1| Home Depot $HD Q4'22 Earnings
$HD's Q4’22 release provided some important read throughs on the home improvement market and names like $FND. The following thread is a collection of some key takeaways from my notes. 2| Results
$HD was off -7% yesterday on sustained but more pronounced deceleration in Q4. Sales growth slowed from +6.5%/+5.6% in Q2/Q3 to +0.3% in Q4. SSS comps slowed from +5.8%/+4.3% in Q2/Q3 to -0.3% in Q4 with choppy and negative mo. trends. Nov -1.3%, Dec +0.8%, Jan -0.1%

1| $POOL Q2'22 Earnings
$POOL Q2’22 results showed an unsurprising, though larger than expected, slowdown in growth. Unfavorable weather, declines in Europe, & negative FX, paired with tough comps, drove deceleration in topline growth. Shares closed down -10% on Thur. Some notes 2| Topline
Revenue growth slowed from +33% in Q1 to +15.0% in Q2 (street +19.4%). Base business growth slowed from +26% to +10% as $POOL's sustained 10.5% price inflation was paired with material volume growth deceleration from 10.0% in Q1 to -0.5% in Q2.

1| $FND Working Capital

I feel like working capital efficiency is an underappreciated area of analysis. $FND has unique & impressive WC dynamics that enhance its competitive position and sets up a material opportunity for CFO as the model matures. 2| Payables

$FND uses a base of 240 small suppliers and is typically their fastest growing customer as well as the largest or top 5-10. In addition to better pricing and priority in supply, this also allows $FND to extract superior supplier payment terms via power over suppliers

1| $POOL off -43% from Nov/'21 highs and like $SITE also at cyclical trough valuation levels on a backward TTM and forward NTM basis. With contractor backlogs full through '22 hard not to see $POOL as pretty attractive here despite substantial macro and housing market uncertainty

https://twitter.com/EquiCompound/status/1537849475653419008

2| $POOL forward NTM EV/EBITDA now at ~13x, well below Nov/'21 peaks in the ~30x range and below all cyclical troughs back through '17. Have to go back to '14 to get to forward multiples as low as current.

1|Floor & Décor $FND Q1 Thread
~ $FND had a strong qtr beating on the top/bottom line and reiterating the full yr guide. Key offsets are higher than expected declines in customer transaction volume in Q2 QTD and uncertainty around '23 demand. This thread reviews my key notes. 2|Topline
~ $FND sales grew +31.5% to $1028.7mln (street $1006.1, +28.6%) on a +14.3% same store sales comp and +18.6% store unit growth. Avg revenue/store expanded +10.1% to $25.2mln. These are against a difficult comp in Q1’21 (revenue +41.0%, comp +31.1%).

1/#Maytronics MTRN.IT
During my $POOL Q1 review I came across a terrific company, #Maytronics, the leading manufacturer of pool cleaning robots. MTRN.IT has 50% market share, 25% ROIC, 20% margins, and grew sales 10x over ‘04-‘21. Some key notes... 2/Intro
Headquartered in Israel, #Maytronics manufacturers a lineup of pool cleaning robots under the Dolphin brand name. In '21, generated USD $437mln in revenue (1.4bln ILS) and $110mln in EBITDA (334mln ILS) (24% margin). Has a USD $2bln mkt cap with $62mln in net debt (0.6x)

1/Pool Corp $POOL Earnings
$POOL had another impressive, blow out qtr. While shares were up as much as 9% on 4/21 they closed down -1% and were down again today despite solid results and a continued strong outlook. Key issue is '23. This thread reviews $POOL results and key notes 2/Results
Revenue was up +33% (street +20%) on a tough comp (Q1’21 +57%) with $POOL gross profit up +49% (street +25%) and op income up +83% (+32%). Big margin expansion – gross margin +327bps to 31.7% (street 29.7%, +135bps), op income +452bps to 16.7% (street 13.4%, +128bps)

1/Floor & Décor Investor Day
$FND's investor day was yesterday. Continue to be impressed by this early-stage category killer. Strong execution and one of the better names in my portfolio.

For a quick walk through see this thread

https://twitter.com/EquiCompound/status/1502734216773218312?s=20&t=xJZH4Yc-BwT5-Avxvv3SEQ

Below are some notes 2/Retail Conversion Rate
Homeowner customers that shop at $FND ultimately purchase over >80% of the time. Professional customers that shop at $FND purchase over >90% of the time. Pretty impressive. Average brick and mortar retail conversion rates are 20%-40% for most retailers

1/ SiteOne Landscape Supply $SITE Thread
$SITE is a high-quality boring business, very similar to $POOL and other distributors. With shares off -31% from recent highs I wanted to provide a quick walk through of the business. If you like $POOL $WSO $FND etc. you will like $SITE 2/Intro
$SITE is the largest and only national scale distributor of landscaping supplies in the US. Sells irrigation, hardscape, nursery, and other items via a 590-branch network in 45 states and 6 CA provinces. Had ’21 revenue of $3.5bln with $415mln in EBITDA (11.9%/sales).

1/ Floor & Décor (FND)
Looking forward to the $FND analyst day on Wed 3/16. $FND, is a high-quality business compounding LT over 20%/yr. Shares are off -36% from 11/21 and I’m currently re-underwriting $FND for my portfolio. This thread discusses key items around the $FND model. 2/Overview
$FND is a specialty retailer that operates 160 large (~75k sq/ft) warehouse stores across 33 states selling tile, stone, wood, laminate, vinyl and other flooring products. Generated $3.4bln in ’21 revenue, $485mln in EBITDA (14.1% margin) and has a ~$10bln mkt cap

1/#Skechers $SKX UBS Conference Notes

$SKX shares have been torpedoed (-22% since mid Feb) along with other international/retail names on the Russia/Ukraine conflict and consumer spending concerns. $SKX just presented at a UBS conference. Below are some quick notes: 2/Exposure

Announced today a suspension of all shipments to Russia, less than 1% of sales are derived from Russia and Ukraine each. Operations in both are distributor businesses with no co. owned stores. $SKX has just 50 distributor stores in each vs. a co. total of 4,306.

1/ $POOL Investor Day Thread

Listened to the Pool Corp (#POOL) Investor Day earlier. Been an owner of $POOL since 2014 and still tear up a bit on every call, such a beautiful business, the type you will tell your grandkids about. Here are some notes. 2/#POOL reiterated '22 guidance for 17%-19% revenue growth (9-10% price, 3-4% volume, 5% M&A) and 15-17% EPS growth. Demand still strong with customers remaining booked through '22 and often into '23 with large backlogs. Sees post '22 revenue growth back to the 6-9% LT model.

1/#Roblox (#RBLX) LT Comp Thread

RBLX CEO David Baszucki has a $3.3-$4.3bln LT equity comp plan that pays out if #RBLX shares are $165-$375 by March 2028. David cut his base salary to $0 (prior $800k) at the IPO. All of his compensation out to 2028 is via equity/RSU/options. 2/The prize is in a "Founder and CEO Long-Term Performance Award" that will grant David 11.5mln Class A shares if #RBLX exceeds seven price hurdles between $165-$375 a share by March of 2028. The notional value in RBLX shares at the hurdle price for each tranche is $3.3bln.