Why Floor & Decor Jumped 28% in July
What happened
Shares of Floor & Decor (NYSE: FND) jumped 28% in July, according to data from S&P Global Market Intelligence.
This surge narrows the specialty retailer's year-to-date share losses to 38.2%, down from 51.7% before the surge.
Image source: Getty images.
So what
Floor & Decor's shares rose in tandem with a broad recovery in the Nasdaq Composite Index and S&P 500 Index for July. The former rose 12.3% for the month while the latter recovered by 9.1%. Investors are still digesting the news over high inflation and the Federal Reserve's intention to raise interest rates aggressively to contain it, but they seem much less pessimistic about company earnings than in the prior three months.
Not that Floor & Decor has anything to worry about. The company's first-quarter results, released in May, demonstrated strong top-line growth, with net sales jumping 31.5% year over year to $1.03 billion. Comparable-store sales also increased by 14.3% year over year, but higher costs led to a slight 2.1% year-over-year dip in operating income and a 6.4% year-over-year decline in net income. The company also opened six new warehouse stores during the quarter, along with three design studios.
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