Core & Main (NYSE:CNM) executives highlighted continued market share gains, margin progress and strong cash generation during the company’s fiscal fourth-quarter and full-year 2025 earnings call, while also outlining a cautious outlook for fiscal 2026 amid uncertainty in private construction and pricing dynamics.
Fiscal 2025 performance: sales growth, share gains and cash flow
Chief Executive Officer Mark Witkowski said fiscal 2025 marked the company’s 16th consecutive year of sales growth, describing the year as one of “disciplined execution” despite end markets that were “roughly flat overall.” Core & Main reported net sales of $7.65 billion, Adjusted EBITDA of $931 million, adjusted diluted EPS of $2.97, and operating cash flow of $650 million.
The company reported 3 points of organic above-market growth in fiscal 2025, driven by sales initiatives and geographic expansion. Witkowski cited double-digit average daily net sales growth in fusible HDPE, treatment plant solutions and geosynthetics, and said meter products grew 12% on an average daily basis in the fourth quarter and mid-single digits for the year, following a strong prior-year comparison.
Fourth-quarter results reflect calendar and weather impacts
Chief Financial Officer Robyn Bradbury said fourth-quarter net sales decreased 7% to $1.58 billion, noting the quarter included one fewer selling week versus the prior year. On an average daily net sales basis, sales increased about 1%, supported by roughly one point of organic volume growth. Bradbury also said severe winter weather in the final week of the quarter temporarily limited construction activity in several regions.
Fourth-quarter gross margin was 27.1%, up 50 basis points year over year, attributed to higher private label penetration and disciplined purchasing and pricing execution. SG&A decreased 5% to $264 million, primarily due to lower variable costs from the shorter quarter and benefits from cost actions. Adjusted EBITDA in the quarter was $167 million, down 7%, while adjusted EBITDA margin improved 10 basis points to 10.6%.
Strategic initiatives: meters, treatment plant solutions, private label and footprint expansion
President Brad Cowles said the company is focused on broadening its product offering and delivering more complete solutions for complex customer needs. Cowles said key initiatives—meters, treatment plant, fusible HDPE and geosynthetics—have grown at an average annual rate of approximately 14% over the past five years.
On metering, Cowles said Core & Main was recently awarded what it believes is the largest metering contract in U.S. history and described a “high rate of success on large, complex projects.” In the Q&A, Cowles said the meters initiative has delivered “at least a low double-digit growth year after year,” with large projects representing roughly a third (or slightly more) of the business volume in a given year, alongside a “massive underlying base” of municipal meter sales.
On treatment plant and large-scale water delivery projects, Cowles said the National Critical Infrastructure Group has helped drive nearly 25% average annual growth over the past five years. He also said the company expects to invest in “upwards of another 30 people” in that initiative during fiscal 2026 to support more complex, higher-capacity projects, including those tied to data centers and large transmission work.
Management also emphasized geographic expansion. Witkowski noted 10 new branches were opened “during and subsequent to the year” as part of making products more accessible. Cowles said Core & Main completed 6 greenfield openings in fiscal 2025 and expects to open a “record” 7 to 10 locations in fiscal 2026.
Private label was another theme tied to margin opportunity. Cowles said private label represented about 5% of sales in fiscal 2025 and that the company sees a path to at least 10% over time. He said the company expanded distribution capacity and increased its assortment by more than 6,000 SKUs since the end of the prior year.
M&A pipeline and capital allocation
Core & Main also discussed acquisitions and capital allocation. Witkowski said fiscal 2025 included 2% growth from acquisitions, including contributions from prior-year deals and two fiscal 2025 acquisitions: Canada Waterworks and Pioneer Supply, which added five branches. The company said it now operates seven branches in Ontario, including two greenfields opened earlier in the year, following prior platform-building activity in Canada.
Cowles said the market remains fragmented and that the company evaluates more than 50 opportunities per year on average, with roughly a dozen in active evaluation at any time. In Q&A, Witkowski said deal activity can be “choppy,” but he said management expects fiscal 2026 to be “right in” its long-term target range for M&A contribution, with additional opportunities that could extend beyond that.
Bradbury said the company ended the year with net debt of nearly $1.95 billion and leverage of 2.1x, within its 1.5x to 3x target range. Liquidity totaled $1.45 billion, including $220 million of cash. The company returned $155 million to shareholders through share repurchases during fiscal 2025, reducing share count by about 3.2 million. After year-end, it repurchased an additional $39 million of stock (800,000 shares). Bradbury said more than $600 million remained under the repurchase authorization, and indicated buybacks would continue to be a significant part of capital allocation.
Fiscal 2026 outlook: flat end markets, margin improvement targeted
For fiscal 2026, Core & Main guided to net sales of $7.8 billion to $7.9 billion and Adjusted EBITDA of $950 million to $980 million, with operating cash flow conversion of 60% to 70% of Adjusted EBITDA.
Bradbury said the company expects overall end markets to be roughly flat for the year, with confidence in municipal demand but continued caution around private construction due to geopolitical volatility, tariff uncertainty, the interest rate environment and builder confidence. She said management expects above-market volume growth from sales and geographic initiatives and expects adjusted EBITDA margins to rise as gross margin initiatives continue and cost actions roll through.
Management discussed pricing crosscurrents, particularly in PVC. Bradbury said pricing was positive across nearly every product category in the fourth quarter except PVC, resulting in roughly flat pricing overall. In Q&A, she said PVC pricing was down about 15% in fiscal 2025, and that even if PVC stabilizes, the company expects a headwind into the first half to three quarters of fiscal 2026. Executives also said rising fuel and resin costs tied to Middle East developments could lead to increases in certain categories such as PVC and HDPE pipe, which management described as potentially neutral to positive, depending on how disruptions evolve and how demand reacts.
On residential, management provided more specific expectations for fiscal 2026. Bradbury said the company expects residential to be down low double digits to mid-teens early in the year, improving sequentially, potentially reaching roughly flat by the back half as comparisons ease. For the full year, she said the company expects residential to be down mid-single digits, with non-residential roughly flat and municipal growing low single digits.
In closing remarks, Witkowski reiterated the company’s focus on extending advantages, compounding share gains and expanding structural earnings power, pointing to gross margin progress, cost actions and ongoing investments in capabilities and footprint.
About Core & Main (NYSE:CNM)
Core & Main, Inc (NYSE:CNM) is a leading distributor of water, sewer, storm drainage and fire protection products across North America. The company’s product portfolio includes valves, hydrants, pipe and fittings, meters, couplings and other essential components that support municipal, industrial and environmental infrastructure projects. By combining a comprehensive inventory with logistics and technical support, Core & Main helps customers address complex water system and distribution challenges.
With more than 300 branch locations and over 3,500 employees, Core & Main serves a diverse customer base that includes municipalities, contractors, engineers and utility providers.
