Core & Main — Fiscal 2026 Second Quarter Earnings Summary

Financial Performance

• Net sales increased 2.5% year-over-year to $2,145 million for the quarter and 1.3% to $4,055 million for the six months ended August 2, 2026.
• Gross profit increased 2.3% to $573 million for the quarter (margin of 26.7%) and 2.1% to $1,093 million for the six months (margin of 27.0%).
• Net income increased 6.4% to $150 million for the quarter and 6.9% to $263 million for the six months.
• Adjusted EBITDA increased 3.0% to $274 million for the quarter (margin of 12.8%) and 2.0% to $500 million for the six months.
• Diluted earnings per share increased 10.0% to $0.77 for the quarter and 9.8% to $1.34 for the six months.
• Adjusted Diluted EPS increased 8.0% to $0.94 for the quarter and 7.1% to $1.66 for the six months.
• Net cash provided by operating activities was $62 million for the quarter and $144 million for the six months.
• SG&A expenses decreased 0.3% to $301 million for the quarter (14.0% of sales) and increased 0.8% to $600 million for the six months (14.8% of sales).
• Operating income increased 6.6% to $227 million for the quarter and 5.2% to $404 million for the six months.

Guidance and Future Outlook

• Reaffirmed full-year fiscal 2026 outlook issued in March 2026.
• Full-year net sales guidance remains $7,800 to $7,900 million, reflecting 2% to 3% growth.
• Full-year Adjusted EBITDA guidance remains $950 to $980 million.
• Full-year Adjusted EBITDA margin guidance remains 12.2% to 12.4%.
• Full-year Operating Cash Flow guidance remains 60% to 70% of Adjusted EBITDA.
• Management expressed confidence in the second half of the year driven by municipal demand strength and opportunities in the acquisition pipeline.

Business Segments and Product Lines

• Net sales for pipes, valves & fittings increased due to acquisitions.
• Net sales for storm drainage were essentially flat for the quarter and decreased for the six months due to lower volumes, partially offset by acquisitions.
• Net sales for fire protection products increased due to higher volumes and higher selling prices.
• Net sales for smart utility products increased primarily due to higher selling prices for the quarter and higher volumes and prices for the six months.
• Opened seven greenfield locations in fiscal 2026, including two during and after the quarter.

Market and Competitive Landscape

• Municipal demand remained a source of strength.
• Fire protection and large capital projects, including treatment plants and data centers, delivered strong growth.
• The company operates in fragmented and highly competitive markets with multiple avenues for growth.

Risks and Challenges

• Forward-looking statements are subject to risks including declines, volatility, and cyclicality in U.S. residential and non-residential construction markets.
• Risks include slowdowns in municipal infrastructure spending, delays in federal fund appropriations, and price fluctuations in product costs including tariffs.
• Challenges include the ability to competitively bid for contracts, manage inventory during supply chain disruptions, and successfully identify, acquire, close, or integrate acquisition targets.
• Other risks involve the ability to hire and retain key personnel, supplier agreement terms, freight availability, and cybersecurity threats.

Management Commentary and Tone

• CEO Mark Witkowski stated the company delivered growth across sales, adjusted EBITDA, and earnings per share with momentum building across the business.
• Management highlighted the durability of the business model in a mixed demand environment, citing strong cash flow generation and investment in future growth.
• The tone was confident regarding the second half of the year and the full-year outlook, supported by a robust acquisition pipeline and strong balance sheet.

Other Key Points

• Deployed $169 million to repurchase 3.7 million shares during the quarter and an additional $11 million to repurchase 0.3 million shares subsequent to quarter end.
• Year-to-date open market share repurchases totaled nearly $270 million and 5.7 million shares.
• Net Debt decreased to $2,166 million as of August 2, 2026, from $2,253 million as of August 3, 2025, primarily due to lower borrowings on the Senior ABL Credit Facility.
• As of August 2, 2026, there were no outstanding borrowings on the Senior ABL Credit Facility, with approximately $1,226 million available after letters of credit.
• Issued $929 million in long-term debt and repaid $617 million in long-term debt during the six months ended August 2, 2026.
• Capital expenditures were $32 million for the six months ended August 2, 2026.