S&P ups Floor & Decor

S&P said it raised its ratings on Floor & Decor Holdings Inc. (FND) and its senior secured term loan due 2027 to BB from BB-. The 3 recovery rating on the loan is unchanged and indicates meaningful (50%-70%, rounded estimate: 55%) recovery in default.

“The upgrade reflects our expectation for continued double-digit revenue growth and consistent profitability amid an ongoing store growth initiative. FND demonstrated good performance over the past several years, with limited annual profit margin volatility despite an ambitious store growth initiative and a rapidly changing macroeconomic environment. Through the first half of fiscal 2022, it reported comparable sales growth of 11.7% while lapping 48.1% growth in the prior year,” S&P said in a press release.

The agency said it forecasts total revenue growth of about 25% in 2022 and over the following 12-24 months revenue growth in the 20% range.

The outlook is stable.

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