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- **Resilient Growth**: Q3 net sales $2.1B (+1% YoY), driven by municipal and data center projects. 
- **Margin Expansion**: Gross margin 27.2% (+60bps YoY), private label sales to reach 5% of total in 2025. 
- **Cost Control**: $30M annualized SG&A savings implemented, Q4 SG&A down $25M. 
- **Strategic Moves**: $500M share buyback authorization, Canada Waterworks acquisition. 
- **Data Center Tailwind**: Hyperscale campuses near branches tripled in size, creating long-term infrastructure demand. 
- **Texas Opportunity**: $20B+ state funding for water projects, aligning with HDPE adoption. 


**【CEO Summary Section】**
- Core & Main delivered 1% net sales growth to $2.1 billion in Q3, driven by acquisitions and strong performance in municipal and nonresidential markets. 
- Municipal construction remains resilient, supported by $100+ billion in state revolving funds and federal infrastructure funding. Data center projects are a growing driver, with local branches near hyperscale campuses tripling in size. 
- Gross margin improved 60bps YoY to 27.2% due to private label initiatives and disciplined pricing. SG&A cost savings of $30M annualized were implemented, with $1M realized in Q3. 
- Canada Waterworks acquisition expands into a $5B addressable market, aligning with core capabilities. 
- Free cash flow conversion at nearly 100% supports $500M share buyback authorization. 

**【CFO Financial Commentary】**
- Q3 GAAP net sales $2.1B (+1% YoY), organic volumes flat vs prior year. Adjusted EPS $0.89 (+3% YoY), driven by higher net income and share buybacks. 
- Gross margin 27.2% (+60bps YoY), SG&A $295M (+8% YoY) due to inflation and strategic investments. 
- Full year guidance reaffirmed: net sales $7.6-7.7B, adjusted EBITDA $920-940M. 
- End market volumes expected flat to down 2025, with residential down low double digits, offset by municipal growth. 
- Private label sales to reach ~5% of total in 2025, targeting 10-15% long-term. 

**【Q&A Key Highlights】**
- **Data Center Growth**: Represents low single-digit sales mix but growing rapidly. Projects require significant water infrastructure upgrades, creating long-term tailwinds. 
- **Residential Market**: Q3 stabilization after 2H softness, with builders pacing development amid affordability concerns. 
- **Gross Margin Expansion**: Private label and sourcing initiatives to drive 10-20bps annual margin improvement. 
- **SG&A Efficiency**: $30M annualized cost savings implemented, with $25M reduction expected in Q4. 
- **M&A Pipeline**: Active deal flow, with Canada acquisition integration underway. 
- **Texas Funding**: $20B+ over 20 years for water supply projects, aligning with state's shift to HDPE solutions. 


Core & Main, Inc.(CNM)-20251209-2026 Q3 Earnings call transcript

- **Topline Growth**: Q2 net sales of $2.1B (+7% YoY) driven by 5% organic growth and M&A, despite -10% residential sales decline.
- **Margin Challenges**: Gross margin improved to 26.8%, but SG&A rose 13% YoY to $302M due to M&A costs and inflation.
- **Strategic Moves**: $34M cost-out actions announced; Canada Waterworks acquisition expands Ontario footprint.
- **Residential Risk**: FY25 residential outlook revised to -10% YoY due to macro headwinds.
- **Long-Term Drivers**: Municipal infrastructure growth and data center projects offset near-term residential weakness.

**【CEO Summary Section】**
- Core & Main reported net sales of $2.1 billion in Q2, up 7% year-over-year, driven by 5% organic growth and 2% from acquisitions.
- Gross margin improved to 26.8%, up 10 basis points sequentially, due to private label initiatives and cost control.
- Residential sales declined 10% YoY due to higher interest rates and affordability concerns, while municipal and nonresidential markets remained stable.
- The company announced the acquisition of Canada Waterworks, expanding its presence in Ontario.

**【CFO Financial Commentary】**
- GAAP net income was $420 million, with Non-GAAP EPS of $1.08, exceeding expectations.
- SG&A expenses rose 13% YoY to $302 million, driven by M&A integration costs, inflation, and one-time expenses.
- Operating cash flow was $34 million, with $47 million in share repurchases year-to-date.
- Adjusted EBITDA was $266 million, up 4% YoY, but margin declined 40 basis points due to higher SG&A.

**【Q&A Key Highlights】**
- **Residential Market Weakness**: Management lowered FY25 residential sales outlook to -10% YoY, citing soft lot development and higher mortgage rates.
- **Cost-Out Actions**: CFO Robyn Bradbury outlined $34 million in targeted cost reductions, with savings expected to materialize in FY26.
- **M&A Pipeline**: CEO Mark Witkowski highlighted a healthy M&A pipeline, including greenfield expansions in priority markets.
- **Gross Margin Stability**: CFO expects gross margins to remain stable in H2, supported by private label growth and sourcing initiatives.
- **Nonresidential Growth**: Data center and highway projects offset weakness in commercial/retail nonresidential sectors.

Core & Main, Inc. (CNM) Q2 2026 Earnings Call Transcript

- **Record Q1 Performance**: $1.9 billion net sales (+10% YoY) and $224 million EBITDA, driven by IIJA-funded municipal projects and product share gains.
- **Resilient Growth Drivers**: 10%+ growth in meters, HDPE, and treatment plants; stable nonresidential markets offsetting residential softening.
- **Profitability Focus**: Gross margin stability at 26.7%, SG&A organic productivity up 4%, with $39M share buybacks.
- **Expansion Ambitions**: 5-10 new greenfields in 2025 and active M&A pipeline targeting 19% market share in $39B addressable market.
- **Risk Management**: Minimal tariff impact, 85% domestic supply chain, and pricing discipline to offset inflation.


**【CEO Business Update】**
- Q1 2025 net sales reached $1.9 billion, a 10% year-over-year increase, driven by mid-single-digit organic growth and acquisitions. Adjusted EBITDA hit $224 million, both all-time highs for the first quarter.
- Municipal construction activity is strong, supported by Infrastructure Investment and Jobs Act (IIJA) funding, with pipeline expansion in water treatment plants and stormwater management.
- Residential lot development showed resilience but faces softening due to economic conditions, with developers reducing project sizes.
- Nonresidential markets remain stable, with growth in data centers, multifamily housing, and road projects, offsetting softer commercial and manufacturing activity.
- Product share gains in meters (+10%), fusible HDPE, and treatment plants contributed to organic growth. Sequential gross margin improvement reflects pricing discipline and private label execution.
- Capital deployment of $58 million in Q1 included share buybacks and M&A pipeline evaluation, with 20% market share in a $39 billion addressable market.

**【CFO Financial Highlights】**
- Q1 GAAP net sales grew 10% to $1.9 billion, with 3% adjusted EBITDA growth to $224 million. Gross margin held steady at 26.7%, benefiting from pricing and private label initiatives.
- SG&A expenses increased 14% due to acquisitions and inflation, but organic SG&A rose only 4% after excluding one-time items.
- Operating cash flow of $77 million supported $39 million in share buybacks, ending the quarter with $285 million remaining under the repurchase authorization.
- Full-year guidance reaffirms net sales of $7.6-$7.8 billion and adjusted EBITDA of $950-$1 billion, with expectations for gross margin expansion and stable pricing.

**【Q&A Key Takeaways】**
- **SG&A Leverage**: Organic SG&A productivity improved 4% Q1, with plans to anniversary acquisition impacts and achieve rate leverage in H2.
- **Residential Softening**: 20% of sales exposed to residential lot development, with potential 1-2% headwind in H2 due to affordability pressures.
- **Greenfield Expansion**: 5-10 new greenfield branches planned for 2025, leveraging low CapEx and 2-year breakeven track record.
- **Tariff Impact**: Minimal direct impact on supply chain, with 85% of products domestically manufactured; cost increases passed through to customers.
- **M&A Pipeline**: Active with 40+ targets since 2017, adding $1.8 billion in net sales and 140 branches, with 19% market share in fragmented sector.


Core & Main, Inc. (CNM) Q1 2025 Earnings Call Transcript

- **Leadership Shift**: Steve LeClair steps back as CEO, with Mark Witkowski and Robyn Bradbury taking over, signaling continuity and growth.
- **Record Growth**: FY2024 sales up 11% to $7.4B, driven by acquisitions and organic gains. Operating cash flow of $620M supports expansion.
- **Private Label Expansion**: 4% of sales from private label products, targeting 10%+ as a margin driver.
- **2025 Outlook**: Confident in sales and profitability growth, despite macro risks, with focus on resilient municipal infrastructure.

**【CEO Summary Section】**
- **Leadership Transition**: Steve LeClair transitions to Executive Chair, with Mark Witkowski becoming CEO and Robyn Bradbury as CFO. This reflects confidence in their ability to drive future growth.
- **FY2024 Performance**: Record net sales of $7.4B (+11% YoY), adjusted EBITDA of $930M, and operating cash flow of $620M. Organic sales growth outpaced the market by 200 basis points.
- **Market Position**: 19% share of a $39B fragmented market, with 40% sales from stable municipal demand. Expansion into private label products (4% of sales, target 10%+).
- **Acquisition Strategy**: 10 acquisitions in FY2024, adding $600M in annual sales. Pipeline remains strong for 2025+.
- **Tariffs and Funding**: Neutral to positive impact on pricing; federal water funding remains intact, though local funding dominates municipal projects.

**【CFO Financial Commentary】**
- **Q4 2024 Results**: Net sales $1.7B (+18% YoY), 26.6% gross margin. Adjusted EBITDA $179M (+12% YoY), margin 10.5% (down 60bps vs. Q3).
- **Full Year 2024**: Operating cash flow $621M, used for $741M in acquisitions and $176M share buybacks. Net debt $2.3B, leverage 2.4x.
- **2025 Outlook**: Sales and profitability growth expected, despite macro uncertainties. Focus on residential lot development and municipal projects.
- **Financial Health**: 12.5% adjusted EBITDA margin, stable cash flow generation, and $324M remaining under share repurchase program.

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