A national home flooring and accessory retailer is trying to shift away from importing products from China but has said it still plans to increase prices due to U.S. tariffs.
Floor & Decor, which sells flooring, tile, vanities, countertops and other home fixtures in 38 states to homeowners and contractors, said it made one vinyl and laminate order from China this year before taking a pause. By the end of 2025, the company expects to have only a single-digit percentage of its total imports from China.
“We paused all purchase orders from China to evaluate the fluid environment and our assortments relative to our competition,” CEO Thomas Taylor said Thursday on the company’s earnings call.
China currently has the highest tariff rate at up to 125%. Other tariffs were put on hold for 90 days, ending in July, except for China. The move away from Chinese imports is part of Floor & Decor’s overall strategy to mitigate the impact of tariffs, which also includes raising prices.
“We are operating in an economic environment marked by high volatility, uncertainty, lack of clarity and the tail risk of a recession,” said Taylor. “While we don't know how this could impact consumer spending for the remainder of fiscal 2025, we have a proactive, flexible plan we are implementing and executing.”
Last year, China accounted for 18% of Floor & Decor’s sold products, down from 50% in 2018. Domestically purchased products accounted for 27% of sold products in 2024.
Floor & Decor has yet to implement the price increases. The company said Thursday it had already received price hikes from various distributors ranging from high-single-digit percentages up to 50%. Floor & Decor works with vendors across 26 countries.
“It is likely that we'll need to raise prices to mitigate some of the incremental tariffs following our negotiations,” said Taylor. “If we do so, we'll continue to use the balanced portfolio approach to product pricing, ensuring a consistent pricing structure across different product categories, while managing our gross margin rate and profitability.”
Taylor said the company has expedited its overseas orders to ensure they arrive by the time tariffs are reinstated in July. The retailer plans to open 20 new stores this year, down from its previous plan of 25.
In years past with price increases, Floor & Decor said it’s seen upticks in its sales profit, but that could be a different story with consumer behavior and the economy.
“The back end [of the year] is a little bit unpredictable with how the consumer is going to be behaving,” said Taylor.