Core & Main sales increase 17.9%
Core & Main Inc. announced net sales increased 17.9% to $1,698 million in its fiscal fourth quarter of 2024.
Fiscal 2024 Fourth Quarter Results (Compared with Fiscal 2023 Fourth Quarter)
- Net sales increased 17.9% to $1,698 million
- Gross profit increased 17.4% to $451 million; gross profit margin of 26.6%
- Net income decreased 11.8% to $67 million
- Diluted earnings decreased 2.9% to $0.33
- Adjusted EBITDA (Non-GAAP) increased 11.9% to $179 million
- Net cash provided by operating activities of $235 million
Fiscal 2024 Results (Compared with Fiscal 2023)
- Net sales increased 11.0% to $7,441 million
- Gross profit increased 8.9% to $1,980 million; gross profit margin of 26.6%
- Net income decreased 18.3% to $434 million
- Diluted earnings per share decreased 0.9% to $2.13
- Adjusted EBITDA (Non-GAAP) increased 2.2% to $930 million
- Net cash provided by operating activities of $621 million
- Repurchased $176 million of shares at an average per share price of approximately $44.31
"Our teams across the country executed at a high level in the fourth quarter, delivering our fifteenth consecutive year of positive sales growth," said Steve LeClair, chair and CEO of Core & Main.
"These consistently strong results are driven by our balanced business mix, the investments we have made to support and execute our growth strategy, and the expertise and dedication of our associates. With growing demand for innovative water infrastructure solutions, we continue to add new products, branches and capabilities to strengthen our leadership position in the industry. We also completed ten acquisitions to expand our presence in important geographies, gain access to new product lines and add key talent. Our strong cash flow generation and flexible balance sheet allow us to invest in organic growth and consolidate our fragmented markets through acquisitions, while returning capital to shareholders.
"I am confident in our outlook for fiscal 2025 as the team continues to execute our sales strategies and improve operating leverage across our business. We will continue delivering exceptional service to our customers and pursue growth through attractive product categories and end markets, while investing capital and resources into the business to drive profitable growth over the long-term."
Three Months Ended February 2, 2025
Net sales for the three months ended February 2, 2025 increased $258 million, or 17.9%, to $1,698 million compared with $1,440 million for the three months ended January 28, 2024. Net sales increased primarily due to acquisitions, higher volumes, and contributions from the 53rd selling week in the current year partially offset by slightly lower selling prices. Net sales increased for pipes, valves & fittings due to acquisitions and higher volumes partially offset by slightly lower selling prices. Net sales increased for storm drainage due to acquisitions and our ability to drive the adoption of advanced stormwater management systems. Net sales for fire protection products declined due to lower selling prices and lower end-market volumes partially offset by acquisitions. Net sales of meter products benefited from our ability to drive the adoption of smart meter technology through municipalities, increased product availability and acquisitions.
Gross profit for the three months ended February 2, 2025 increased $67 million, or 17.4%, to $451 million compared with $384 million for the three months ended January 28, 2024. Gross profit as a percentage of net sales for the three months ended February 2, 2025 was 26.6% compared with 26.7% for the three months ended January 28, 2024. The overall decrease in gross profit as a percentage of net sales was primarily attributable to larger prior year benefits from strategic inventory investments during an inflationary period partially offset by favorable impacts from the execution of our gross margin initiatives and accretive acquisitions.
Fiscal Year Ended February 2, 2025
Net sales for fiscal 2024 increased $739 million, or 11.0%, to $7,441 million compared with $6,702 million for fiscal 2023. Net sales increased primarily due to acquisitions, higher volumes and contributions from the 53rd selling week in the current year partially offset by slightly lower selling prices. Net sales increased for pipes, valves & fittings due to acquisitions partially offset by slightly lower selling prices. Net sales increased for storm drainage due to acquisitions and our ability to drive the adoption of advanced storm water management systems. Net sales for fire protection products declined due to lower selling prices and lower end-market volumes partially offset by acquisitions. Net sales of meter products benefited from our ability to drive the adoption of smart meter technology through municipalities, increased product availability and acquisitions.
Gross profit for fiscal 2024 increased $162 million, or 8.9%, to $1,980 million compared with $1,818 million for fiscal 2023. Gross profit as a percentage of net sales for fiscal 2024 was 26.6% compared with 27.1% for fiscal 2023. The overall decrease in gross profit as a percentage of net sales was primarily attributable to larger prior year benefits from strategic inventory investments during an inflationary period partially offset by favorable impacts from the execution of our gross margin initiatives and accretive acquisitions.
Net income for fiscal 2024 decreased $97 million, or 18.3%, to $434 million compared with $531 million for fiscal 2023. The decrease in net income was primarily attributable to an increase in interest expense, related to increased borrowings to support acquisitions in fiscal 2024, and an increase in income tax expense related to an increase in the allocation of net income to taxable entities. The remaining decrease is related to a 2.8% decline in operating income.
Fiscal 2025 Outlook
Core & Main provides the following guidance for fiscal 2025, a 52-week year compared to fiscal 2024, a 53-week year.
- Net sales of $7,600 to $7,800 million
- Net sales growth of 2% to 5%, reflecting average daily sales growth of 4% to 7%
- Adjusted EBITDA (Non-GAAP) of $950 to $1,000 million
- Adjusted EBITDA margin (Non-GAAP) of 12.5% to 12.8%
- Operating Cash Flow of $570 to $650 million
"As we enter fiscal 2025, we expect overall demand in our industry to be flat to slightly positive with modest growth in municipal repair and replacement activity," said CFO Mark Witkowski.
"We offer a strong value proposition to the industry and intend to deliver above market sales growth and market share gains from the execution of our product, customer and geographic expansion initiatives. After a period of normalization, we expect to drive gross margin expansion in fiscal 2025, supported by our private label, sourcing optimization and pricing initiatives.
"We anticipate strong operating cash flow generation and will continue deploying capital that results in accelerated growth and value creation for our shareholders in what we expect will be another year of profitable growth for Core & Main."
INDUSTRIAL SUPPLY MAGAZINE
The March/April issue of Industrial Supply magazine features an in-depth cover story about Industrial Supply Co. Plus, we're featuring articles by contributing writers Dr. Bharani Nagarathnam and Frank Hurtte, as well as interviews with numerous product and distribution industry experts.
