Core & Main (CNM) Q3 2026 earnings summary

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 organic volumes and prices flat.

• Municipal and non-residential markets remained strong, offsetting softness in residential, especially in Sunbelt regions and lot development.

• Strategic investments in product lines, geographic expansion, and M&A, including entry into the Canadian market, are driving long-term growth.

• Product initiatives like fusible HDPE, treatment plant solutions, and geosynthetics achieved double-digit growth; metering products saw high single-digit growth.

• $30 million in annualized cost savings implemented, with 4% reduction in non-sales roles.

Financial highlights

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

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

• Adjusted Diluted EPS rose 3.5% to $0.89; diluted EPS up 4.3% to $0.72.

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

• Free cash flow yield over the last 12 months was 5.6% of market capitalization.

Outlook and guidance

• Full-year net sales guidance reaffirmed at $7,600–$7,700 million, with adjusted EBITDA of $920–$940 million and operating cash flow of $550–$610 million.

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

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

• Gross margin expected to improve year-over-year, with continued private label and sourcing initiatives.

• On track for 2–4% organic above-market growth.