Core & Main (CNM) investor relations material

Executive summary

• Net sales for Q3 FY2025 rose 1.2% year-over-year to $2,062 million, driven by acquisitions and strong sales initiatives, with municipal and non-residential strength offsetting residential softness.

• Product initiatives such as fusible HDPE, treatment plant solutions, and geosynthetics achieved double-digit growth; metering products returned to high single-digit growth.

• Geographic expansion continued with five new branches year-to-date, including Houston and Denver.

• Completed the Canada Waterworks acquisition, enhancing presence in the $5B Canadian market.

• Implemented $30 million in annualized cost savings, primarily through personnel reductions, while maintaining service levels and investing in growth.

Financial highlights

• Q3 net sales up 1.2% to $2,062 million; gross profit up 3.3% to $561 million; gross margin improved 60 bps year-over-year to 27.2%.

• Q3 net income grew 2.1% to $143 million; diluted EPS up 4.3% to $0.72; Adjusted Diluted EPS up 3.5% to $0.89.

• Adjusted EBITDA for Q3 was $274 million, down 1.1% year-over-year; Adjusted EBITDA margin declined 30 bps to 13.3%.

• Operating cash flow for Q3 was $271 million, nearly 100% conversion from adjusted EBITDA.

• SG&A expenses increased 7.7% year-over-year, mainly due to acquisition-related costs and inflation.

Outlook and guidance

• Full-year FY2025 net sales guidance reaffirmed at $7,600–$7,700 million, with adjusted EBITDA of $920–$940 million and margin of 12.1–12.2%.

• Net sales growth projected at 4–5%, excluding a 2% headwind from one fewer selling week.

• End market volumes expected flat to slightly down, with residential down double digits, municipal up low to mid-single digits, and non-residential flat.

• On track for 2–4% organic above-market growth and further gross margin expansion.

• Operating cash flow projected at $550–$610 million.