Core & Main (CNM) Q3 2025 earnings summary

Executive summary

• Achieved record Q3 net sales of $2.04 billion, up 12% year-over-year, and Adjusted EBITDA of $277 million, driven by organic growth and acquisitions, with five acquisitions completed in the quarter contributing $150 million in annualized net sales.

• Gross profit increased 10% year-over-year to $543 million, with gross margin expanding 20 basis points sequentially to 26.6%.

• Opened new locations in Idaho and Tennessee, further expanding geographic reach and supporting long-term growth.

• Robust operating cash flow enabled $100 million in Q3 share repurchases, with $121 million repurchased year-to-date.

• Raised full-year guidance for net sales to $7.35–$7.45 billion and Adjusted EBITDA to $915–$935 million.

Financial highlights

• Q3 net sales rose 12% year-over-year to $2.04 billion, with acquisitions contributing 9% and organic volumes up mid-single digits.

• Gross margin was 26.6%, down 40 basis points year-over-year but up 20 basis points sequentially; gross profit reached $543 million.

• Net income was $140 million, down from $158 million last year, mainly due to higher SG&A, amortization, and interest expenses.

• Diluted EPS increased 6% to $0.69, aided by share repurchases.

• Adjusted EBITDA rose 7% to $277 million; Adjusted EBITDA margin was 13.6%, down 60 basis points year-over-year but up 50 basis points sequentially.

• Operating cash flow for Q3 was $260 million, with over 90% conversion from Adjusted EBITDA.

Outlook and guidance

• Raised FY2024 guidance: net sales of $7.35–$7.45 billion and Adjusted EBITDA of $915–$935 million.

• Expect stable end markets and pricing for the remainder of FY2024; gross margins anticipated to hold at current levels.

• For FY2025, anticipate positive end market volumes, 2–4 points of organic above-market growth, and 2 points from closed acquisitions.

• Targeting 30–50 basis points of annual Adjusted EBITDA margin expansion and continued strong operating cash flow (60–75% of Adjusted EBITDA).

• Management expects continued benefit from federal infrastructure investment and expanding municipal budgets.