Core & Main Reports Q2 Fiscal 2026: Margin Gains Drive Net Sales Up 2.5%

Core & Main Inc. (NYSE: CNM) reported Q2 fiscal 2026 results on September 9, 2026, highlighting steady margin gains and capital deployment amid a robust expansion strategy. Net sales climbed 2.5% year-over-year to $2.145 billion, with adjusted EBITDA rising 3.0% to $274 million—a 10-basis-point improvement in adjusted EBITDA margin to 12.8%. Net income increased 6.4% to $150 million, while adjusted diluted earnings per share (EPS) exceeded estimates by 2.2%, reaching $0.94 (up 8.0% YoY). GAAP EPS also rose 10.0% to $0.77. Despite a 10-basis-point compression in gross margin to 26.7%, operational efficiency remained strong, with SG&A expenses flat at $301 million, delivering 40 basis points of leverage. Operating cash flow generated $62 million after accounting for working capital, interest, and taxes, while total capital deployed in the quarter totaled $187 million, including $169 million for share repurchases—bringing year-to-date buybacks to nearly $270 million (3.7 million shares). Post-quarter, an additional $11 million was allocated to repurchases, with 5.7 million shares bought back through August 2, 2026. The company’s free cash flow yield stood at 7.5%, outperforming specialty distributor peers (3.9%) and the S&P 500 (2.9%). Total debt as of August 2, 2026, was $2.478 billion, with net debt at $2.166 billion, maintaining a leverage ratio of ~2.3x trailing adjusted EBITDA (target range: 1.5x–3.0x). Stock premarket trading on the report’s release fell 4.34% to $42.15, marking a 52-week low of $41.25. CEO Mark Witkowski emphasized momentum in municipal infrastructure growth, citing the EPA’s estimate that U.S. drinking water, wastewater, and stormwater systems require over $1.2 trillion in investment over the next two decades. The company’s branch network expanded to over 370 locations, serving 60,000+ customers across the U.S. and Canada, with 20% market share in a $39 billion U.S. addressable market (17% including Canada). Fiscal 2026 guidance projects net sales of $7.8 billion–$7.9 billion and adjusted EBITDA of $950 million–$980 million, with adjusted EBITDA margins targeting 12.2%–12.4%. Capital allocation remains disciplined, with operating cash flow conversion aimed at 60%–70% of adjusted EBITDA and capex averaging 0.7%–0.8% of net sales. Since 2017, Core & Main has completed 43 acquisitions totaling $1.85 billion in sales, adding 148 branches, including 40 in fiscal 2024 alone. The company opened seven greenfield locations year-to-date, with eight to ten expected in fiscal 2026, reflecting aggressive expansion in municipal, non-residential, and residential segments. The presentation underscored growth through acquisitions, operational efficiency, and strategic capital deployment, positioning Core & Main for sustained profitability amid a booming infrastructure sector.