CNM Beats Earnings, Revenue Falls But Strategy Still Works

Core & Main (CNM) reported fiscal 2026 Q4 results on March 24, 2026, with non-GAAP EPS of $0.52 beating estimates by $0.19. The company guided to $7.8–7.9 billion in 2026 sales, aligning with expectations. Despite a 6.9% revenue decline, earnings growth and margin expansion highlighted operational resilience.

Revenue

The total revenue of Core & Main decreased by 6.9% to $1.58 billion in 2026 Q4, down from $1.70 billion in 2025 Q4 .

Earnings/Net Income

Core & Main's EPS rose 10.6% to $0.36 in 2026 Q4 from $0.32 in 2025 Q4, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $73 million in 2026 Q4, marking 9.0% growth from $67 million in 2025 Q4. Earnings growth accelerated, with EPS and net income both rising year-over-year, underscoring improved profitability.

Price Action

The stock price of Core & Main has climbed 4.72% during the latest trading day, has climbed 4.76% during the most recent full trading week, and has tumbled 10.30% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Core & Main (CNM) shares after a revenue drop quarter-over-quarter on the financial report release date and holding for 30 days delivered strong returns over the past three years. The strategy achieved a 98.25% return, significantly outperforming the benchmark return of 43.94%. The excess return was 54.30%, with a compound annual growth rate (CAGR) of 18.82%. While the strategy had a maximum drawdown of 39.03%, it maintained a relatively high Sharpe ratio of 0.49, indicating good risk-adjusted returns.

CEO Commentary

Mark Witkowski (CEO & Director) highlighted Core & Main’s 16th consecutive year of sales growth, driven by disciplined execution, 3 points of organic above-market growth, and structural gross margin expansion. He emphasized resilience in municipal markets (44% of sales) amid softness in residential (18% of sales) due to housing affordability and mortgage rates. Strategic priorities include expanding market share via geographic footprint growth (10 new branches in 2025, with 7–10 planned for 2026), product innovations (e.g., smart meters, treatment plant solutions), and M&A. Leadership remains optimistic about long-term growth, citing aging infrastructure, AI-related needs, and treatment plant modernization, while cautiously navigating near-term residential challenges and geopolitical uncertainties.

Guidance

Core & Main guided to fiscal 2026 net sales of $7.8 billion to $7.9 billion, adjusted EBITDA of $950 million to $980 million, and operating cash flow conversion of 60–70% of adjusted EBITDA. The CEO expects flat end-market demand but anticipates above-market volume growth from municipal strength, greenfield openings, and margin expansion via private label initiatives and cost actions. Cautiousness persists on private construction markets due to geopolitical volatility and interest rate uncertainty, though municipal stability and disciplined pricing are seen as tailwinds. The company plans to reinvest in growth, pursue M

Additional News

Core & Main announced a $500 million share repurchase program, reflecting confidence in its capital structure and shareholder value. The company also outlined plans to open 7–10 new branches in 2026, expanding its geographic footprint and enhancing service capabilities. Additionally, management emphasized a strategic focus on M&A to accelerate growth in infrastructure-related markets, leveraging its expertise in municipal and industrial solutions. These initiatives align with its long-term vision to capitalize on aging infrastructure and technological advancements.