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Image source: The Motley Fool. Wednesday, Sept. 9, 2026 at 8:30 a.m. ET Vice President of Investor Relations - Landon Althoff Chief Executive Officer - Mark Witkowski Chief Financial Officer - Robyn Bradbury President - Brad Cowles Operator: Hello, everyone. Thank you for joining us, and welcome to the Core & Main Q2 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Landon Althoff, Vice President of Investor Relations. Landon, please go ahead. Landon Althoff: Good morning, and thank you for joining us. I'm Landon Althoff, Vice President of Investor Relations at Core & Main. We appreciate you taking the time to be with us today for Core & Main's Fiscal 2026 Second Quarter Earnings Call. Joining me this morning are Mark Witkowski, our Chief Executive Officer; and Robyn Bradbury, our Chief Financial Officer. Brad Cowles, our President, is also with us and will be available for the question-and-answer portion of today's call. Mark will begin with a business update, highlighting our quarterly performance and the continued momentum across the business, including large project opportunities, greenfield expansion and our M&A pipeline. Robyn will follow with a review of our financial results and outlook for fiscal 2026. We will then open the line for questions before Mark wraps up with closing remarks. As a reminder, our press release, presentation materials and the statements made during today's call may include forward-looking statements. These are subject to various risks and uncertainties that could cause actual results to differ materially from our expectations. For more information, please refer to the cautionary statements included in our earnings release and our filings with the SEC. We will also reference certain non-GAAP financial measures during today's discussion. We believe these metrics provide useful insight into the underlying performance of our business. Reconciliations to the most comparable GAAP measures are available in both our press release and the appendix of today's investor presentation. Thank you again for your interest in Core & Main. I'll now turn the call over to our Chief Executive Officer, Mark Witkowski. Mark Witkowski: Thanks, Landon, and good morning, everyone. Thank you for joining us today. During the second quarter, we delivered growth in sales, adjusted EBITDA and EPS with momentum building across the business. We see it in our healthy backlog, growing participation in large complex infrastructure projects and increased activity across our acquisition pipeline. Combined with our strong cash generation and balance sheet flexibility, Core & Main is well positioned to capitalize on the opportunities ahead, drive long-term growth and create value for shareholders. Net sales in the second quarter were approximately $2.1 billion, up 2.5% compared with the prior year. Adjusted EBITDA grew approximately 3% to $274 million, while adjusted EBITDA margin expanded 10 basis points to 12.8%, reflecting disciplined cost management and meaningful SG&A leverage. Adjusted diluted EPS was $0.94, an increase of 8% over the prior year. These results reflect consistent execution throughout the business. Growth in the quarter was driven by continued strength in treatment plant solutions and fire protection, along with a growing contribution from data center projects, which has nearly doubled year-over-year. Treatment plant, data center development and other large-scale infrastructure work increasingly draw on what differentiates Core & Main, deep local expertise, strong supplier relationships and the technical and project support capabilities needed to execute reliably over the multiyear project cycles. As these projects become a more meaningful part of our growth profile, we continue investing in the capabilities and product breadth needed to capture the opportunity ahead. We also continue to execute our long-term growth initiatives, expanded our footprint with new greenfield locations and advanced strategic opportunities across our M&A pipeline. Additionally, we put our strong cash generation and balance sheet flexibility to work and executed our second consecutive quarter of record open market share buybacks. Since our IPO, we have repurchased nearly 25% of the shares outstanding. Robyn will work through the details shortly, but these repurchases reflect our confidence in the long-term value of Core & Main and our disciplined opportunistic approach to allocating capital where we believe returns are most attractive. Turning to our end markets. Municipal demand continued to be a source of strength. The long-term need to repair, replace and expand critical water infrastructure remains significant and continues to support investment across the municipal end market. The EPA estimates the U.S. drinking water, wastewater and storm water systems require more than $1.2 trillion of investment over the next 20 years to replace, rehabilitate and expand aging infrastructure. After decades of underinvestment and deferred maintenance, many water systems face increasing pressure to replace aging infrastructure before failures, water loss and service disruptions become more frequent or costly. At the same time, municipalities are investing to improve water quality, comply with evolving regulatory requirements, expand treatment capacity, adopt smart utility technologies and support population-driven growth. These investments are essential, largely nondiscretionary and supported by a diverse mix of state, local and federal funding sources. The vast majority of municipal water infrastructure spending is funded at the state and local level, which helps support consistent investment activity regardless of the federal funding environment. While the pace and timing of individual projects may vary, the underlying need remains clear. Water infrastructure continues to be a critical priority for municipalities and utilities, supporting our confidence in the opportunities ahead. Our treatment plant initiative delivered another quarter of strong double-digit growth and remains one of the most compelling growth opportunities within our municipal platform. Leveraging our deep municipal relationships, we continue to expand our product offering, technical expertise and project support capabilities to support a larger share of treatment plant projects. As a result, treatment plant projects have grown to a mid-single-digit percentage of our sales mix with substantial opportunity for further expansion. We are particularly focused on increasing our mix of higher-value specialty products, which deepen our involvement and expand the content we provide on each project. With significant runway ahead, we see meaningful opportunities to grow this business through both organic expansion and strategic acquisitions. Within smart utility, we continue to see strong underlying demand and are winning projects across municipalities and utilities of all sizes. Recent wins reinforce our confidence in the business' growth trajectory with a number of larger projects expected to continue over multiple periods as deployments ramp. We believe smart utility is well positioned to benefit from continued investment in system visibility, water loss reduction, billing accuracy and operational efficiency. Within nonresidential construction, performance continued to vary across project types, but we saw encouraging strength across several key categories. Fire protection delivered another strong quarter with sales increasing 14%. Growth was driven by higher volumes on continued share gains and higher steel pricing. Momentum remains strong across the business, supported by our expanding geographic footprint, broad capabilities and a steady stream of project wins. Data center development remains one of the most active areas of infrastructure investment today and continues to drive opportunities across multiple product categories. We support these projects from the earliest stages of site development, providing the water, wastewater and storm drainage infrastructure needed to prepare and serve these facilities. As construction progresses, we also provide the fire protection systems that support these critical assets. We continue to see a growing contribution from data center-related activity across our business. The impact extends beyond the data center itself. These large-scale developments often require municipalities and utilities to expand water and wastewater capacity and can spur additional commercial and residential growth in surrounding communities. As a result, data center investments can create broader infrastructure demand over time. Residential lot development remained challenged during the quarter as expected, particularly in markets that benefited from strong development activity last year. While affordability concerns and higher interest rates continue to influence near-term activity, we expect comparisons to become considerably more favorable in the back half of the year. Over the long term, the fundamentals remain strong. Population shifts, household formation and a structural housing shortage continue to support the need for additional residential development, giving us confidence in the long-term opportunity within this end market. As we look ahead, we continue to build for the long term, expanding our large project capabilities, extending our geographic reach and advancing opportunities across our acquisition pipeline. Geographic expansion remains an important part of our growth strategy. So far this year, we've opened 7 new greenfield locations, including 2 recent openings in attractive markets where we see opportunities to improve our customer proximity, expand our reach and gain share. We evaluate new locations based on market size, infrastructure demand, customer needs and our competitive position. While greenfield locations require investment and time to mature, they allow us to strengthen local relationships, expand service capabilities and build market density over time. We are on track to open a record number of greenfield locations this year, extending our national capabilities into new and underpenetrated markets. Alongside our organic expansion efforts, we continue to see compelling opportunities to grow through M&A. Following quarter end, we completed the acquisition of Walker Industries, a provider of storm drainage products in Hawaii. This acquisition broadens our product offering in the market, complements our existing operations and represents just one example of a growing number of larger opportunities ahead. More broadly, our M&A pipeline has meaningfully accelerated. We continue to advance discussions across a range of opportunities, including acquisitions that expand our geographic footprint, broaden our product offering and capabilities and strengthen our position in attractive end markets. These opportunities span a range of transaction sizes from complementary bolt-on acquisitions to larger strategic transactions. Many of these businesses are seeking a long-term partner that can provide additional resources, expand product breadth and future growth opportunities while preserving the local relationships that have driven their success. For Core & Main, these acquisitions expand the solutions we can offer customers, help simplify increasingly complex projects and create opportunities to deepen customer relationships and drive long-term growth. Our customer-focused operating model, strong culture, long record of successful integrations and commitment to local market leadership continue to resonate with business owners, and we believe Core & Main remains uniquely positioned to be that partner. Supported by our strong balance sheet, ample liquidity and proven acquisition playbook, we remain well positioned to pursue opportunities that expand our capabilities, extend our geographic reach and create long-term value for shareholders. With that, I'll turn it over to Robyn for the financial update. Robyn Bradbury: Thanks, Mark, and good morning, everyone. I'll begin on Page 7 of the presentation with an overview of our second quarter results. Net sales increased 2.5% to $2.1 billion with volume, price and acquisitions each contributing positively. As Mark mentioned, municipal demand remains a key source of strength, supported by a broad range of activity across water and wastewater infrastructure. Within nonresidential, activity was led by data center construction, offset by ongoing softness in light commercial and retail. Residential lot development remained challenged against a tougher prior year comparison, in line with our expectations. Pricing was up slightly in the quarter as increases across much of our portfolio more than offset lower year-over-year PVC pricing. Gross margin was approximately 26.7%, similar to the prior year as benefits from our margin initiatives, including private label, were offset by normal shifts in project mix and a stabilizing price environment within certain product categories. Our private label and sourcing initiatives remain on track and continue to support our long-term margin objectives. Total SG&A was approximately $301 million, roughly flat with the prior year period, while improving approximately 40 basis points as a percentage of sales. Notably, we held SG&A dollars flat while growing net sales 2.5% even as we continue to invest in greenfields, growth initiatives and acquisitions. This was enabled by disciplined cost management and executed savings initiatives that offset inflation and supported our strategic investments. We delivered adjusted EBITDA growth of approximately 3% to $274 million compared with $266 million in the prior year period. Strong SG&A leverage drove a 10 basis point increase in adjusted EBITDA margin to 12.8%. Adjusted diluted earnings per share increased 8% to $0.94 compared with $0.87 in the prior year, marking another quarter of strong per share earnings growth. The result reflects growth in adjusted net income and the benefit of a lower diluted share count resulting from our substantial share repurchase activity. Turning to the balance sheet, cash flow and capital allocation. We ended the quarter with net debt of approximately $2.2 billion and net debt leverage of approximately 2.3x within our target range. Total liquidity was approximately $1.5 billion, including over $300 million of cash, with the remainder primarily available under our ABL facility. Operating cash flow was $62 million during the quarter and $144 million throughout the first half of the year. Our cash generation reflects disciplined working capital management and the strength of our asset-light business model. As is typical with the seasonality of our business, we expect the majority of our operating cash flow generation to occur during the second half of the fiscal year. Over the last 12 months, we've generated a free cash flow yield of 7.5% of our market capitalization. That's more than double the average of S&P 500 companies and meaningfully above specialty distribution peers. During the quarter, we further strengthened our capital structure through refinancing transactions that extended our debt maturities and enhanced financial flexibility. These actions position us to support future growth opportunities while maintaining a strong and flexible balance sheet. Our strong cash generation and balance sheet flexibility also allowed us to return significant capital to shareholders during the quarter. We deployed $169 million to repurchase 3.7 million shares, marking our second consecutive quarter of record open market repurchases. Including buybacks completed subsequent to quarter end, we have now deployed nearly $270 million to repurchase approximately 5.7 million shares during fiscal 2026. Since our IPO, we have deployed nearly $2 billion to repurchase approximately 58 million shares, representing almost 25% of the shares outstanding at the time of our IPO. This level of capital deployment reflects our ability to generate strong cash flow and our confidence in the long-term value of Core & Main. At the same time, our balance sheet and liquidity continue to provide substantial flexibility to invest organically, expand our greenfield footprint, pursue acquisitions and return capital to shareholders through opportunistic share repurchases. Turning to our outlook. We are affirming our full year guidance for 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% to 70%. We remain confident in our ability to deliver our full year outlook. Our second quarter results demonstrated the strength of our operating model, driving meaningful SG&A leverage and adjusted EBITDA margin expansion. Continued strength in fire protection, treatment plants, data centers and record greenfield openings are increasing our visibility into demand and reinforcing that confidence. Backed by a strong balance sheet, substantial liquidity and consistent cash generation, we are well positioned to continue generating profitable growth while returning capital to shareholders through share repurchases over the short, medium and long term. With that, we'll open the line for questions. Operator: [Operator Instructions] Your first question is from the line of Brian Biros with Thompson Research Group. Brian Biros: Municipal, again, called out as a source of strength. Can you maybe just talk a little bit more about the end market, kind of, where we sit today? I know you provided some high-level details in the prepared remarks. But maybe if you could talk a little bit more direct to the quarter or even the near term. I think there may be some mixed views on that end market, just how strong it really is or can continue to be. So maybe just talk about, kind of, what you're seeing in that segment on the ground would be helpful. Robyn Bradbury: Yes, sure. I'll take that one, Brian. Thanks for the question. So, I'll start talking about municipal. And, I would say, overall, the market is vastly in line with what we expected and in line with what we've been seeing over the last couple of quarters. Municipal continues to be strong, stable, steady, kind of up in that low single digits range, good funding sources, consistent repair and replacement activity, and that's an end market that we expect to be strong and stable as we go forward. On nonresidential, it was kind of flattish to maybe up slightly a little bit in the quarter. Most project types within nonresidential are on the weaker side, especially that traditional or light commercial type of work, but it's really being uplifted by data center activity. And as you heard in our prepared remarks, we're seeing a lot of really good data center activity and a lot more projects for us there. So, that's really what's helping hold nonresidential up. And then residential continues to be more of the same. We saw that decline in the back half of 2025. It hasn't really moved up or down since that point in time. So it was down, kind of, high single digits or so in the quarter. Those comps for us do get easier in the back half of the year as we anniversary the decline in last year. So expect that the residential market would be flattish to down slightly in the back half of the year and residential would be down, kind of, mid-single digits for the full year. Brian Biros: Got it. Helpful. And then second question for me maybe on the fire protection share gains there. can you talk more about that? I guess, just how are you measuring kind of what counts as a share gain? Who you think you're taking share from large competitors or mom-and-pops? And I guess what's kind of triggering that customer to switch to the Core & Main offering? Mark Witkowski: Yes. Thanks, Brian. This is Mark. I'll take that one. We've been really pleased with the performance of our fire protection product line here over the last, I'd say, 12 to 18 months. It's definitely been supported by increases in steel pricing that we've laid out. So that's been a portion of the strong growth. But definitely from a volume perspective, they're seeing the same kind of softness across the construction of the rest of the businesses, but seeing a lot of really good share gains really across the board. We have had some white space in the fire protection area. So we've added some really good locations here over the last couple of years that are benefiting from share gains. And I'd say beyond that, we've been a very consistent, kind of, reliable partner to our contractors that we do work with there. And I believe we've been taking share really from, I'd say, various other competitors across the board of all sizes. So that team is really firing on all cylinders right now. They're just doing a great job. So real pleased with the performance there. Operator: Your next question comes from the line of Matthew Bouley with Barclays. Matthew Bouley: I wanted to touch on the overall guide for the year. So obviously, unchanged. Question is really just around some of the moving pieces in that. It seems like in the quarter, maybe you got a little bit of positive price. On the other hand, at least the gross margin was a little bit lighter than our own model. So maybe if you can kind of dive into those couple of pieces. Is the gross margin coming in any lower than you guys expected internally? And kind of what would be some of the offsets within the overall guide there? Robyn Bradbury: Sure, Matt. Thanks for the question. So, you're right. The guide is unchanged. Everything is coming in line with our expectations. Market is really in line with what we expected. EBITDA is in line with what we expected. Margins are down from the first quarter, which can happen. We can see variability from quarter-to-quarter, but we really made up for that on the SG&A. So, if we look into like the second half of the guide, we expect our EBITDA rate to be positive year-over-year. Expect that to be mostly driven by the fourth quarter, but do expect for the full year to get a little bit of improvement in gross margin and a little bit in SG&A to meet that guide. And overall, we're confident in our gross margins being supportive and our SG&A being supportive in meeting that EBITDA guidance for the year. Matthew Bouley: Okay. Got it. That's helpful. And then secondly, just diving into the smart utilities and the meters business. I mean it looked like, at least in the commentary that you may have had some positive price there. And I wasn't sure if the volumes had actually pulled back a little bit in that business. So maybe you can kind of -- if there's anything there around large project timing or just kind of your broader visibility into how the smart utilities business may play out here into how you're expecting the second half of the year in that segment? Bradford Cowles: Yes. Matt, thanks for the question. This is Brad. I'll take this one. There was a little bit of price, but volume was essentially flat. It didn't go backwards at all. So, it's kind of netted out to about that plus 1% for the quarter. We see in that business pretty good fundamental flow on our -- think of the business we've got as an installed base across a growing list of municipalities as our smart utility initiative has had tremendous success, particularly in the recent years, we've got a pretty good installed base. And that installed base is performing well. It's delivering kind of that groundswell of flow. We are winning an increasing number, as we've talked about, of really large and exciting smart utility projects that are of significant size and complexity. And I think with that definitely comes some challenges getting some of these projects started. The early phases of these large projects have a lot of variability in the timing, pilot phases, all sorts of interesting challenges to overcome. And so we are seeing a little bit of a large project start timing impact here that's keeping us, kind of, in that flat range on top of that great run rate business. But we have a tremendous backlog. We do continue to win some projects, medium, large that are going to give us some exciting execution, we think, starting latter in the year into 2027 for sure. Operator: Your next question comes from the line of Matt Johnson with UBS. Matthew Johnson: I guess my first question is on pricing. I know last quarter, PVC pricing was, I think, a bigger topic, but it sounds like a lot of those price announcements from earlier this year didn't really stick. So I guess could you guys just kind of give us an update on what you saw in terms of municipal PVC pipe pricing through the quarter, your expectations into the back half? And then also, I guess, kind of similar to that, but different is just on HDPE pricing, what you've seen there given the similar disruption in the resin costs? Bradford Cowles: Yes. This is Brad again. I'll take that. Just kind of what I'm seeing from the field. We -- there were a lot of price signaling when we talked at the last quarter that prices might go up. And we were -- we didn't have full confidence in that. We weren't seeing in this particular end market, the likelihood of that price sticking, and that's why we weren't overly excited about changing anything with respect to PVC price. On the bright side, we're encouraged that PVC pricing has kind of stabilized and been in a pretty flattish mode as opposed to its continual decline that we've been living through for the last period. So that part of it has been pretty good. But we have just seen an inability, I guess, of the market given where it's at to support any pricing increases. So net, we continue to remain steady with pricing and on PVC, we see it kind of sitting there for the time being. We don't really have any indication until demand really picks up in those end markets that are heavy PVC consumers that's likely to change. And on HDPE, I'll hand it over to Mark. Mark Witkowski: Yes, Matt, I'll cover the HDPE. We've got 2 different pipe categories there that utilize that kind of product. There's corrugated HDPE that goes into the storm drainage market, and then there's fusible HDPE that's used across the various different applications. I would tell you on the corrugated HDPE storm drainage side, I'd say the pricing in that area has been relatively steady. On the fusible HDPE side, it's a little bit more of a commodity type product. It's a very small percentage ultimately of what we sell, but that has seen some spikes recently. The disruption in the Middle East definitely impacted resin. That product typically follows some of those resin spikes. So we've seen some increases there with pricing in that category. A little bit of a mixed bag just depending on the nature of that application. Matthew Johnson: That's great. Appreciate that color. And then I guess if I could just follow up on the meters business. Is there any update you guys could give or have just on the status of the Miami-Dade contract and when that could begin shipping? And just any additional color on kind of the timing or magnitude of some of these additional large project wins you guys talked about. And I guess also just bigger picture, I guess, as you guys mix towards more of these large projects moving forward in the meters business, is there any sort of margin impact we should think about there as you guys take on some of those additional services? Bradford Cowles: Yes, I'll take that one. Let me see if I can unpack all of that. Starting with Miami-Dade, that's the largest project we think there's ever been in this space, and we're excited to be a part of it. That said, it probably exemplifies the amount of pilot work and prework that has to be done before that project really hits its stride. We're anticipating -- in fact, we're in the middle right now of a number of small pilot stages that are going to start to ramp up. We think we'll see some Miami-Dade volume move towards the end of the year. It will be a relatively small percentage of the overall project, somewhere between 5% and 10%, I would estimate. And then we fully expect by 2027 for that to hit its full run rate. It's about a 5-year project implementation. So, that's -- it's a pretty strong number, 100,000 meters being installed and connected to the systems per year is approximately what we would expect. So pretty significant volume, the most significant we've done. But with that, there's a lot of challenges and a lot of moving parts that we just continue to manage with our team there. On the -- some other -- just one mention I'll make. We were able to win a project with Connecticut Water that's a pretty substantial scale, and that's pretty exciting for us. We've become a really strong metering smart utility player in our Northeast region, which has really paired up perfectly with our core waterworks distribution growth in the area. Again, that's a pretty substantial project. So, it's got a lot of work between here and the starting point of getting that really up and running. So, that's pretty characteristic of what we're seeing, a nice win like that popping up every now and then and a number of smaller ones along the way. And then I think your final question was talk about pricing. The larger these projects, there can be a competitive nature there where you got to be at the right price and you got to partner with the best manufacturers to get the solution in place. But the solutions that we provide, which do extend into services and software and integrations and the like, those can carry some exciting margin profiles along with it that kind of tends to blend up, if you will, any volume effects that we might have on pricing in the project. So we see them as pretty much in line with the rest of our meter business, which is still kind of to the exciting side on the margin line. Operator: Your next question comes from the line of Joe Ritchie with Goldman Sachs. Unknown Analyst: This is [ Anvi ] on for Joe. I just wanted to follow up on the gross margin piece. I know you discussed it briefly in your prepared remarks as well. But I'm just trying to understand or like bridge into the back half. Can you touch upon some of the puts and takes, be it product mix, end markets, even the pricing comments that you made? What would it really take to see a sequential or even a year-on-year expansion in the back half? And then what are some of the things, maybe private label, if you could size the benefit coming from that as well? Robyn Bradbury: Yes, sure. Thanks for the question. So, we had a really good gross margin in the first quarter. We always can expect fluctuation from quarter-to-quarter depending on seasonal mix, project mix and timing. The way that our gross margin works is it's very local, and it's based on local project wins. And with some of that seasonal mix and project mix can come with some lower SG&A and some lower load for the branch and favorable EBITDA rate, which is what we saw in the quarter. As we look into the back half of the year, we do expect EBITDA expansion, like I mentioned, in the back half of the year, most of that driven by Q4. We expect overall EBITDA margin expansion and expect that to be driven a portion by gross margin and a portion by SG&A. We do have a kind of a tougher margin comp in Q3 versus Q4, so we would see, kind of, more of a year-over-year margin benefit in Q4 versus Q3. From an SG&A standpoint, as we start to see growth in the back half of the year, we'll be able to leverage that more. And so, should see some good SG&A leverage in the back half of the year given our cost-out actions plus some growth that we can leverage in the back half. Unknown Analyst: Got it. That's helpful. And if I can just follow up on the M&A and the greenfield activity that you've seen. It was good to see the 7 greenfield locations opened year-to-date. I think from an M&A standpoint, like what would you call out as your key focal points today in terms of market, where are you seeing the attractive opportunities? And then how are you balancing some of this incremental buyback that you're doing against the M&A? Mark Witkowski: Yes. Thanks for the question. I'll take that one. I think what's most exciting about our strategy that we have to grow this business is that we're fully capable given our cash flow characteristics of delivering on all 3 fronts there. So, we continue to invest in the business organically. You've seen that through the greenfield additions there. We added 3 locations kind of the western part of the U.S. 2 locations kind of in the Southeast area and then 2 up in Canada, where we continue to build out our presence in that market. So, that's been really exciting growth for us. I would say, over the last 12 to 18 months, the M&A activity that we've seen in the market has just been pretty limited. We've been able to complete some M&A, as you've seen despite it just being limited opportunities. But we've seen that, I'd say, pick up pretty significantly here over the last 3 to 6 months, and I've been really excited about the opportunities that have come across our desk that our team has sources from a proprietary standpoint, and then we've seen some other ones kind of come to market. So it's been exciting to see that activity pick up. We've advanced now several, I'd say, through the LOI stage. So, we're making some really good progress there. And I'd say the focus there continues to be what we've looked at historically, which is continued bolt-ons right in line with kind of the core waterworks business and fire protection. And then we look for ways to continue to add complementary products and solutions to our offering that fit right with our existing customer base. So, no change in focus there and really, really like what we're seeing. And given some of the actual M&A activity has been a little lighter that we've closed over the recent quarters, we've been able to do a lot of repurchase activity in the market as well. So again, we've got all 3 of those opportunities, and we'll continue to look at it and deliver on that going forward. Operator: Your next question is from David Manthey with Baird. David Manthey: Good to hear on the M&A pipeline. And from what I'm hearing you say, Mark, it was just a, for whatever reason, a lack of targets that were available and that has since started to free up. Am I hearing you right on that? Mark Witkowski: Yes, that's exactly it, Dave. Yes. David Manthey: Okay. Main question here is on the major commercial projects and data center. Can you size those for us just in terms of percentage of your sales that are going to some of these major projects? I assume data center is a low single digit, but could you just sort of frame what that is for you? And then second, there's a lot of talk around water usage at these data centers. And I'm just wondering from a Core & Main standpoint, as you're selling into these, does it matter if the data center is a traditional evaporative situation or if they're engineering that to be more of a closed loop or zero water system? Bradford Cowles: Dave, this is Brad. I'll try to unpack all of that. First of all, on the size, we've said that the data centers, especially as they become such a widely dispersed phenomenon across the country, it plays so well into our strength because we've got branches everywhere, as you know, they're all outstanding service providers and have great local relationships. And when a data center gets built in a place like Indiana, ultimately, the people that are putting the underground water utilities or treatment plant into the area are local, and we own those relationships. And so as that has been occurring, we've seen our data center project run rate, as Mark said, we've doubled this quarter year-over-year, which is pretty exciting from my seat. That's taken it from, I would say, low single digit to the mid-single-digit range in terms of our total business. And what's exciting for me is we've talked about data center kind of making up for a lot of drag in the classic light commercial work that has been a mainstay for years, offices and retail and the like. The data center is now in the high single-digit range as a percentage of our nonresidential work. So it's great for us. We're well positioned. It looks a lot like our core business. It's not significantly different from a technical perspective. It just requires an elevated level of service, and that's what we're really good at. So again, it's kind of a sweet spot, meet sweet spot, and we're pretty excited about it. As far as the types of demand, different data centers and their cooling approaches, almost all data centers have some mix of cooling that can be recirculated or there's a lot of HVAC component that still evaporates a lot of water. Regardless, they need water. And so sometimes the water volumes we're delivering are higher, sometimes they're lower. But it's always good and it always leads to a pretty material percentage of the project being underground water utility. And then I think one of the biggest switches that can flip is whether the local municipality is already prepared or not to supply treated water to that data center or whether there needs to be some private investment in water treatment, either on-site or near site or some other public-private coupling to kind of accelerate local water demand. So we're kind of excited about the first order effect of the data center itself. And then that second order effect is just increasing municipal water demand from that business and all the businesses that grow up around it. David Manthey: That's helpful. And I guess what we're seeing with electricity, it sounds like you're seeing a similar effect on the water side to sort of bring your own water as opposed to just tapping into the municipalities. Is that what you're saying? Bradford Cowles: That is what I'm saying, and it's an interesting comment because there's sort of a trade-off between how much electricity you have to spend cooling versus how much water you can evaporate to cool. So we kind of -- the data centers are trying to find those locations where they can get both, and they often cannot get both and get one or the other. And so more electricity for the closed-loop systems to refrigerate that water and move the heat. And if not, they need more water to evaporate. So it's kind of driving general municipal demand for energy and water, whichever way you price it. Operator: Your next question comes from the line of Sam Reid with Wells Fargo. Richard Reid: I wanted to dig a little bit deeper into resi. You mentioned on the call that the comps obviously get easier in the second half, which is great. Can you just decompose a little bit more what you're embedding specifically in the second half for resi relative to the high single-digit decline in the second quarter? Robyn Bradbury: Sure, Sam. I'll take that one. So, for resi, the way that the year is trending, it was down about low double digits in the first quarter. In the second quarter, it was down kind of high single digits. And then in the back half of the year, when we anniversary the decline, we expect it to be flat or maybe down slightly. So overall, that gets you to, kind of, a mid-single-digit down on residential. But that doesn't assume residential gets any better or worse. It's been kind of bumping along at the same levels, and that's what we've got assumed in the overall guide. So, that assumes, kind of, flattish overall markets for the full year. Richard Reid: That's helpful, Robyn. And then switching gears here, there are some questions that we're getting on ARPA funding rolling off at the end of this year. So just curious your perspective on how much that was potentially benefiting the muni segment through 2026? And then also, just any updated perspective on highway funding initiatives, mixed reads there, but you've heard potentially some of that coming in light. So just curious any implications. Mark Witkowski: Yes. Sam, I would tell you, just in general on municipal funding, we definitely have heard some mixed messages in the market. I would just reiterate that the vast majority of the funding of the type of work that we do in the municipal area is funded through those local water municipalities and the rates they charge the consumers, and we've continued to see that as a positive from the standpoint of they continue to look to pass rate increases to help close the funding gap between the need for those municipalities to upgrade their systems and the funding they have available. So, that overall, kind of, big large pocket of funding continues to rise. And then beyond that, there's been additional funding mechanisms at the state and federal level that have been supportive in the backdrop, ARPA funding being one of them. So that was helpful. I'd say back several years ago, and obviously, funding is coming off, but you've had the increase in the IIJA money that sits at that state level that's now been kind of fully allocated down to the states, but municipalities have just pulled a small portion of that to the local level. So, there's plenty of federal funding out there to go get. It becomes whether the municipalities have the capacity and resources to go through the requirements and regulations to go get that funding. So, I don't see that as any kind of a risk or slowdown with that federal side of it, and we're really positive on the fact that the 50,000-plus municipalities still continue to work to try to get the value of water to align more with what the needs are and continue to believe that will be a good backdrop to support our municipal end market demand over the next several years. Operator: Your next question comes from the line of Anthony Pettinari with Citigroup. Anthony Pettinari: On fire protection, I was wondering if it's possible to parse out the sales growth that you saw in the quarter between volume and price. And given the strength in the category, do you run into kind of tougher comps in the second half? I'm just wondering if you could talk about sort of the sustainability of the strength you've seen there. Robyn Bradbury: Yes. Thanks for the question. And like mentioned earlier, we're really excited about the fire protection product line and the growth that we've had there. For the quarter, it was split between price and volume, a little bit more weighted towards volume. A lot of that driven by share gain and performance and things like that. But there was about 2/3 of it of the growth or so that was pricing related, specifically related to steel pricing. And then as we get into the back half of the year, the fire protection product line has been performing well for a while now, but I wouldn't say that the comps are meaningfully different. We do expect to see a good finish to the year for fire protection. Anthony Pettinari: Great. Great. That's very helpful. And then maybe just kind of a random one. With Canadian tariffs do you see any impact on product price hikes or products across the border or just demand at your Canadian branches, like, any potential impact there? Mark Witkowski: Yes. No, thanks for the question. At this point, we don't see any major movement there. Our exposure in Canada, as we sit here today is still pretty light relative to the overall business. But at this point, as we unpack all the tariffs and retaliatory tariffs there between the countries, we don't see any major implications [indiscernible] today. Operator: Your next question comes from the line of Mike Dahl with RBC Capital Markets. Michael Dahl: Robyn, just to go back to the gross margin dynamic one more time, understanding there's always elements of mix that can produce differentials. I think your guidance or your comments that gross margin will still end up slightly for the full year would require you to be back in that 27-ish range in the back half, so up sequentially. So can you be a little more specific about some of the mix dynamics or other drivers that you see in the second half that would produce that slight uptick relative to what you just posted in 2Q? Robyn Bradbury: Yes, sure. And it depends what we see in the back half of the year as far as project mix. And like I said, a lot of that is local and kind of those local project wins will help drive some of that. But if we do see gross margins a little bit lower in the back half, then we would expect to see lower SG&A to come along with that. But as far as the project mix, like I said, we see -- we can see sequential declines from the first quarter to second quarter. Some of that given seasonality, there's projects that are more underground, there can be more direct ship, so there can be less demand on that local branch, less variable costs associated with that. We also -- it is -- our underground business is more seasonal. So as you see quarters like the first quarter when we have areas like fire protection that's less seasonal. We've got more of a private label mix in there. So it can vary from quarter-to-quarter. But the good news is that if that gross margin is a little bit lower because of project mix, then we would expect the SG&A to be lower. And so that would help support the EBITDA margins overall. Michael Dahl: Okay. Yes, that's helpful, understanding that it really is just that mix dynamic, not necessarily getting squeezed on something idiosyncratic to gross margin. The second question, I mean, just a little more near term. Can you talk through kind of the growth. How we exited the quarter and what you're seeing quarter-to-date? And obviously, you maintained the full year sales guide, but maybe a little more color on how 3Q is shaping up so far would be great. Mark Witkowski: Yes, sure. I'll take that one. As we exited the second quarter, I'd say we felt really good with the momentum building, especially into July and then August reflected that momentum as well. So that's what gave us those couple of points that we saw some good acceleration that was supportive of the bidding activity and the project wins that we were seeing. So that felt really good. And as we talked about some of the comps on resi that's been a headwind for us get a little easier. Now obviously, we're not expecting resi to get a lot better, but it helps to have a little softer comp in the back half and allows a lot of the progress that we've made with many of our growth initiatives to shine more without that headwind. And that, coupled with the stability we've seen with PVC, has -- should put us in a good position to show some really good growth here in the second half. Operator: Your next question is from the line of Keith Hughes with Truist. Keith Hughes: How much did acquisitions add in the quarter? I know it's a small number, but what is it exactly? Robyn Bradbury: It's a little less than 1 point, Keith. So, we had 2.5% growth in the quarter, and we had volume, price and acquisitions all contribute slightly to that 2.5% growth. Keith Hughes: And you made some positive comments earlier in the call about potential deals coming down the pipe in a slow period here. Assuming you get a reasonable number of those, what kind of future growth would those represent to sales? Mark Witkowski: Yes, Keith, we've laid out in terms of our long-term strategy, we expect M&A to contribute in the, kind of, 2 to 4 points of growth range. And obviously, in the recent year or 2, we've been under that. So, it's possible we could exceed that in any given year as activity picks up, but we generally expect it to be in that kind of 2 to 4 points of incremental sales growth just based on our long-term strategy. And I tried to highlight that we've got several that kind of advanced through that LOI stage, and we're in diligence now. So, expecting a good finish to the year and should set us up for some really good growth in 2027. Keith Hughes: Okay. Final question. You had talked very beginning of the call that the -- it was about mid-single-digit growth coming from the treatment centers. Is data centers part of that? Is that a separate number? I heard about high single digits of nonresi. I'm just trying to get the -- as a percentage of total sales, get it straight. Robyn Bradbury: Yes. So Keith, treatment plant is, kind of, in the mid-single-digit percent of our overall sales, but it grew double digits in the quarter. So that's been performing really well. That's been an area that's been performing strong for us quarter-over-quarter. It's typically separate from data centers, we've been doing a lot of activity and making investments in treatment plant and growing that business. But, like Brad mentioned, there can be treatment facilities needed that go along with the data center. So, it can be both. It can be kind of core municipal water infrastructure treatment plant or it could be treatment plant growth related to water needs from data center activity growth. So, in either regard, that area is growing well for us and growing overall, and we expect to see continued growth in treatment plants in the back half of the year. Operator: Your next question comes from the line of Ryan Merkel with William Blair. Ryan Merkel: Mark, I think I heard you mention large projects, there was a bit of lumpiness. Can you talk about where that was and what some of the issues are? And then also if there's any better visibility to better releases in the second half? Mark Witkowski: Yes, Ryan, I think Brad referenced some of the project timing on some of the smart utility wins that we have. I'd say there's no issues or problems, but it's just a part of the nature of doing large meter implementations in a municipality. There can be various elements that impact the timing to really get those launched into full run rate. You've got multiple systems that a municipality is typically running that we're simplifying. I mean there's a number of factors that come into play. I wouldn't really indicate there's issues or challenges. It's just a matter of when those get off and running. And then beyond that, just with large projects, I'd say that we feel really good about what's in the pipeline, but sometimes those can be just core water infrastructure projects can have delays with timing due to weather and various other factors in a particular market that impact timing and availability. So, feel good with what's in the pipeline. As Brad mentioned, I think we'll see some of that smart meter release here in the second half and really get off and running in 2027 and continue to see a lot of great wins across the other large capital projects, like we've mentioned with data centers and other awards. So it's been, I'd say, mostly positive, just timing and when is all that going to really get out and shipped. Ryan Merkel: I see. Okay. That helps. And the second question because you said in the release that the smart meters was mostly price, the growth there. So, that's -- the volume is just sort of a timing issue, it sounds like. And what kind of pricing are you seeing on the smart utility side? How much did price contribute in the quarter? Mark Witkowski: Yes. Just a small amount of price increase there. Overall, the growth was 1 point of growth in the quarter, so a little bit of price. No offset on -- volume was neutral to slightly positive. Operator: This concludes our Q&A session. I will now turn the call back to Mark Witkowski for closing remarks. Mark Witkowski: Thank you again for joining us today. We are pleased with the performance we delivered this quarter, but what excites us most is what we see ahead. Our growth and our margin initiatives are delivering results, and we are encouraged by the opportunities emerging across our acquisition pipeline. Looking to the second half, we believe the elements of our growth framework are increasingly falling into place. End markets are stabilizing, large project activity is expanding, and we are seeing a growing set of opportunities to strengthen our business, both organically and through M&A. Combined with our demonstrated operating discipline and significant financial flexibility, these trends give us confidence in our ability to accelerate profitable growth and create long-term shareholder value. Thank you for your continued interest in Core & Main. Operator, that concludes our call. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Core & Main, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Core & Main wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Core & Main (CNM) Q2 2027 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was anchored by municipal demand, which remains stable due to the non-discretionary nature of aging water infrastructure repair and evolving regulatory requirements. Data center development has emerged as a significant growth engine, nearly doubling year-over-year, while treatment plant projects have grown to a mid-single-digit percentage of the total sales mix. Treatment plant solutions delivered double-digit growth as the company successfully pivots toward higher-value specialty products and technical project support. Fire protection strength was driven by a combination of market share gains in new geographies and favorable steel pricing dynamics. Residential lot development remained the primary headwind, declining high single digits as high interest rates and affordability concerns continue to suppress new project starts. Management achieved 40 basis points of SG&A leverage by holding operating costs flat despite inflationary pressures and ongoing investments in greenfield expansion. Full-year guidance assumes residential comparisons will become considerably more favorable in the second half as the company anniversaries the steep declines of the prior year. Management expects EBITDA margin expansion in the second half, particularly in the fourth quarter, driven by anticipated volume growth and continued cost discipline. The M&A pipeline has meaningfully accelerated over the last three to six months, with several opportunities now in the letter of intent (LOI) and diligence stages. Smart utility project deployments are expected to ramp up late in the fiscal year, with significant volume contributions from large-scale contracts projected for 2027. Organic growth strategy remains focused on a record number of greenfield openings this year to improve customer proximity and capture market density in underpenetrated regions. Executed record open market share buybacks for the second consecutive quarter, bringing total repurchases to approximately 25% of shares outstanding since the IPO. PVC pricing has stabilized following a period of continual decline, though management notes that current demand levels do not yet support significant price increases. The acquisition of Walker Industries in Hawaii post-quarter end serves as a template for geographic and product breadth expansion through bolt-on transactions. Refinancing transactions completed during the quarter extended debt maturities and enhanced liquidity to support both M&A and opportunistic share repurchases. Management explained that while volume was essentially flat this quarter, it was due to the complex pilot phases and integration requirements of large-scale municipal projects. The Miami-Dade project, the largest in the sector's history, is currently in pilot stages with only 5% to 10% of volume expected to ship by year-end before hitting full run rate in 2027. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Growth was roughly two-thirds price-related due to steel, but volume gains were significant due to expansion into 'white space' geographies. Management believes they are taking share from competitors of all sizes by acting as a more reliable partner during periods of broader construction softness. The sequential dip in gross margin was attributed to local project mix and seasonal shifts toward underground work, which often involves more direct shipping. Management clarified that lower gross margins on certain projects are typically offset by lower SG&A load at the branch level, protecting the overall EBITDA rate. Management downplayed risks from federal funding roll-offs, noting that the vast majority of spending is funded by local utility rates which continue to rise. Federal IIJA funds remain largely untapped at the local level, providing a significant multi-year tailwind as municipalities navigate the application process. Data centers now represent high single digits of the non-residential business, with demand spanning underground utilities, fire protection, and treatment facilities. Regardless of whether a facility uses evaporative or closed-loop cooling, the massive scale of these projects often forces municipalities to expand their overall water capacity.

This article first appeared on GuruFocus. Net Sales: Approximately $2.1 billion, up 2.5% year-over-year. Adjusted EBITDA: $274 million, up approximately 3% from $266 million in the prior year. Adjusted EBITDA Margin: Expanded 10 basis points to 12.8%. Adjusted Diluted EPS: $0.94, an increase of 8% from $0.87 in the prior year. Gross Margin: Approximately 26.7%, similar to the prior year. SG&A: Approximately $301 million, roughly flat year-over-year, improving approximately 40 basis points as a percentage of sales. Operating Cash Flow: $62 million in the quarter; $144 million in the first half of the year. Net Debt: Approximately $2.2 billion, with net debt leverage of approximately 2.3x. Share Repurchases: Deployed $169 million to repurchase 3.7 million shares in the quarter; nearly $270 million to repurchase approximately 5.7 million shares in fiscal 2026. Fire Protection Sales: Increased 14% year-over-year. Treatment Plant Sales: Delivered strong double-digit growth; now mid-single-digit percentage of sales mix. Data Center Projects: Contribution nearly doubled year-over-year. Greenfield Locations: Opened 7 new locations so far this year, on track for a record number. Full Year Guidance: Affirmed 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% to 70%. Warning! GuruFocus has detected 8 Warning Signs with ODD. Is CNM fairly valued? Test your thesis with our free DCF calculator. Release Date: September 09, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Core & Main Inc (NYSE:CNM) delivered growth in sales, adjusted EBITDA, and EPS, with adjusted diluted EPS increasing 8% year-over-year to $0.94. The company saw strong performance in treatment plant solutions, fire protection (sales up 14%), and data center projects, which nearly doubled year-over-year. Core & Main Inc (NYSE:CNM) executed its second consecutive quarter of record open market share buybacks, repurchasing nearly 25% of shares outstanding since its IPO. The M&A pipeline has meaningfully accelerated, with several opportunities advanced through the LOI stage and the acquisition of Walker Industries completed post-quarter. The company maintained its full-year guidance, reflecting confidence in its outlook, supported by strong cash generation and a free cash flow yield of 7.5%. Residential lot development remained challenged, declining high single digits in the quarter, with continued softness expected in the near term. PVC pricing remained flat with no ability to support price increases, and the company saw lower year-over-year PVC pricing. Gross margin was slightly lower sequentially due to project mix, with expectations of variability in the back half of the year. Smart utility volumes were essentially flat, impacted by timing delays in large project starts, such as Miami-Dade, which is not expected to hit full run rate until 2027. Non-residential construction performance varied, with ongoing softness in light commercial and retail offsetting strength in data centers. Q: Can you provide more detail on the strength of the municipal end market and the trends you are seeing in non-residential and residential markets?A: Robyn Bradbury (CFO) stated that the municipal market remains strong, stable, and steady, growing in the low single digits, supported by good funding sources and consistent repair and replacement activity. Non-residential was flat to slightly up, with weakness in traditional light commercial work being offset by strong data center activity. Residential declined in the high single digits, but comparisons become easier in the back half of the year, with expectations for it to be flat to down slightly, resulting in a mid-single-digit decline for the full year. Q: What is driving the strong growth and share gains in the fire protection business, and how much of the growth is price versus volume?A: Mark Witkowski (CEO) attributed the strong performance to share gains across the board, supported by new greenfield locations and consistent, reliable service to contractors. Robyn Bradbury (CFO) added that the 14% sales growth was split between price and volume, with roughly two-thirds of the growth related to steel pricing and the remainder driven by volume and share gains. The company expects a good finish to the year for fire protection. Q: Can you provide an update on the status of the Miami-Dade smart utility contract and the timing of volume shipments?A: Bradford Cowles (President) stated that the project is currently in the middle of several small pilot stages. He expects some Miami-Dade volume to move towards the end of the year, representing a relatively small percentage (5%-10%) of the overall project. The project is expected to hit its full run rate in 2027, with approximately 100,000 meters being installed and connected per year over the 5-year implementation period. Q: What are the puts and takes for gross margin in the back half of the year, and what would drive the expected expansion?A: Robyn Bradbury (CFO) explained that gross margin can fluctuate from quarter-to-quarter due to seasonal and project mix. The company expects EBITDA margin expansion in the back half, mostly driven by the fourth quarter, with contributions from both gross margin and SG&A leverage. If gross margins are lower due to project mix, the company would expect lower SG&A to accompany it, supporting overall EBITDA margins. Q: Can you size the data center opportunity as a percentage of sales and discuss the impact of different cooling technologies on water demand?A: Bradford Cowles (President) stated that data center project run rates have doubled year-over-year, moving from low single digits to the mid-single-digit range as a percentage of total business. It is now in the high single-digit range as a percentage of non-residential work. Regardless of the cooling approach, data centers require water, and the projects often involve significant underground water utility work. The company is also seeing second-order effects as municipalities expand water and wastewater capacity to support these developments. Q: What is your expectation for residential market performance in the second half, and what is embedded in the guidance?A: Robyn Bradbury (CFO) stated that residential was down low double digits in Q1 and high single digits in Q2. In the back half of the year, as the company anniversaries the decline, it expects residential to be flat or down slightly, resulting in a mid-single-digit decline for the full year. The guidance assumes the market remains at current levels without significant improvement or deterioration. Q: How is the M&A pipeline evolving, and how are you balancing buybacks with acquisition opportunities?A: Mark Witkowski (CEO) noted that M&A activity has picked up significantly over the last 3 to 6 months after a slower period, with several opportunities advanced through the LOI stage and into diligence. The focus remains on bolt-on acquisitions in core waterworks and fire protection, as well as complementary products. The company's strong cash flow allows it to execute on all fronts, including organic investment, M&A, and share repurchases, with a long-term expectation of M&A contributing 2 to 4 points of growth. Q: What is the current status of PVC and HDPE pricing, and what are your expectations going forward?A: Bradford Cowles (President) stated that PVC pricing has stabilized and been in a flattish mode after a period of continual decline, but the market has not been able to support pricing increases. Mark Witkowski (CEO) added that corrugated HDPE pricing for storm drainage has been relatively steady, while fusible HDPE, a more commodity-type product, has seen some price spikes due to resin disruptions from Middle East events. Q: How much did acquisitions contribute to sales growth in the quarter, and what is the outlook for future M&A contributions?A: Robyn Bradbury (CFO) stated that acquisitions contributed slightly less than 1 point to the 2.5% sales growth in the quarter. Mark Witkowski (CEO) reiterated the long-term strategy of M&A contributing 2 to 4 points of incremental sales growth, noting that recent years have been below that range, but the company expects a good finish to the year with several deals in diligence. Q: Can you discuss the momentum exiting the quarter and what you are seeing quarter-to-date in July and August?A: Mark Witkowski (CEO) stated that the company felt good about the momentum building as it exited Q2, with acceleration into July and August reflecting that momentum. The easing of residential comparisons in the back half, coupled with stability in PVC pricing, should position the company to show good growth in the second half of the year. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Core & Main (CNM) came out with quarterly earnings of $0.94 per share, beating the Zacks Consensus Estimate of $0.93 per share. This compares to earnings of $0.87 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +1.08%. A quarter ago, it was expected that this distributor of water and fire protection products would post earnings of $0.7 per share when it actually produced earnings of $0.72, delivering a surprise of +2.86%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Core & Main, which belongs to the Zacks Manufacturing - Tools & Related Products industry, posted revenues of $2.15 billion for the quarter ended July 2026, surpassing the Zacks Consensus Estimate by 0.17%. This compares to year-ago revenues of $2.09 billion. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Core & Main shares have lost about 15.2% since the beginning of the year versus the S&P 500's gain of 12.1%. While Core & Main has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Core & Main was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.96 on $2.15 billion in revenues for the coming quarter and $3.15 on $7.88 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Manufacturing - Tools & Related Products is currently in the top 24% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Apogee Enterprises (APOG), another stock in the broader Zacks Industrial Products sector, has yet to report results for the quarter ended August 2026. This glass products company is expected to post quarterly earnings of $0.59 per share in its upcoming report, which represents a year-over-year change of -39.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Apogee Enterprises' revenues are expected to be $362.61 million, up 1.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Core & Main, Inc. (CNM) : Free Stock Analysis Report Apogee Enterprises, Inc. (APOG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Core & Main, Inc.? Here are five stocks we like better. Core & Main reported solid fiscal Q2 results: Sales rose 2.5% to about $2.1 billion, adjusted EBITDA increased 3% to $274 million, and adjusted EPS climbed 8% to $0.94. Municipal infrastructure, treatment plant projects, fire protection and data center work supported performance. Growth areas offset market weakness. Data center-related activity nearly doubled year over year, fire protection sales rose 14%, and treatment plant projects delivered double-digit growth, while residential lot development declined by high single digits and traditional light commercial activity remained soft. The company maintained its fiscal 2026 outlook for $7.8 billion–$7.9 billion in sales and $950 million–$980 million in adjusted EBITDA. Core & Main also continued aggressive capital allocation, repurchasing $169 million of shares during the quarter and expanding through seven new locations and the acquisition of Walker Industries. Med-tech stock Conmed dips ahead of big Q4 report...opportunity? Core & Main (NYSE:CNM) reported higher fiscal 2026 second-quarter sales, adjusted EBITDA and adjusted earnings per share, supported by municipal infrastructure activity, treatment plant projects, fire protection demand and growing data center-related work. Second-quarter net sales rose 2.5% year over year to approximately $2.1 billion. Adjusted EBITDA increased about 3% to $274 million, while adjusted EBITDA margin expanded 10 basis points to 12.8%. Adjusted diluted earnings per share rose 8% to $0.94 from $0.87 a year earlier. → 3 Under-the-Radar Defense Stocks With Record Backlogs CEO Mark Witkowski said the company saw momentum building across its backlog, large-project opportunities and acquisition pipeline. He also pointed to strong cash generation, balance-sheet flexibility and continued investments in new locations and product capabilities. Municipal demand remained a primary source of strength during the quarter. CFO Robyn Bradbury described the market as “strong, stable, steady,” with activity growing in the low-single-digit range. She said repair and replacement work, along with funding sources available to municipalities, continued to support demand. → Ride-Share Reckoning: Tesla Drives Into Uber's Lane Witkowski said water infrastructure investment remains a long-term priority, citing the Environmental Protection Agency’s estimate that U.S. drinking water, wastewater and stormwater systems will require more than $1.2 trillion of investment over the next 20 years. He noted that most municipal water infrastructure spending is funded at the state and local level, particularly through utility rates. The company’s treatment plant initiative posted another quarter of double-digit growth. Treatment plant projects now represent a mid-single-digit percentage of Core & Main’s sales mix, according to management. The company is seeking to expand its specialty-product mix, technical expertise and project-support capabilities within that business. → High Gas Prices Aren't Budging—Here Are 3 Stocks That Benefit Core & Main’s Smart Utility business recorded modest growth, with pricing contributing slightly and volume remaining essentially flat. President Brad Cowles said the business has a growing installed base and a substantial backlog, but some large deployments are taking longer to move through pilot phases and other startup work. Cowles said the Miami-Dade project, which he described as the largest project the company believes has been awarded in the sector, is moving through several pilot stages. Core & Main expects some Miami-Dade volume toward the end of the year, representing an estimated 5% to 10% of the overall project, with the project expected to reach fuller run rates in 2027. The five-year implementation is expected to involve approximately 100,000 meters installed and connected annually. Non-residential construction was mixed, with continued softness in traditional light commercial and retail work. However, management said data center construction has helped support the category. Data center-related activity nearly doubled from the prior-year quarter and increased from the low-single-digit range to the mid-single-digit range of Core & Main’s overall business, Cowles said. Data centers now account for a high-single-digit percentage of the company’s non-residential work. The company provides water, wastewater and storm-drainage infrastructure during site development, as well as fire protection systems as construction progresses. Cowles said data center developments can also drive secondary demand as municipalities expand water and wastewater capacity and as surrounding commercial and residential development grows. Fire protection sales increased 14% during the quarter. Management attributed the growth to higher volumes, share gains and higher steel prices. Bradbury said roughly two-thirds of the category’s growth was related to steel pricing, with the remainder supported by volume growth. Residential lot development remained weak, declining by high single digits in the second quarter following a low-double-digit decline in the first quarter. Bradbury said Core & Main expects residential activity to be flat to down slightly in the second half as comparisons become easier, resulting in a mid-single-digit decline for the full fiscal year. Gross margin was approximately 26.7%, roughly consistent with the prior-year quarter. Benefits from private-label and sourcing initiatives were offset by project-mix shifts and a stabilizing pricing environment in some categories. Pricing was slightly positive overall, as increases across much of the portfolio more than offset lower year-over-year PVC pricing. Total selling, general and administrative expense was approximately $301 million, roughly flat from the prior year and down about 40 basis points as a percentage of sales. Bradbury said cost management and savings initiatives helped offset inflation while allowing the company to continue investing in greenfield locations, acquisitions and growth initiatives. The company ended the quarter with about $2.2 billion of net debt and net debt leverage of approximately 2.3 times, within its target range. Total liquidity was approximately $1.5 billion, including more than $300 million of cash. Operating cash flow was $62 million in the quarter and $144 million in the first half. During the quarter, Core & Main repurchased 3.7 million shares for $169 million. Including repurchases made after quarter-end, the company said it has deployed nearly $270 million to repurchase approximately 5.7 million shares during fiscal 2026. Since its initial public offering, the company has repurchased nearly 25% of the shares outstanding at the time of the IPO. Core & Main opened seven greenfield locations year to date and said it remains on pace to open a record number of locations this year. The new sites include locations in the western U.S., the Southeast and Canada. Following the quarter, the company acquired Walker Industries, a Hawaii-based provider of storm drainage products. Witkowski said the company’s M&A pipeline has accelerated over the past three to six months, with several opportunities advancing through letters of intent and into diligence. Core & Main expects acquisitions to contribute roughly two to four percentage points of long-term sales growth, though management said that contribution could exceed that range in a given year if deal activity increases. The company reaffirmed fiscal 2026 guidance for 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% to 70%. Management expects adjusted EBITDA margin expansion in the second half, with most of the year-over-year improvement expected in the fourth quarter. Core & Main, Inc (NYSE:CNM) is a leading distributor of water, sewer, storm drainage and fire protection products across North America. The company's product portfolio includes valves, hydrants, pipe and fittings, meters, couplings and other essential components that support municipal, industrial and environmental infrastructure projects. By combining a comprehensive inventory with logistics and technical support, Core & Main helps customers address complex water system and distribution challenges. With more than 300 branch locations and over 3,500 employees, Core & Main serves a diverse customer base that includes municipalities, contractors, engineers and utility providers. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Core & Main Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Water and fire protection solutions company Core & Main (NYSE:CNM) will be announcing earnings results this Wednesday before market hours. Here’s what investors should know. Core & Main beat analysts’ revenue expectations last quarter, reporting revenues of $1.91 billion, flat year on year. It was a mixed quarter for the company, with a decent beat of analysts’ EBITDA estimates but full-year EBITDA guidance meeting analysts’ expectations. Is Core & Main a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting Core & Main’s revenue to grow 2% year on year, slowing from the 6.6% increase it recorded in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Core & Main has missed Wall Street’s revenue estimates multiple times over the last two years. Looking at Core & Main’s peers in the industrial distributors segment, some have already reported their Q2 results, giving us a hint as to what we can expect. DNOW delivered year-on-year revenue growth of 108%, beating analysts’ expectations by 3.1%, and Watsco reported revenues up 2.1%, falling short of estimates by 1.9%. DNOW traded up 16.2% following the results while Watsco was down 15.4%. Read our full analysis of DNOW’s results here and Watsco’s results here. In the last year or so, investors have shifted their focus from one macro dynamic to the next (AI disintermediation and AI investment to geopolitical conflict, interest rates, and the health of the wider economy). While some of the industrial distributors stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 4.7% on average over the last month. Core & Main is down 4.1% during the same time and is heading into earnings with an average analyst price target of $59.43 (compared to the current share price of $44.32). WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it. This is what the early days of Palantir looked like before it became a giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.

ST. LOUIS, August 26, 2026--(BUSINESS WIRE)--Core & Main, Inc. (NYSE: CNM) ("Core & Main"), a leading specialty distributor dedicated to advancing reliable infrastructure with local service, nationwide, will issue its financial results for the second quarter ended August 2, 2026, before the market opens on Wednesday, September 9, 2026. Core & Main will host a conference call and webcast at 8:30 a.m. ET the same day to discuss the company’s financial results. The live webcast will be accessible via the events calendar at ir.coreandmain.com. The conference call may also be accessed by dialing 833-461-5787 or +1-585-542-9983 (international). The passcode for the live call is 858 028 883. To ensure participants are connected for the full call, please dial in at least 10 minutes prior to the start of the call. An archived version of the webcast will be available immediately following the call. A slide presentation highlighting Core & Main’s results will also be made available on the Investor Relations section of Core & Main’s website prior to the call. About Core & Main Based in St. Louis, Core & Main is a leader in advancing reliable infrastructure® with local service, nationwide®. As a specialty distributor with a focus on water, wastewater, storm drainage and fire protection products and related services, Core & Main provides solutions to municipalities, private water companies and professional contractors across municipal, non-residential and residential end markets in the United States and Canada. With more than 370 locations, the company provides its customers local expertise backed by a national supply chain. Core & Main’s 5,600 associates are committed to helping their communities thrive with safe and reliable infrastructure. Visit coreandmain.com to learn more. Cautionary Note Regarding Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, without limitation, all statements other than statements of historical facts contained in this press release, including statements relating to our intentions, beliefs, assumptions or current expectations concerning, among other things, our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding expected growth, future capital expenditures, capital allocation and debt service obligations, and the anticipated impact on our business. Some of the forward-looking statements can be identified by the use of forward-looking terms such as "believes," "expects," "may," "will," "shall," "should," "would," "could," "seeks," "aims," "projects," "is optimistic," "intends," "plans," "estimates," "anticipates" or the negative versions of these words or other comparable terms. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be outside our control. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of the market in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this press release. Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. View source version on businesswire.com: https://www.businesswire.com/news/home/20260826994739/en/ Contacts Investor Relations:Landon Althoff, [email protected] Media Relations:Patrick Lunsford, [email protected]