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]

Financial Performance - Core & Main, Inc. is expected to report first-quarter earnings of 54 cents per share, an increase from 49 cents per share in the same period last year [1] - The company projects quarterly revenue of $1.85 billion, compared to $1.74 billion a year earlier [1] - In the fourth quarter, Core & Main reported earnings of 33 cents per share, missing the consensus estimate of 36 cents [2] Stock Performance - Core & Main shares fell 0.6% to close at $59.33 on the previous Monday [2] - Analysts have provided various ratings and price targets for Core & Main, with JP Morgan maintaining an Overweight rating and increasing the price target from $54 to $56 [7] - RBC Capital maintained an Outperform rating but cut the price target from $62 to $60 [7] - Baird lowered the price target from $66 to $65 while maintaining an Outperform rating [7] - Wells Fargo raised the price target from $62 to $65 while keeping an Overweight rating [7] - Citigroup raised the price target from $43 to $56 while maintaining a Neutral rating [7]

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]

Core Insights - Core & Main's stock closed at $51.64, showing a -0.39% change from the previous day, underperforming compared to the S&P 500's loss of 0.07% [1] - The stock has increased by 7.6% over the past month, which is lower than the Industrial Products sector's gain of 16.88% and the S&P 500's gain of 13.74% [1] Financial Projections - The upcoming earnings per share (EPS) for Core & Main is projected at $0.52, indicating a 6.12% increase year-over-year [2] - Revenue is expected to reach $1.83 billion, reflecting a 5.25% rise from the same quarter last year [2] - For the full year, earnings are estimated at $2.43 per share and revenue at $7.71 billion, showing increases of +14.08% and +3.66% respectively from the previous year [3] Analyst Sentiment - Investors should monitor shifts in analyst projections for Core & Main, as positive estimate revisions can indicate optimism about the company's outlook [4] - The Zacks Rank system, which reflects these estimate changes, currently rates Core & Main at 3 (Hold) [6] Valuation Metrics - Core & Main has a Forward P/E ratio of 21.33, which is higher than the industry average of 18.31 [7] - The company has a PEG ratio of 1.96, compared to the Manufacturing - Tools & Related Products industry's average PEG ratio of 1.49 [7] Industry Context - The Manufacturing - Tools & Related Products industry is part of the Industrial Products sector and currently holds a Zacks Industry Rank of 224, placing it in the bottom 10% of all industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Company Performance - Core & Main's stock closed at $50.43, reflecting a +1.49% change from the previous session, underperforming compared to the S&P 500's gain of 1.67% [1] - Over the past month, Core & Main's stock has increased by 0.34%, outperforming the Industrial Products sector's decline of 8.85% and the S&P 500's decline of 6.57% [1] Earnings Forecast - Core & Main is projected to report earnings of $0.52 per share, indicating a year-over-year growth of 6.12% [2] - The Zacks Consensus Estimate for revenue is $1.83 billion, representing a 5.25% increase from the previous year [2] - For the entire year, earnings are forecasted at $2.43 per share and revenue at $7.71 billion, reflecting changes of +14.08% and +3.66% respectively compared to the previous year [3] Analyst Estimates - Recent changes to analyst estimates for Core & Main are important as they reflect the shifting dynamics of short-term business patterns [4] - Upbeat changes in estimates suggest a favorable outlook on the company's business health and profitability [4] Valuation Metrics - Core & Main has a Forward P/E ratio of 20.45, which is a premium compared to the industry's average Forward P/E of 16.8 [6] - The company has a PEG ratio of 1.88, compared to the Manufacturing - Tools & Related Products industry's average PEG ratio of 1.28 [7] Industry Ranking - The Manufacturing - Tools & Related Products industry is part of the Industrial Products sector and holds a Zacks Industry Rank of 91, placing it in the top 37% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Company Overview - Core & Main, Inc. (CNM) is positioned as an intriguing investment choice due to solid earnings estimate revision activity and favorable industry ranking [1][3]. - The company has seen a rise in earnings estimates, with current quarter estimates increasing from $0.51 per share to $0.52 per share, and current year estimates rising from $2.40 per share to $2.43 per share [4]. Industry Context - The Industrial Products space, where Core & Main operates, has a Zacks Industry Rank of 57 out of 247 industries, indicating a strong position relative to other segments [2]. - A positive trend in the industry can benefit all companies within it, suggesting that Core & Main could thrive alongside its peers [2][5]. Investment Potential - The recent solid estimate revisions indicate that analysts are becoming more optimistic about Core & Main's short and long-term prospects [3][5]. - The company currently holds a Zacks Rank 3 (Hold), which is considered a favorable signal for potential investors [4].

Core Viewpoint - The Zacks Manufacturing-Tools & Related Products industry is facing challenges due to softness in the manufacturing sector, a slowdown in new orders, and ongoing supply-chain issues, compounded by a shortage of skilled labor in the U.S. [1][5][6] Industry Overview - The industry includes companies that develop and distribute various tools such as hand and mechanics tools, hydraulic tools, and engineered fastening systems, among others [3] - Advanced tools are utilized across multiple sectors including industrial, commercial, oil & gas, mining, and automotive [4] Major Trends - **Weakness in the Manufacturing Sector**: The Manufacturing Purchasing Manager's Index fell to 49% in March, indicating contraction, with the New Orders Index at 45.2% [5] - **Rising Costs**: Input cost inflation and supply-chain issues are negatively impacting profitability, with the Supplier Deliveries Index showing slower deliveries for four consecutive months [6] - **Investments in Product Development**: Companies are focusing on innovation and product upgrades, although this often leads to highly leveraged balance sheets [7] Industry Performance - The Zacks Manufacturing-Tools & Related Products industry ranks 162, placing it in the bottom 34% of 247 Zacks industries, indicating weak near-term prospects [8][9] - The industry's earnings estimates for 2025 have decreased by 11.1% over the past year, reflecting analysts' diminishing confidence in earnings growth [10] - The industry has underperformed both the sector and the S&P 500, declining 20.5% over the past year compared to the S&P 500's growth of 6.9% [12] Current Valuation - The industry is trading at a forward P/E ratio of 15.81X, below the S&P 500's 20.05X and the sector's 16.83X [13] Notable Companies - **Stanley Black & Decker, Inc.**: Expected growth driven by strong performance in the Tools & Outdoor segment and cost-reduction efforts [14][15] - **Lincoln Electric Holdings, Inc.**: Benefiting from cost management and product launches in automation solutions [15][16] - **Core & Main, Inc.**: Increased demand for infrastructure products and recent acquisitions are positive for growth [17][18] - **Enerpac Tool Group Corp.**: Solid momentum in the Industrial Tools & Services segment supports its growth [20][21]

Industry Overview - The Zacks Manufacturing-Tools & Related Products industry includes companies that develop and distribute various tools and technology solutions, serving sectors such as industrial, commercial, oil & gas, mining, and automotive [3] - The industry is currently facing challenges due to softness in the manufacturing sector, a slowdown in new orders, and ongoing supply-chain issues [1][4] Current Trends - The Manufacturing Purchasing Manager's Index (PMI) fell to 49% in March, indicating contraction, while the New Orders Index dropped to 45.2% [4] - Input cost inflation and supply-chain disruptions are negatively impacting profitability, with the Supplier Deliveries Index reflecting slower deliveries for the fourth consecutive month [5] - Companies are focusing on cost management initiatives, including streamlining operations and optimizing supply networks to mitigate cost-related challenges [5] Investment Opportunities - Investments in product development and innovation are expected to drive growth, although they may lead to highly leveraged balance sheets [6] - Key players like Lincoln Electric Holdings, Core & Main, Stanley Black & Decker, and Enerpac Tool Group are well-positioned to navigate challenging market conditions [2] Performance Metrics - The Zacks Manufacturing-Tools & Related Products industry ranks 162 out of 247 Zacks industries, placing it in the bottom 34% [7] - The industry's earnings estimates for 2025 have decreased by 11.1% over the past year, indicating negative earnings prospects [9] - Over the past year, the industry has declined by 20.5%, underperforming both the sector and the S&P 500, which grew by 6.9% [11] Valuation - The industry is currently trading at a forward P/E ratio of 15.81X, below the S&P 500's 20.05X and the sector's 16.83X [14] - Historical trading ranges for the industry have been between 11.65X and 22.71X over the past five years [14] Notable Companies - **Stanley Black & Decker**: Expected growth driven by strong performance in the Tools & Outdoor segment and cost-reduction efforts [19][20] - **Lincoln Electric**: Benefits from cost management and product launches in automation solutions, with upward revisions in earnings estimates [23][24] - **Enerpac Tool Group**: Solid momentum in the Industrial Tools & Services segment, supported by strength in the Cortland Biomedical business [29] - **Core & Main**: Increased demand for infrastructure products and successful acquisitions are expected to bolster growth [30][31]

Group 1 - The analyst maintains a positive outlook on Core & Main (CNM) for FY25, reiterating a buy rating based on demand expectations [1] - The analysis incorporates various investment strategies, including fundamental, technical, and momentum investing, to enhance the investment process [1] Group 2 - The article serves as a platform for tracking investment ideas and connecting with like-minded investors [1]

Financial Data and Key Metrics Changes - The company achieved record net sales of over $7.4 billion for fiscal 2024, reflecting an 11% increase year-over-year [26][47] - Adjusted EBITDA for fiscal 2024 increased by 2% to $930 million, with an adjusted EBITDA margin of 12.5%, down 110 basis points from the previous year [51][62] - Gross margin for fiscal 2024 was 26.6%, a decrease from 27.1% in fiscal 2023, attributed to higher average inventory costs [48][62] - Selling, general and administrative (SG&A) expenses rose approximately 16% to nearly $1.1 billion, primarily due to acquisitions and inflation [49][62] Business Line Data and Key Metrics Changes - The company reported strong double-digit average daily sales growth in metering and storm drainage products, and high single-digit growth in treatment plant projects [27] - Acquisitions contributed about 9% to sales growth, while organic average daily volumes were up low single digits [42][47] - Private label products represented approximately 4% of sales, with a target to grow to 10% or more over time [29][62] Market Data and Key Metrics Changes - The company estimates it holds a 19% share of a $39 billion addressable market, indicating significant growth potential [15] - Municipal spending on water infrastructure is expected to remain resilient, with low single-digit growth projected for 2025 [58][62] - The company anticipates flat nonresidential construction starts in 2025, with a stable outlook for municipal projects [56][62] Company Strategy and Development Direction - The company plans to continue driving profitable growth through both organic means and acquisitions, while maintaining strong cash flow [40][62] - The focus remains on expanding presence in underpenetrated geographies and driving the adoption of new products [60][62] - The company aims to enhance gross margins through private label initiatives, sourcing optimization, and pricing strategies [61][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating uncertainties related to interest rates, federal funding, and tariffs, while remaining optimistic about municipal water infrastructure projects [54][56] - The company expects to achieve net sales growth of 2% to 5% in fiscal 2025, with adjusted EBITDA projected to range from $950 million to $1 billion [62] - Management highlighted the importance of maintaining a strong culture and leadership team during the transition of executive roles [11][104] Other Important Information - The company completed 10 acquisitions in fiscal 2024, adding over $600 million in annual sales [27][32] - The company returned $176 million to shareholders through share repurchases, with a remaining authorization of $324 million [53][62] - Management noted that tariffs are not expected to significantly impact the business, as most products are produced domestically [33][116] Q&A Session Summary Question: What percentage of COGS is PVC today and what are the price expectations? - PVC pipe accounts for less than 15% of COGS, with an overall neutral pricing environment expected moving forward [68][69] Question: Can you provide insight into first quarter trends? - The start of 2025 is in line with expectations, with strong bidding activity and a good backlog [72][73] Question: What is the outlook for end markets? - Residential and non-residential markets are expected to remain steady, with municipal spending projected to be resilient [76][79] Question: What are the key levers for gross margin expansion? - Private label initiatives are the primary driver for gross margin expansion, followed by sourcing optimization [81][82] Question: How do you view the competitive dynamics in your markets? - The competitive environment remains stable, with continued market share gains expected [119]