Floor & Decor Holdings, Inc.

Greetings. Welcome to Florida Car Holdings Incorporated's fiscal 2023 third quarter conference call. At this time, all participants are in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. At this time, I'll now turn the conference over to Wayne Hood, Vice President of Investor Relations. Mr. Hood, you may begin.

Thank you, operator, and good afternoon, everyone. Welcome to Floor & Decor's Fiscal 2023 Third Quarter Earnings Conference Call. Joining me on our call today are Tom Taylor, Chief Executive Officer, Trevor Lang, President, and Brian Langley, Executive Vice President and Chief Financial Officer. Before we start, I want to remind everyone of the company's Safe Harbor language, Comments made during this conference call and webcast contain forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995 and are subject to risk and uncertainties. Any statement that refers to expectations, projections, or other characterizations of future events, including financial projections or future market conditions, is a forward-looking statement. the company's actual future results could differ materially from those expressed in such forward-looking statements for any reason included in those listed in its SEC filings. Florida Corps assumes no obligation to update any such forward-looking statements. Please also note that past performance or market information is not a guarantee of future results. During this conference call, the company will discuss non-GAAP financial measures as defined by SEC Regulation G. We believe non-GAAP disclosures enable investors to better understand our core operating performance on a comparable basis between periods. A reconciliation of each of these non-GAAP measures to the mostly directly comparable GAAP financial measure can be found in the earnings press release, which is available on our investor relations website at ir.florentocore.com. A recorded replay of this call and related materials will be available on our investor relations website. Let me now turn the call over to Tom.

Thank you, Wayne, and everyone for joining us on our fiscal 2023 third quarter earnings conference call. During today's call, Trevor and I will discuss some of our fiscal 2023 third quarter earnings highlights. Then Brian will provide a more in-depth review of our third quarter financial performance and share our thoughts about some of our financial projections for the remainder of fiscal 2023. We are proud to deliver third quarter diluted earnings per share of 61 cents, especially amidst the continuing economic challenges posed by 30-year mortgage interest rates that are now at about 8%, near record low existing home sales of 3.96 million units annualized in September, the ongoing pressures on housing affordability, and the small sales of large ticket discretionary products. Our fiscal 2023 third quarter financial results are a testament to our company's agility and commitment to executing our key growth and customer engagement strategies, which we believe will continue to widen our competitive moat. As many of you know, our industry and company have been affected by the Federal Reserve's current interest rate policies aimed at curbing economic growth and moderating inflation to 2% over time. The lagged effect of these policies is exerting greater than expected pressure on existing home sales and, in turn, our sales than we previously expected. We were expecting that existing home sales would approximate 4.1 to 4.3 million units annualized as we moved into the second half of 2023. But regrettably, this has not materialized to date. As Brian will discuss in more detail, we have experienced an unexpected accelerated decline in comparable store sales from the lagged effect of these policies in the early part of the fourth quarter of 2023 and have begun to tighten expenses further in November to align with the recent accelerated decline. We believe the ongoing impact of these monetary policies will continue to which could lead to a decline in our comparable store sales for the year. Therefore, we believe it is prudent to approach fiscal 2024 with more rigor in our expense management and added discipline in our growth investments and capital spending. Additionally, we think it is important to add a level of flexibility and optionality to our operating and store opening plans in 2024, given the current macroeconomic environment. I am proud of how our teams have stepped up to this short-term challenge. We are not standing still and see evidence that our strategies to grow our market share in this challenging period are working, even when industry sales are contracting. We are fortunate that the strength of our business model, balance sheet, and cash flow allow us to continue in investing in the new stores and merchandising growth initiatives in the face of these near-term headwinds. For example, we intend to test an outdoor department within our stone department in 10 to 12 stores early next year, including full outdoor focused vignettes and select design centers to better show our assortment. I believe that our demonstrated history of strong and agile execution, coupled with the investments we continue to make in new warehouse stores and merchandising, will position us for accelerating sales, market share, and strong earnings growth when the industry growth returns. Let me now turn the call over to Trevor.