• Net Sales: $1.9 billion, a 10% increase, marking a first-quarter record.

• Adjusted EBITDA: $224 million, a 3% increase, with margins at 11.7%.

• Gross Margin: 26.7%, a slight sequential improvement from the previous quarter.

• SG&A Expenses: Increased 14% to $293 million, primarily due to acquisitions and inflation.

• Interest Expense: $30 million, down from $34 million in the prior year.

• Net Debt: Nearly $2.3 billion with a net leverage of 2.4 times.

• Operating Cash Flow: $77 million generated in the first quarter.

• Share Repurchases: 837,000 shares repurchased for $39 million at an average price of $46.64 per share.

• Diluted EPS: Increased approximately 6% to $0.52.

• Full-Year Guidance: Net sales of $7.6 billion to $7.8 billion and adjusted EBITDA of $950 million to $1 billion.

• Warning! GuruFocus has detected 8 Warning Signs with PLAY.

Release Date: June 10, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Core & Main Inc (NYSE:CNM) achieved record first-quarter net sales of $1.9 billion and adjusted EBITDA of $224 million, marking all-time highs for the first quarter.

• The company reported a 10% growth in net sales, with mid-single-digit organic sales growth and additional growth from acquisitions.

• Core & Main Inc (NYSE:CNM) saw strong performance in municipal construction activity, supported by funding from the Infrastructure Investment and Jobs Act.

• The company experienced robust growth in specific product categories, including a 10% increase in meters and double-digit growth in treatment plant and fusible high-density polyethylene offerings.

• Core & Main Inc (NYSE:CNM) maintained strong gross margins through disciplined pricing and effective execution of private label and sourcing initiatives.

Negative Points

• The residential construction market showed signs of softening due to economic conditions and affordability pressures, with developers reducing project footprints.

• Activity in commercial buildings, manufacturing, and warehousing remained softer compared to other sectors.

• The company faced a year-over-year decline in gross margins due to higher average inventory costs, despite sequential improvement.

• Tariff-related cost increases from suppliers are beginning to impact the company, although the direct impact on Core & Main Inc (NYSE:CNM)'s supply chain has been minimal so far.

• Uncertainty surrounding tariffs, inflation, and interest rates could impact customer sentiment and demand in the latter half of the year.

Q & A Highlights

Q: Can you provide more details on the SG&A productivity improvements and expectations for the year? A: Robyn Bradbury, CFO, explained that SG&A productivity improved by 4% excluding acquisitions and equity compensation. They expect further organic improvement in SG&A rates year-over-year as they continue to work on M&A synergies, which typically take 12 to 18 months to realize. They are also offsetting inflation impacts and feel positive about their progress.