Annual report pursuant to Section 13 and 15(d)

Segment Reporting

v3.25.0.1
Segment Reporting
 12 Months Ended
Dec. 26, 2024
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
The Company operates as a multi-channel specialty retailer of hard surface flooring and related accessories and seller of commercial surfaces. The Company primarily sells hard surface flooring and related accessories through retail stores located in the United States and through its website.
Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and evaluating financial performance. The Company’s CODM, its Chief Executive Officer, reviews financial information about the Company’s two operating segments, Retail and Spartan, for purposes of allocating resources and evaluating financial performance. The Spartan segment, which engages in selling commercial surfaces and is entirely comprised of the Company’s Spartan subsidiary, does not meet the materiality criteria of ASC 280, Segment Reporting (“ASC 280”), and is therefore not disclosed separately as a reportable segment. The Company files a consolidated income tax return and does not allocate income taxes and other corporate-level expenses, including interest expense, to Spartan. All material corporate costs are included in the Retail segment.
The Company concluded that the economic and operating characteristics of its one reportable segment, Retail, are similar across its retail operations, including the net sales, gross profit and gross margin, and operating income of its retail stores as well as the nature of products and services offered, customer base, marketing initiatives, operating procedures, store layouts, employee incentive programs, methods of distribution, competitive and operating risks, and the level of shared resources across the business.
The accounting policies of the Retail segment are the same as those described in Note 1, “Summary of Significant Accounting Policies.” The CODM assesses performance for the Retail segment and decides how to allocate resources based on operating income. The CODM considers budget to actual variances on a monthly basis to monitor performance. The Company does not report capital expenditures or assets at the segment level as the information is not regularly provided to the CODM. The Company does not have intersegment sales.
The following table presents the Company’s segment information for each of the last three fiscal years:
Fiscal Year Ended
December 26, 2024 December 28, 2023 December 29, 2022
in thousands Retail Other (1) Consolidated Retail Other (1) Consolidated Retail Other (1) Consolidated
Net sales $ 4,240,556  $ 215,214  $ 4,455,770  $ 4,218,328  $ 195,556  $ 4,413,884  $ 4,128,930  $ 135,543  $ 4,264,473 
Less:
Cost of sales 2,379,694  2,425,472  2,444,952 
Personnel expense (2) 719,360  644,356  576,036 
Property cost (3) 532,079  467,388  383,683 
Other segment items (4) 367,511  378,801  340,555 
Operating income (5) 241,912  14,264  256,176  302,311  19,117  321,428  383,704  13,056  396,760 
Interest expense, net 2,773  9,897  11,138 
Income before income taxes $ 253,403  $ 311,531  $ 385,622 
(1)Represents the Company’s non-reportable operating segment.
(2)Personnel expense is primarily comprised of store and store support center compensation including wages, incentive compensation, and benefits.
(3)Property cost is primarily comprised of rent, common area maintenance, utilities, property taxes, and insurance, as well as depreciation and amortization of leasehold improvements, buildings and improvements, furniture, fixtures, and equipment, and computer software and hardware at stores and the store support center.
(4)Other segment items expense is primarily comprised of advertising costs, credit card fees, information technology costs, and other operating expenses.
(5)Includes depreciation and amortization expense of $225.8 million, $195.7 million, and $149.9 million for the fiscal years ended December 26, 2024, December 28, 2023, and December 29, 2022, respectively, in our Retail segment.