Core & Main(US:CNM)2025-12-09 11:33Financial Performance - Net sales for the three months ended November 2, 2025, were $2,062 million, a slight increase from $2,038 million for the same period in 2024, reflecting a growth of 1.2%[18] - Gross profit for the nine months ended November 2, 2025, reached $1,631 million, compared to $1,529 million for the same period in 2024, indicating a year-over-year increase of 6.7%[18] - Operating income for the three months ended November 2, 2025, was $220 million, slightly down from $223 million in the prior year, a decrease of 1.4%[18] - Net income attributable to Core & Main, Inc. for the three months ended November 2, 2025, was $137 million, compared to $133 million for the same period in 2024, an increase of 3.0%[18] - Basic earnings per share (EPS) for the three months ended November 2, 2025, was $0.72, up from $0.69 in the same period last year, reflecting a growth of 4.3%[18] - Net income for the quarter ending November 2, 2025, was reported at $143 million, compared to $105 million for the previous period, representing a 36.2% increase[24] - Net income for the nine months ended November 2, 2025, increased to $389 million from $367 million for the same period last year, representing a growth of 6%[29] - Adjusted Diluted Earnings Per Share for the nine months ended November 2, 2025, increased by 7.5% to $2.45 compared to $2.28 for the same period in 2024, driven by an increase in net income[138] Assets and Liabilities - Total assets increased to $6,300 million as of November 2, 2025, up from $5,870 million on February 2, 2025, representing an increase of 7.3%[16] - Total stockholders' equity attributable to Core & Main, Inc. increased to $1,977 million as of November 2, 2025, from $1,698 million on February 2, 2025, a rise of 16.4%[16] - Long-term debt decreased to $2,129 million as of November 2, 2025, down from $2,237 million on February 2, 2025, a reduction of 4.8%[16] - Total liabilities increased to $4,245 million as of November 2, 2025, compared to $4,096 million on February 2, 2025, an increase of 3.6%[16] - The total debt as of November 2, 2025, was $2,172 million, with a significant portion attributed to the Senior Term Loan Credit Facility[60] Cash Flow and Investments - Cash flows from operating activities for the nine months ended November 2, 2025, were $382 million, slightly down from $386 million in the previous year[29] - Net cash used in investing activities decreased by $686 million to $71 million for the nine months ended November 2, 2025, primarily due to a $690 million decrease in cash outflows for acquisitions[150] - Net cash used in financing activities was $230 million for the nine months ended November 2, 2025, compared to net cash provided of $380 million for the same period in 2024, reflecting a $610 million change attributed to net debt activity[151] Shareholder Activities - The company repurchased and retired equity interests amounting to $50 million during the quarter ending November 2, 2025[24] - The company repurchased 1,949,239 shares of Class A common stock for a total of $97 million during the nine months ended November 2, 2025, compared to 2,890,483 shares for $121 million in the prior year[33] - The company completed $97 million of Class A common stock repurchases under the Repurchase Program during the nine months ended November 2, 2025[146] - The company has $227 million remaining available for use under its share repurchase program as of November 2, 2025[33] - On December 1, 2025, the board of directors authorized an increase of $500 million to the existing share repurchase program[86] Acquisitions and Market Position - The company completed acquisitions with an aggregate transaction value of $49 million during the nine months ended November 2, 2025, compared to $748 million in the prior year[44] - The total assets acquired in the Fiscal 2025 Acquisition amounted to $51 million, compared to $878 million in Fiscal 2024[48] - The net assets acquired in the Fiscal 2025 Acquisition were valued at $33 million, while the Fiscal 2024 Acquisitions were valued at $753 million[50] - The contingent consideration for the Canada Waterworks acquisition could reach up to $18 million based on future Adjusted EBITDA targets[49] - Goodwill from the Fiscal 2025 Acquisition was recorded at $20 million, while goodwill from Fiscal 2024 Acquisitions was $239 million[50] Operational Insights - The company operates approximately 370 branch locations across 49 U.S. states, focusing on water, wastewater, storm drainage, and fire protection products[31] - Core & Main's operating results are typically lower in the first and fourth fiscal quarters due to seasonality, particularly in northern regions[93] - The company categorizes its net sales into various product lines, including pipes, valves & fittings, storm drainage products, fire protection products, and meter products[102] - The company experienced significant supply chain disruptions in fiscal 2022, leading to price inflation and product surcharges, but saw improvements in supply chain stability in fiscal 2023[95] Financial Ratios and Metrics - The effective tax rate for the three months ended November 2, 2025, was 24.7%, a slight decrease from 25.1% for the same period in 2024[71] - EBITDA for the nine months ended November 2, 2025, was $744 million, compared to $732 million for the same period in 2024[158] - Adjusted EBITDA for the nine months ended November 2, 2025, was $764 million, an increase from $751 million for the same period in 2024[158] - The weighted average interest rate on the company's debt was 5.99% as of November 2, 2025[152] Management and Governance - Core & Main LP announced an executive transition agreement with John R. Schaller effective September 5, 2025[188] - Mark R. Witkowski serves as the Principal Executive Officer, while Robyn L. Bradbury is the Principal Financial Officer[191] - The report includes certifications pursuant to the Sarbanes-Oxley Act of 2002 by both the Principal Executive Officer and Principal Financial Officer[188] - There were no changes in internal control over financial reporting that materially affected the company's financial reporting during the fiscal quarter[173] Risk Factors - The company is exposed to price fluctuations in product procurement, which may affect gross profit margins[169] - Foreign currency operations were not material, with a hypothetical 10% change in the U.S. dollar's value not significantly impacting net earnings[170] - The company has not been involved in any material legal proceedings as of the reporting date, minimizing potential liabilities[176]