“Decade of 2020-30 will likely be remembered as ‘The Golden Age of Remodeling’ but with a nasty cyclical slowdown in the middle” – Zonda Downturn $HD $LOW $FND $POOL & $SITE are seeing offer attractive entry points to participate in the LT growth trends these co's are riding

The next ~3-4yrs are going to see exceptional growth in the number of single family homes entering their peak remodeling years... Names like $HD $LOW & $FND will be key beneficiaries of an increasingly tired base of housing that will drive robust remodeling demand

Source

Not exactly surprising, but there is a massive variance in home improvement spending by income & type… Pro spend is 2-3x DIY, skewing towards larger projects & higher income Pro & DIY feature 2-3x spreads in spending between highest and lowest income cohorts $HD $LOW $FND

Interested in more JCHS data and insights? Check out the thread below

@TSOH_Investing Thanks Alex, appreciate it!

Source

A follow-up part two thread will be posted after the release which will update $FND and peer total market share data and analyze trends Stay tuned

All in, $FND continues to dramatically outperform its competitors across all retailer types We eagerly await FCW’s annual statistical report, typically released in July, which will provide 2022 data on total industry sales growth for manufacturers and retailers

$FND stores generate… ~6x more revenue/store vs. $HD ~9x more revenue/store vs. $LOW ~3x more revenue/store vs. the remaining top 75

We can also derive market share insights from FCW’s data Note - share figures are market share of just the top 78's sales Amongst the top ~78, notable share shifts occurred in ‘22… $FND took +230bps $HD lost -190bps $LOW lost -130bps The remaining Top 75 took +100bps

Backing out $FND and weak results from $HD & $LOW leaves the remaining top 75 seeing more respectable +11% growth and a +$803mln $ sales increase Still outperformed over >2x by $FND's +24% growth and at parity with $FND's sales $ increase (+$831mln)

Location data is also interesting… While $FND has ~16% share (of top 78), its 191 locations comprise just ~3% of total locations (of top 78), as its stores generate vastly higher revenue/store

…and, rather stunningly… ~excluding the next 5 largest retailers, $FND is larger than all the other top ~78 retailers combined

Growth takeaways were also impressive The top ~78 retailers, ex $FND, grew just +4% in '22, with sales $ up +$903mln $FND grew ~6x faster with +24% growth & a +$831mln sales $ increase $FND captured nearly 1/2 the top 78’s growth despite having ~16% share of the top 78’s sales

$FND also massively outperformed $HD & $LOW FCW estimated flooring department sales growth of just +1% for $HD with $LOW sales est. flat y/y FCW’s estimated $HD results also align with our fenced comp est. from mgmt. commentary (see below)

To give you a sense of $FND's scale… $FND is ~larger than the next 5 largest retailers combined ~3-4x larger vs. #4 Artisan Design Group & #5 LL Flooring

Takeaways… $FND remains the 3rd largest retailer While still ~1/2 $HD in size, $FND is within striking distance of eclipsing $LOW who is just ~15% larger $FND is likely to surpass $LOW in ’24 based on ’23 guidance (+10%)

If you own $FND, or home improvement names like $HD or $LOW, Floor Covering Weekly is an excellent resource for industry data on the flooring industry FCW recently put out its 2023 Top 50 Retailers report which had some great data points Some key notes

First, the report title is a bit of a misnomer... FCW reports est. sales & locations for the top 50, but also data on other retailer types – product specialists, direct sellers, home centers, etc All in ~78 of the largest flooring retailers are covered

Source

A follow-up part two thread will be posted after the release which will update $FND and peer total market share data and analyze trends Stay tuned

$FND stores generate… ~6x more revenue/store vs. $HD ~9x more revenue/store vs. $LOW ~3x more revenue/store vs. the remaining top 75

All in, $FND continues to dramatically outperform its competitors across all retailer types We eagerly await FCW’s annual statistical report, typically released in July, which will provide 2022 data on total industry sales growth for both manufacturers and retailers

Location data is also interesting… While $FND has ~16% share (of top 78), its 191 locations comprise just ~3% of total locations (of top 78), as its stores generate vastly higher revenue/store