Brandon Dietz Profile picture
Equity Analyst and Investor. Hunting for exceptional businesses. In-depth research available at
Dec 1, 2023 9 tweets 3 min read
Investors in $FND should keep close tabs on store openings…

Due to a flurry of openings so far this qtr (+8), $FND is now at +25 new stores YTD vs. 2023 guidance for +32 new stores Image Recall - $FND exited Q3 at +17 new stores, and has opened +8 additional stores since

+4 in October & +4 in November

$FND cadence needs to step up to another +7 new stores this month to reach FY guidance (+32)
Aug 28, 2023 7 tweets 3 min read
Stuffed in the footnotes of their 10-K’s, some may not know that $HD & $LOW actually report their flooring department sales annually…

While their fiscal yr ends do lag $FND by a month, we can still derive good insights from their results

A few highlights… Image $FND has massively outperformed $HD & $LOW since 2013…

Using 2013 as a base, $FND sales are up a cumulative +861%, around ~14x $HD (+62%) and $LOW's (+58%) flooring department growth
Aug 14, 2023 11 tweets 4 min read
$DHR was the first company I came across that had a “business system” – a structured operating framework used to drive continuous growth & improvement

Many other companies have similar systems in place

Often these have proved to be exceptional businesses

Here’s 10 I've found Image First up is Fortive $FTV

$DHR's framework unsurprisingly extended to its spun-off industrial business, which has a similar system – the “Fortive Business System”
Aug 1, 2023 17 tweets 4 min read
$TREX is up +7% today on Q2 results which showed surprising resilience…in contrast to other outdoor living category players like $POOL...

$TREX's better than expected results have a positive read through for names like $FND $SITE $HD & $LOW

My key notes... Image $TREX saw revenues decline just -5% (adj), well ahead of street & prior guidance for a -15-16% (adj) decline

Key driver was more resilient consumer demand for composite decking as $TREX saw +MSD growth in channel sell through, leading to higher channel sell in for $TREX Image
Jul 31, 2023 11 tweets 5 min read
$MHK Q2 earnings had some important read through for $FND $HD $LOW & peers

While last qtr mgmt had encouraging comments around a potential bottom in flooring, this qtr mgmt noted they still have yet to see a trough form but remain "hopeful" volumes are near a bottom

Some notes Image Investors in $FND should keep close tabs on $MHK as it is…

1) the largest flooring manufacturer (~21% share)
2) $MHK's NA Flooring y/y results have very high correlation (~90%) with $FND total sales and SSS comp sales

Jun 12, 2023 14 tweets 5 min read
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 Image 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 Image
Jun 8, 2023 22 tweets 8 min read
If you own $HD $LOW $FND or other home improvement & housing linked names like $POOL or $SITE, Zonda is a great resource for industry data

Zonda recently hosted a webinar that had some very interesting data points

Some key notes… Image KPI’s like housing starts, home prices, home equity & mortgage rates are seen as classic primary drivers of demand for the industry & names like $HD, $LOW & $FND

Zonda noted real personal income actually has the highest correlation to changes in home improvement spending though Image
Jun 8, 2023 9 tweets 3 min read
While small, nice to see $FND out after the close yesterday with a tuck-in acquisition for the Spartan side of its commercial business – acquiring Salesmaster Flooring Solutions

Salesmaster augments Spartans Northeastern footprint by adding presence in NYC & New England markets Image Per $FND's investor day last yr., NYC in particular was an area Spartan really lacked meaningful sales rep coverage

Salesmaster helps fill in key coverage for one of the largest commercial flooring MSA’s in the country Image
Jun 7, 2023 4 tweets 2 min read
Composite decking made by companies like $TREX & $AZEK still only comprises ~24% of total decking used (in linear ft) despite a vastly superior value proposition vs. wood

Large secular growth opportunity long term as an increasing number of decks built convert to composites Image Both $TREX & $AZEK see ~50-75% share possible long term, providing ~2-3x industry upside

this is before other growth factors that further add to the industries growth opportunity

(i.e. total R&R growth, total decks built, intl expansion, price increases, etc.) Image
Jun 7, 2023 4 tweets 1 min read
$SITE is the dominant US wholesale landscape distributor by a wide margin

- >3x larger than its nearest competitor
- >8x larger vs the #3 player
- massive in scale vs. the balance of the industry which is largely comprised of small local mom & pop's Image $SITE is unique vs many other distribution businesses in that it faces no other nationally scaled full product line wholesale distributor of landscape supplies
Jun 6, 2023 19 tweets 7 min read
While $FND has a fragmented base of over ~240 suppliers, many be unaware of $FND's largest & most important supplier & its high concentration in a particularly key flooring category

Some key notes... Image Per industry calls, $FND's largest supplier is Creative Flooring Solutions (CFL Flooring), previously known as China Floors

CFL serves as $FND's primary supplier of LVT making key private label brands like Nucor, AquaGuard and DuraLux. These are exclusive to $FND Image
May 8, 2023 24 tweets 9 min read
While $FND's Q1'23 top & bottom line results came in modestly better than expectations, shares were off -5% on Friday as KPI trends in SSS comp, transactions, & ticket – both in the qtr. and so far in Q2 – were weaker than expected.

My key notes from the release & call. Image $FND revenue up +9.1% (est +8.2%) via a -3.3% comp with +12.4% new store growth. EBITDA up +10.2% (est +7.6%) w/+14bps in leverage (est -8bps) as +15% gross profit growth (est +13%) & +214bps in gm exp (est +175bps) was offset by -210bps deleverage from +17% OPEX growth (ex depr) Image
Feb 22, 2023 14 tweets 6 min read
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%
Jul 24, 2022 24 tweets 7 min read
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.
Jun 18, 2022 20 tweets 6 min read
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
Jun 17, 2022 4 tweets 2 min read
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 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.
May 6, 2022 23 tweets 7 min read
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. Image 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%). Image
Apr 23, 2022 24 tweets 13 min read
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)
Apr 22, 2022 16 tweets 5 min read
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)
Mar 17, 2022 12 tweets 4 min read
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

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
Mar 16, 2022 18 tweets 5 min read
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).