Core & Main Inc. reported second‑quarter fiscal 2026 results that topped Wall Street expectations. Adjusted earnings per share rose 8% year‑over‑year to $0.94, beating the consensus $0.92 estimate by $0.02, a 2.2% surprise. Net sales reached approximately $2.14 billion, up 2.5% from the prior year.
Adjusted EBITDA increased three percent to $274 million, yielding a 12.8% margin, a modest 10‑basis‑point expansion. Gross margin held steady at roughly 26.7%, while SG&A expenses stayed flat at about $301 million, improving 40 basis points as a share of revenue. Operating cash flow for the quarter was $62 million, bringing the first‑half total to $144 million.
The balance sheet showed net debt of about $2.2 billion, equating to a leverage ratio of 2.3 times. Total liquidity stood near $1.5 billion, comprising over $300 million in cash and the remainder under an asset‑based loan facility. The company repurchased 3.7 million shares for $169 million during the quarter, and has deployed roughly $270 million to buy back about 5.7 million shares for fiscal 2026. Since its IPO, Core & Main has bought back nearly $2 billion of stock, representing about 25% of the shares outstanding at listing. Free‑cash‑flow yield over the trailing twelve months was 7.5% of market capitalization.
Despite the earnings beat, the shares fell 4.34% in pre‑market trading, slipping to $42.15 from $44.06. The stock trades within a 52‑week range of $41.25 to $59.66 and carries a market value of $8.03 billion. Year‑to‑date performance is down 15%, with a 12% decline over the past six months.
Core & Main left its full‑year fiscal 2026 outlook unchanged, projecting net sales of $7.8‑$7.9 billion, adjusted EBITDA of $950‑$980 million, and operating cash‑flow conversion between 60% and 70%.
Segment commentary highlighted steady growth in municipal waterworks, described as "strong, stable, steady" with low‑single‑digit expansion, supported by repair and replacement work and federal funding. The EPA estimates over $1.2 trillion will be needed for U.S. drinking water, wastewater and stormwater systems over the next two decades. Fire‑protection sales rose 14% on volume gains and higher steel prices. Data‑center activity nearly doubled year‑over‑year. Residential lot‑development sales remain pressured by affordability and higher interest rates, expected to decline mid‑single digits for the full year.
Treatment‑plant solutions delivered double‑digit growth, now accounting for a mid‑single‑digit share of total sales. Smart‑utility and meter volume was flat, though the company secured major projects, including a historic Miami‑Dade contract to install and connect 100,000 meters annually over five years, with pilot volume slated at 5‑10% by year‑end and full run‑rate by 2027. A sizable metering project was also won in Connecticut.
Greenfield expansion continued, with seven new locations opened year‑to‑date—three in the western United States, two in the southeast, and two in Canada—positioning the firm for a record year of greenfield openings. M&A activity progressed with the post‑quarter acquisition of Walker Industries, a storm‑drainage product provider in Hawaii, and an accelerated pipeline of deals moving from letters of intent into diligence.
The earnings call featured CEO Mark Witkowski, CFO Robyn Bradbury, President Brad Cowles and VP of Investor Relations Landon Althoff, with analysts from Thompson Research Group, Barclays, UBS and Goldman Sachs participating in the Q&A.
