 5,959 | |
Total variable lease cost | 657 | 151 | |
General and administrative | |||
Lease, Cost [Abstract] | |||
Total fixed operating lease cost | 4,118 | 2,272 | |
Total variable lease cost | 151 | 5 | |
Building | |||
Lease Commitments | |||
Right-of-use assets | 851,092 | 808,989 | |
Less: current obligations under leases | 88,287 | 67,500 | |
Long-term lease obligations | 873,098 | 837,510 | |
Equipment | |||
Lease Commitments | |||
Right-of-use assets | 6,865 | 7,322 | |
Less: current obligations under leases | 3,941 | 3,758 | |
Long-term lease obligations | 2,924 | 3,902 | |
Land | |||
Lease Commitments | |||
Right-of-use assets | 56,708 | 2,378 | |
Less: current obligations under leases | 440 | 170 | |
Long-term lease obligations | 65,103 | 2,357 | |
Software | |||
Lease Commitments | |||
Right-of-use assets | 1,660 | 3,567 | |
Less: current obligations under leases | 1,834 | 3,164 | |
Long-term lease obligations | $ 0 | $ 500 |
Commitments and Contingencies_2
Commitments and Contingencies - Lease Maturity (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 26, 2019 | Sep. 26, 2019 | Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Undiscounted Cash Flows | |||||
2021 | $ 145,813 | ||||
2022 | 141,815 | ||||
2023 | 136,289 | ||||
2024 | 133,866 | ||||
2025 | 125,790 | ||||
Thereafter | 713,557 | ||||
Total minimum lease payments | 1,397,130 | ||||
Less: amount of lease payments representing interest | 361,503 | ||||
Present value of future minimum lease payments | $ 918,861 | 1,035,627 | $ 918,861 | ||
Less: current obligations under leases | 74,592 | 94,502 | 74,592 | ||
Long-term lease obligations | 844,269 | 941,125 | 844,269 | ||
Minimum lease payments for leases not yet commenced | 132,900 | ||||
Minimum lease payments for options to extend lease terms | 59,300 | ||||
Cash paid during the period against operating lease liabilities | 131,300 | 112,800 | |||
Operating lease, right-of-use asset impairment | $ 4,100 | 0 | 4,136 | ||
Operating lease termination | $ 1,900 | $ 0 | $ 1,926 | $ 0 |
Debt - Summary of Long-term Deb
Debt - Summary of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Feb. 14, 2020 | Dec. 26, 2019 |
Debt Instrument [Line Items] | |||
Total secured debt at par value | $ 217,804 | $ 144,600 | $ 145,500 |
Less: current maturities | 1,647 | 0 | |
Long-term debt maturities | 216,157 | 145,500 | |
Less: unamortized discount and debt issuance costs | 9,000 | 2,894 | |
Net carrying amount | $ 207,157 | 142,606 | |
UBS Facility Term Loan B | |||
Debt Instrument [Line Items] | |||
Interest rate at end of period (as a percent) | 2.15% | ||
Total secured debt at par value | $ 143,179 | 145,500 | |
UBS Facility Term Loan B-1 | |||
Debt Instrument [Line Items] | |||
Interest rate at end of period (as a percent) | 5.00% | ||
Total secured debt at par value | $ 74,625 | 0 | |
Line of Credit | Wells Facility Revolving Line of Credit | |||
Debt Instrument [Line Items] | |||
Interest rate at end of period (as a percent) | 3.50% | ||
Total secured debt at par value | $ 0 | $ 0 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Feb. 14, 2020 | Dec. 26, 2019 |
Debt Instrument [Line Items] | |||
2021 | $ 1,647 | ||
2022 | 2,196 | ||
2023 | 2,196 | ||
2024 | 2,196 | ||
2025 | 2,384 | ||
Thereafter | 207,185 | ||
Total secured debt at par value | 217,804 | $ 144,600 | $ 145,500 |
UBS Facility Term Loan B | |||
Debt Instrument [Line Items] | |||
Thereafter | 136,300 | ||
Total secured debt at par value | 143,179 | 145,500 | |
UBS Facility Term Loan B-1 | |||
Debt Instrument [Line Items] | |||
Thereafter | 70,900 | ||
Total secured debt at par value | $ 74,625 | $ 0 |
Debt - Schedule of Components o
Debt - Schedule of Components of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Debt Disclosure [Abstract] | |||
Total interest costs | $ 9,606 | $ 8,801 | $ 8,917 |
Interest capitalized | 1,217 | 0 | 0 |
Interest expense, net | $ 8,389 | $ 8,801 | $ 8,917 |
Debt - Term Loan Facility (Narr
Debt - Term Loan Facility (Narrative) (Details) - USD ($) | May 18, 2020 | Feb. 14, 2020 | Feb. 13, 2020 | Jun. 25, 2020 | Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 |
Debt Instrument [Line Items] | |||||||
Principle amount | $ 144,600,000 | $ 217,804,000 | $ 145,500,000 | ||||
Proceeds from term loan facility | 75,000,000 | 0 | $ 0 | ||||
Fees to creditors | 6,882,000 | 0 | 170,000 | ||||
Gain (loss) on extinguishment of debt | 1,015,000 | 0 | $ 0 | ||||
Term Loan Facility Accordion Feature | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing capacity | $ 270,000,000 | ||||||
Borrowing capacity as a percentage of EBITDA | 100.00% | ||||||
Amended Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Principle amount | $ 143,179,000 | 145,500,000 | |||||
Consolidated First Lien Leverage Ratio | 2.50 | ||||||
Consolidated Secured Leverage Ratio | 3.50 | ||||||
Consolidated Total Leverage Ratio | 3.50 | ||||||
Applicable interest rate (as a percent) | 2.15% | ||||||
Amended Term Loan Facility | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Consolidated Total Leverage Ratio | 4.50 | ||||||
Amended Term Loan Facility | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 3.00% | 1.00% | |||||
Leverage based step-up (as a percent) | 1.25% | ||||||
Amended Term Loan Facility | Base Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 1.75% | ||||||
Amended Term Loan Facility | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 1.50% | ||||||
Amended Term Loan Facility | Eurodollar | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 4.00% | 2.00% | |||||
Leverage based step-up (as a percent) | 2.25% | ||||||
Interest rate floor (as a percent) | 1.00% | 0.00% | |||||
Amended Term Loan Facility | Eurodollar | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 2.75% | ||||||
Amended Term Loan Facility | Eurodollar | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate (as a percent) | 2.50% | ||||||
UBS Facility Term Loan B-1 | |||||||
Debt Instrument [Line Items] | |||||||
Principle amount | $ 74,625,000 | $ 0 | |||||
Applicable interest rate (as a percent) | 5.00% | ||||||
Fourth Amendment to Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Face amount of debt | $ 75,000,000 | ||||||
Proceeds from term loan facility | 70,500,000 | ||||||
Original issue discount | 4,100,000 | ||||||
Fees to creditors | $ 300,000 | ||||||
Gain (loss) on extinguishment of debt | $ 1,000,000 | ||||||
Unamortized debt issuance costs | $ 500,000 |
Debt - ABL Facility (Narrative)
Debt - ABL Facility (Narrative) (Details) - USD ($) | Feb. 14, 2020 | Feb. 13, 2020 | Dec. 31, 2020 |
ABL Facility | |||
Line of Credit Facility [Line Items] | |||
Borrowing capacity | $ 400,000,000 | ||
Eligible net trade receivables (as a percent) | 85.00% | ||
Eligible letter of credit (as a percent) | 100.00% | ||
Outstanding letters of credit | $ 21,300,000 | ||
Available borrowing capacity | 378,700,000 | ||
ABL Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 0.75% | ||
Revolving Credit Facility Accordion Feature | |||
Line of Credit Facility [Line Items] | |||
Borrowing capacity | $ 100,000,000 | 400,000,000 | |
Letter of Credit | |||
Line of Credit Facility [Line Items] | |||
Borrowing capacity | $ 50,000,000 | ||
Basis spread on variable rate (as a percent) | 0.75% | ||
Letter of Credit | Maximum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 1.00% | ||
Base Rate | ABL Facility | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 0.25% | ||
Base Rate | ABL Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 0.25% | ||
Base Rate | ABL Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 0.50% | ||
LIBO Rate | ABL Facility | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 1.25% | ||
Interest rate floor (as a percent) | 0.00% | ||
LIBO Rate | ABL Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 1.25% | ||
LIBO Rate | ABL Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate (as a percent) | 1.50% |
Debt - Covenants, Deferred Debt
Debt - Covenants, Deferred Debt Issuance Cost And Original Issue Discount (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Debt Instrument [Line Items] | |||
Amortization expense | $ 1,400 | $ 1,100 | $ 1,000 |
ABL Facility | |||
Debt Instrument [Line Items] | |||
Percentage usage of facility to trigger covenant | 90.00% | ||
Deferred debt issuance costs | $ 975 | 574 | |
Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Deferred debt issuance costs | $ 9,000 | $ 2,900 |
Debt - Fair Value of Debt (Deta
Debt - Fair Value of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Feb. 14, 2020 | Dec. 26, 2019 |
Debt Instrument [Line Items] | |||
Total debt at par value | $ 217,804 | $ 144,600 | $ 145,500 |
Less: unamortized discount and debt issuance costs | 9,000 | 2,894 | |
Net carrying amount | 208,804 | 142,606 | |
Level 3 | |||
Debt Instrument [Line Items] | |||
Fair value | $ 215,626 | $ 145,136 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock and Conversion Features (Details) | 12 Months Ended |
Dec. 31, 2020voteclass | |
Conversion of Stock [Line Items] | |
Number of classes of common stock | class | 3 |
Common Class A | |
Conversion of Stock [Line Items] | |
Votes per share held | 1 |
Common Class B | |
Conversion of Stock [Line Items] | |
Votes per share held | 0 |
Common Class C | |
Conversion of Stock [Line Items] | |
Votes per share held | 0 |
Stockholders' Equity - Stock In
Stockholders' Equity - Stock Incentive Plans (Details) - shares | Dec. 31, 2020 | Dec. 26, 2019 | Dec. 29, 2016 | Dec. 31, 2015 |
2011 Stock Option Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of stock authorized under the plan | 12,520,407 | 10,780,970 | ||
Shares available for grant (in shares) | 179,575 | 104,269 | ||
2017 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of stock authorized under the plan | 5,000,000 | |||
Shares available for grant (in shares) | 2,120,839 | 2,806,549 |
Stockholders' Equity - Secondar
Stockholders' Equity - Secondary Offerings (Details) - $ / shares | Aug. 13, 2020 | May 22, 2020 | Feb. 28, 2019 | Sep. 14, 2018 | May 29, 2018 |
Equity [Abstract] | |||||
Number of shares sold by stockholders (in shares) | 5,686,422 | 4,972,900 | 10,000,000 | 11,500,000 | 10,000,000 |
Share price (in dollars per share) | $ 67.60 | $ 44.55 | $ 37.50 | $ 37.25 | $ 45.80 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Equity [Abstract] | |||
Stock-based compensation expense | $ 16.1 | $ 8.7 | $ 6.5 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Fair Value Assumptions | |||
Weighted average fair value per stock option (in dollars per share) | $ 22.27 | $ 20.38 | $ 15.63 |
Options | |||
Outstanding at the beginning of period (in shares) | 6,037,079 | ||
Granted (in shares) | 294,563 | ||
Exercised (in shares) | (2,485,427) | ||
Forfeited or expired (in shares) | (105,611) | ||
Outstanding at the end of period (in shares) | 3,740,604 | 6,037,079 | |
Vested and exercisable (in shares) | 2,071,137 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of period (in dollars per share) | $ 13.64 | ||
Granted (in dollars per share) | 58.15 | ||
Exercised (in dollars per share) | 7.75 | ||
Forfeited or expired (in dollars per share) | 25.71 | ||
Outstanding at the end of period (in dollars per share) | 20.72 | $ 13.64 | |
Vested and exercisable (in dollars per share) | $ 13.22 | ||
Additional Disclosures | |||
Options outstanding, weighted-average remaining contractual life (in years) | 5 years 10 months 24 days | ||
Options vested and exercisable, weighted-average remaining contractual life (in years) | 4 years 9 months 18 days | ||
Options outstanding, aggregate intrinsic value | $ 269,794 | ||
Options vested and exercisable, aggregate intrinsic value | 164,918 | ||
Fair value of stock options vested | 7,500 | $ 7,500 | $ 4,900 |
Options exercised, intrinsic value | $ 135,500 | $ 146,600 | $ 87,200 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Contractual term (in years) | 10 years | ||
Vesting period (in years) | 4 years | ||
Fair Value Assumptions | |||
Risk-free interest rate (as a percent) | 1.17% | 2.06% | 3.05% |
Expected volatility (as a percent) | 39.00% | 45.00% | 45.00% |
Expected life (in years) | 5 years 9 months | 6 years 8 months 4 days | 6 years 3 months 14 days |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Additional Disclosures | |||
Unrecognized compensation cost amount | $ 16,000 | ||
Unrecognized compensation cost period for recognition (in years) | 2 years 2 months 12 days | ||
Stock options | Tranche one | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting rights (as a percent) | 25.00% | ||
Stock options | Tranche two | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting rights (as a percent) | 25.00% | ||
Stock options | Tranche three | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting rights (as a percent) | 25.00% | ||
Stock options | Tranche four | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting rights (as a percent) | 25.00% | ||
Stock options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 1 year | ||
Stock options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 5 years |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Unit Activity (Details) - Restricted Stock Units $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period (in years) | 4 years |
Restricted Stock Units | |
Beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 133,256 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (5,036) |
Ending balance (in shares) | shares | 128,220 |
Weighted Average Grant Date Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 59.24 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 55.08 |
Ending balance (in dollars per share) | $ / shares | $ 59.40 |
Unrecognized compensation cost amount | $ | $ 6.2 |
Unrecognized compensation cost period for recognition (in years) | 3 years 2 months 12 days |
Tranche one | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting rights (as a percent) | 25.00% |
Tranche two | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting rights (as a percent) | 25.00% |
Tranche three | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting rights (as a percent) | 25.00% |
Tranche four | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting rights (as a percent) | 25.00% |
Stockholders' Equity - Restri_2
Stockholders' Equity - Restricted Stock Award Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Restricted Stock Awards | |||
Weighted Average Grant Date Fair Value | |||
Unrecognized compensation cost amount | $ 15,200,000 | $ 1,100,000 | |
Unrecognized compensation cost period for recognition (in years) | 2 years 7 months 6 days | ||
Fair value of restricted stock awards vested | $ 500,000 | $ 500,000 | $ 0 |
Service-based | |||
Restricted Stock Awards | |||
Beginning balance (in shares) | 37,032 | ||
Granted (in shares) | 103,767 | ||
Vested (in shares) | (8,955) | ||
Forfeited (in shares) | 0 | ||
Ending balance (in shares) | 131,844 | 37,032 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 35.78 | ||
Granted (in dollars per share) | 57.84 | ||
Vested (in dollars per share) | 27.23 | ||
Forfeited (in dollars per share) | 0 | ||
Ending balance (in dollars per share) | $ 53.72 | $ 35.78 | |
Performance-based | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years | ||
Restricted Stock Awards | |||
Beginning balance (in shares) | 0 | ||
Granted (in shares) | 160,315 | ||
Vested (in shares) | 0 | ||
Forfeited (in shares) | 0 | ||
Ending balance (in shares) | 160,315 | 0 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 0 | ||
Granted (in dollars per share) | 57.70 | ||
Vested (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | 0 | ||
Ending balance (in dollars per share) | $ 57.70 | $ 0 | |
Performance-based | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grantee's continued service through the vesting date period (in years) | 3 years | ||
Performance-based | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grantee's continued service through the vesting date period (in years) | 4 years | ||
TSR | |||
Restricted Stock Awards | |||
Beginning balance (in shares) | 0 | ||
Granted (in shares) | 104,456 | ||
Vested (in shares) | 0 | ||
Forfeited (in shares) | 0 | ||
Ending balance (in shares) | 104,456 | 0 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 0 | ||
Granted (in dollars per share) | 44.28 | ||
Vested (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | 0 | ||
Ending balance (in dollars per share) | $ 44.28 | $ 0 | |
TSR | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grantee's continued service through the vesting date period (in years) | 3 years | ||
TSR | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grantee's continued service through the vesting date period (in years) | 4 years |
Stockholders' Equity - Employee
Stockholders' Equity - Employee Stock Purchase Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | May 17, 2018 | Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued under employee stock plan (in shares) | 56,389 | 104,363 | ||
Common Class A | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Employee stock purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair market value measurement period (in months) | 6 months | |||
Stock purchase plan, expense | $ 700 | $ 500 | $ 300 | |
Employee stock purchase plan | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Purchase price, as a percentage of fair market value | 90.00% | |||
Employee stock purchase plan | Common Class A | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of stock authorized under the plan | 1,500,000 | |||
Common stock, par value (in dollars per share) | $ 0.001 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 24, 2020 | Jun. 25, 2020 | Mar. 26, 2020 | Dec. 26, 2019 | Sep. 26, 2019 | Jun. 27, 2019 | Mar. 28, 2019 | Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 57,140 | $ 68,774 | $ 32,004 | $ 37,063 | $ 35,341 | $ 40,974 | $ 43,596 | $ 30,720 | $ 194,981 | $ 150,631 | $ 116,187 |
Basic weighted average shares outstanding | 102,690 | 99,435 | 96,770 | ||||||||
Dilutive effect of share-based awards | 3,452 | 5,527 | 7,791 | ||||||||
Diluted weighted average shares outstanding | 106,142 | 104,962 | 104,561 | ||||||||
Basic earnings per share (in dollars per share) | $ 0.55 | $ 0.67 | $ 0.31 | $ 0.36 | $ 0.35 | $ 0.41 | $ 0.44 | $ 0.31 | $ 1.90 | $ 1.51 | $ 1.20 |
Diluted earnings per share (in dollars per share) | $ 0.54 | $ 0.65 | $ 0.30 | $ 0.35 | $ 0.34 | $ 0.39 | $ 0.42 | $ 0.29 | $ 1.84 | $ 1.44 | $ 1.11 |
Earnings Per Share - Dilutive e
Earnings Per Share - Dilutive effects of share based awards (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from the computation of diluted earnings (in shares) | 320 | 971 | 298 |
Selected Quarterly Financial _3
Selected Quarterly Financial Information (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 24, 2020 | Jun. 25, 2020 | Mar. 26, 2020 | Dec. 26, 2019 | Sep. 26, 2019 | Jun. 27, 2019 | Mar. 28, 2019 | Dec. 31, 2020 | Dec. 26, 2019 | Dec. 27, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 723,652 | $ 684,847 | $ 462,352 | $ 554,937 | $ 527,002 | $ 521,093 | $ 520,311 | $ 477,050 | $ 2,425,788 | $ 2,045,456 | $ 1,709,848 |
Gross profit | 307,540 | 294,628 | 196,692 | 236,032 | 230,029 | 213,788 | 217,823 | 201,374 | 1,034,892 | 863,014 | 702,268 |
Net income | $ 57,140 | $ 68,774 | $ 32,004 | $ 37,063 | $ 35,341 | $ 40,974 | $ 43,596 | $ 30,720 | $ 194,981 | $ 150,631 | $ 116,187 |
Basic earnings per share (in dollars per share) | $ 0.55 | $ 0.67 | $ 0.31 | $ 0.36 | $ 0.35 | $ 0.41 | $ 0.44 | $ 0.31 | $ 1.90 | $ 1.51 | $ 1.20 |
Diluted earnings per share (in dollars per share) | $ 0.54 | $ 0.65 | $ 0.30 | $ 0.35 | $ 0.34 | $ 0.39 | $ 0.42 | $ 0.29 | $ 1.84 | $ 1.44 | $ 1.11 |
Subsequent Event (Details)
Subsequent Event (Details) - Term Loan Facility - USD ($) | Feb. 09, 2021 | May 18, 2020 | Feb. 14, 2020 |
Base Rate | |||
Subsequent Event [Line Items] | |||
Basis spread on variable rate (as a percent) | 3.00% | 1.00% | |
Leverage based step-up (as a percent) | 1.25% | ||
Eurodollar | |||
Subsequent Event [Line Items] | |||
Basis spread on variable rate (as a percent) | 4.00% | 2.00% | |
Leverage based step-up (as a percent) | 2.25% | ||
Interest rate floor (as a percent) | 1.00% | 0.00% | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Borrowing capacity | $ 65,000,000 | ||
Prepayment period subject to premium (in months) | 6 years | ||
Prepayment premium percentage | 1.00% | ||
Subsequent Event | Base Rate | |||
Subsequent Event [Line Items] | |||
Basis spread on variable rate (as a percent) | 1.00% | ||
Leverage based step-up (as a percent) | 1.25% | ||
Subsequent Event | Eurodollar | |||
Subsequent Event [Line Items] | |||
Basis spread on variable rate (as a percent) | 2.00% | ||
Leverage based step-up (as a percent) | 2.25% | ||
Interest rate floor (as a percent) | 0.00% |
Uncategorized Items - fnd-20201
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2014-09 [Member] |