Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 30, 2021 | Feb. 21, 2022 | Jul. 01, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 30, 2021 | ||
Current Fiscal Year End Date | --12-30 | ||
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 | $ 11.1 | ||
Entity Common Stock, Shares Outstanding | 105,781,629 | ||
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 29, 2022, 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 | 2021 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 30, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Atlanta, Georgia |
Auditor Firm ID | 42 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 139,444 | $ 307,772 |
Income taxes receivable | 3,507 | 0 |
Receivables, net | 81,463 | 50,427 |
Inventories, net | 1,008,151 | 654,000 |
Prepaid expenses and other current assets | 40,780 | 28,257 |
Total current assets | 1,273,345 | 1,040,456 |
Fixed assets, net | 929,083 | 579,359 |
Right-of-use assets | 1,103,750 | 916,325 |
Intangible assets, net | 151,935 | 109,269 |
Goodwill | 255,473 | 227,447 |
Deferred income tax assets, net | 9,832 | 0 |
Other assets | 7,277 | 7,569 |
Total long-term assets | 2,457,350 | 1,839,969 |
Total assets | 3,730,695 | 2,880,425 |
Current liabilities: | ||
Current portion of term loans | 2,103 | 1,647 |
Current portion of lease liabilities | 104,602 | 94,502 |
Trade accounts payable | 661,883 | 417,898 |
Accrued expenses and other current liabilities | 248,935 | 162,283 |
Income taxes payable | 0 | 12,391 |
Deferred revenue | 14,492 | 10,115 |
Total current liabilities | 1,032,015 | 698,836 |
Term loans | 195,762 | 207,157 |
Lease liabilities | 1,120,990 | 941,125 |
Deferred income tax liabilities, net | 40,958 | 27,990 |
Other liabilities | 17,771 | 7,929 |
Total long-term liabilities | 1,375,481 | 1,184,201 |
Total liabilities | 2,407,496 | 1,883,037 |
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 30,2021 and December 31, 2020 | 0 | 0 |
Additional paid-in capital | 450,332 | 408,124 |
Accumulated other comprehensive income, net | 535 | 164 |
Retained earnings | 872,226 | 588,996 |
Total stockholders’ equity | 1,323,199 | 997,388 |
Total liabilities and stockholders’ equity | 3,730,695 | 2,880,425 |
Common Class A | ||
Capital stock: | ||
Common stock | 106 | 104 |
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. 30, 2021 | Dec. 31, 2020 |
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) | 105,760,650 | 104,368,212 |
Common stock, shares outstanding (in shares) | 105,760,650 | 104,368,212 |
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. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Income Statement [Abstract] | |||
Net sales | $ 3,433,533 | $ 2,425,788 | $ 2,045,456 |
Cost of sales | 2,011,267 | 1,390,896 | 1,182,442 |
Gross profit | 1,422,266 | 1,034,892 | 863,014 |
Operating expenses: | |||
Selling and store operating | 849,440 | 654,100 | 546,853 |
General and administrative | 199,401 | 144,715 | 132,386 |
Pre-opening | 34,433 | 21,498 | 24,594 |
Total operating expenses | 1,083,274 | 820,313 | 703,833 |
Operating income | 338,992 | 214,579 | 159,181 |
Interest expense, net | 4,924 | 8,389 | 8,801 |
Gain on early extinguishment of debt | 0 | (1,015) | 0 |
Income before income taxes | 334,068 | 207,205 | 150,380 |
Provision (benefit) for income taxes | 50,838 | 12,224 | (251) |
Net income | 283,230 | 194,981 | 150,631 |
Change in fair value of hedge instruments, net of tax | 371 | 357 | (379) |
Total comprehensive income | $ 283,601 | $ 195,338 | $ 150,252 |
Basic earnings per share (in dollars per share) | $ 2.71 | $ 1.90 | $ 1.51 |
Diluted earnings per share (in dollars per share) | $ 2.64 | $ 1.84 | $ 1.44 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Class A | 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. 27, 2018 | 97,588,000 | |||||||
Beginning balance at Dec. 27, 2018 | $ 584,309 | $ (179) | $ 98 | $ 340,462 | $ 186 | $ 243,563 | $ (179) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
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 purchase plan (in shares) | 104,363 | 105,000 | ||||||
Shares issued under employee stock purchase plan | $ 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 | 101,458,000 | |||||||
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) | 2,485,000 | |||||||
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 purchase plan (in shares) | 56,389 | 56,000 | ||||||
Shares issued under employee stock purchase plan | $ 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 | 104,368,000 | ||||||
Ending balance at Dec. 31, 2020 | 997,388 | $ 104 | 408,124 | 164 | 588,996 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Stock-based compensation expense | $ 20,528 | 20,528 | ||||||
Exercise of stock options (in shares) | 1,252,566 | 1,253,000 | ||||||
Exercise of stock options | $ 14,736 | $ 2 | 14,734 | |||||
Issuance of restricted stock award (in shares) | 29,000 | |||||||
Forfeiture of restricted stock awards (in shares) | (3,000) | |||||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 29,000 | |||||||
Shares issued under employee stock purchase plan (in shares) | 46,273 | 46,000 | ||||||
Shares issued under employee stock purchase plan | $ 3,063 | 3,063 | ||||||
Issuance of stock related to acquisition (in shares) | 50,000 | |||||||
Issuance of stock related to acquisition | 5,000 | 5,000 | ||||||
Common stock redeemed for tax liability (in shares) | (11,000) | |||||||
Common stock redeemed for tax liability | (1,117) | (1,117) | ||||||
Other comprehensive income gain (loss), net of tax | 371 | 371 | ||||||
Net income | 283,230 | 283,230 | ||||||
Ending balance (in shares) at Dec. 30, 2021 | 105,760,650 | 105,761,000 | ||||||
Ending balance at Dec. 30, 2021 | $ 1,323,199 | $ 106 | $ 450,332 | $ 535 | $ 872,226 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Operating activities | |||
Net income | $ 283,230 | $ 194,981 | $ 150,631 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 118,196 | 91,640 | 74,001 |
Stock-based compensation expense | 20,528 | 16,115 | 8,711 |
Deferred income taxes | 3,042 | 9,614 | (10,584) |
Interest cap derivative contracts | 357 | 372 | 446 |
Loss on asset impairments and disposals, net | 438 | 14 | 4,111 |
Gain on early extinguishment of debt | 0 | (1,015) | 0 |
Operating lease termination | 0 | 0 | 1,926 |
Changes in operating assets and liabilities, net of effects of acquisition: | |||
Receivables, net | (19,768) | 18,874 | (17,850) |
Inventories, net | (349,678) | (72,135) | (110,851) |
Trade accounts payable | 232,761 | 49,439 | 54,956 |
Accrued expenses and other current liabilities | 36,684 | 59,017 | 20,744 |
Income taxes | (15,897) | 15,264 | 3,894 |
Deferred revenue | 3,158 | 3,432 | 1,439 |
Other, net | (11,709) | 20,552 | 23,084 |
Net cash provided by operating activities | 301,342 | 406,164 | 204,658 |
Investing activities | |||
Purchases of fixed assets | (407,671) | (212,448) | (196,008) |
Acquisition, net of cash acquired | (63,567) | 0 | 0 |
Net cash used in investing activities | (471,238) | (212,448) | (196,008) |
Financing activities | |||
Proceeds from term loans | 65,000 | 75,000 | 0 |
Payments on term loans | (76,202) | (2,697) | (3,500) |
Borrowings on revolving line of credit | 13,466 | 275,000 | 100,100 |
Payments on revolving line of credit | (15,969) | (275,000) | (100,100) |
Proceeds from exercise of stock options | 14,736 | 19,254 | 18,798 |
Proceeds from employee stock purchase plan | 3,063 | 2,344 | 2,445 |
Debt issuance costs | (1,409) | (6,882) | 0 |
Tax payments for stock-based compensation awards | (1,117) | 0 | 0 |
Net cash provided by financing activities | 1,568 | 87,019 | 17,743 |
Net (decrease) increase in cash and cash equivalents | (168,328) | 280,735 | 26,393 |
Cash and cash equivalents, beginning of the period | 307,772 | 27,037 | 644 |
Cash and cash equivalents, end of the period | 139,444 | 307,772 | 27,037 |
Supplemental disclosures of cash flow information | |||
Buildings and equipment acquired under operating leases | 285,865 | 177,932 | 277,392 |
Cash paid for interest, net of capitalized interest | 6,279 | 8,043 | 7,388 |
Cash paid for income taxes, net of refunds | 63,684 | 12,670 | 6,453 |
Fixed assets accrued at the end of the period | $ 87,645 | $ 19,987 | $ 19,527 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 30, 2021 | |
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., together with its subsidiaries (the “Company,” “we,” “our,” or “us”) is a multi-channel specialty retailer and commercial flooring distributor. The Company offers a broad assortment of in-stock hard-surface flooring, including tile, wood, laminate, vinyl, and natural stone along with decorative accessories and wall tile, installation materials, and adjacent categories 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 our products for professional installation (“Buy it Yourself” or “BIY”). We operate within one reportable segment. On June 4, 2021, the Company acquired Spartan Surfaces, Inc. (“Spartan”), a commercial specialty hard-surface flooring distribution company for total estimated purchase consideration of $77.7 million. Refer to Note 14, “Acquisition” for additional information. As of December 30, 2021, the Company, through its wholly owned subsidiary, Floor and Decor Outlets of America, Inc. (“F&D” or “Outlets”), operates 160 warehouse-format stores, which average 78,000 square feet, and two small-format standalone design studios in 33 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 30, 2021 (“fiscal 2021”) and December 26, 2019 (“fiscal 2019”) 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. The full impact that the COVID-19 pandemic could continue to have on the Company’s business remains an evolving situation and is highly uncertain. While the Company’s operations during fiscal 2021 did not appear to be negatively impacted, the COVID-19 pandemic had a material negative impact on the Company’s operations and financial results during the first half of fiscal 2020 and could have additional negative impacts in the future. 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, the success of vaccination programs, the spread of COVID-19, including its developing variants, within the markets in which the Company operates, as well as the countries from which the Company sources inventory, fixed assets, and other supplies, the effect of the pandemic on consumer confidence and spending, and actions taken by government entities in response to the pandemic, all of which are highly uncertain. Business Combinations The Company accounts for acquisitions in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations. The purchase price of an acquisition is measured as the aggregate fair value of the consideration transferred at the date of acquisition. The purchase price is allocated to the fair values of the tangible and intangible assets acquired and liabilities assumed, with any excess recorded as goodwill. These fair value determinations require judgment and may involve the use of significant estimates and assumptions. The purchase price allocation may be provisional during a measurement period of up to one year from the acquisition date to provide reasonable time to obtain the information necessary to identify and measure the assets acquired and liabilities assumed. Only facts and circumstances that existed as of the acquisition date are considered for subsequent adjustment to the purchase price allocation, and any such adjustment will be recognized in the period in which it is determined prior to completion of the measurement period. Transaction costs associated with acquisitions are expensed as incurred. Cash and Cash Equivalents Cash consists of currency and demand deposits with banks. Receivables Receivables consist primarily of amounts due from credit card companies, receivables from vendors, and amounts due from commercial sales. The Company typically collects its credit card receivables within three five On November 7, 2019, the U.S. Trade Representative 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 $22.0 million related to Section 301 tariff payments, of which $14.6 million has been received as of December 30, 2021. As of December 30, 2021 and December 31, 2020, receivables included $7.4 million and $11.4 million of expected tariff refunds from U.S. Customs. The tariff refund receivables outstanding as of December 30, 2021 are expected to be received during fiscal 2022. The Company recognized a $2.6 million increase to cost of sales related to a reduction in estimated tariff refunds in fiscal 2021. During fiscal 2020 and 2019, the Company recognized a reduction to cost of sales of $4.5 million and $14.0 million, respectively. Interest income recognized related to tariff refunds during fiscal 2021, 2020, and 2019 was $0.3 million, $0.6 million, $0.3 million, respectively. 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 is offered to the Company's customers through a proprietary credit card underwritten by third-party financial institutions at no recourse to the Company. The Company also offers limited credit to its commercial clients. The Company’s total credit exposure for receivables not insured by a third party at the end of fiscal 2021 and fiscal 2020 was $6.0 million and $1.2 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 $7.8 million and $5.4 million as of December 30, 2021 and December 31, 2020, 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 its 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. Finite-lived Intangible Assets In accordance with ASC 350, Intangibles—Goodwill and Other, identifiable intangible assets with finite lives are amortized over their estimated useful lives. The estimated lives of the Company’s finite-lived intangible assets are as follows: Useful Life Customer relationships 12 years Non-compete agreement 5 years 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 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. 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 its trade names, which are 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. The Company has the option to assess the value of its goodwill and other 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 other 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 other 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 2021, 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 other indefinite-lived intangible assets were not impaired as of October 29, 2021. No events or changes in circumstances have occurred since the date of the Company's most recent annual impairment assessment that would more likely than not reduce the fair value of the reporting unit below its carrying amount. The Company’s goodwill and other indefinite-lived intangible assets impairment assessments contain uncertainties because they require management to make significant judgments in estimating the fair value of the Company’s reporting unit and other indefinite-lived intangible assets and, if a quantitative assessment is deemed necessary, may include 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 the Company’s 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 assets, 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. Definite-lived intangible assets are amortized over their respective estimated useful lives 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 assets. The useful lives of definite-lived intangible asset are evaluated on an annual basis. Leases The Company recognizes lease right-of-use 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 the Company’s 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 the Company’s 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 the Company has the right to control the property. 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’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 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 the Company’s 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. Derivative contracts are recognized 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 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. The Company performs an assessment of the effectiveness of its derivative contracts designated as hedges, including assessing the possibility of counterparty default. If it is determined that a derivative is no longer expected to be highly effective, hedge accounting is discontinued prospectively, and subsequent changes in the fair value of the hedge are recognized in earnings. The Company’s outstanding derivative contracts, which are interest rate cap contracts that continue to be designated as cash flow hedges, are expected to 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 In accordance with Accounting Standards Update (“ASU”) No. 2014-9, “Revenue from Contracts with Customers” (“Topic 606”), revenue and cost of sales are recognized when the related performance obligations in contracts with customers are settled. Performance obligations for the Company’s retail store sales, as well as for orders placed through its website and shipped to 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 primarily include hard surface flooring and related accessories. The Company does not perform installation services, and free design services are offered in-store. The transaction price recognized in revenue 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. The Company provides customers 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. Reserves for future returns of previously sold goods are estimated based on historical experience and various other assumptions that management believes to be reasonable. These reserves reduce sales and cost of sales and establish a related return asset and refund liability as defined in 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 The Company sells gift cards to customers through its stores and website and also issues merchandise credits in its stores. Gift cards and merchandise credits are accounted for 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, breakage income is recognized in proportion to the pattern of rights exercised by the customer when the Company expects 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. The Company has 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 years 2021, 2020, and 2019, the Company recognized gift card breakage income related to unredeemed gift cards of $2.4 million, $1.5 million, and $1.2 million, respectively, within net sales in the Consolidated Statements of Operations and Comprehensive Income. Loyalty Program The Company completed the roll out of its Pro Premier loyalty program to all stores in the second half of fiscal 2019, which allows customers to earn points through purchases from the Company’s stores and 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. Redemption patterns for the loyalty program are monitored on an ongoing basis and the estimated loyalty breakage rate will be adjusted, as necessary, as the program matures. In fiscal years 2021, 2020, and 2019, loyalty breakage of $2.2 million, $1.4 million, and $1.1 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 30, 2021 and December 31, 2020, was $36.2 million and $22.3 million, respectively. Cost of Sales Cost of sales consists of merchandise costs as well as freight, duty, and other costs to transport inventory to the Company’s 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 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 The Company expenses advertising costs as the advertising takes place. Advertising costs incurred during the fiscal years ended December 30, 2021, December 31, 2020, and December 26, 2019 were $90.4 million, $66.6 million, and $65.7 million, respectively, and are included in selling and store operating expenses and pre-opening expenses in the accompanying Cons |
Revenue
Revenue | 12 Months Ended |
Dec. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Net sales consist of revenue associated with contracts with customers for the sale of goods and services in amounts that reflect the consideration the Company is entitled to receive in exchange for those goods and services. Deferred Revenue & Contract Liabilities In accordance with ASC 606, Revenue from Contracts with Customers , the Company recognizes revenue when the customer obtains control of the inventory. Amounts in deferred revenue at period-end reflect orders for which the inventory was not yet ready for physical transfer to customers. Contract liabilities within the Consolidated Balance Sheets as of December 30, 2021 and December 31, 2020 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 30, 2021, contract liabilities totaled $40.2 million and included $14.5 million of deferred revenue, $20.4 million of loyalty program liabilities, and $5.3 million of 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. Of the contract liabilities outstanding as of December 31, 2020, approximately $11.1 million was recognized in revenue during fiscal 2021. Disaggregated Revenue The Company has one reportable segment. The following table presents the net sales of each major product category for each of the last three fiscal years: Fiscal Year Ended in thousands December 30, December 31, December 26, Product Category Net Sales % of Net Sales Net Sales % of Net Sales Net Sales % of Net Sales Laminate / luxury vinyl plank $ 876,714 26 % $ 555,963 23 % $ 442,171 22 % Tile 801,101 23 605,357 25 523,076 26 Decorative accessories / wall tile (1) 642,697 19 464,589 19 386,657 19 Installation materials and tools 558,721 16 403,184 17 346,356 17 Wood 259,637 8 211,307 9 202,888 10 Natural stone 199,140 6 152,665 6 127,975 6 Adjacent categories (1) 54,482 1 20,487 1 7,251 — Other (2) 41,041 1 12,236 — 9,082 — Total $ 3,433,533 100 % $ 2,425,788 100 % $ 2,045,456 100 % (1) To conform to the current period presentation, the presentation of revenue by product category for the fiscal years ended December 31, 2020 and December 26, 2019 has been updated within this table to provide disclosure of adjacent categories, which primarily includes bathroom and kitchen products and accessories, as a separate category. In prior periods, adjacent categories revenue was included as a component of the decorative accessories / wall tile product category. (2) Other includes delivery, sample, and other product revenue and adjustments for deferred revenue, sales returns reserves, customer rewards under the Company’s 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. 30, 2021 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities as of December 30, 2021 and December 31, 2020 consisted of the following: in thousands December 30, December 31, Accrued incentive compensation $ 36,705 $ 24,591 Sales returns and allowances 36,210 22,266 Sales tax payable 25,232 21,824 Accrued construction in progress new stores 59,771 20,818 Insurance reserve incurred but not reported 14,770 13,511 Wages and payroll tax payable 20,147 22,349 Loyalty program liability 20,404 12,073 Other 35,696 24,851 Accrued expenses and other current liabilities $ 248,935 $ 162,283 |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Fixed Assets Fixed assets as of December 30, 2021 and December 31, 2020 consisted of the following: in thousands December 30, December 31, Furniture, fixtures, and equipment $ 494,743 $ 259,696 Leasehold improvements 465,429 380,671 Computer software and hardware 173,046 138,321 Buildings and building improvements (1) 126,042 65,552 Land 80,509 30,731 Fixed assets, at cost 1,339,769 874,971 Less: accumulated depreciation and amortization 410,686 295,612 Fixed assets, net $ 929,083 $ 579,359 (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. Depreciation and amortization on fixed assets for the fiscal years ended December 30, 2021, December 31, 2020, and December 26, 2019 was $113.4 million, $90.1 million, and $69.9 million, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Goodwill and changes in the carrying amount of goodwill are as follows for the periods presented: in thousands December 30, 2021 December 31, 2020 Goodwill, balance at beginning of year $ 227,447 $ 227,447 Acquisitions (1) 28,026 — Goodwill, balance at end of year $ 255,473 $ 227,447 (1) Reflects goodwill related to the Spartan acquisition. See Note 14, “Acquisition” for additional details. The gross carrying amount and accumulated amortization of other intangible assets as of December 30, 2021 and December 31, 2020 are as follows: December 30, 2021 December 31, 2020 in thousands Gross carrying amount Accumulated amortization Net carrying value Gross carrying amount Accumulated amortization Net carrying value Amortizable intangible assets: Customer relationships $ 34,900 $ (1,697) $ 33,203 $ — $ — $ — Non-compete agreement 300 (37) 263 — — — Total amortizable intangible assets 35,200 (1,734) 33,466 — — — Indefinite-lived intangible assets: Trade names 118,469 — 118,469 109,269 — 109,269 Total intangible assets: $ 153,669 $ (1,734) $ 151,935 $ 109,269 $ — $ 109,269 Amortization expense related to amortizable intangible assets was $1.7 million for the fiscal year ended December 30, 2021 and was immaterial for the fiscal years ended December 31, 2020 and December 26, 2019. As of December 30, 2021, the estimated aggregate future amortizable expense related to other intangible assets is as follows: in thousands Amount 2022 $ 2,974 2023 2,974 2024 2,974 2025 2,974 2026 2,908 Thereafter 18,662 Total $ 33,466 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of the provision for income taxes are as follows: Fiscal Year Ended in thousands December 30, December 31, December 26, Current expense (benefit): Federal $ 37,869 $ (1,781) $ 7,975 State 9,927 4,391 2,358 Total current expense 47,796 2,610 10,333 Deferred expense (benefit): Federal 4,853 11,684 (6,522) State (1,811) (2,070) (4,062) Total deferred expense (benefit) 3,042 9,614 (10,584) Provision (benefit) for income taxes $ 50,838 $ 12,224 $ (251) 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 30, 2021, December 31, 2020, and December 26, 2019 to income before income taxes: Fiscal Year Ended in thousands December 30, December 31, December 26, Computed “expected” provision at statutory rate $ 70,154 $ 43,513 $ 31,580 State income taxes, net of federal income tax benefit (1) 6,186 1,493 (1,364) Permanent differences: Excess tax benefit related to stock options exercised (25,710) (27,003) (29,441) Other 908 517 543 Total permanent differences (24,802) (26,486) (28,898) Provision to return (34) (150) (282) Federal tax credits (1,471) (920) (1,306) CARES Act benefit — (7,676) — Uncertain Tax Positions 308 2,724 — Other, net 497 (274) 19 Provision (benefit) for income taxes $ 50,838 $ 12,224 $ (251) (1) Includes state excess tax benefits related to stock options exercised for fiscal years 2021, 2020, and 2019 of $4.6 million, $5.3 million, and $5.6 million, respectively. 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 30, Fiscal Year Ended December 31, Deferred tax assets: Lease liabilities $ 308,198 $ 259,273 Accruals not currently deductible for tax purposes 11,622 8,293 Inventories 10,711 6,941 Stock-based compensation 8,754 5,979 Gift card liability 1,254 557 Other intangibles 335 268 Litigation accrual 86 120 Other 5,428 10,732 Total deferred tax assets 346,388 292,163 Deferred tax liabilities: Right-of-use assets (274,151) (227,166) Fixed assets (70,289) (62,374) Intangible assets (27,198) (27,053) Other (5,876) (3,560) Total deferred tax liabilities (377,514) (320,153) Net deferred tax liabilities $ (31,126) $ (27,990) The Company utilized $0.2 million and generated less than $0.1 million of tax-effected state net operating losses in fiscal 2021 and fiscal 2020, respectively; as of December 30, 2021, approximately $2.3 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 fiscal 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 30, 2021 or December 31, 2020. 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”). The Company closed a federal audit with the IRS for the 2015 to 2017 tax years. Foreign, state, and local income tax returns are generally subject to examination for a period of three to five years after filing of the respective returns. Following is a reconciliation of the beginning and ending balance of unrecognized tax benefits for periods presented: Fiscal Year Ended in thousands December 30, December 31, December 26, Unrecognized tax benefits balance at beginning of fiscal year $ 6,107 $ 402 $ — Additions based on tax positions related to the current year 390 281 282 Additions for tax positions of prior years — 5,424 120 Reductions due to settlements (5,424) — — Unrecognized tax benefits balance at end of fiscal year $ 1,073 $ 6,107 $ 402 As of December 30, 2021, there were no unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate, while there were $1.9 million of such unrecognized tax benefits as of December 31, 2020. 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 years 2021 or 2019. 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. Subsequent to enactment of the CARES Act, additional legislation was enacted that affected the availability of employee retention credits, including the Consolidated Appropriations Act, 2021, the American Rescue Plan Act of 2021, and The Infrastructure Investment and Jobs Act. Collectively, these laws provided availability of the CARES Act employee retention credit through September 30, 2021. 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 also received $28.4 million of cash refunds in fiscal 2020 related to the accelerated QIP depreciation and the carry back of the fiscal 2019 net operating loss. During the fiscal years ended December 30, 2021 and December 31, 2020, the Company recognized employee retention credits totaling $1.0 million and $1.7 million, respectively. Within the Consolidated Statements of Operations and Comprehensive Income, employee retention credits during the periods presented were recognized as a reduction to selling and store operating expenses with the exception of $0.2 million of such credits that were recognized as an offset to general and administrative expenses during fiscal 2020. As of December 30, 2021, the Company has deferred $6.0 million of employer social security taxes under the CARES Act that are required to be deposited by December 31, 2022 and are included in other liabilities within the Consolidated Balance Sheets. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements As of December 30, 2021 and December 31, 2020, 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 carrying 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. Recurring Fair Value Measurements As of December 30, 2021, the contingent earn-out liability related to the Spartan acquisition, as described in Note 14, “Acquisition,” had an estimated fair value of $10.2 million (classified as level 3 within the fair value hierarchy), of which $2.5 million is included in accrued expenses and other current liabilities and the remaining $7.7 million is included in other liabilities within the Consolidated Balance Sheets. For the fiscal year ended December 30, 2021, a $1.1 million net increase in the fair value of the contingent earn-out liability was recognized in general and administrative expense within the Consolidated Statements of Operations and Comprehensive Income. The Company determined the fair value of the contingent earn-out liability as of December 30, 2021 with assistance from a third-party valuation specialist using a Monte Carlo valuation method using significant unobservable inputs, including the following weighted-average assumptions: discount rate of 11.5%, Spartan revenue volatility of 29.0%, and Spartan EBITDA volatility of 55.0%. 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 30, 2021 and December 31, 2020, the total fair value of the Company's interest rate cap contracts was approximately $0.5 million and $0.1 million, respectively. |
Derivatives and Risk Management
Derivatives and Risk Management | 12 Months Ended |
Dec. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Risk Management | Derivatives and Risk Management Changes in interest rates impact the Company’s results of operations. In an effort to manage exposure to this risk, the Company enters into derivative contracts and may adjust its 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 30, 2021: in thousands Notional Balance Final Maturity Date Other Assets AOCI, Net of Tax Designated as hedges: Interest rate cap (cash flow hedge) $ 75,000 U.S. dollars April 2024 $ 262 $ (106) Interest rate cap (cash flow hedge) $ 75,000 U.S. dollars April 2024 $ 262 $ (108) Interest rate cap (cash flow hedge) $ 102,500 U.S. dollars December 2021 $ — $ (272) Not designated as hedges: Interest rate cap $ 102,500 U.S. dollars December 2021 $ — $ (49) Derivative Position as of December 31, 2020: 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 $ — $ (89) Not designated as hedges: Interest rate cap $ 102,500 U.S. dollars December 2021 $ — $ (75) Designated Hedge Gain (Losses) Gains (losses) related to designated hedge contracts are as follows: Effective Portion Recognized in Fiscal Year Ended in thousands December 30, December 31, December 26, Interest rate cap (cash flow hedge) $ 371 $ 357 $ (379) No amounts related to the effective portion of the Company’s cash flow hedges were reclassified from accumulated other comprehensive income to earnings during fiscal years 2021, 2020, or 2019. Interest Rate Risk The Company’s exposure to market risk from adverse changes in interest rates is primarily associated with its long-term debt obligations, which carry variable interest rates. Market risk associated with the Company’s 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 exposure to the risk associated with variable interest rate long term debt, the Company periodically enters into interest rate derivative contracts. These interest rate derivative contracts are used to convert the interest rate exposure on a portion of the Company’s debt portfolio from a floating rate to a capped rate and are designated as cash flow hedges. Credit Risk To manage credit risk associated with the Company’s interest rate hedging program, the Company selects counterparties based on their credit ratings and limits exposure to any one counterparty. The counterparties to the Company’s derivative contracts are financial institutions with investment grade credit ratings. To manage credit risk related to its derivative financial instruments, the Company periodically monitors the credit risk of its counterparties, limits its exposure in the aggregate and to any single counterparty, and adjust its hedging positions, as appropriate. The impact of credit risk, as well as the ability of each party to fulfill its obligations under the 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 the Company’s derivative contracts. The Company’s derivative financial instruments do not have any credit risk-related contingent features or collateral requirements. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Commitments In the first quarter of fiscal 2019, the Company adopted ASU No. 2016-02, “Leases (Topic 842),” which requires that lessees recognize lease right-of-use 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 was elected. The Company adopted ASU No. 2016-02 using the modified retrospective approach and elected the package of practical expedients to use in transition, which permitted the Company to not reassess, under the new standard, 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. Additionally, the Company does not separate lease and nonlease components of contracts. The majority of the Company’s long-term operating lease agreements are for its corporate office, retail locations, and distribution centers, which expire in various years through 2042. Most of these agreements are retail leases wherein both the land and building are leased. For a small number of retail locations, the Company has ground leases in which only the land is leased. The initial lease terms for the Company's corporate office, retail, and distribution center facilities generally range from 10-20 years. The majority of the Company’s retail and ground 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 the Company subleases real estate within one of its distribution centers to a third party. Certain of the 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 the Company has the right to control the property. The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants that would reasonably be expected to have a material impact on the business. When readily determinable, the rate implicit in the lease is used to discount lease payments to present value; however, substantially all of the Company’s leases do not provide a readily determinable implicit rate. If the rate implicit in the lease is not readily determinable, the Company uses a third party to assist in the determination of a secured incremental borrowing rate, determined on a collateralized basis, to discount lease payments based on information available at lease commencement. The secured incremental borrowing rate is estimated based on yields obtained from Bloomberg for U.S. consumers with a BB- credit rating and is adjusted for collateralization as well as inflation. 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 30, 2021 As of December 31, 2020 Assets Building Right-of-use assets $ 972,962 $ 851,092 Land Right-of-use assets 107,764 56,708 Equipment Right-of-use assets 14,127 6,865 Software Right-of-use assets 8,897 1,660 Total operating lease assets 1,103,750 916,325 Liabilities Current Building Current portion of lease liabilities 92,909 88,287 Land Current portion of lease liabilities 1,385 440 Equipment Current portion of lease liabilities 6,842 3,941 Software Current portion of lease liabilities 3,466 1,834 Total current operating lease liabilities 104,602 94,502 Noncurrent Building Lease liabilities 989,712 873,098 Land Lease liabilities 120,174 65,103 Equipment Lease liabilities 7,285 2,924 Software Lease liabilities 3,819 — Total noncurrent operating lease liabilities 1,120,990 941,125 Total operating lease liabilities $ 1,225,592 $ 1,035,627 Weighted-average remaining lease term 11 years 11 years Weighted-average discount rate 5.1% 5.3% Lease Costs The table below presents components of lease expense for operating leases. Fiscal Year Ended in thousands Classification December 30, December 31, December 26, Fixed operating lease cost: Selling and store operating $ 123,882 $ 105,207 $ 87,124 Cost of sales 24,170 22,672 17,132 Pre-opening 10,127 7,886 5,959 General and administrative 4,359 4,118 2,272 Total fixed operating lease cost $ 162,538 $ 139,883 $ 112,487 Variable lease cost (1): Selling and store operating $ 42,093 $ 34,499 $ 28,894 Cost of sales 5,506 4,860 3,570 Pre-opening 274 657 151 General and administrative 310 151 5 Total variable lease cost $ 48,183 $ 40,167 $ 32,620 Sublease income Cost of sales (2,694) (2,713) (2,414) Operating lease right-of-use asset impairment General and administrative — — 4,136 Total operating lease cost (2) $ 208,027 $ 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 30, 2021, December 31, 2020, and December 26, 2019. 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 30, 2021 were as follows: in thousands Amount 2022 $ 163,924 2023 170,295 2024 161,516 2025 151,944 2026 143,693 Thereafter 866,242 Total minimum lease payments (1) (2) 1,657,614 Less: amount of lease payments representing interest 432,022 Present value of future minimum lease payments 1,225,592 Less: current obligations under leases 104,602 Long-term lease obligations $ 1,120,990 (1) Future lease payments exclude approximately $72.6 million of legally binding minimum lease payments for operating leases signed but not yet commenced. (2) Operating lease payments include $108.5 million related to options to extend lease terms that are reasonably certain of being exercised. For the fiscal years ended December 30, 2021, December 31, 2020, and December 26, 2019, cash paid for operating leases was $157.9 million, $131.3 million, and $112.8 million, respectively. Right-of-Use Asset Impairment and Write Off During the third quarter of fiscal 2019, the Company began the move from its former store support center in Smyrna, Georgia to a nearby location in Atlanta, Georgia. Prior to this period, future payments under the operating lease agreement were expected to be fully covered with proceeds from a sublease. As of the end of the third quarter of fiscal 2019, the Company 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, the fair value of the right-of-use asset was determined 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, an impairment of $4.1 million was recognized in the third quarter of fiscal 2019 within general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income. In addition, during the fourth quarter of fiscal 2019, the move to the new location was completed and the lease for the previous store support center facility in Smyrna, Georgia was terminated. As a result, a loss of $1.9 million was recognized related to the settlement of 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 within general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income. Litigation On November 15, 2021, the Company was added as a defendant in a wrongful death lawsuit, Nguyen v. Inspections Now, Inc., No. 21-DCV-287142, pending in the 434th Judicial District Court of Fort Bend County, Texas. Inspections Now, Inc. and Jason Post Homes, LLC are also named defendants in the case. Plaintiff’s petition alleges that unspecified “wood paneling” allegedly purchased from the Company was installed in the vicinity of plaintiff’s fireplace and caught fire while the fireplace was lit. The fire consumed plaintiff’s home and resulted in injuries to plaintiff and the death of plaintiff’s three children and mother. Plaintiff alleges product defect and failure to warn claims against the Company and negligent inspection claims against Inspections Now and Jason Post Homes. Plaintiff’s petition seeks damages in excess of $1.0 million for property damage, personal injury, and wrongful death. The petition also seeks exemplary damages. The Company responded to Plaintiff’s petition on December 13, 2021, denying the allegations, and the case is in the early stages of discovery. 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 previously dismissed In re Floor & Decor Holdings, Inc. Securities Litigation. 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, the Company is 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 its 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. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table summarizes the Company's long-term debt as of December 30, 2021 and December 31, 2020: in thousands Maturity Date Interest Rate Per Annum at December 30, December 30, December 31, Credit Facilities: Term Loan B February 14, 2027 2.09% Variable $ 206,602 $ 143,179 Term Loan B-1 February 14, 2027 n/a Variable — 74,625 Total secured debt at par value 206,602 217,804 Less: current maturities 2,103 1,647 Long-term debt maturities 204,499 216,157 Less: unamortized discount and debt issuance costs 8,737 9,000 Total long-term debt $ 195,762 $ 207,157 n/a - not applicable 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 30, 2021: in thousands Amount 2022 $ 2,103 2023 2,103 2024 2,103 2025 2,103 2026 2,629 Thereafter 195,561 Total minimum debt payments $ 206,602 Components of interest expense are as follows for the periods presented: Fiscal Year Ended in thousands December 30, December 31, December 26, Total interest costs, net of interest income $ 7,657 $ 9,606 $ 8,801 Interest capitalized $ 2,733 $ 1,217 $ — Interest expense, net $ 4,924 $ 8,389 $ 8,801 Term Loan Facility On February 9, 2021 (the “Effective Date”), Outlets entered into a fifth amendment to the credit agreement governing its senior secured term loan facility (as amended, the “Term Loan Facility”). The fifth amendment provided for, among other things, a supplemental term loan in the aggregate principal amount of $65.0 million (the “Supplemental Term Loan Facility”) that increased the term loan B facility. The Supplemental Term Loan Facility has the same maturity date (February 14, 2027) and terms as the term loan B facility, except that voluntary prepayments made within six months after the Effective Date are subject to a 1.00% soft call prepayment premium. The other terms of loans under the Term Loan Facility remain unchanged, including the applicable margin for loans under the term loan B facility. The proceeds of the Supplemental Term Loan Facility, together with cash on hand, were used to (i) repay the $75.0 million term loan B-1 facility and (ii) pay fees and expenses incurred in connection with the Supplemental Term Loan Facility. The Term Loan Facility (including loans under the Supplemental Term Loan Facility) provides a margin for loans of: (x) in the case of ABR Loans (as defined in the Term Loan Facility) 1.00% per annum (subject to a leverage-based step-up to 1.25% if Outlets exceeds certain leverage ratio tests), and (y) in the case of Eurodollar Loans (as defined in the Term Loan Facility) 2.00% per annum (subject to a leverage-based step-up to 2.25% if Outlets exceeds certain leverage ratio tests and a 0.00% floor on Eurodollar Loans). All obligations under the Term Loan Facility (including loans under the Supplemental 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 asset-based loan facility (“ABL” or “ABL Facility”). The Company evaluated the fifth amendment to the Term Loan Facility in accordance with ASC 470-50, Debt , and determined that the amendment resulted in a debt modification that was not an extinguishment. Therefore, no loss on debt extinguishment was recognized. The Company incurred costs of $1.6 million in connection with the refinancing which were comprised of (i) $1.4 million of fees to creditors that were accounted for as debt issuance costs and are amortizing to interest expense over the term of the Term Loan Facility using the interest method and (ii) $0.2 million of professional fees to other third parties that were expensed during the fiscal year ended December 30, 2021 and included in general and administrative expense on the Consolidated Statements of Operations and Comprehensive Income. Gain on Debt Extinguishment During the second quarter of fiscal 2020, the Company evaluated a 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 As of December 30, 2021, 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 has a maturity date of February 14, 2025 and 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 $22.5 million, was $377.5 million based on financial data as of December 30, 2021. 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 Costs and Original Issue Discounts Deferred debt issuance costs related to the ABL Facility were approximately $0.8 million as of December 30, 2021 and $1.0 million as of December 31, 2020 and are included in other assets on the Consolidated Balance Sheets. Deferred debt issuance costs and original issue discounts related to the Term Loan Facility were $8.7 million as of December 30, 2021 and $9.0 million as of December 31, 2020 and are included in term loans on the Consolidated Balance Sheets. For the fiscal years ended December 30, 2021, December 31, 2020, and December 26, 2019, deferred debt issuance and original issue discount amortization expense was $1.9 million, $1.4 million, and $1.1 million, respectively, and is included in interest expense, net on the Company’s Consolidated Statements of Operations and Comprehensive Income. 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 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 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 30, 2021 and December 31, 2020, the fair values of the Company’s debt are as follows: in thousands December 30, December 31, Total debt at par value $ 206,602 $ 217,804 Less: unamortized discount and debt issuance costs 8,737 9,000 Net carrying amount 197,865 208,804 Fair value $ 202,986 $ 215,626 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 30, 2021 | |
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. The Company 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 30, 2021 and December 31, 2020, there were 1,926,142 and 2,120,839 shares available for grant pursuant to awards under the 2017 Plan, respectively. Secondary Offerings On August 13, 2020, 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. On May 22, 2020, 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 February 28, 2019, 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. 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 30, 2021, December 31, 2020, and December 26, 2019 was $20.5 million, $16.1 million, and $8.7 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 to eligible employees during fiscal 2021 vest in four four Stock option award grant date fair values were estimated using the Black-Scholes-Merton option pricing model with the following weighted-average assumptions: Fiscal Year Ended December 30, December 31, December 26, Weighted average fair value per stock option $ 41.75 $ 22.27 $ 20.38 Risk-free interest rate 0.80% 1.17% 2.06% Expected volatility 48% 39% 45% Expected life (in years) 5.40 5.75 6.68 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 30, 2021: Options Weighted Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2021 3,740,604 $ 20.72 Granted 66,505 95.68 Exercised (1,252,566) 11.77 Forfeited or expired (50,889) 39.11 Outstanding at December 30, 2021 2,503,654 $ 26.81 5.7 $ 258,395 Vested and exercisable at December 30, 2021 1,685,628 $ 19.58 5.2 $ 186,097 The fair value of stock options vested during the fiscal years ended December 30, 2021, December 31, 2020, and December 26, 2019 was $8.8 million, $7.5 million, and $7.5 million, respectively. The aggregate intrinsic value of stock options exercised was $126.6 million, $135.5 million, and $146.6 million for the fiscal years ended December 30, 2021, December 31, 2020, and December 26, 2019, respectively. The Company’s total unrecognized compensation cost related to stock options as of December 30, 2021 and December 31, 2020 was $9.7 million and $16.0 million, respectively. The unrecognized compensation cost remaining as of December 30, 2021 is expected to be recognized over a weighted average period of 1.9 years. Restricted Stock Units During the fiscal year ended December 30, 2021, 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 30, 2021: Restricted Stock Units Weighted Average Grant Date Fair Value Unvested at January 1, 2021 128,220 $ 59.40 Granted 129,290 99.78 Vested (28,631) 58.01 Forfeited (14,101) 76.14 Unvested at December 30, 2021 214,778 $ 82.80 The total unrecognized compensation cost related to restricted stock units as of December 30, 2021 and December 31, 2020 was $14.0 million and $6.2 million, respectively. The unrecognized compensation cost remaining as of December 30, 2021 is expected to be recognized over a weighted average period of 3.0 years. Restricted Stock Awards During the fiscal year ended December 30, 2021, the Company issued service-based restricted stock awards to certain executive officers and non-employee directors that are subject to the grantee’s continued service through the applicable vesting date. Service-based restricted stock awards granted during the period to executive officers vest in four four The following table summarizes restricted stock award activity during the fiscal year ended December 30, 2021: 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 January 1, 2021 131,844 $ 53.72 160,315 $ 57.70 104,456 $ 44.28 Granted 29,153 96.86 — — — — Vested (13,764) 49.70 — — — — Forfeited (2,508) 46.37 — — — — Unvested at December 30, 2021 144,725 $ 62.92 160,315 $ 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 30, 2021 and December 31, 2020, total unrecognized compensation cost related to unvested restricted stock awards was $10.9 million and $15.2 million, respectively. The unrecognized compensation cost remaining as of December 30, 2021 is expected to be recognized over a weighted average period of 1.9 years. The total fair value of restricted stock awards that vested during the fiscal years ended December 30, 2021, December 31, 2020, and December 26, 2019 was $1.4 million, $0.5 million, and $0.5 million, respectively. Employee Stock Purchase Plan The Employee Stock Purchase Plan (the “ESPP”) is a tax-qualified plan under Section 423 of the Internal Revenue Code and permits eligible employees to purchase shares of the Company’s 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 its common stock on either the first or last trading day of each six-month offering period. There are 1,500,000 shares of the Company’s Class A common stock, par value $0.001 per share, approved for issuance under the ESPP, 46,273, 56,389, and 104,363 of which were issued during fiscal years 2021, 2020, and 2019, respectively. During fiscal years 2021, 2020, and 2019, the Company recognized stock-based compensation expense related to the ESPP totaling $1.0 million, $0.7 million, and $0.5 million, respectively. 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 years 2021 and 2020. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 30, 2021 | |
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: Fiscal Year Ended in thousands, except per share data December 30, December 31, December 26, Net income $ 283,230 $ 194,981 $ 150,631 Basic weighted average shares outstanding 104,683 102,690 99,435 Dilutive effect of share-based awards 2,707 3,452 5,527 Diluted weighted average shares outstanding 107,390 106,142 104,962 Basic earnings per share $ 2.71 $ 1.90 $ 1.51 Diluted earnings per share $ 2.64 $ 1.84 $ 1.44 The following potentially dilutive securities were excluded from the computation of diluted earnings per share as a result of their anti-dilutive effect: Fiscal Year Ended in thousands December 30, December 31, December 26, Stock options 71 320 971 |
Selected Quarterly Financial In
Selected Quarterly Financial Information (unaudited) | 12 Months Ended |
Dec. 30, 2021 | |
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 2021 and fiscal 2020. Fiscal 2021 in thousands, except per share data First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 782,537 $ 860,108 $ 876,553 $ 914,335 Gross profit 336,933 365,438 365,308 354,587 Net income 75,796 82,916 74,645 49,873 Basic earnings per share 0.73 0.79 0.71 0.47 Diluted earnings per share 0.71 0.77 0.69 0.46 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 |
Acquisition
Acquisition | 12 Months Ended |
Dec. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition | Acquisition On June 4, 2021 (“acquisition date” or “closing date”), the Company acquired Spartan Surfaces, Inc. (“Spartan”), a commercial specialty hard-surface flooring distribution company, for total estimated purchase consideration of $77.7 million. The acquisition was accounted for in accordance with ASC 805, Business Combinations , and, accordingly, Spartan’s results of operations, financial position, and cash flows have been consolidated in the Company’s consolidated financial statements since the date of acquisition. The Company determined that Spartan is not a significant subsidiary as defined in Rule 1-02(w), Securities Act Rule 405, and Exchange Act Rule 12b-2. The acquisition was not material to the Company’s consolidated results of operations or financial position for the periods presented and, therefore, pro forma information has not been presented. During the fiscal year ended December 30, 2021, we recognized business acquisition and integration costs totaling $3.4 million within general and administrative expenses within the Consolidated Statements of Operations and Comprehensive Income. The Company incurred no business acquisition or integration costs in fiscal 2020 or 2019. The following table summarizes the fair values of the components of the purchase price as of the acquisition date: in thousands Cash, net of cash acquired $ 63,567 Floor and Decor Class A common stock 5,000 Contingent consideration 9,090 Total purchase price $ 77,657 The contingent consideration represents the estimated fair value associated with potential earn-out payments to the seller of up to $18.0 million subject to Spartan's achievement of certain financial performance targets in fiscal years 2021 through 2024. Of the total earn-out consideration, $9.0 million is related to the achievement of certain annual adjusted EBITDA margin targets, and $9.0 million is related to the achievement of certain annual gross profit targets. A portion of these earn-out opportunities is payable each year subject to achievement of the applicable performance targets for that year, with the maximum payout requiring that each of the individual annual targets are met. The Company determined the fair value of the contingent earn-out consideration (“contingent earn-out liability”) with assistance from a third-party valuation specialist using a Monte Carlo valuation method. Significant assumptions included the amount and timing of projected cash flows, growth rates, volatility, and discount factors. The contingent earn-out liability is classified as Level 3 within the fair value hierarchy due to the use of unobservable inputs that are significant to its valuation and is required to be remeasured at each reporting date through the applicable earn-out periods, with any resulting gains or losses recognized in general and administrative expenses in the period of remeasurement. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date: in thousands Fair Value Current assets $ 16,467 Fixed assets, net 970 Right-of-use assets 3,300 Intangible assets, net 44,400 Goodwill 28,026 Total assets acquired $ 93,163 Current liabilities $ 12,393 Lease liabilities 2,725 Other liabilities 388 Total liabilities assumed $ 15,506 Net assets acquired $ 77,657 The fair values of identifiable intangible assets were determined with assistance from a third-party valuation specialist using the multi-period excess earnings method for customer relationships, the relief-from-royalty method for the trade name, and an incremental income method for the non-compete agreement. These valuation methodologies included significant assumptions such as the amount and timing of projected cash flows, growth rates, customer attrition rates, discount rates, royalty rates (for use in estimating the fair value of the Spartan trade name), and the assessment of each asset’s life cycle. Following are the estimated fair values, which are classified within Level 3 of the fair value hierarchy, and estimated remaining useful lives of identifiable intangibles assets as of the acquisition date: in thousands Useful Life (Years) Fair Value Identifiable intangible assets: Customer relationships 12 $ 34,900 Trade name Indefinite 9,200 Non-compete agreement 5 300 Total identifiable intangible assets $ 44,400 The goodwill arising from the acquisition is primarily attributable to operational synergies and acceleration of growth strategies. The goodwill and intangible assets from the Spartan acquisition are expected to be deductible for U.S. federal and state tax purposes. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 30, 2021 | |
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 30, 2021 (“fiscal 2021”) and December 26, 2019 (“fiscal 2019”) 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. |
Business Combinations | Business Combinations The Company accounts for acquisitions in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations. The purchase price of an acquisition is measured as the aggregate fair value of the consideration transferred at the date of acquisition. The purchase price is allocated to the fair values of the tangible and intangible assets acquired and liabilities assumed, with any excess recorded as goodwill. These fair value determinations require judgment and may involve the use of significant estimates and assumptions. The purchase price allocation may be provisional during a measurement period of up to one year from the acquisition date to provide reasonable time to obtain the information necessary to identify and measure the assets acquired and liabilities assumed. Only facts and circumstances that existed as of the acquisition date are considered for subsequent adjustment to the purchase price allocation, and any such adjustment will be recognized in the period in which it is determined prior to completion of the measurement period. Transaction costs associated with acquisitions are expensed as incurred. |
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, receivables from vendors, and amounts due from commercial sales. The Company typically collects its credit card receivables within three five On November 7, 2019, the U.S. Trade Representative 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 $22.0 million related to Section 301 tariff payments, of which $14.6 million has been received as of December 30, 2021. As of December 30, 2021 and December 31, 2020, receivables included $7.4 million and $11.4 million of expected tariff refunds from U.S. Customs. The tariff refund receivables outstanding as of December 30, 2021 are expected to be received during fiscal 2022. The Company recognized a $2.6 million increase to cost of sales related to a reduction in estimated tariff refunds in fiscal 2021. During fiscal 2020 and 2019, the Company recognized a reduction to cost of sales of $4.5 million and $14.0 million, respectively. Interest income recognized related to tariff refunds during fiscal 2021, 2020, and 2019 was $0.3 million, $0.6 million, $0.3 million, respectively. 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 ProgramCredit is offered to the Company's customers through a proprietary credit card underwritten by third-party financial institutions at no recourse to the Company. The Company also offers limited credit to its commercial clients. |
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 $7.8 million and $5.4 million as of December 30, 2021 and December 31, 2020, respectively. |
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 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. 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 its trade names, which are 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. The Company has the option to assess the value of its goodwill and other 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 other 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 other 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 2021, 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 other indefinite-lived intangible assets were not impaired as of October 29, 2021. No events or changes in circumstances have occurred since the date of the Company's most recent annual impairment assessment that would more likely than not reduce the fair value of the reporting unit below its carrying amount. |
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 the Company’s 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 assets, 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. Definite-lived intangible assets are amortized over their respective estimated useful lives 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 assets. The useful lives of definite-lived intangible asset are evaluated on an annual basis. |
Leases | Leases The Company recognizes lease right-of-use 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 the Company’s 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 the Company’s 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 the Company has the right to control the property. |
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’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 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 the Company’s 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 | 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. Derivative contracts are recognized 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 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. The Company performs an assessment of the effectiveness of its derivative contracts designated as hedges, including assessing the possibility of counterparty default. If it is determined that a derivative is no longer expected to be highly effective, hedge accounting is discontinued prospectively, and subsequent changes in the fair value of the hedge are recognized in earnings. The Company’s outstanding derivative contracts, which are interest rate cap contracts that continue to be designated as cash flow hedges, are expected to 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 the Company’s results of operations. In an effort to manage exposure to this risk, the Company enters into derivative contracts and may adjust its 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 The Company’s exposure to market risk from adverse changes in interest rates is primarily associated with its long-term debt obligations, which carry variable interest rates. Market risk associated with the Company’s 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 exposure to the risk associated with variable interest rate long term debt, the Company periodically enters into interest rate derivative contracts. These interest rate derivative contracts are used to convert the interest rate exposure on a portion of the Company’s debt portfolio from a floating rate to a capped rate and are designated as cash flow hedges. Credit Risk To manage credit risk associated with the Company’s interest rate hedging program, the Company selects counterparties based on their credit ratings and limits exposure to any one counterparty. The counterparties to the Company’s derivative contracts are financial institutions with investment grade credit ratings. To manage credit risk related to its derivative financial instruments, the Company periodically monitors the credit risk of its counterparties, limits its exposure in the aggregate and to any single counterparty, and adjust its hedging positions, as appropriate. The impact of credit risk, as well as the ability of each party to fulfill its obligations under the 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 the Company’s derivative contracts. The Company’s derivative financial instruments do not have any credit risk-related contingent features or collateral requirements. |
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 In accordance with Accounting Standards Update (“ASU”) No. 2014-9, “Revenue from Contracts with Customers” (“Topic 606”), revenue and cost of sales are recognized when the related performance obligations in contracts with customers are settled. Performance obligations for the Company’s retail store sales, as well as for orders placed through its website and shipped to 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 primarily include hard surface flooring and related accessories. The Company does not perform installation services, and free design services are offered in-store. The transaction price recognized in revenue 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. The Company provides customers 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. Reserves for future returns of previously sold goods are estimated based on historical experience and various other assumptions that management believes to be reasonable. These reserves reduce sales and cost of sales and establish a related return asset and refund liability as defined in 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. |
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 the Company’s 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 ExpensesThe Company expenses advertising costs as the advertising takes place. |
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 . As necessary, the Company obtains independent third-party valuation studies to assist with determining the grant date fair value of employee stock awards. 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 Company’s common stock as well as 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. The Company includes any estimated interest and penalties on tax-related matters in income taxes payable and income tax expense. The Company accounts for uncertain tax positions in accordance with ASC 740. ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements using a two-step process for evaluating tax positions taken, or expected to be taken, on a tax return. The Company may only recognize the tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. In addition, the Company recognizes a loss contingency for uncertain tax positions when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Amounts recognized for uncertain tax positions require that management make estimates and judgments based on provisions of the tax law, which may be subject to change or varying interpretations. The Company includes estimated interest and penalties related to uncertain tax position accruals within accrued expenses and other current liabilities in the Consolidated Balance Sheets and within income tax expense in the Consolidated Statements of Operations and Comprehensive Income. |
Segments | Segments The Company operates as a multi-channel specialty retailer and commercial flooring distributor. The Company primarily sells 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 enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and evaluating financial performance. The Company’s CODM, its Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by information abo ut the Company’s two operating segments, Floor & Decor Retail and Spartan, for purposes of allocating resources and evaluating financial performance. The Spart an segment, which engages in commercial flooring distribution and is entirely comprised of the Company’s Spartan subsidiary that was acquired during the second quarter of fiscal 2021, does not meet the materiality criteria of ASC 280, Segment Reporting (“ASC 280”), and is therefore not disclosed separately as a reportable segment. Specifically, the Spartan segment’s revenue, gross profit, operating income, and total assets are immaterial in relation to the Company’s consolidated revenue, gross profit, operating income, and total assets. The Company concluded that the economic and operating characteri stics of its one reporta ble segment, Floor & Decor Retail, 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 nature of products and services offered, customer base, marketing initiatives, operating procedures, store layouts, employee incentive programs, 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 Presentation of Financial Statements, Financial Services—Depository and Lending, Financial Services—Investment Companies. In August 2021, the FASB issued ASU No. 2021-06, “ Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946) .” The ASU includes Release No.33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses . This update amends certain SEC disclosure guidance that is included in the accounting standards codification to reflect the SEC’s recent issuance of rules intended to modernize and streamline disclosure requirements, including updates to business acquisition and disposition significance tests used, the significance thresholds for pro forma statement disclosures, the number of preceding years of financial statements required for disclosure, and other provisions in the SEC releases. The guidance is effective upon its addition to the FASB codification. The adoption of ASU No. 2021-06 did not have a material impact on the Company’s consolidated financial statements or related disclosures. Simplifying the Accounting for Income Taxes. In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. In the first quarter of fiscal 2021, the Company adopted ASU No. 2019-12 on a prospective basis. The adoption of ASU No. 2019-12 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. 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. 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. The Company 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. Recently Issued Accounting Pronouncements Reference Rate Reform. In January 2021, the FASB issued ASU No. 2021-01, “ 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. Business Combinations. In October 2021, the FASB issued ASU No. 2021-08, “ Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .” The ASU addresses diversity and inconsistency related to the recognition and measurement of contract assets and contract liabilities acquired in a business combination and require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. This standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption of the standard is permitted, including adoption in an interim period. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial statements or related disclosures. |
Fair Value Measurements | Fair Value Measurements As of December 30, 2021 and December 31, 2020, 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 carrying 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. Recurring Fair Value Measurements As of December 30, 2021, the contingent earn-out liability related to the Spartan acquisition, as described in Note 14, “Acquisition,” had an estimated fair value of $10.2 million (classified as level 3 within the fair value hierarchy), of which $2.5 million is included in accrued expenses and other current liabilities and the remaining $7.7 million is included in other liabilities within the Consolidated Balance Sheets. For the fiscal year ended December 30, 2021, a $1.1 million net increase in the fair value of the contingent earn-out liability was recognized in general and administrative expense within the Consolidated Statements of Operations and Comprehensive Income. The Company determined the fair value of the contingent earn-out liability as of December 30, 2021 with assistance from a third-party valuation specialist using a Monte Carlo valuation method using significant unobservable inputs, including the following weighted-average assumptions: discount rate of 11.5%, Spartan revenue volatility of 29.0%, and Spartan EBITDA volatility of 55.0%. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Fixed Assets | 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 Fixed assets as of December 30, 2021 and December 31, 2020 consisted of the following: in thousands December 30, December 31, Furniture, fixtures, and equipment $ 494,743 $ 259,696 Leasehold improvements 465,429 380,671 Computer software and hardware 173,046 138,321 Buildings and building improvements (1) 126,042 65,552 Land 80,509 30,731 Fixed assets, at cost 1,339,769 874,971 Less: accumulated depreciation and amortization 410,686 295,612 Fixed assets, net $ 929,083 $ 579,359 (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. |
Schedule of Finite-Lived Intangible Assets | In accordance with ASC 350, Intangibles—Goodwill and Other, identifiable intangible assets with finite lives are amortized over their estimated useful lives. The estimated lives of the Company’s finite-lived intangible assets are as follows: Useful Life Customer relationships 12 years Non-compete agreement 5 years The gross carrying amount and accumulated amortization of other intangible assets as of December 30, 2021 and December 31, 2020 are as follows: December 30, 2021 December 31, 2020 in thousands Gross carrying amount Accumulated amortization Net carrying value Gross carrying amount Accumulated amortization Net carrying value Amortizable intangible assets: Customer relationships $ 34,900 $ (1,697) $ 33,203 $ — $ — $ — Non-compete agreement 300 (37) 263 — — — Total amortizable intangible assets 35,200 (1,734) 33,466 — — — Indefinite-lived intangible assets: Trade names 118,469 — 118,469 109,269 — 109,269 Total intangible assets: $ 153,669 $ (1,734) $ 151,935 $ 109,269 $ — $ 109,269 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | The following table presents the net sales of each major product category for each of the last three fiscal years: Fiscal Year Ended in thousands December 30, December 31, December 26, Product Category Net Sales % of Net Sales Net Sales % of Net Sales Net Sales % of Net Sales Laminate / luxury vinyl plank $ 876,714 26 % $ 555,963 23 % $ 442,171 22 % Tile 801,101 23 605,357 25 523,076 26 Decorative accessories / wall tile (1) 642,697 19 464,589 19 386,657 19 Installation materials and tools 558,721 16 403,184 17 346,356 17 Wood 259,637 8 211,307 9 202,888 10 Natural stone 199,140 6 152,665 6 127,975 6 Adjacent categories (1) 54,482 1 20,487 1 7,251 — Other (2) 41,041 1 12,236 — 9,082 — Total $ 3,433,533 100 % $ 2,425,788 100 % $ 2,045,456 100 % (1) To conform to the current period presentation, the presentation of revenue by product category for the fiscal years ended December 31, 2020 and December 26, 2019 has been updated within this table to provide disclosure of adjacent categories, which primarily includes bathroom and kitchen products and accessories, as a separate category. In prior periods, adjacent categories revenue was included as a component of the decorative accessories / wall tile product category. (2) Other includes delivery, sample, and other product revenue and adjustments for deferred revenue, sales returns reserves, customer rewards under the Company’s 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. 30, 2021 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses and other current liabilities as of December 30, 2021 and December 31, 2020 consisted of the following: in thousands December 30, December 31, Accrued incentive compensation $ 36,705 $ 24,591 Sales returns and allowances 36,210 22,266 Sales tax payable 25,232 21,824 Accrued construction in progress new stores 59,771 20,818 Insurance reserve incurred but not reported 14,770 13,511 Wages and payroll tax payable 20,147 22,349 Loyalty program liability 20,404 12,073 Other 35,696 24,851 Accrued expenses and other current liabilities $ 248,935 $ 162,283 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Dec. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | 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 Fixed assets as of December 30, 2021 and December 31, 2020 consisted of the following: in thousands December 30, December 31, Furniture, fixtures, and equipment $ 494,743 $ 259,696 Leasehold improvements 465,429 380,671 Computer software and hardware 173,046 138,321 Buildings and building improvements (1) 126,042 65,552 Land 80,509 30,731 Fixed assets, at cost 1,339,769 874,971 Less: accumulated depreciation and amortization 410,686 295,612 Fixed assets, net $ 929,083 $ 579,359 (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. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Amount of Goodwill | Goodwill and changes in the carrying amount of goodwill are as follows for the periods presented: in thousands December 30, 2021 December 31, 2020 Goodwill, balance at beginning of year $ 227,447 $ 227,447 Acquisitions (1) 28,026 — Goodwill, balance at end of year $ 255,473 $ 227,447 (1) Reflects goodwill related to the Spartan acquisition. See Note 14, “Acquisition” for additional details. |
Schedule of Finite-Lived Intangible Assets | In accordance with ASC 350, Intangibles—Goodwill and Other, identifiable intangible assets with finite lives are amortized over their estimated useful lives. The estimated lives of the Company’s finite-lived intangible assets are as follows: Useful Life Customer relationships 12 years Non-compete agreement 5 years The gross carrying amount and accumulated amortization of other intangible assets as of December 30, 2021 and December 31, 2020 are as follows: December 30, 2021 December 31, 2020 in thousands Gross carrying amount Accumulated amortization Net carrying value Gross carrying amount Accumulated amortization Net carrying value Amortizable intangible assets: Customer relationships $ 34,900 $ (1,697) $ 33,203 $ — $ — $ — Non-compete agreement 300 (37) 263 — — — Total amortizable intangible assets 35,200 (1,734) 33,466 — — — Indefinite-lived intangible assets: Trade names 118,469 — 118,469 109,269 — 109,269 Total intangible assets: $ 153,669 $ (1,734) $ 151,935 $ 109,269 $ — $ 109,269 |
Schedule of Indefinite-Lived Intangible Assets | The gross carrying amount and accumulated amortization of other intangible assets as of December 30, 2021 and December 31, 2020 are as follows: December 30, 2021 December 31, 2020 in thousands Gross carrying amount Accumulated amortization Net carrying value Gross carrying amount Accumulated amortization Net carrying value Amortizable intangible assets: Customer relationships $ 34,900 $ (1,697) $ 33,203 $ — $ — $ — Non-compete agreement 300 (37) 263 — — — Total amortizable intangible assets 35,200 (1,734) 33,466 — — — Indefinite-lived intangible assets: Trade names 118,469 — 118,469 109,269 — 109,269 Total intangible assets: $ 153,669 $ (1,734) $ 151,935 $ 109,269 $ — $ 109,269 |
Schedule of Future Amortizable Expense Related to Other Intangible Assets | As of December 30, 2021, the estimated aggregate future amortizable expense related to other intangible assets is as follows: in thousands Amount 2022 $ 2,974 2023 2,974 2024 2,974 2025 2,974 2026 2,908 Thereafter 18,662 Total $ 33,466 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of the Provision For Income Taxes | The components of the provision for income taxes are as follows: Fiscal Year Ended in thousands December 30, December 31, December 26, Current expense (benefit): Federal $ 37,869 $ (1,781) $ 7,975 State 9,927 4,391 2,358 Total current expense 47,796 2,610 10,333 Deferred expense (benefit): Federal 4,853 11,684 (6,522) State (1,811) (2,070) (4,062) Total deferred expense (benefit) 3,042 9,614 (10,584) Provision (benefit) for income taxes $ 50,838 $ 12,224 $ (251) |
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 30, 2021, December 31, 2020, and December 26, 2019 to income before income taxes: Fiscal Year Ended in thousands December 30, December 31, December 26, Computed “expected” provision at statutory rate $ 70,154 $ 43,513 $ 31,580 State income taxes, net of federal income tax benefit (1) 6,186 1,493 (1,364) Permanent differences: Excess tax benefit related to stock options exercised (25,710) (27,003) (29,441) Other 908 517 543 Total permanent differences (24,802) (26,486) (28,898) Provision to return (34) (150) (282) Federal tax credits (1,471) (920) (1,306) CARES Act benefit — (7,676) — Uncertain Tax Positions 308 2,724 — Other, net 497 (274) 19 Provision (benefit) for income taxes $ 50,838 $ 12,224 $ (251) (1) Includes state excess tax benefits related to stock options exercised for fiscal years 2021, 2020, and 2019 of $4.6 million, $5.3 million, and $5.6 million, respectively. |
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 30, Fiscal Year Ended December 31, Deferred tax assets: Lease liabilities $ 308,198 $ 259,273 Accruals not currently deductible for tax purposes 11,622 8,293 Inventories 10,711 6,941 Stock-based compensation 8,754 5,979 Gift card liability 1,254 557 Other intangibles 335 268 Litigation accrual 86 120 Other 5,428 10,732 Total deferred tax assets 346,388 292,163 Deferred tax liabilities: Right-of-use assets (274,151) (227,166) Fixed assets (70,289) (62,374) Intangible assets (27,198) (27,053) Other (5,876) (3,560) Total deferred tax liabilities (377,514) (320,153) Net deferred tax liabilities $ (31,126) $ (27,990) |
Schedule of Unrecognized Tax Benefits Roll Forward | Following is a reconciliation of the beginning and ending balance of unrecognized tax benefits for periods presented: Fiscal Year Ended in thousands December 30, December 31, December 26, Unrecognized tax benefits balance at beginning of fiscal year $ 6,107 $ 402 $ — Additions based on tax positions related to the current year 390 281 282 Additions for tax positions of prior years — 5,424 120 Reductions due to settlements (5,424) — — Unrecognized tax benefits balance at end of fiscal year $ 1,073 $ 6,107 $ 402 |
Derivatives and Risk Manageme_2
Derivatives and Risk Management (Tables) | 12 Months Ended |
Dec. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Position | Derivative Position as of December 30, 2021: in thousands Notional Balance Final Maturity Date Other Assets AOCI, Net of Tax Designated as hedges: Interest rate cap (cash flow hedge) $ 75,000 U.S. dollars April 2024 $ 262 $ (106) Interest rate cap (cash flow hedge) $ 75,000 U.S. dollars April 2024 $ 262 $ (108) Interest rate cap (cash flow hedge) $ 102,500 U.S. dollars December 2021 $ — $ (272) Not designated as hedges: Interest rate cap $ 102,500 U.S. dollars December 2021 $ — $ (49) Derivative Position as of December 31, 2020: 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 $ — $ (89) Not designated as hedges: Interest rate cap $ 102,500 U.S. dollars December 2021 $ — $ (75) |
Schedule of Gains (Losses) Related to Our Designated Hedge Contracts | Gains (losses) related to designated hedge contracts are as follows: Effective Portion Recognized in Fiscal Year Ended in thousands December 30, December 31, December 26, Interest rate cap (cash flow hedge) $ 371 $ 357 $ (379) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 30, 2021 | |
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 30, 2021 As of December 31, 2020 Assets Building Right-of-use assets $ 972,962 $ 851,092 Land Right-of-use assets 107,764 56,708 Equipment Right-of-use assets 14,127 6,865 Software Right-of-use assets 8,897 1,660 Total operating lease assets 1,103,750 916,325 Liabilities Current Building Current portion of lease liabilities 92,909 88,287 Land Current portion of lease liabilities 1,385 440 Equipment Current portion of lease liabilities 6,842 3,941 Software Current portion of lease liabilities 3,466 1,834 Total current operating lease liabilities 104,602 94,502 Noncurrent Building Lease liabilities 989,712 873,098 Land Lease liabilities 120,174 65,103 Equipment Lease liabilities 7,285 2,924 Software Lease liabilities 3,819 — Total noncurrent operating lease liabilities 1,120,990 941,125 Total operating lease liabilities $ 1,225,592 $ 1,035,627 Weighted-average remaining lease term 11 years 11 years Weighted-average discount rate 5.1% 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 30, December 31, December 26, Fixed operating lease cost: Selling and store operating $ 123,882 $ 105,207 $ 87,124 Cost of sales 24,170 22,672 17,132 Pre-opening 10,127 7,886 5,959 General and administrative 4,359 4,118 2,272 Total fixed operating lease cost $ 162,538 $ 139,883 $ 112,487 Variable lease cost (1): Selling and store operating $ 42,093 $ 34,499 $ 28,894 Cost of sales 5,506 4,860 3,570 Pre-opening 274 657 151 General and administrative 310 151 5 Total variable lease cost $ 48,183 $ 40,167 $ 32,620 Sublease income Cost of sales (2,694) (2,713) (2,414) Operating lease right-of-use asset impairment General and administrative — — 4,136 Total operating lease cost (2) $ 208,027 $ 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 30, 2021, December 31, 2020, and December 26, 2019. |
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 30, 2021 were as follows: in thousands Amount 2022 $ 163,924 2023 170,295 2024 161,516 2025 151,944 2026 143,693 Thereafter 866,242 Total minimum lease payments (1) (2) 1,657,614 Less: amount of lease payments representing interest 432,022 Present value of future minimum lease payments 1,225,592 Less: current obligations under leases 104,602 Long-term lease obligations $ 1,120,990 (1) Future lease payments exclude approximately $72.6 million of legally binding minimum lease payments for operating leases signed but not yet commenced. (2) Operating lease payments include $108.5 million related to options to extend lease terms that are reasonably certain of being exercised. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | The following table summarizes the Company's long-term debt as of December 30, 2021 and December 31, 2020: in thousands Maturity Date Interest Rate Per Annum at December 30, December 30, December 31, Credit Facilities: Term Loan B February 14, 2027 2.09% Variable $ 206,602 $ 143,179 Term Loan B-1 February 14, 2027 n/a Variable — 74,625 Total secured debt at par value 206,602 217,804 Less: current maturities 2,103 1,647 Long-term debt maturities 204,499 216,157 Less: unamortized discount and debt issuance costs 8,737 9,000 Total long-term debt $ 195,762 $ 207,157 n/a - not applicable |
Schedule of Maturities of Debt | The following table summarizes scheduled maturities of the Company’s debt, including current maturities, as of December 30, 2021: in thousands Amount 2022 $ 2,103 2023 2,103 2024 2,103 2025 2,103 2026 2,629 Thereafter 195,561 Total minimum debt payments $ 206,602 |
Schedule of Components of Interest Expense | Components of interest expense are as follows for the periods presented: Fiscal Year Ended in thousands December 30, December 31, December 26, Total interest costs, net of interest income $ 7,657 $ 9,606 $ 8,801 Interest capitalized $ 2,733 $ 1,217 $ — Interest expense, net $ 4,924 $ 8,389 $ 8,801 |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | At December 30, 2021 and December 31, 2020, the fair values of the Company’s debt are as follows: in thousands December 30, December 31, Total debt at par value $ 206,602 $ 217,804 Less: unamortized discount and debt issuance costs 8,737 9,000 Net carrying amount 197,865 208,804 Fair value $ 202,986 $ 215,626 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 30, 2021 | |
Equity [Abstract] | |
Schedule of Assumptions Used to Estimate the Fair Value of Stock Option Awards Granted | Stock option award grant date fair values were estimated using the Black-Scholes-Merton option pricing model with the following weighted-average assumptions: Fiscal Year Ended December 30, December 31, December 26, Weighted average fair value per stock option $ 41.75 $ 22.27 $ 20.38 Risk-free interest rate 0.80% 1.17% 2.06% Expected volatility 48% 39% 45% Expected life (in years) 5.40 5.75 6.68 Dividend yield —% —% —% |
Schedule of Stock Option Activity | The table below summarizes stock option activity for the fiscal year ended December 30, 2021: Options Weighted Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2021 3,740,604 $ 20.72 Granted 66,505 95.68 Exercised (1,252,566) 11.77 Forfeited or expired (50,889) 39.11 Outstanding at December 30, 2021 2,503,654 $ 26.81 5.7 $ 258,395 Vested and exercisable at December 30, 2021 1,685,628 $ 19.58 5.2 $ 186,097 |
Schedule of Restricted Stock Unit Activity | The following table summarizes restricted stock unit activity during the fiscal year ended December 30, 2021: Restricted Stock Units Weighted Average Grant Date Fair Value Unvested at January 1, 2021 128,220 $ 59.40 Granted 129,290 99.78 Vested (28,631) 58.01 Forfeited (14,101) 76.14 Unvested at December 30, 2021 214,778 $ 82.80 |
Schedule of Restricted Stock Award Activity | The following table summarizes restricted stock award activity during the fiscal year ended December 30, 2021: 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 January 1, 2021 131,844 $ 53.72 160,315 $ 57.70 104,456 $ 44.28 Granted 29,153 96.86 — — — — Vested (13,764) 49.70 — — — — Forfeited (2,508) 46.37 — — — — Unvested at December 30, 2021 144,725 $ 62.92 160,315 $ 57.70 104,456 $ 44.28 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 30, 2021 | |
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: Fiscal Year Ended in thousands, except per share data December 30, December 31, December 26, Net income $ 283,230 $ 194,981 $ 150,631 Basic weighted average shares outstanding 104,683 102,690 99,435 Dilutive effect of share-based awards 2,707 3,452 5,527 Diluted weighted average shares outstanding 107,390 106,142 104,962 Basic earnings per share $ 2.71 $ 1.90 $ 1.51 Diluted earnings per share $ 2.64 $ 1.84 $ 1.44 |
Schedule of Awards Excluded From Computation | The following potentially dilutive securities were excluded from the computation of diluted earnings per share as a result of their anti-dilutive effect: Fiscal Year Ended in thousands December 30, December 31, December 26, Stock options 71 320 971 |
Selected Quarterly Financial _2
Selected Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 30, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following tables present the Company’s unaudited quarterly results for fiscal 2021 and fiscal 2020. Fiscal 2021 in thousands, except per share data First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 782,537 $ 860,108 $ 876,553 $ 914,335 Gross profit 336,933 365,438 365,308 354,587 Net income 75,796 82,916 74,645 49,873 Basic earnings per share 0.73 0.79 0.71 0.47 Diluted earnings per share 0.71 0.77 0.69 0.46 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 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Fair Values of the Components of the Purchase Price | The following table summarizes the fair values of the components of the purchase price as of the acquisition date: in thousands Cash, net of cash acquired $ 63,567 Floor and Decor Class A common stock 5,000 Contingent consideration 9,090 Total purchase price $ 77,657 |
Schedule of the Estimated Preliminary Fair Values of the Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date: in thousands Fair Value Current assets $ 16,467 Fixed assets, net 970 Right-of-use assets 3,300 Intangible assets, net 44,400 Goodwill 28,026 Total assets acquired $ 93,163 Current liabilities $ 12,393 Lease liabilities 2,725 Other liabilities 388 Total liabilities assumed $ 15,506 Net assets acquired $ 77,657 |
Schedule of the Preliminary Estimated Fair Values and Estimated Remaining Useful Lives of Identifiable Intangible Assets | . Following are the estimated fair values, which are classified within Level 3 of the fair value hierarchy, and estimated remaining useful lives of identifiable intangibles assets as of the acquisition date: in thousands Useful Life (Years) Fair Value Identifiable intangible assets: Customer relationships 12 $ 34,900 Trade name Indefinite 9,200 Non-compete agreement 5 300 Total identifiable intangible assets $ 44,400 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) ft² in Thousands, $ in Thousands | Jun. 04, 2021USD ($) | Dec. 30, 2021USD ($)ft²distributionCentersegmentstoredesignCenterstate | Dec. 31, 2020USD ($) | Dec. 26, 2019USD ($) | Dec. 27, 2018USD ($) |
Real Estate Properties [Line Items] | |||||
Number of reportable segments | segment | 1 | ||||
Number of states with facilities | state | 33 | ||||
Number of distribution centers | distributionCenter | 4 | ||||
Allowance for doubtful accounts | $ 300 | $ 300 | |||
Tariff recoveries expected | 22,000 | ||||
Tariff recoveries received | 14,600 | ||||
Tariff recoveries receivable | 7,400 | 11,400 | |||
Cost of sales | 2,011,267 | 1,390,896 | $ 1,182,442 | ||
Interest income earned on anticipated tariff recoveries | 300 | 600 | 300 | ||
Exposure from credit program | 6,000 | 1,200 | |||
Inventory valuation reserves | $ 7,800 | 5,400 | |||
Number of days customer may return merchandise | 90 days | ||||
Gift card breakage income | $ 2,400 | 1,500 | 1,200 | ||
Loyalty program award, as a percentage of selling price | 1.00% | ||||
Loyalty program breakage income | $ 2,200 | 1,400 | 1,100 | ||
Allowance for sales returns | 36,210 | 22,266 | |||
Advertising expense | 90,400 | 66,600 | 65,700 | ||
Pre-opening expenses | $ 34,433 | 21,498 | 24,594 | ||
Number of operating segments | segment | 2 | ||||
Cumulative effect adjustment to retained earnings upon adoption | $ 1,323,199 | 997,388 | 764,336 | $ 584,309 | |
Tariff Refund | |||||
Real Estate Properties [Line Items] | |||||
Cost of sales | 2,600 | 4,500 | 14,000 | ||
Spartan | |||||
Real Estate Properties [Line Items] | |||||
Total purchase price | $ 77,657 | ||||
Retained earnings | |||||
Real Estate Properties [Line Items] | |||||
Cumulative effect adjustment to retained earnings upon adoption | $ 872,226 | $ 588,996 | $ 394,015 | 243,563 | |
Cumulative Effect, Period of Adoption, Adjustment | |||||
Real Estate Properties [Line Items] | |||||
Cumulative effect adjustment to retained earnings upon adoption | (179) | ||||
Cumulative Effect, Period of Adoption, Adjustment | Retained earnings | |||||
Real Estate Properties [Line Items] | |||||
Cumulative effect adjustment to retained earnings upon adoption | (179) | ||||
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 | 160 | ||||
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) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Fixed Assets Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 30, 2021 | |
Minimum | Furniture, fixtures, and equipment | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 2 years |
Minimum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 10 years |
Minimum | Buildings and building improvements | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 10 years |
Minimum | Computer software and hardware | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 3 years |
Maximum | Furniture, fixtures, and equipment | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 7 years |
Maximum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 25 years |
Maximum | Buildings and building improvements | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 40 years |
Maximum | Computer software and hardware | |
Property, Plant and Equipment [Line Items] | |
Useful Life | 7 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Finite-Lived Intangible Assets (Details) | 12 Months Ended |
Dec. 30, 2021 | |
Customer relationships | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 12 years |
Non-compete agreement | |
Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 5 years |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2021 | Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Contract liabilities | $ 40,200 | $ 24,800 |
Deferred revenue | 14,492 | 10,115 |
Deferred revenue, loyalty program | 20,400 | 12,100 |
Deferred revenue, unredeemed gift cards | 5,300 | $ 2,600 |
Contract liabilities, revenue recognized | $ 11,100 |
Revenue - Disaggregated Revenue
Revenue - Disaggregated Revenue (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Jul. 01, 2021USD ($) | Apr. 01, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 24, 2020USD ($) | Jun. 25, 2020USD ($) | Mar. 26, 2020USD ($) | Dec. 30, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 26, 2019USD ($) | |
Disaggregation of Revenue [Line Items] | |||||||||||
Number of reportable segments | segment | 1 | ||||||||||
Net sales | $ 914,335 | $ 876,553 | $ 860,108 | $ 782,537 | $ 723,652 | $ 684,847 | $ 462,352 | $ 554,937 | $ 3,433,533 | $ 2,425,788 | $ 2,045,456 |
Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 100.00% | 100.00% | 100.00% | ||||||||
Laminate / luxury vinyl plank | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 876,714 | $ 555,963 | $ 442,171 | ||||||||
Laminate / luxury vinyl plank | Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 26.00% | 23.00% | 22.00% | ||||||||
Tile | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 801,101 | $ 605,357 | $ 523,076 | ||||||||
Tile | Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 23.00% | 25.00% | 26.00% | ||||||||
Decorative accessories/wall tile | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 642,697 | $ 464,589 | $ 386,657 | ||||||||
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% | 19.00% | ||||||||
Installation materials and tools | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 558,721 | $ 403,184 | $ 346,356 | ||||||||
Installation materials and tools | Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 16.00% | 17.00% | 17.00% | ||||||||
Wood | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 259,637 | $ 211,307 | $ 202,888 | ||||||||
Wood | Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 8.00% | 9.00% | 10.00% | ||||||||
Natural stone | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 199,140 | $ 152,665 | $ 127,975 | ||||||||
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% | 6.00% | ||||||||
Adjacent categories | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 54,482 | $ 20,487 | $ 7,251 | ||||||||
Adjacent categories | Revenue from contract with customer, product and service benchmark | Product concentration risk | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
% of Net Sales | 1.00% | 1.00% | 0.00% | ||||||||
Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net sales | $ 41,041 | $ 12,236 | $ 9,082 | ||||||||
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% | 0.00% |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 30, 2021 | Dec. 31, 2020 |
Accrued Liabilities, Current [Abstract] | ||
Accrued incentive compensation | $ 36,705 | $ 24,591 |
Sales returns and allowances | 36,210 | 22,266 |
Sales tax payable | 25,232 | 21,824 |
Accrued construction in progress new stores | 59,771 | 20,818 |
Insurance reserve incurred but not reported | 14,770 | 13,511 |
Wages and payroll tax payable | 20,147 | 22,349 |
Loyalty program liability | 20,404 | 12,073 |
Other | 35,696 | 24,851 |
Accrued expenses and other current liabilities | $ 248,935 | $ 162,283 |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | $ 1,339,769 | $ 874,971 | |
Less: accumulated depreciation and amortization | 410,686 | 295,612 | |
Fixed assets, net | 929,083 | 579,359 | |
Depreciation and amortization | 113,400 | 90,100 | $ 69,900 |
Furniture, fixtures, and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | 494,743 | 259,696 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | 465,429 | 380,671 | |
Computer software and hardware | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | 173,046 | 138,321 | |
Buildings and building improvements | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | 126,042 | 65,552 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, at cost | $ 80,509 | $ 30,731 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Goodwill, balance at beginning of year | $ 227,447 | $ 227,447 |
Acquisitions | 28,026 | 0 |
Goodwill, balance at end of year | $ 255,473 | $ 227,447 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | $ 35,200 | $ 0 | |
Accumulated amortization | (1,734) | 0 | |
Net carrying value | 33,466 | 0 | |
Total intangible assets: | |||
Gross carrying amount | 153,669 | 109,269 | |
Accumulated amortization | (1,734) | 0 | |
Net carrying value | 151,935 | 109,269 | |
Amortization of intangible assets | 1,700 | 0 | $ 0 |
Trade names | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | 118,469 | 109,269 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 34,900 | 0 | |
Accumulated amortization | (1,697) | 0 | |
Net carrying value | 33,203 | 0 | |
Total intangible assets: | |||
Accumulated amortization | (1,697) | 0 | |
Non-compete agreement | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying amount | 300 | 0 | |
Accumulated amortization | (37) | 0 | |
Net carrying value | 263 | 0 | |
Total intangible assets: | |||
Accumulated amortization | $ (37) | $ 0 |
Intangible Assets - Schedule _3
Intangible Assets - Schedule of Future Amortizable Expense Related to Other Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 2,974 | |
2023 | 2,974 | |
2024 | 2,974 | |
2025 | 2,974 | |
2026 | 2,908 | |
Thereafter | 18,662 | |
Net carrying value | $ 33,466 | $ 0 |
Income Taxes - Provision (Detai
Income Taxes - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Current expense (benefit): | |||
Federal | $ 37,869 | $ (1,781) | $ 7,975 |
State | 9,927 | 4,391 | 2,358 |
Total current expense | 47,796 | 2,610 | 10,333 |
Deferred expense (benefit): | |||
Federal | 4,853 | 11,684 | (6,522) |
State | (1,811) | (2,070) | (4,062) |
Total deferred expense (benefit) | 3,042 | 9,614 | (10,584) |
Provision (benefit) for income taxes | $ 50,838 | $ 12,224 | $ (251) |
Income Taxes - Effective rate r
Income Taxes - Effective rate reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Income Taxes [Line Items] | |||
Computed “expected” provision at statutory rate | $ 70,154 | $ 43,513 | $ 31,580 |
State income taxes, net of federal income tax benefit | 6,186 | 1,493 | (1,364) |
Excess tax benefit related to stock options exercised | (25,710) | (27,003) | (29,441) |
Other | 908 | 517 | 543 |
Total permanent differences | (24,802) | (26,486) | (28,898) |
Provision to return | (34) | (150) | (282) |
Federal tax credits | (1,471) | (920) | (1,306) |
CARES Act benefit | 0 | (7,676) | 0 |
Uncertain Tax Positions | 308 | 2,724 | 0 |
Other, net | 497 | (274) | 19 |
Provision (benefit) for income taxes | 50,838 | 12,224 | (251) |
State and Local Jurisdiction | |||
Income Taxes [Line Items] | |||
Excess tax benefit related to stock options exercised | $ (4,600) | $ (5,300) | $ (5,600) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 30, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Lease liabilities | $ 308,198 | $ 259,273 |
Accruals not currently deductible for tax purposes | 11,622 | 8,293 |
Inventories | 10,711 | 6,941 |
Stock-based compensation | 8,754 | 5,979 |
Gift card liability | 1,254 | 557 |
Other intangibles | 335 | 268 |
Litigation accrual | 86 | 120 |
Other | 5,428 | 10,732 |
Total deferred tax assets | 346,388 | 292,163 |
Deferred tax liabilities: | ||
Right-of-use assets | (274,151) | (227,166) |
Fixed assets | (70,289) | (62,374) |
Intangible assets | (27,198) | (27,053) |
Other | (5,876) | (3,560) |
Total deferred tax liabilities | (377,514) | (320,153) |
Net deferred tax liabilities | $ (31,126) | $ (27,990) |
Income Taxes - Valuation and Un
Income Taxes - Valuation and Unrecognized (Details) - USD ($) | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Income Taxes [Line Items] | |||
State net operating losses | $ (334,068,000) | $ (207,205,000) | $ (150,380,000) |
Valuation allowance | 0 | 0 | |
State and Local Jurisdiction | |||
Income Taxes [Line Items] | |||
State net operating losses | 200,000 | $ 100,000 | |
Net operating losses available to reduce future income taxes | $ 2,300,000 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits balance at beginning of fiscal year | $ 6,107,000 | $ 402,000 | $ 0 |
Additions based on tax positions related to the current year | 390,000 | 281,000 | 282,000 |
Additions for tax positions of prior years | 0 | 5,424,000 | 120,000 |
Reductions due to settlements | (5,424,000) | 0 | 0 |
Unrecognized tax benefits balance at end of fiscal year | 1,073,000 | 6,107,000 | 402,000 |
Unrecognized tax benefits that would impact the effective tax rate | 0 | 1,900,000 | |
Unrecognized tax benefits, interest on income taxes expense | $ 0 | $ 600,000 | $ 0 |
Income Taxes - CARES Act (Detai
Income Taxes - CARES Act (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jun. 25, 2020 | Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Income Taxes [Line Items] | ||||
Income tax benefit | $ (50,838) | $ (12,224) | $ 251 | |
Estimated cash refunds | 28,400 | |||
CARES Act | ||||
Income Taxes [Line Items] | ||||
Employee retention credit recorded | 1,700 | |||
Deferred employer social security taxes | 6,000 | |||
Offset to selling and store operating expenses | CARES Act | ||||
Income Taxes [Line Items] | ||||
Employee retention credit recorded | $ 1,000 | |||
Offset to general and administrative expenses | CARES Act | ||||
Income Taxes [Line Items] | ||||
Employee retention credit recorded | $ 200 | |||
Fiscal 2019 | CARES Act | ||||
Income Taxes [Line Items] | ||||
Income tax benefit | $ 7,700 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Millions | Dec. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Spartan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | $ 10.2 | |
Spartan | Other liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | 7.7 | |
Spartan | Accrued expenses and other current liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration liability | $ 2.5 | |
Measurement Input, Discount Rate | Spartan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input, contingent consideration | 0.115 | |
Measurement Input, Revenue Volatility | Spartan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input, contingent consideration | 0.290 | |
Measurement Input, EBITDA Volatility | Spartan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input, contingent consideration | 0.550 | |
Recurring | Level 2 | Interest Rate Cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate cap | $ 0.5 | $ 0.1 |
Derivatives and Risk Manageme_3
Derivatives and Risk Management (Details) - USD ($) | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Other Comprehensive Income (Loss), before Tax [Abstract] | |||
Other comprehensive income gain (loss), net of tax | $ 371,000 | $ 357,000 | $ (379,000) |
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | |||
Other Comprehensive Income (Loss), before Tax [Abstract] | |||
Reclassification from accumulated other comprehensive income | 0 | 0 | 0 |
Interest Rate Cap | |||
Other Comprehensive Income (Loss), before Tax [Abstract] | |||
Other comprehensive income gain (loss), net of tax | 371,000 | 357,000 | $ (379,000) |
Designated as hedging instrument | Interest Rate Cap | |||
Derivative [Line Items] | |||
Notional Balance | 75,000,000 | 102,500,000 | |
Other Assets | 262,000 | 0 | |
AOCI, Net of Tax | (106,000) | (89,000) | |
Designated as hedging instrument | Interest Rate Cap One | |||
Derivative [Line Items] | |||
Notional Balance | 75,000,000 | ||
Other Assets | 262,000 | ||
AOCI, Net of Tax | (108,000) | ||
Designated as hedging instrument | Interest Rate Cap Two | |||
Derivative [Line Items] | |||
Notional Balance | 102,500,000 | ||
Other Assets | 0 | ||
AOCI, Net of Tax | (272,000) | ||
Not designated as hedging instrument | Interest Rate Cap | |||
Derivative [Line Items] | |||
Notional Balance | 102,500,000 | 102,500,000 | |
Other Assets | 0 | 0 | |
AOCI, Net of Tax | $ (49,000) | $ (75,000) |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | Nov. 15, 2021 | Dec. 26, 2019USD ($) | Sep. 26, 2019USD ($) | Dec. 30, 2021USD ($)distributionCenterlease | Dec. 31, 2020USD ($) | Dec. 26, 2019USD ($) |
Lessee, Lease, Description [Line Items] | ||||||
Right-of-use assets | $ 1,103,750 | $ 916,325 | ||||
Operating lease liability | $ 1,225,592 | 1,035,627 | ||||
Number of leases with variable payments | lease | 1 | |||||
Number of distribution centers subleased | distributionCenter | 1 | |||||
Cash paid during the period against operating lease liabilities | $ 157,900 | 131,300 | $ 112,800 | |||
Operating lease, right-of-use asset impairment | $ 4,100 | 0 | 0 | 4,136 | ||
Operating lease termination | $ (1,900) | $ 0 | $ 0 | $ 1,926 | ||
Loss contingency, damages (in excess) | 1.0 million | |||||
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_2
Commitments and Contingencies - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 26, 2019 | Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Lease Commitments | ||||
Right-of-use assets | $ 1,103,750 | $ 916,325 | ||
Less: current obligations under leases | 104,602 | 94,502 | ||
Long-term lease obligations | 1,120,990 | 941,125 | ||
Present value of future minimum lease payments | $ 1,225,592 | $ 1,035,627 | ||
Weighted-average remaining lease term | 11 years | 11 years | ||
Weighted-average discount rate | 5.10% | 5.30% | ||
Lease, Cost [Abstract] | ||||
Total fixed operating lease cost | $ 162,538 | $ 139,883 | $ 112,487 | |
Total variable lease cost | 48,183 | 40,167 | 32,620 | |
Sublease income | (2,694) | (2,713) | (2,414) | |
Operating lease right-of-use asset impairment | $ 4,100 | 0 | 0 | 4,136 |
Total operating lease cost | 208,027 | 177,337 | 146,829 | |
Selling and store operating | ||||
Lease, Cost [Abstract] | ||||
Total fixed operating lease cost | 123,882 | 105,207 | 87,124 | |
Total variable lease cost | 42,093 | 34,499 | 28,894 | |
Cost of sales | ||||
Lease, Cost [Abstract] | ||||
Total fixed operating lease cost | 24,170 | 22,672 | 17,132 | |
Total variable lease cost | 5,506 | 4,860 | 3,570 | |
Pre-opening | ||||
Lease, Cost [Abstract] | ||||
Total fixed operating lease cost | 10,127 | 7,886 | 5,959 | |
Total variable lease cost | 274 | 657 | 151 | |
General and administrative | ||||
Lease, Cost [Abstract] | ||||
Total fixed operating lease cost | 4,359 | 4,118 | 2,272 | |
Total variable lease cost | 310 | 151 | $ 5 | |
Building | ||||
Lease Commitments | ||||
Right-of-use assets | 972,962 | 851,092 | ||
Less: current obligations under leases | 92,909 | 88,287 | ||
Long-term lease obligations | 989,712 | 873,098 | ||
Land | ||||
Lease Commitments | ||||
Right-of-use assets | 107,764 | 56,708 | ||
Less: current obligations under leases | 1,385 | 440 | ||
Long-term lease obligations | 120,174 | 65,103 | ||
Equipment | ||||
Lease Commitments | ||||
Right-of-use assets | 14,127 | 6,865 | ||
Less: current obligations under leases | 6,842 | 3,941 | ||
Long-term lease obligations | 7,285 | 2,924 | ||
Software | ||||
Lease Commitments | ||||
Right-of-use assets | 8,897 | 1,660 | ||
Less: current obligations under leases | 3,466 | 1,834 | ||
Long-term lease obligations | $ 3,819 | $ 0 |
Commitments and Contingencies_3
Commitments and Contingencies - Lease Maturity (Details) - USD ($) $ in Thousands | Dec. 30, 2021 | Dec. 31, 2020 |
Undiscounted Cash Flows | ||
2022 | $ 163,924 | |
2023 | 170,295 | |
2024 | 161,516 | |
2025 | 151,944 | |
2026 | 143,693 | |
Thereafter | 866,242 | |
Total minimum lease payments | 1,657,614 | |
Less: amount of lease payments representing interest | 432,022 | |
Present value of future minimum lease payments | 1,225,592 | $ 1,035,627 |
Less: current obligations under leases | 104,602 | 94,502 |
Long-term lease obligations | 1,120,990 | $ 941,125 |
Minimum lease payments for leases not yet commenced | 72,600 | |
Minimum lease payments for options to extend lease terms | $ 108,500 |
Debt - Summary of Long-term Deb
Debt - Summary of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Total secured debt at par value | $ 206,602 | $ 217,804 |
Less: current maturities | 2,103 | 1,647 |
Long-term debt maturities | 204,499 | 216,157 |
Less: unamortized discount and debt issuance costs | 8,737 | 9,000 |
Net carrying amount | $ 195,762 | 207,157 |
Term Loan B | ||
Debt Instrument [Line Items] | ||
Interest rate at end of period (as a percent) | 2.09% | |
Total secured debt at par value | $ 206,602 | 143,179 |
Term Loan B-1 | ||
Debt Instrument [Line Items] | ||
Total secured debt at par value | $ 0 | $ 74,625 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Debt (Details) - USD ($) $ in Thousands | Dec. 30, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
2022 | $ 2,103 | |
2023 | 2,103 | |
2024 | 2,103 | |
2025 | 2,103 | |
2026 | 2,629 | |
Thereafter | 195,561 | |
Total secured debt at par value | $ 206,602 | $ 217,804 |
Debt - Schedule of Components o
Debt - Schedule of Components of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Debt Disclosure [Abstract] | |||
Total interest costs, net of interest income | $ 7,657 | $ 9,606 | $ 8,801 |
Interest capitalized | 2,733 | 1,217 | 0 |
Interest expense, net | $ 4,924 | $ 8,389 | $ 8,801 |
Debt - Term Loan Facility (Narr
Debt - Term Loan Facility (Narrative) (Details) - USD ($) | Feb. 09, 2021 | Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 |
Debt Instrument [Line Items] | ||||
Interest rate floor (as a percent) | 0.00% | |||
Loss on extinguishment of debt | $ 0 | $ 1,015,000 | $ 0 | |
Supplemental Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 65,000,000 | |||
Voluntary prepayments subject to soft call prepayment premium, period (in months) | 6 months | |||
Soft call prepayment premium (as a percent) | 1.00% | |||
Term Loan B-1 | ||||
Debt Instrument [Line Items] | ||||
Repayments of debt | $ 75,000,000 | |||
Amended Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Loss on extinguishment of debt | 0 | |||
Costs incurred in connection with the refinancing | 1,600,000 | |||
Debt issuance costs | 1,400,000 | |||
Professional fees | $ 200,000 | |||
Amended Term Loan Facility | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.00% | |||
Leverage based step-up (as a percent) | 1.25% | |||
Amended Term Loan Facility | Eurodollar | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 2.00% | |||
Leverage based step-up (as a percent) | 2.25% |
Debt - Gain on Debt Extinguishm
Debt - Gain on Debt Extinguishment (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 25, 2020 | Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Extinguishment of Debt [Line Items] | ||||
Gain on early extinguishment of debt | $ 0 | $ 1,015,000 | $ 0 | |
Incremental term loan | ||||
Extinguishment of Debt [Line Items] | ||||
Gain on early extinguishment of debt | $ 1,000,000 | |||
Original issue discount | 4,100,000 | |||
Unamortized debt issuance costs | $ 500,000 |
Debt - ABL Facility (Narrative)
Debt - ABL Facility (Narrative) (Details) | 12 Months Ended |
Dec. 30, 2021USD ($) | |
Asset-Based Loan Facility | ABL Facility | |
Line of Credit Facility [Line Items] | |
Eligible net trade receivables (as a percent) | 85.00% |
Eligible letter of credit (as a percent) | 100.00% |
Outstanding letters of credit | $ 22,500,000 |
Available borrowing capacity | 377,500,000 |
Revolving Credit Facility Accordion Feature | ABL Facility | |
Line of Credit Facility [Line Items] | |
Borrowing capacity | 400,000,000 |
Letter of Credit | |
Line of Credit Facility [Line Items] | |
Borrowing capacity | $ 50,000,000 |
Debt - Covenants, Deferred Debt
Debt - Covenants, Deferred Debt Issuance Cost and Original Issue Discount (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Debt Instrument [Line Items] | |||
Total interest costs, net of interest income | $ 7,657 | $ 9,606 | $ 8,801 |
Interest capitalized | 2,733 | 1,217 | 0 |
Deferred debt issuance and original issue discount amortization expense | $ 1,900 | 1,400 | $ 1,100 |
ABL Facility | |||
Debt Instrument [Line Items] | |||
Percentage usage of facility to trigger covenant | 90.00% | ||
Deferred debt issuance costs | $ 800 | 1,000 | |
Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Deferred debt issuance costs | $ 8,700 | $ 9,000 |
Debt - Fair Value of Debt (Deta
Debt - Fair Value of Debt (Details) - USD ($) $ in Thousands | Dec. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Total debt at par value | $ 206,602 | $ 217,804 |
Less: unamortized discount and debt issuance costs | 8,737 | 9,000 |
Net carrying amount | 197,865 | 208,804 |
Level 3 | ||
Debt Instrument [Line Items] | ||
Fair value | $ 202,986 | $ 215,626 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock and Conversion Features (Details) | 12 Months Ended |
Dec. 30, 2021voteclass | |
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. 30, 2021 | Dec. 31, 2020 | 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) | 1,926,142 | 2,120,839 |
Stockholders' Equity - Secondar
Stockholders' Equity - Secondary Offerings (Details) - $ / shares | Aug. 13, 2020 | May 22, 2020 | Feb. 28, 2019 |
Equity [Abstract] | |||
Number of shares sold by stockholders (in shares) | 5,686,422 | 4,972,900 | 10,000,000 |
Share price (in dollars per share) | $ 67.60 | $ 44.55 | $ 37.50 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Equity [Abstract] | |||
Stock-based compensation expense | $ 20.5 | $ 16.1 | $ 8.7 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Fair Value Assumptions | |||
Weighted average fair value per stock option (in dollars per share) | $ 41.75 | $ 22.27 | $ 20.38 |
Options | |||
Outstanding at the beginning of period (in shares) | 3,740,604 | ||
Granted (in shares) | 66,505 | ||
Exercised (in shares) | (1,252,566) | ||
Forfeited or expired (in shares) | (50,889) | ||
Outstanding at the end of period (in shares) | 2,503,654 | 3,740,604 | |
Vested and exercisable (in shares) | 1,685,628 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of period (in dollars per share) | $ 20.72 | ||
Granted (in dollars per share) | 95.68 | ||
Exercised (in dollars per share) | 11.77 | ||
Forfeited or expired (in dollars per share) | 39.11 | ||
Outstanding at the end of period (in dollars per share) | 26.81 | $ 20.72 | |
Vested and exercisable (in dollars per share) | $ 19.58 | ||
Additional Disclosures | |||
Options outstanding, weighted-average remaining contractual life (in years) | 5 years 8 months 12 days | ||
Options vested and exercisable, weighted-average remaining contractual life (in years) | 5 years 2 months 12 days | ||
Options outstanding, aggregate intrinsic value | $ 258,395 | ||
Options vested and exercisable, aggregate intrinsic value | 186,097 | ||
Fair value of stock options vested | 8,800 | $ 7,500 | $ 7,500 |
Options exercised, intrinsic value | $ 126,600 | $ 135,500 | $ 146,600 |
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) | 0.80% | 1.17% | 2.06% |
Expected volatility (as a percent) | 48.00% | 39.00% | 45.00% |
Expected life (in years) | 5 years 4 months 24 days | 5 years 9 months | 6 years 8 months 4 days |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% |
Additional Disclosures | |||
Unrecognized compensation cost amount | $ 9,700 | $ 16,000 | |
Unrecognized compensation cost period for recognition (in years) | 1 year 10 months 24 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 - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 30, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period (in years) | 4 years | |
Restricted Stock Units | ||
Beginning balance (in shares) | 128,220 | |
Granted (in shares) | 129,290 | |
Vested (in shares) | (28,631) | |
Forfeited (in shares) | (14,101) | |
Ending balance (in shares) | 214,778 | |
Weighted Average Grant Date Fair Value | ||
Beginning balance (in dollars per share) | $ 59.40 | |
Granted (in dollars per share) | 99.78 | |
Vested (in dollars per share) | 58.01 | |
Forfeited (in dollars per share) | 76.14 | |
Ending balance (in dollars per share) | $ 82.80 | |
Unrecognized compensation cost amount | $ 14 | $ 6.2 |
Unrecognized compensation cost period for recognition (in years) | 3 years | |
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 ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 4 years | ||
Weighted Average Grant Date Fair Value | |||
Unrecognized compensation cost amount | $ 10.9 | $ 15.2 | |
Unrecognized compensation cost period for recognition (in years) | 1 year 10 months 24 days | ||
Fair value of restricted stock awards vested | $ 1.4 | $ 0.5 | $ 0.5 |
Service-based | |||
Restricted Stock Awards | |||
Beginning balance (in shares) | 131,844 | ||
Granted (in shares) | 29,153 | ||
Vested (in shares) | (13,764) | ||
Forfeited (in shares) | (2,508) | ||
Ending balance (in shares) | 144,725 | 131,844 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 53.72 | ||
Granted (in dollars per share) | 96.86 | ||
Vested (in dollars per share) | 49.70 | ||
Forfeited (in dollars per share) | 46.37 | ||
Ending balance (in dollars per share) | $ 62.92 | $ 53.72 | |
Performance-based | |||
Restricted Stock Awards | |||
Beginning balance (in shares) | 160,315 | ||
Granted (in shares) | 0 | ||
Vested (in shares) | 0 | ||
Forfeited (in shares) | 0 | ||
Ending balance (in shares) | 160,315 | 160,315 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 57.70 | ||
Granted (in dollars per share) | 0 | ||
Vested (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | 0 | ||
Ending balance (in dollars per share) | $ 57.70 | $ 57.70 | |
TSR | |||
Restricted Stock Awards | |||
Beginning balance (in shares) | 104,456 | ||
Granted (in shares) | 0 | ||
Vested (in shares) | 0 | ||
Forfeited (in shares) | 0 | ||
Ending balance (in shares) | 104,456 | 104,456 | |
Weighted Average Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 44.28 | ||
Granted (in dollars per share) | 0 | ||
Vested (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | 0 | ||
Ending balance (in dollars per share) | $ 44.28 | $ 44.28 |
Stockholders' Equity - Employee
Stockholders' Equity - Employee Stock Purchase Plan (Details) - USD ($) $ / shares in Units, $ in Millions | May 17, 2018 | Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued under employee stock plan (in shares) | 46,273 | 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 | $ 1 | $ 0.7 | $ 0.5 | |
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. 30, 2021 | Sep. 30, 2021 | Jul. 01, 2021 | Apr. 01, 2021 | Dec. 31, 2020 | Sep. 24, 2020 | Jun. 25, 2020 | Mar. 26, 2020 | Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 49,873 | $ 74,645 | $ 82,916 | $ 75,796 | $ 57,140 | $ 68,774 | $ 32,004 | $ 37,063 | $ 283,230 | $ 194,981 | $ 150,631 |
Basic weighted average shares outstanding | 104,683 | 102,690 | 99,435 | ||||||||
Dilutive effect of share-based awards | 2,707 | 3,452 | 5,527 | ||||||||
Diluted weighted average shares outstanding | 107,390 | 106,142 | 104,962 | ||||||||
Basic earnings per share (in dollars per share) | $ 0.47 | $ 0.71 | $ 0.79 | $ 0.73 | $ 0.55 | $ 0.67 | $ 0.31 | $ 0.36 | $ 2.71 | $ 1.90 | $ 1.51 |
Diluted earnings per share (in dollars per share) | $ 0.46 | $ 0.69 | $ 0.77 | $ 0.71 | $ 0.54 | $ 0.65 | $ 0.30 | $ 0.35 | $ 2.64 | $ 1.84 | $ 1.44 |
Earnings Per Share - Dilutive e
Earnings Per Share - Dilutive effects of share based awards (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
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) | 71 | 320 | 971 |
Selected Quarterly Financial _3
Selected Quarterly Financial Information (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2021 | Sep. 30, 2021 | Jul. 01, 2021 | Apr. 01, 2021 | Dec. 31, 2020 | Sep. 24, 2020 | Jun. 25, 2020 | Mar. 26, 2020 | Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 914,335 | $ 876,553 | $ 860,108 | $ 782,537 | $ 723,652 | $ 684,847 | $ 462,352 | $ 554,937 | $ 3,433,533 | $ 2,425,788 | $ 2,045,456 |
Gross profit | 354,587 | 365,308 | 365,438 | 336,933 | 307,540 | 294,628 | 196,692 | 236,032 | 1,422,266 | 1,034,892 | 863,014 |
Net income | $ 49,873 | $ 74,645 | $ 82,916 | $ 75,796 | $ 57,140 | $ 68,774 | $ 32,004 | $ 37,063 | $ 283,230 | $ 194,981 | $ 150,631 |
Basic earnings per share (in dollars per share) | $ 0.47 | $ 0.71 | $ 0.79 | $ 0.73 | $ 0.55 | $ 0.67 | $ 0.31 | $ 0.36 | $ 2.71 | $ 1.90 | $ 1.51 |
Diluted earnings per share (in dollars per share) | $ 0.46 | $ 0.69 | $ 0.77 | $ 0.71 | $ 0.54 | $ 0.65 | $ 0.30 | $ 0.35 | $ 2.64 | $ 1.84 | $ 1.44 |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) - Spartan - USD ($) | Jun. 04, 2021 | Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 |
Business Acquisition [Line Items] | ||||
Purchase consideration | $ 77,657,000 | |||
Integration and transaction costs | $ 3,400,000 | $ 0 | $ 0 | |
Contingent consideration, potential earnout payments | 18,000,000 | |||
Net increase in fair value of contingent earn-out liability | 1,100,000 | |||
Contingent consideration liability | $ 10,200,000 | |||
Annual Adjusted EBITDA Margin Targets | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, potential earnout payments | 9,000,000 | |||
Annual Gross Profit Targets | ||||
Business Acquisition [Line Items] | ||||
Contingent consideration, potential earnout payments | $ 9,000,000 |
Acquisition - Schedule of Fair
Acquisition - Schedule of Fair Values of the Components of the Purchase Price (Details) - USD ($) $ in Thousands | Jun. 04, 2021 | Dec. 30, 2021 | Dec. 31, 2020 | Dec. 26, 2019 |
Business Acquisition [Line Items] | ||||
Cash, net of cash acquired | $ 63,567 | $ 0 | $ 0 | |
Spartan | ||||
Business Acquisition [Line Items] | ||||
Cash, net of cash acquired | $ 63,567 | |||
Floor and Decor Class A common stock | 5,000 | |||
Contingent consideration | 9,090 | |||
Total purchase price | $ 77,657 |
Acquisition - Schedule of the E
Acquisition - Schedule of the Estimated Preliminary Fair Values of the Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 30, 2021 | Jun. 04, 2021 | Dec. 31, 2020 | Dec. 26, 2019 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 255,473 | $ 227,447 | $ 227,447 | |
Spartan | ||||
Business Acquisition [Line Items] | ||||
Current assets | $ 16,467 | |||
Fixed assets, net | 970 | |||
Right-of-use assets | 3,300 | |||
Intangible assets, net | 44,400 | |||
Goodwill | 28,026 | |||
Total assets acquired | 93,163 | |||
Current liabilities | 12,393 | |||
Lease liabilities | 2,725 | |||
Other liabilities | 388 | |||
Total liabilities assumed | 15,506 | |||
Net assets acquired | $ 77,657 |
Acquisition - Schedule of the P
Acquisition - Schedule of the Preliminary Estimated Fair Values and Estimated Remaining Useful Lives of Identifiable Intangible Assets (Details) - Spartan $ in Thousands | Jun. 04, 2021USD ($) |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Intangible assets, net | $ 44,400 |
Trade name | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Preliminary fair value of indefinite-lived identifiable intangible assets | $ 9,200 |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life (Years) | 12 years |
Preliminary fair value of finite-lived identifiable intangible assets | $ 34,900 |
Non-compete agreement | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life (Years) | 5 years |
Preliminary fair value of finite-lived identifiable intangible assets | $ 300 |
Uncategorized Items - fnd-20211
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2014-09 [Member] |