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Introduction & Market Context
Core & Main Inc. (NYSE:CNM) presented its fiscal 2025 first quarter results on June 10, 2025, reporting record performance with significant growth across key financial metrics. The water infrastructure products distributor saw its shares rise 5.19% to $62.41 in premarket trading following the announcement, reflecting positive investor sentiment despite previous concerns over an earnings miss in Q4 2024.
The company’s strong performance comes amid resilient demand in the municipal water infrastructure segment, which continues to benefit from aging infrastructure replacement needs, while residential and non-residential markets remain flat.
Quarterly Performance Highlights
Core & Main reported impressive financial results for Q1 2025, with double-digit growth in net sales and solid increases across other key metrics compared to the same period last year.
"We achieved record Q1 performance and market share gains, driven by resilient end market demand for upgrading aging water infrastructure," said Mark Witkowski, Chief Executive Officer, as highlighted in the company’s presentation.
As shown in the following financial results chart:
Net sales increased 10% to $1,911 million, up from $1,741 million in Q1 2024. Gross profit rose 9% to $510 million, while net income grew 4% to $105 million. Adjusted EBITDA increased 3% to $224 million, though the adjusted EBITDA margin contracted slightly to 11.7% from 12.5% in the prior-year period.
The company generated $77 million in operating cash flow during the quarter, demonstrating strong cash conversion despite seasonal working capital requirements. The cash flow and balance sheet summary reveals the company’s capital allocation priorities:
Core & Main deployed $39 million to repurchase 837,000 shares during the quarter, while investing $13 million in capital expenditures and allocating $6 million to debt service. The company maintained a disciplined approach to its balance sheet with total debt of $2,284 million and net debt of $2,276 million.
Strategic Growth Initiatives
The company continues to execute on multiple growth strategies that have fueled its expansion in recent years. Core & Main’s presentation highlighted four key levers driving growth:
Product initiatives are targeting approximately 13% 10-year CAGR, while the company’s sales talent development program supports over 600 field sales representatives with an average tenure of 14 years. Core & Main has also expanded its physical footprint with 20 new greenfield locations since 2017, adding approximately $300 million in annual net sales.
Acquisitions remain a cornerstone of the company’s growth strategy, with over 40 acquisitions completed since 2017, contributing approximately $1.8 billion in annual net sales. The company’s acquisition track record is impressive:
"We’re widely viewed as the ’acquirer of choice’ in our industry, and we maintain a robust pipeline of priority targets," noted Robyn Bradbury, Chief Financial Officer. "Our disciplined approach to M&A has allowed us to successfully integrate these businesses while realizing meaningful synergies."
Financial Position & Capital Allocation
Core & Main’s nationwide presence and diverse product portfolio position it well within the water infrastructure market. The company’s snapshot reveals its extensive reach:
With 370+ branches across 49 U.S. states, approximately 5,700 associates, and relationships with over 60,000 customers and 5,000 suppliers, Core & Main has established itself as a leader in the water infrastructure distribution space. The company offers more than 225,000 products, serving various end markets with a balanced mix of new construction and repair/replacement work.
The company’s product and service offerings span the entire water infrastructure ecosystem:
This comprehensive product portfolio enables Core & Main to serve customers across the full spectrum of water infrastructure projects, from municipal water treatment to storm water management and fire protection systems.
Forward Guidance & Outlook
Core & Main reaffirmed its fiscal 2025 outlook, projecting continued growth despite mixed end-market conditions:
For fiscal 2025, the company expects net sales of $7,600-$7,800 million, representing growth of 2-5% compared to fiscal 2024 sales of $7,441 million. Adjusted EBITDA is projected to reach $950-$1,000 million, up from $930 million in fiscal 2024, with adjusted EBITDA margin expected to be 12.5%-12.8%.
The company anticipates flat performance in both residential and non-residential markets, while the municipal segment is expected to grow in the low-single digits. Operating cash flow is forecast at $570-$650 million for the full year.
"Our minimal exposure to tariffs and continued focus on margin enhancement initiatives position us well for the remainder of fiscal 2025," said Witkowski. "We remain committed to our capital allocation strategy, prioritizing organic growth, strategic acquisitions, and returning value to shareholders through our share repurchase program."
With its strong market position, diverse product portfolio, and multiple growth levers, Core & Main appears well-positioned to continue its growth trajectory despite mixed economic conditions in its end markets. The positive market reaction to the Q1 results suggests investors share this confidence in the company’s strategy and execution.
Full presentation:
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