Core & Main (CNM) closed the most recent trading day at $61.85, moving +2.25% from the previous trading session. The stock's performance was ahead of the S&P 500's daily gain of 0.54%. Elsewhere, the Dow gained 0.52%, while the tech-heavy Nasdaq added 0.74%. Prior to today's trading, shares of the distributor of water and fire protection products had gained 7.73% outpaced the Industrial Products sector's gain of 5.35% and the S&P 500's gain of 4.2%.Market participants will be closely following the financial ...

Industry Overview - The Zacks Manufacturing-Tools & Related Products industry includes companies that develop and distribute various tools and technology solutions, serving multiple sectors such as industrial, commercial, oil & gas, and automotive [3] - The industry is currently facing challenges due to a slowdown in the manufacturing sector, with the Manufacturing Purchasing Manager's Index at 49% in June, indicating contraction [4] - The New Orders Index has also been in contraction for five consecutive months, registering 46.4% in June [4] Current Challenges - The industry is experiencing input cost inflation and supply-chain issues, which are negatively impacting profitability and margins [5] - The Supplier Deliveries Index indicates slower deliveries for the seventh consecutive month, further complicating the operational landscape [5] - A shortage of skilled labor in the United States is also a significant challenge for the industry [1] Strategic Responses - Companies in the industry are focusing on cost-control measures and investments in product development to remain competitive [2] - Initiatives include streamlining operational structures, optimizing supply networks, and implementing effective pricing policies to manage costs [5] - Continuous innovation and product upgrades are seen as essential for long-term growth, although they may lead to highly leveraged balance sheets [6] Performance Metrics - The Zacks Manufacturing-Tools & Related Products industry currently holds a Zacks Industry Rank of 163, placing it in the bottom 34% of 246 Zacks industries, indicating weak prospects [7][8] - The industry's earnings estimates for 2025 have decreased by 7.3% over the past year, reflecting analysts' diminishing confidence in earnings growth potential [9] - Over the past year, the industry has underperformed compared to the sector and the S&P 500, growing only 7.7% versus 14.8% and 12.4% respectively [11] Valuation Insights - The industry is currently trading at a forward P/E ratio of 17.92X, which is below the S&P 500's 22.75X and the sector's 20.09X [14] - Historical trading ranges for the industry have been between 11.65X and 22.13X over the past five years, with a median of 18.55X [14] Notable Companies - **Stanley Black & Decker, Inc. (SWK)**: Focused on tools and engineered fastening systems, the company has shown solid momentum in its Tools & Outdoor segment, particularly in its DEWALT business. It has reported better-than-expected results in the last four quarters, with an average earnings surprise of 18.4% [19][20] - **Core & Main, Inc. (CNM)**: Provides water and fire protection products, benefiting from increased demand and recent acquisitions. Its fiscal 2026 earnings estimates have been revised upward by 1.2% in the past 60 days [23][24] - **Kennametal Inc. (KMT)**: Specializes in high-speed metal cutting tools and has seen improved supply chain conditions and increased OEM build rates in aerospace markets. The company has consistently surpassed earnings estimates, with an average surprise of 27% [26][27]

Financial Performance - Core & Main reported quarterly earnings of $0.52 per share, matching the Zacks Consensus Estimate, and an increase from $0.49 per share a year ago [1] - The company posted revenues of $1.91 billion for the quarter ended April 2025, exceeding the Zacks Consensus Estimate by 4.29%, compared to $1.74 billion in the same quarter last year [2] - Over the last four quarters, Core & Main has surpassed consensus revenue estimates three times [2] Stock Performance - Core & Main shares have increased approximately 16.5% since the beginning of the year, significantly outperforming the S&P 500's gain of 2.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.75 on revenues of $2.11 billion, and for the current fiscal year, it is $2.43 on revenues of $7.71 billion [7] - The trend of estimate revisions for Core & Main is mixed, which may change following the recent earnings report [6] Industry Context - Core & Main operates within the Manufacturing - Tools & Related Products industry, which is currently ranked in the bottom 11% of over 250 Zacks industries [8] - Historical data indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

Financial Data and Key Metrics Changes - The company reported first quarter net sales of $1,900,000,000, marking a 10% increase year-over-year, with adjusted EBITDA rising 3% to $224,000,000, both representing all-time highs for the first quarter [5][20][24] - Gross margins improved sequentially to 26.7% from 26.6% in the previous quarter, although down from 26.9% year-over-year [21][24] - Diluted earnings per share increased approximately 6% to $0.52 due to higher net income and a lower share count following share repurchases [23][24] Business Line Data and Key Metrics Changes - The company achieved mid single-digit organic sales growth, with notable performance in meters (10% growth) and double-digit growth in treatment plant and fusible high-density polyethylene offerings [9][20] - Storm drainage products outperformed with a 17% growth, driven by road and bridge projects and increased distribution opportunities [71] Market Data and Key Metrics Changes - The municipal construction market remains stable, supported by funding from the Infrastructure Investment and Jobs Act, with a growing pipeline of projects [6][94] - Residential lot development showed resilience, but signs of softening were noted due to economic conditions and affordability pressures [7][62] Company Strategy and Development Direction - The company is focused on expanding its presence through both organic growth and acquisitions, with a healthy acquisition pipeline and plans to open 5 to 10 new greenfield locations in 2025 [12][87] - The strategic plan emphasizes local service, product line expansion, and leveraging market intelligence to drive growth [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the near and long-term outlook for municipal construction, despite short-term uncertainties in residential development [8][27] - The company reaffirmed its full-year guidance for net sales between $7,600,000,000 and $7,800,000, with adjusted EBITDA expected between $950,000,000 and $1,000,000, reflecting stable demand and project activity [25][26] Other Important Information - The company has been actively managing its supply chain to mitigate impacts from tariffs and trade restrictions, with minimal direct effects noted so far [11][21] - The company continues to invest in employee training and development, which has been recognized in industry awards [17] Q&A Session Summary Question: Insights on SG&A productivity for the year - Management indicated that SG&A expenses increased 14% due to acquisitions and inflation, but productivity gains were noted, with expectations for improved rates in the second quarter [30][33] Question: Top-line guidance and market conservatism - Management expects the market to be roughly flat for the full year, with stronger performance in the first half and potential challenges in the back half due to economic uncertainties [36][37] Question: Pricing dynamics and commodity impacts - Pricing improved sequentially, with expectations for flat pricing for the year, despite some inflationary pressures on certain product categories [44][46] Question: Residential construction market outlook - Management noted a potential slowdown in residential development, with bidding activity scaling down, but emphasized that this segment represents only about 20% of the business [62][63] Question: Employee retention and poaching concerns - Management reported high employee retention rates and viewed occasional poaching as an opportunity to attract talent [102][103] Question: Cost-out initiatives and SG&A alignment - Management is focusing on aligning resources to areas of growth, with some cost-out initiatives underway, but no substantial quantification provided [104][106]

Core & Main (CNM) Q1 2026 Earnings Call June 10, 2025 08:30 AM ET Speaker0 Hello, and welcome to the Core and Main Q1 twenty twenty five Earnings Call. My name is Alex, and I'll be coordinating the call today. I'll now hand it over to Glenn Floyd, Director of Investor Relations. Please go ahead. Speaker1 Thank you. Good morning, everyone. This is Glenn Floyd, Director of Investor Relations for Core and Main. We are excited to have you join us this morning for our fiscal twenty twenty five first quarter earn ...

Use of Non-GAAP Financial Measures In addition to providing results that are determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"), we present EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and Net Debt, all of which are non-GAAP financial measures. These measures are not considered measures of financial performance or liquidity under GAAP and the items excluded therefrom are significant components in understanding and assessing our financial perfor ...

Financial Performance - Net sales for the three months ended May 4, 2025, increased to $1,911 million, up 9.8% from $1,741 million for the same period in 2024[18] - Gross profit for the same period was $510 million, representing a gross margin of 26.7%, compared to $468 million and a gross margin of 26.9% in the prior year[18] - Net income attributable to Core & Main, Inc. for the three months ended May 4, 2025, was $100 million, an increase of 5.3% from $95 million in the prior year[18] - Basic earnings per share (EPS) increased to $0.53, up from $0.49 in the same period last year, while diluted EPS also rose to $0.52 from $0.49[18] - Operating income for the three months ended May 4, 2025, was $171 million, slightly up from $168 million in the same period last year[18] - Adjusted EBITDA for the three months ended May 4, 2025, increased by $7 million, or 3.2%, to $224 million compared to $217 million for the same period in 2024[118] Assets and Liabilities - Total assets as of May 4, 2025, were $6,278 million, an increase from $5,870 million as of February 2, 2025[16] - Total liabilities increased to $4,457 million as of May 4, 2025, compared to $4,096 million as of February 2, 2025[16] - Retained earnings rose to $515 million as of May 4, 2025, up from $449 million as of February 2, 2025[16] - Total debt as of May 4, 2025, was $2,284 million, with current maturities of long-term debt totaling $24 million[55] - The company reported an increase in accounts payable by $361 million, compared to an increase of $244 million in the prior year[25] Cash Flow and Investments - Cash flows from operating activities provided $77 million, slightly down from $78 million in the same period last year[25] - Net cash provided by operating activities was $77 million for the three months ended May 4, 2025, a decrease of $1 million compared to $78 million for the same period in 2024[129] - Net cash used in investing activities decreased significantly by $558 million to $16 million for the three months ended May 4, 2025, primarily due to $564 million in cash outflows for acquisitions in fiscal 2024[130] - Net cash used in financing activities was $61 million for the three months ended May 4, 2025, compared to net cash provided of $525 million for the same period in 2024, reflecting a $586 million change[131] Shareholder Activities - The company repurchased 837,268 shares of Class A common stock for a total of $39 million during the three months ended May 4, 2025, with $285 million remaining under the authorized repurchase program[29] - The company completed $39 million of Class A common stock repurchases during the three months ended May 4, 2025[126] - The maximum number of shares that may yet be purchased under the repurchase program is $285 million[159] Tax and Compliance - The effective tax rate for the three months ended May 4, 2025, was 25.5%, an increase from 24.6% in the prior year[67] - The provision for income taxes increased by $3 million, or 9.1%, to $36 million, with an effective tax rate of 25.5% for the three months ended May 4, 2025[113] - The Company was in compliance with all debt covenants as of May 4, 2025[59] Acquisitions and Intangible Assets - The company did not complete any acquisitions during the three months ended May 4, 2025, following significant acquisitions totaling $585 million in the previous fiscal year[39] - The company closed acquisitions during the fiscal year ended February 2, 2025, with an aggregate transaction value of $769 million[94] - The company’s intangible assets acquired during the Fiscal 2024 Acquisitions included $219 million related to customer relationships and $282 million in goodwill[44] - Total intangible assets as of May 4, 2025, amounted to $1,811 million, with net intangible assets of $901 million[53] Market and Economic Conditions - The Infrastructure Investment and Jobs Act includes $55 billion for water infrastructure investment, which may positively impact the Company's business[87] - The company experienced price stability in fiscal 2023 compared to price inflation in fiscal 2022, with improvements in supply chain conditions[90] - The company is exposed to price fluctuations in the cost of procuring products, which may affect gross profit margins[148] - As of May 4, 2025, foreign currency operations were not material, with a hypothetical 10% change in the U.S. dollar's value not materially impacting net earnings[149] Risk and Legal Matters - The company is not currently party to any material legal proceedings, although it faces inherent risks related to product liability claims[154] - The company maintains provisions for potential credit losses, which have historically been within expectations[147]

Financial Performance - Net sales increased by 9.8% to $1,911 million compared to $1,741 million in the prior year[6] - Gross profit rose by 9.0% to $510 million, with a gross profit margin of 26.7%[6] - Net income increased by 4.0% to $105 million, with diluted earnings per share rising by 6.1% to $0.52[6] - Adjusted EBITDA increased by 3.2% to $224 million, reflecting higher gross profit partially offset by increased SG&A expenses[13] - Net sales for the three months ended May 4, 2025, reached $1,911 million, a 9.8% increase from $1,741 million in the same period last year[29] - Gross profit increased to $510 million, up from $468 million, reflecting a gross margin improvement[29] - Net income attributable to Core & Main, Inc. was $100 million, compared to $95 million, representing a 5.3% year-over-year growth[29] - Adjusted EBITDA for the three months ended May 4, 2025, was $224 million, an increase from $217 million in the prior year[40] - Operating income for the quarter was $171 million, slightly up from $168 million in the same quarter last year[29] - Basic earnings per share (EPS) increased to $0.53 from $0.49, while diluted EPS rose to $0.52 from $0.49[29] Expenses and Cash Flow - SG&A expenses rose by 14.0% to $293 million, representing 15.3% of net sales[9] - Operating cash flow was $77 million, slightly down from $78 million in the prior year[14] - The company incurred capital expenditures of $13 million during the quarter, compared to $7 million in the same period last year[33] Debt and Assets - Net debt decreased to $2,276 million from $2,419 million year-over-year[15] - The company reported a net debt of $2,276 million as of May 4, 2025, down from $2,419 million a year earlier[42] - Total current assets increased to $2,444 million, compared to $2,025 million at the end of the previous quarter[31] - Cash and cash equivalents remained stable at $8 million, consistent with the previous quarter[31] Outlook and Strategic Focus - The company reaffirmed its full-year outlook for net sales between $7,600 million and $7,800 million, with expected net sales growth of 2% to 5%[21] - Adjusted EBITDA for the full year is projected to be between $950 million and $1,000 million, with an adjusted EBITDA margin of 12.5% to 12.8%[21] - The company continues to focus on addressing aging water infrastructure needs across the U.S. and adapting to macroeconomic changes[5]

Core & Main, Inc. CNM will release its first-quarter financial results before the opening bell on Tuesday, June 10. Analysts expect the Saint Louis, Missouri-based company to report quarterly earnings at 54 cents per share, up from 49 cents per share in the year-ago period. Core & Main projects quarterly revenue of $1.85 billion, compared to $1.74 billion a year earlier, according to data from Benzinga Pro. On March 25, Core & Main reported fourth-quarter earnings of 33 cents per share, missing the consensu ...

Company Overview - Core & Main, Inc. (CNM) shares increased by 10.4% to $59.09 in the last trading session, with a higher-than-average trading volume [1] - The company has made the Fortune 500 list for the first time at No. 497, indicating rapid growth in providing essential water infrastructure products [2] Financial Performance - Core & Main is expected to report quarterly earnings of $0.52 per share, reflecting a year-over-year increase of 6.1% [3] - Revenue projections for the upcoming quarter are $1.83 billion, which is a 5.3% increase compared to the same quarter last year [3] Market Sentiment - The recent stock price increase is attributed to optimism regarding rising customer demand for storm drainage products and pipes, valves, and fittings [2] - The consensus EPS estimate for Core & Main has remained unchanged over the last 30 days, suggesting that the stock's price movement may not sustain without earnings estimate revisions [4] Industry Context - Core & Main operates within the Zacks Manufacturing - Tools & Related Products industry, where Sandvik AB (SDVKY) also competes [4] - Sandvik's consensus EPS estimate has remained unchanged at $0.36, representing a year-over-year change of 24.1% [5]