IPO of the Week: Floor & Decor

Josef Schuster
Dr. Josef Schuster is the founder of Chicago-based IPOX Schuster LLC and chief architect of the IPOX® Indexes. The IPOX methodology is implemented in an IPO and spin-off strategy at Catalyst Funds. Before founding IPOX, Dr. Schuster pursued his academic work on European IPOs in the Financial Markets Group (FMG) at the London School of Economics (LSE), where he completed his MSc and PhD and conceived the idea to start IPOX. He regularly appears in the media as an expert in global New Listings and respective investment products.

Company Description

Founded in 2000, Floor & Decor is a private equity-backed specialty retailer of hard surface flooring and related accessories with warehouse-format stores. The company offers in-stock tile, wood, laminate and natural stone flooring along with decorative and installation accessories.

Business Model

Floor & Decor operates in the retail sector and generates revenue from sales both in-store and online.

IPO History

On 4/27/2017, Floor & Décor began trading on NYSE. BofA Merrill Lynch, Barclays, UBS and Credit Suisse are acting as joint book running managers for the offering. The share was priced at $21.0 per share, above the expected range of $16 to $18 per share. With a full subscription of 8,823,500 shares offered, and an additional 15% over-allotment option fully exercised, Floor & Decor was valued at approximately $1.94 billion at offer. The stock opened at $30.25/share and finished the first day at $32.05. Floor & Decor was included in the IPOX® 100 U.S. Portfolio on 06/16/2017 and currently weighs approximately 0.4% of the portfolio.

Historical Performance

Growth Outlook

Industry Comparison

Company

Stock

Symbol

IPO/Spin-off

Date

Initial

Return

Offer to Date

2019

YTD

Beta to S&P

EPS

2018

Revenue

(in million)

Net Income

(in million)

P/E Ratio

Floor & Decor

FND US

4/27/2017

52.62 %

141.81%

96.1%

1.21

$1.11

1,709.85

116.19

42.0

FBM

FBM US

2/10/2017

10.71%

13.79%

91.7%

0.945

-$0.28

2,044.31

-12.18

23.7

Home Depot

HD US

Home Depot went public in 1981

33.9%

1.34

$9.73

108,203.0

11,121.0

22.3

Lumber Liquidators

LL US

11/08/2007

-11.27%

-17.73%

-4.94%

1.55

-$1.90

1,084.64

-54.38

20.8