Floor & Decor Holdings, Inc. (NYSE:FND) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 05:00 pm ET


Floor & Decor Holdings, Inc. (NYSE:FND) Q2 2020 Earnings Conference Call - Final Transcript


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Trevor Lang

another $9 million in the second half of 2020. And third, we expect to benefit from employee retention credits, which we estimate total at least $1.1 million potentially more, if we qualify additional credits during the second half of 2020. Collectively, we expect these to increase our cash flow by approximately $42 million.

Moving on to capital expenditures. Our fiscal 2020 capital expenditures are currently planned to be between approximately $188 million to $196 million compared to approximately $255 million to $265 million when we originally planned and will be funded primarily by cash generated from operations. The growth in capital spending reflects our planned opening of 13 new warehouse stores in fiscal 2020 compared to 11 new store openings when we planned at the end of the first quarter of 2020. Additionally, we plan one small format stand-alone design center and to start construction on stores we plan to open in the early part of fiscal 2021. Capital expenditures associated with these projects is expected to be $121 million to $125 million in fiscal 2020. We also will invest more in existing store remodeling projects and distribution centers in fiscal 2020, using approximately $47 million to $49 million of cash. We plan to invest in information technology, infrastructure, e-commerce and other store support center and should be using approximately $20 million to $22 million of cash. Based on these changes, we expect our depreciation and amortization to be approximately $91 million to $93 million in 2020.

Our planned capital expenditures and related depreciation could vary materially from our estimates as we are operating in a very unique environment, but this is our current best estimate. While we're excited about bringing our stores back to full operations and a result in strong growth in our comparable store sales, the remaining significant business and economic risk could still creates a wide range of potential outcomes in the second half of 2020. For this reason, we have elected at this time not to change our policy of not providing annual sales and earnings until economic and business risks have improved and the range of outcome narrows.

In closing, I would like to say that our entire executive leadership team is extremely proud of how quickly Floor & Decor adapted to meet the challenges of the COVID-19 pandemic. It is a testament to the resiliency of our business model, our talented associates and the investments we've made in our business that have been critical in managing through such a challenging time. I want to personally thank all of our associates for their tireless work and dedication to serving our customers under such challenging circumstances.

With that, I'll now turn the call back over to the operator for questions.