Floor & Decor Holdings, Inc. (FND): Business Model Canvas [Dec-2025 Updated]

You're looking at the operating engine of a specialty retailer that's clearly winning on price and availability, and honestly, the strategy for Floor & Decor Holdings, Inc. is a masterclass in supply chain control married to aggressive physical growth. As a former head analyst, I can tell you the core is their direct global sourcing network feeding 262 warehouse stores as of Q3 2025, aiming for 20 new openings in the fiscal year while projecting net sales between $4.660 billion and $4.710 billion. This model thrives on keeping inventory high-all 4,400 SKUs in stock-to serve both the 50% Pro business and the DIY crowd with everyday low prices, backed by a planned capital expenditure of up to $300 million for expansion. If you want to see exactly how they manage the cost structure to support that value proposition, dive into the full nine-block breakdown below.

Floor & Decor Holdings, Inc. (FND) - Canvas Business Model: Key Partnerships

You're looking at how Floor & Decor Holdings, Inc. builds its supply chain and professional network to drive sales, and honestly, it's all about scale and direct relationships. The foundation of their cost advantage rests heavily on these external relationships.

The direct sourcing network is a massive competitive moat. Floor & Decor Holdings, Inc. maintains relationships with over 240 vendors across 26 countries as of fiscal 2025. Procuring the majority of products directly from manufacturers cuts out layers of cost from importers and wholesalers, which is key to their everyday low price strategy.

The logistics side is equally critical for moving goods from those 26 countries to their stores. Floor & Decor Holdings, Inc. opened a new distribution center in the third quarter of fiscal 2025, adding to their infrastructure designed to support their complex global supply chain management. This expansion is part of a strategy that also included plans to open additional distribution centers near Seattle and Baltimore in the 2025-2026 timeframe.

Securing the physical footprint requires strong ties with real estate developers and landlords. Floor & Decor Holdings, Inc. is actively expanding its warehouse store base, remaining on track to open 20 new warehouse format stores in fiscal 2025. As of the end of the third quarter of fiscal 2025, the company operated 262 stores.

The B2B growth engine, Spartan Surfaces, LLC, is a key partner in the commercial surfaces segment. The success of this focus is clear when you see that pro customer sales accounted for approximately 50% of sales in the second quarter of fiscal 2025.

The PRO Partners program is where Floor & Decor Holdings, Inc. really locks in the professional customer base by offering savings that go beyond just flooring materials. These exclusive solutions save pros both time and money, which is a big deal when you're managing project timelines. Here's a look at the categories of partners supporting the PRO Premier Rewards members:

• Lead Generation Services, such as Angi Leads.
• Tool & Equipment Rentals, supporting on-site needs.
• Vehicle Rentals, with partners like Avis/Budget implied.
• Health and Business Insurance solutions via providers like Augeo Benefits.
• Industry association memberships, including the NTCA.
• Financing options through partnerships like Finturf for point-of-sale credit.

To show the scale of the sourcing network versus the B2B customer focus, consider this snapshot:

If onboarding new suppliers takes longer than expected, it definitely pressures the gross margin, so you want to see those 240 vendors actively supplying. Finance: draft 13-week cash view by Friday.

Floor & Decor Holdings, Inc. (FND) - Canvas Business Model: Key Activities

Floor & Decor Holdings, Inc. focuses its core operational activities on maintaining a compelling value proposition through aggressive physical expansion and disciplined supply chain management. You see this reflected in their ongoing commitment to physical footprint growth, even while navigating a soft hard surface flooring industry environment.

Direct global sourcing and procurement to maintain low prices.

Floor & Decor Holdings, Inc. actively manages its supply chain to keep customer prices low. This involves significant work to mitigate external cost pressures, such as tariffs. The company executed a sourcing diversification strategy to reduce its exposure to China, moving reliance from 18% of products in 2024 to a projected mid-to-low single-digit percentage by the end of fiscal 2025. This effort, alongside disciplined expense management, helped product margins improve by approximately 80 bps year-over-year as of the third quarter of fiscal 2025.

Aggressive new store expansion, planning 20 new warehouse stores in fiscal 2025.

Expansion remains a primary activity, though the pace was adjusted based on market conditions. The plan for fiscal 2025 was to open 20 new warehouse stores, a reduction from an initial target of 25 stores. As of the end of the third quarter of fiscal 2025, Floor & Decor Holdings, Inc. had opened 12 new warehouse stores year-to-date and ended the quarter operating 262 warehouse-format stores. The company is reconfiguring new store openings, noting that the initial investment for the fiscal 2025 class of new stores is estimated to be about $1.5 million lower than the fiscal 2023 class.

Here's a look at the physical footprint growth as of late fiscal 2025:

Managing a large-format, high-inventory distribution and logistics network.

Supporting the store base requires managing substantial inventory and logistics infrastructure. As of the end of the third quarter, inventory stood at approximately $1.2 billion, representing an 11.3% year-over-year increase. The company continues to invest in this area, opening a new distribution center in the third quarter. This network, which historically included four distribution centers and a transload facility, is a key component, though new DCs can temporarily pressure gross margins due to capacity not yet fully utilized by store volume. Capital expenditures guidance for fiscal 2025 was set between $280 million and $300 million.

In-store design consulting and specialized Pro customer service.

Floor & Decor Holdings, Inc. differentiates itself by focusing on specialized customer segments. The company emphasizes its differentiated focus on Pro customers. Furthermore, design services and connected customer sales collectively grew to account for 18.8% of total sales in Q3 2025, an increase of 2% year-over-year.

Investing in the Connected Customer e-commerce platform.

Digital engagement is integrated with the physical stores. While sales fulfilled by individual stores (including e-commerce) are included in comparable store sales, the company views its digital presence as a growth opportunity. For the full fiscal year 2023, connected customer sales represented approximately 19% of total net sales.

Finance: review the Q4 2025 inventory turnover projection against the 11.3% year-over-year inventory growth reported in Q3.

Floor & Decor Holdings, Inc. (FND) - Canvas Business Model: Key Resources

You're looking at the core assets Floor & Decor Holdings, Inc. (FND) uses to deliver its value proposition. These aren't just line items; they are the physical and structural advantages that let them compete in the hard surface flooring space.

The foundation of the physical footprint is the large-format warehouse stores. As of the end of fiscal 2024, these stores averaged approximately 77,000 square feet. By the third quarter of fiscal 2025, Floor & Decor Holdings, Inc. operated 262 warehouse-format stores across 38 states. This scale is a key differentiator against smaller specialty flooring retailers.

The company's sourcing strategy relies heavily on its global direct sourcing relationships and supply chain infrastructure. Floor & Decor Holdings, Inc. maintains these direct relationships with manufacturers and quarries spanning 26 countries. This infrastructure supports their everyday low pricing strategy by cutting out intermediaries.

Maintaining a broad, in-stock assortment is critical. As of the close of fiscal 2024, the average store carried approximately 4,400 SKUs, all intended to be in-stock. This deep inventory level is supported by significant investment; inventory at cost per store was approximately $2.7 million as of December 26, 2024. The total workforce supporting these operations and sales efforts was 13,690 total employees as of late 2025.

The logistics network is scaling up to support this inventory. Floor & Decor Holdings, Inc. operates several distribution centers. One notable asset mentioned is a facility near Seattle/Tacoma measuring 1.1 million sq ft. By the end of the third quarter of fiscal 2025, the company reported operating five distribution centers in total.

To capture the professional segment, Floor & Decor Holdings, Inc. deploys specialized personnel. This includes a dedicated Pro sales force and design consultants offering free services in stores. The company is actively investing in this area, planning capital expenditures between $280 million to $300 million for fiscal 2025, which includes constructing new distribution centers and opening 20 new warehouse stores for the year.

Here's a quick look at the scale of the physical assets as of late 2025 data points:

The focus on the Pro segment is supported by specialized teams and programs, which are a key intangible resource built upon the physical infrastructure. Floor & Decor Holdings, Inc. also utilizes its online platform, FloorandDecor.com, to enhance customer reach, which acts as a digital resource supporting the physical stores.

• Free design consulting in stores is a service-based resource.
• The Pro loyalty rewards program builds customer retention.
• The company is strategically focusing on adjacent category growth, including cabinets and outdoor products.

Floor & Decor Holdings, Inc. (FND) - Canvas Business Model: Value Propositions

You're looking at how Floor & Decor Holdings, Inc. (FND) locks in customers by delivering tangible value, which is key to their strategy, especially when the housing market feels tight.

Broadest in-stock selection of hard surface flooring in the industry.

Floor & Decor Holdings, Inc. positions itself as the go-to source by maintaining a broad assortment. As of Q3 2025, the company ended the period with 262 warehouse stores across its network. This physical footprint supports a wide offering that includes laminate, vinyl, wood, natural stone, tile, installation materials, and decorative accessories. The company is aggressively expanding this reach, remaining on track to open 20 new warehouse format stores in fiscal 2025.

Everyday low prices achieved through direct global sourcing.

The ability to offer everyday low prices is directly tied to their supply chain structure. In fiscal 2025, Floor & Decor Holdings, Inc.'s direct global sourcing network involved over 240 vendors across 26 countries. This deep sourcing has allowed them to significantly de-risk their supply chain; China exposure was reduced from 50% in FY18 to 18% by 2024, while US sourcing increased to 27% by 2024. This structure helps them maintain competitive pricing even when competitors pass along tariff costs; some independent retailers implemented high single-digit or higher price increases in response to tariffs, but Floor & Decor Holdings, Inc. focused on maintaining its price advantage.

Immediate product availability for large and small projects.

The warehouse format is designed to ensure immediate availability, which is critical for project timelines. The Pro segment, which accounted for approximately 50% of sales in Q2 2025, relies heavily on this in-stock promise. The company's fiscal 2025 total sales are projected to land between $4.660 billion and $4.750 billion, showing the scale of inventory they manage to keep on hand.

Free in-store design services for homeowners and Pros.

You get design help without an extra bill. Floor & Decor Holdings, Inc. explicitly offers free design services in-store. This service is a stated competitive moat, driving deep customer engagement. In Q2 2025, sales from design services and connected customers grew year-over-year, making up approximately 19% of total sales. Furthermore, design studios, which offer the full catalog, see an average ticket that is 2x that of non-design customers.

One-stop shop for flooring, installation materials, and accessories.

The breadth of the offering means less running around for the customer. You can find everything from tile and wood to installation materials all in one place. This comprehensive approach supports both the DIY homeowner and the high-volume professional customer base.

Here are some key operational metrics supporting these value drivers as of late 2025:

The core value propositions can be summarized by what Floor & Decor Holdings, Inc. offers its distinct customer segments:

• Broadest in-stock selection of hard surface flooring in the industry.
• Everyday low prices achieved through direct global sourcing.
• Immediate product availability for large and small projects.
• Free in-store design services for homeowners and Pros.
• One-stop shop for flooring, installation materials, and accessories.

The company's operational discipline, evidenced by an operating margin expansion of 20 basis points year-over-year to 6.1% in Q3 2025, helps protect the pricing advantage even with new distribution center costs acting as a drag.

Floor & Decor Holdings, Inc. (FND) - Canvas Business Model: Customer Relationships

You're looking at how Floor & Decor Holdings, Inc. (FND) manages its interactions across its customer base as of late 2025. It's a multi-pronged approach, balancing dedicated, high-value relationships with scalable digital and transactional channels. The split isn't perfectly clean, but the numbers show where the focus is.

Dedicated Pro sales team and Pro loyalty rewards program

Floor & Decor Holdings, Inc. clearly prioritizes the Professional (Pro) segment, which drives significant, high-frequency business. Sales to these professional customers accounted for approximately 50% of total sales in the second quarter of fiscal 2025, a figure that held steady, also representing approximately 50% of total sales in the third quarter of fiscal 2025. This segment's sales growth modestly outpaced the company's overall growth in Q3 2025. While specific financial details on the Pro loyalty rewards program aren't public, the commitment to a dedicated Pro desk and building deeper relationships is a strategic hedge against housing market volatility. The Pro comparable store sales in Q3 2025 were essentially flat, balancing a slight decline in transactions with a small increase in average ticket.

High-touch, personalized service via free design consulting

The high-touch service element centers on the free design consulting offered, which is a key differentiator, especially when paired with the Pro segment. The design services were a standout performer in the second quarter of fiscal 2025, showing strong sequential and year-over-year sales growth. Here's the quick math on why this matters: when designers are involved in a project, the average ticket is significantly higher, and gross margin rates rise substantially. Floor & Decor Holdings, Inc. operated five design studios as of September 25, 2025, supporting this personalized service model alongside the warehouse stores.

Self-service options through the Connected Customer digital platform

For customers seeking more independence, the 'Connected Customer' digital platform provides self-service exploration and transaction support. In the second quarter of fiscal 2025, connected customer sales grew by 2% year-over-year, making up approximately 19% of sales. This trend continued into the third quarter of fiscal 2025, with connected customer sales rising 2% year-over-year, representing 18.8% of total sales. This channel is critical for product exploration and driving customers to the stores for pickup or delivery, even though the hard surface flooring category has relatively low digital penetration.

Transactional relationships for DIY/BIY customers

The remaining portion of the business, which you can infer represents the Do-It-Yourself (DIY) and Buy-It-Yourself (BIY) customers, primarily engages in transactional relationships. These customers leverage the core value proposition of Floor & Decor Holdings, Inc.: an extensive in-stock selection at everyday low prices across its 262 warehouse stores as of the end of Q3 2025. These relationships are less about ongoing service and more about efficient, one-time fulfillment of project needs, supported by the company's massive inventory and direct sourcing model.

Here is a snapshot of the key engagement metrics driving these relationships through the first three quarters of fiscal 2025:

Finance: draft 13-week cash view by Friday.

Floor & Decor Holdings, Inc. (FND) - Canvas Business Model: Channels

You're looking at how Floor & Decor Holdings, Inc. gets its product into the hands of customers, and it's a multi-pronged approach that leans heavily on physical presence but increasingly incorporates digital reach. The core of the distribution is the massive warehouse-format retail stores. As of the third quarter of fiscal 2025, which ended September 25, 2025, Floor & Decor Holdings, Inc. operated 262 warehouse-format stores across 38 states. This physical expansion is a key driver; the company remains on track to open a total of 20 new warehouse stores in fiscal 2025.

To supplement the large-format locations, Floor & Decor Holdings, Inc. uses smaller, more focused locations. The company operated five small-format design studios as of the end of the third quarter of fiscal 2025. These studios are noted to result in greater customer conversion compared with the warehouse-style stores, and the average ticket from design studio customers is 2x that of non-design customers.

The physical footprint is complemented by digital channels, though sales fulfillment often ties back to the stores. Here's a quick look at the scale across the main customer access points:

The e-commerce platform, FloorandDecor.com, serves as a critical channel for online research and purchase, though its sales are integrated into the store network for fulfillment. For instance, digital sales accounted for 18.3% of total revenue in the first quarter of fiscal 2025. It's important to note that sales generated through the e-commerce platform and design studios are included in comparable store sales only if the fulfilling store meets the specific criteria for comparable store sales calculation.

For the Pro and commercial segment, Floor & Decor Holdings, Inc. uses a dedicated direct sales force through its subsidiary, Spartan Surfaces, LLC. Sales from Spartan Surfaces do not involve the retail stores and are therefore explicitly excluded from the comparable store sales calculation. This commercial segment is a focus for growth; in the third quarter of fiscal 2025, sales through Spartan Surfaces grew 13.3% year-over-year. The company sees significant runway here, targeting the commercial flooring market, which is estimated to be a $13 billion addressable market.

The use of these channels is supported by infrastructure, including five distribution centers as of the third quarter of fiscal 2025.

• Warehouse-format stores are the primary point of sale and fulfillment.
• Design studios drive higher average ticket sales through focused consultation.
• E-commerce supports research and transactions, integrated with store inventory.
• Spartan Surfaces provides a dedicated, non-store-dependent channel for commercial projects.

Finance: draft 13-week cash view by Friday.

Floor & Decor Holdings, Inc. (FND) - Canvas Business Model: Customer Segments

Floor & Decor Holdings, Inc. serves a diversified customer base, with a clear emphasis on the professional trade channel as of late 2025.

The Professional Installers and Commercial Businesses segment is the largest contributor to the top line, showing resilience even when the homeowner market softens. This segment, which includes small and medium-sized remodelers and contractors, is a key driver of growth and margin stability for Floor & Decor Holdings, Inc.

The overall consumer demand environment, which heavily impacts the homeowner segments, shows specific trends in transaction and ticket size as of the third quarter of fiscal 2025.

• Comparable store sales decreased 1.2% for the thirteen weeks ended September 25, 2025.
• Transaction volume decreased by 3% in Q3 2025.
• Average ticket size increased by 1.8% in Q3 2025.
• The company is on track to open 20 new warehouse stores for fiscal 2025.
• Total net sales for Q3 2025 reached $1,179.5 million.

Finance: draft 13-week cash view by Friday.

Floor & Decor Holdings, Inc. (FND) - Canvas Business Model: Cost Structure

The Cost Structure for Floor & Decor Holdings, Inc. is heavily weighted toward the cost of the goods sold, reflecting its inventory-intensive, big-box retail model, alongside significant ongoing investment in physical expansion.

High Cost of Goods Sold (COGS) and Inventory Scale

The scale of inventory required to maintain an in-stock position for hard surface flooring drives a high COGS component. This is managed through aggressive sourcing strategies, though new infrastructure creates near-term pressure.

The gross margin rate for the second quarter of fiscal 2025, at 43.9%, is estimated to represent the high quarter for the year.

Capital Expenditures for Physical Expansion

Significant capital is allocated to expanding the physical footprint, though the cost per new store is being optimized.

• Fiscal 2025 planned capital expenditures range: $280 million to $300 million.
• Investment planned for 20 new warehouse format stores (and construction for 2026 stores): Approximately $180 million to $205 million.
• Planned investment for new distribution centers in Seattle and Baltimore: Approximately $20 million to $25 million.
• Cost to open the 2025 store class is projected to be ~$1.5 million cheaper than the 2023 class.

Selling and Store Operating Expenses (S&SOE)

These costs cover the specialized sales force, store labor, and overhead necessary to service both the Pro and homeowner segments, which is a major component of operating costs.

• Selling and store operating expenses as a percentage of sales are estimated for the full year 2025 to be 31.5% to 32%.
• S&SOE as a percentage of sales for Q3 2025 was 31.2%.
• The Pro segment accounts for approximately 50% of total sales.
• Q2 2025 S&SOE increased by 10.2% year-over-year, with $33.8 million attributed to new stores.

Supply Chain and Distribution Center Operating Costs

The network of distribution centers, including the new one in Seattle, adds fixed overhead that pressures the gross margin until utilization rates improve.

Floor & Decor Holdings ended the third quarter of fiscal 2025 with five distribution centers. The overhead from these new facilities is a direct, measurable cost impacting the gross margin rate, as seen by the 90 basis point drag in the third quarter.

Marketing and Advertising

Costs are incurred to drive traffic across channels, supporting both the Pro segment and the homeowner customer base.

• Momentum in Design Services is noted as supporting mix and gross margin.
• Connected customer penetration was approximately 19% as of Q2 2025.

Finance: draft 13-week cash view by Friday.

Floor & Decor Holdings, Inc. (FND) - Canvas Business Model: Revenue Streams

You're looking at how Floor & Decor Holdings, Inc. (FND) converts its value proposition into cash, which is critical for understanding its financial health as a specialty retailer. The revenue streams are heavily weighted toward product sales, but they are diversifying the top line through services and commercial channels.

The primary revenue driver remains the sale of hard surface flooring and related accessories. For the full fiscal year 2025, Floor & Decor Holdings, Inc. projects Net Sales of approximately $4.660 billion to $4.710 billion. This projection comes after the company reported Q3 2025 net sales of $1.1795 billion, which was a 5.5% increase year-over-year for that quarter.

The mix of sales channels is evolving, with digital penetration becoming a more significant component. Connected Customer sales, which includes e-commerce fulfillment from stores, showed strong growth in the third quarter of fiscal 2025. Specifically, these sales represented 18.8% of total sales in Q3 2025, up from a reported 19% of sales in Q2 2025. This channel is supported by the company's five design studios.

Floor & Decor Holdings, Inc. also generates revenue from specialized segments and services. The commercial surfaces segment, primarily through Spartan Surfaces, LLC, is a key growth area. While specific 2025 revenue is not broken out, the segment showed growth of 13.3% year-over-year in the context of Q3 2025 results. Furthermore, the Pro customer segment, which is a major focus, represented approximately 50% of total sales in Q3 2025.

Here's a breakdown of the key revenue components and related financial metrics we have for the period:

The sales from installation materials and adjacent categories are bundled within the main net sales but are crucial for increasing the average ticket size. These adjacent categories include:

• Grout, mortar, backer board, tools, adhesives, and underlayments.
• Moldings and stair treads.
• Decorative tiles and mosaics, including natural stone and glass.
• Bathroom accessories, faucets, sinks, and lighting.

Regarding fees from credit offerings and Pro program services, the direct fee revenue isn't explicitly itemized, but the structure is clear. Credit is offered via a proprietary card underwritten by third-party financial institutions at no recourse to Floor & Decor Holdings, Inc. The total credit exposure for receivables not insured by a third party stood at $11.4 million as of the end of fiscal 2024. The Pro program drives revenue through direct sales, with its contribution at about 50% of total sales in Q3 2025.