Q2 2025 Core & Main Inc Earnings Call Transcript
Key Points
- Core & Main Inc (CNM) achieved nearly 7% net sales growth in Q2 2025, with approximately 5% attributed to organic growth.
- The company reported strong gross margins at 26.8%, up 10 basis points sequentially and 40 basis points year-over-year, driven by private label and sourcing initiatives.
- Core & Main Inc (CNM) is expanding its presence with new locations in Kansas City and Wisconsin, and announced an acquisition in Canada, enhancing its market position.
- The company has a healthy pipeline of bids and project awards, supporting a positive outlook for metering upgrade projects.
- Core & Main Inc (CNM) is well-positioned to benefit from long-term investments in aging US water infrastructure, with a focus on growth and margin expansion opportunities.
- Residential lot development, which accounts for roughly 20% of sales, slowed during the quarter, particularly in Sunbelt markets, due to higher interest rates and affordability concerns.
- Operating costs were elevated in Q2 2025, with unusually high employee benefit costs and inflation in facilities, fleet, and distribution-related expenses.
- Sales of meter products declined year-over-year due to project delays and a difficult comparison to last year's 48% growth rate.
- The company lowered its full-year guidance due to higher operating costs and softer residential demand, expecting net sales of $7.6 billion to $7.7 billion.
- Adjusted EBITDA margin declined 40 basis points to 12.7% due to higher SG&A as a percentage of net sales, despite efforts to optimize costs.
Hello, and welcome to the Core & Main Q2 2025 earnings call. My name is Alex. I'll be cordoning today's call. (Operator Instructions)
I will now hand it over to Glenn Floyd, Director of Investor Relations. Please go ahead.
Good morning, and thank you for joining us. I'm Glenn Floyd, Director of Investor Relations at Core & Main. We appreciate you taking the time to be with us today for our fiscal 2025 second quarter earnings call.
Joining me this morning are Mark Witkowski, our Chief Executive Officer; and Robyn Bradbury, our Chief Financial Officer. On today's call, Mark will begin by sharing an overview of our business and recent performance, Robyn will follow with a review of our second quarter results and our outlook for the rest of fiscal 2025.
We'll then open the line for Q&A, and Mark will wrap up with closing remarks.
As a reminder, our press release, presentation materials and the statements made during today's call may include forward-looking statements. These are subject to various
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