Core & Main (CNM) Q2 2025 earnings summary

Executive summary

• Net sales reached a record $1.96 billion for Q2 2024, up 6% year-over-year, driven by acquisitions despite project delays and softer end-market volumes.

• Adjusted EBITDA declined 5% to $257 million, with margin down 140 basis points to 13.1%, impacted by higher SG&A and interest expenses.

• Diluted EPS fell 8% to $0.61, with net income down 23.2% to $126 million, primarily due to lower operating income and higher interest expense.

• Five acquisitions completed or announced, including entry into the Canadian market via HM Pipe Products, expanding product and geographic reach.

• Leadership changes and organizational realignment were implemented to support growth and integration of new acquisitions.

Financial highlights

• Q2 2024 net sales: $1.96 billion (+6% year-over-year); gross profit: $518 million (+3% year-over-year); gross margin: 26.4% (down 50 bps year-over-year).

• Net income: $126 million for Q2 2024 (down 23.2% year-over-year); diluted EPS: $0.61 (down 8%).

• Adjusted EBITDA: $257 million for Q2 2024 (down 5% year-over-year); margin: 13.1% (down 140 bps year-over-year).

• SG&A expenses rose 13% to $268 million, mainly from acquisitions; SG&A as % of sales increased to 13.6%.

• Net cash from operating activities was $48 million for Q2 and $126 million year-to-date, reflecting higher working capital investment.

Outlook and guidance

• FY2024 net sales guidance lowered to $7.3–$7.4 billion and Adjusted EBITDA to $900–$930 million due to weather disruptions and delayed growth.

• Operating cash flow conversion guidance raised to 65–75% of Adjusted EBITDA.

• End markets expected to be flat to slightly down for the year, with some growth deferred to 2025.

• M&A expected to contribute 8–9% of total sales growth for the year.

• Management remains optimistic on long-term demand despite near-term market softness.