Core & Main (NYSE:CNM) Q4 2026 Earnings call March 24, 2026 08:30 AM ET Company ParticipantsBrad Cowles - PresidentGlenn Floyd - Director of Investor RelationsJoe Ritchie - Managing DirectorMark Witkowski - CEOMike Dahl - Managing Director, Equity ResearchNigel Coe - Managing DirectorRobyn Bradbury - CFOConference Call ParticipantsDavid Manthey - Senior Research AnalystMatt Johnson - Equity Research AnalystOperatorHello, and welcome to the Core & Main Q4 and full year 2025 earnings call. My name is Alex. I' ...

Core & Main (NYSE:CNM) Q4 2026 Earnings call March 24, 2026 08:30 AM ET Company ParticipantsBrad Cowles - PresidentGlenn Floyd - Director of Investor RelationsJoe Ritchie - Managing DirectorMark Witkowski - CEOMatthew Bouley - Managing DirectorMike Dahl - Managing Director, Equity ResearchNigel Coe - Managing DirectorRobyn Bradbury - CFOConference Call ParticipantsDavid Manthey - Senior Research AnalystMatt Johnson - Equity Research AnalystOperatorHello, and welcome to the Core & Main Q4 and full year 2025 ...

Core & Main (NYSE:CNM) Q4 2026 Earnings call March 24, 2026 08:30 AM ET Speaker8Hello, and welcome to the Core & Main Q4 and full year 2025 earnings call. My name is Alex. I'll be coordinating today's call. If you'd like to ask a question at the end of the presentation, you may press star followed by one on your telephone keypad. I'll now hand it over to Glenn Floyd, Director of Investor Relations, to begin. Please go ahead.Speaker2Good morning, and thank you for joining us. I'm Glenn Floyd, Director of Inv ...

Core Investment Overview - NIA Impact Advisors initiated a position in Core & Main by acquiring 66,437 shares valued at approximately $3.58 million after the stock dropped nearly 20% in a single day during Q3 2025 [1][2] - This new position represents 1.2% of NIA's total reportable U.S. equity holdings of $307.72 million as of September 30, 2025 [3] Company Performance Metrics - As of December 10, 2025, Core & Main's stock price was $55.19, reflecting a 3% increase over the past year, but underperforming the S&P 500 by 10 percentage points [3] - Core & Main has a market capitalization of $10.52 billion, with trailing twelve months (TTM) revenue of $7.74 billion and net income of $431 million [4][5] Industry Position and Strategy - Core & Main is a leading distributor of water, wastewater, and fire protection infrastructure products in the U.S., serving municipalities, private water companies, and contractors [5][7] - The company operates in a highly fragmented industry, with the top two players controlling one-third of the market, presenting acquisition opportunities [10] - Core & Main's strategic focus on essential utility markets and specialized services supports a resilient business model [8] Financial Metrics and Valuation - The company trades at a forward price-to-earnings ratio of 24 and an enterprise value to EBITDA multiple of 13, indicating a valuation that is cheaper than the broader market [3][12] - Core & Main's return on invested capital has consistently been above 10%, showcasing its effectiveness as a profitable acquirer and integrator of businesses [11]

Financial Data and Key Metrics Changes - The company reported nearly 7% net sales growth in Q2 2025, reaching $2.1 billion, with approximately 5% organic growth [3][5] - Gross margin improved to 26.8%, up 10 basis points sequentially and 40 basis points year-over-year [4][6] - Adjusted diluted earnings per share increased approximately 13% to $0.87 compared to $0.77 in the prior year [6] - SG&A expenses rose 13% to $302 million, with half of the increase attributed to acquisitions and one-time costs [6][42] Business Line Data and Key Metrics Changes - Sales of meter products declined year-over-year due to project delays, but a growing backlog is expected to support strong sales growth in the second half [4][47] - The municipal market remains strong, with healthy demand driven by funding and infrastructure projects [3][9] - Residential lot development slowed, particularly in the Sun Belt markets, leading to a revised outlook for residential demand [3][4] Market Data and Key Metrics Changes - Municipal end market volumes are expected to grow in the low single digits, while non-residential volumes are projected to be roughly flat [6] - Residential lot development is anticipated to decline in the low double digits for the full year [6][18] Company Strategy and Development Direction - The company is focusing on organic growth and complementary acquisitions, with recent acquisition of Canada Waterworks enhancing its position in the Canadian market [4][5] - Investments are being made in new locations and technology solutions to improve efficiency and support long-term margin expansion [4][6] - The company aims to capture growth opportunities in aging U.S. water infrastructure and is confident in its long-term growth and profitability prospects [4][6] Management's Comments on Operating Environment and Future Outlook - Management noted that higher interest rates and affordability concerns are impacting residential demand, which is expected to remain soft [3][4] - The company is implementing targeted cost-out actions to improve productivity and operating margins, with some benefits expected in the second half of the year [4][6] - Management remains optimistic about the long-term demand characteristics across its end markets and the potential for above-market growth [6][18] Other Important Information - The company generated $34 million of operating cash flow in the quarter and returned $8 million to shareholders through share repurchases [6] - Total liquidity was reported at $1.1 billion, primarily from availability under the ABL credit facility [6] Q&A Session Summary Question: What are the factors affecting the revenue guidance? - Management indicated that the decline in residential outlook is the main driver, but there are positive contributions from municipal markets and successful sales initiatives [8][9] Question: What are the growth opportunities in the evolving water market? - Management expressed optimism about the water market, highlighting increased demand from data centers and aging infrastructure projects [10][11] Question: How is the company addressing higher operating expenses? - Management acknowledged stubborn inflation and higher costs but emphasized ongoing cost-out actions and targeted investments for growth [15][16] Question: What is the outlook for residential demand? - Management noted that residential demand weakened throughout Q2 and is expected to remain low double digits for the rest of the year [17][18] Question: How does the company view the competitive environment? - Management stated that the competitive environment remains typical, with no significant changes, and emphasized the stability Core & Main provides to customers [59][60]