Core & Main posts record quarterly sales
Core & Main Inc., a specialty distributor focused on water, wastewater, storm drainage, and fire protection products and related services, reported its net sales increased 11.5% to $2,038 million for the third quarter ended October 27.
Highlights for the quarter included:
- Gross profit increased 9.9% to $543 million; gross profit margin was 26.6%, increasing 20 basis points from the second quarter
- Net income decreased 11.4% to $140 million
- Diluted earnings per share increased 6.2% to $0.69
- Adjusted EBITDA (Non-GAAP) increased 6.5% to $277 million; Adjusted EBITDA margin (Non-GAAP) was 13.6%
- Completed five acquisitions during and after the quarter: HM Pipe Products, GroGreen Solutions, Green Equipment Company, Eastcom Associates and ARGCO Northeast
"We delivered strong performance in the third quarter, including record quarterly sales and adjusted EBITDA, demonstrating that Core & Main can grow in any environment," said Steve LeClair, the company's chair and CEO.
"Our ongoing focus on driving organic market share gains, combined with our disciplined approach to M&A, enabled us to achieve nearly 12% sales growth in the third quarter.
"Our strategic approach to capital allocation further demonstrates our commitment to growth and creating value for shareholders," he continued. "We completed five acquisitions during and after the quarter to expand our presence in key geographies, gain access to new product lines and add key talent. We also deployed $100 million to repurchase and retire 2.46 million shares, reinforcing our confidence in our outlook and ability to deploy capital to generate strong returns.
"Overall, our teams are executing our strategy, outperforming the market with organic volume growth, and advancing our initiatives to support growth and margin expansion in 2025 and beyond. As a leader in the industry, Core & Main is committed to being a valuable partner in the supply chain, utilizing our scale and capabilities to support our customers and their complex project needs. Looking ahead, we remain well-positioned to capitalize on a range of strategic growth opportunities while delivering value to our customers and shareholders," LeClair concluded.
Three Months Ended October 27
Net sales for the three months ended October 27 increased $211 million, or 11.5%, to $2,038 million compared with $1,827 million for the three months ended October 29, 2023. Net sales increased primarily due to acquisitions and comparably higher end-market volumes partially offset by slightly lower selling prices.
Net sales increased for pipes, valves & fittings due to acquisitions and comparably higher end-market volumes partially offset by slightly lower selling prices. Net sales increased for storm drainage products 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 comparably lower end-market volumes. 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 October 27, 2024 increased $49 million, or 9.9%, to $543 million compared with $494 million for the three months ended October 29, 2023. Gross profit as a percentage of net sales for the three months ended October 27, 2024 was 26.6% compared with 27.0% for the three months ended October 29, 2023. The overall decline 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 2024 Outlook
"We are raising our full year outlook based on results to-date, recent acquisitions, and our expectation that both prices and our end markets will remain stable through the end of the year," LeClair said. "The non-discretionary repair and replacement portion of our business remains resilient, and we are pleased with our level of execution to expand gross margins sequentially from the second quarter. We expect full year net sales to range from $7,350 to $7,450 million and we expect Adjusted EBITDA to range from $915 to $935 million. Our teams continue to lead and innovate, and we are optimistic that our scale, entrepreneurial culture and strong balance sheet position us to deliver meaningful value creation over the long-term."
Read full financial report here.
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