Core & Main (CNM) Q1 2027 earnings summary

Executive summary

• Q1 net sales were $1.91 billion, essentially flat year-over-year, with adjusted EBITDA of $226 million and adjusted diluted EPS of $0.72, reflecting stable municipal and select non-residential demand, offset by softer residential markets.

• Gross profit rose 2% to $520 million, with gross margin expanding 50 basis points to 27.2% due to private label growth, sourcing optimization, and disciplined pricing.

• Net income increased 8% to $113 million, driven by higher operating income and lower interest expense; diluted EPS grew 9.6% to $0.57.

• Five new greenfield locations were opened, with a target of 8–10 for the year, and $125 million was deployed for share repurchases during and after the quarter.

• Smart utility and treatment plant solutions delivered double-digit and high single-digit growth, respectively, driven by investments in technical expertise and project support.

Financial highlights

• Net sales were flat year-over-year at $1.91 billion; organic volumes declined 1%, while acquisitions contributed about one point of growth.

• Adjusted EBITDA of $226 million was up 1% year-over-year; adjusted EBITDA margin increased 10 basis points to 11.8%.

• Gross margin expanded to 27.2%, up 50 basis points year-over-year.

• Adjusted diluted EPS increased 5.9% to $0.72, aided by higher adjusted net income and share repurchases.

• Operating cash flow was $82 million, up from $77 million year-over-year; free cash flow yield was 6.4% of market capitalization.

Outlook and guidance

• Full-year FY2026 guidance reaffirmed: net sales of $7.8–$7.9 billion, adjusted EBITDA of $950–$980 million, and adjusted EBITDA margin of 12.2–12.4%.

• Operating cash flow conversion targeted at 60–70% of adjusted EBITDA.

• End market volumes expected to be roughly flat for the year, with municipal strength offsetting cautious private construction outlook.

• Modest sequential tailwind expected from recent PVC price increases; adjusted EBITDA margin expansion anticipated through gross margin initiatives and cost actions.

• Slight growth expected in Q2, with low to mid-single digit growth in Q3 and Q4 as easier comps and backlog releases materialize.