Core & Main (CNM) Q2 2027 earnings summary

Executive summary

• Net sales grew 2.5% year-over-year to $2,145 million in Q2, driven by volume, price, and acquisitions, with municipal demand and large capital projects as key growth drivers.

• Adjusted EBITDA increased 3.0% to $274 million, with margin up 10 basis points to 12.8%; Adjusted Diluted EPS rose 8% to $0.94.

• Net income rose 6.4% to $150 million, and diluted EPS increased 10% to $0.77, reflecting higher operating income and share repurchases.

• Year-to-date, $270 million was deployed for share repurchases, with seven greenfield locations opened and a robust M&A pipeline.

• Full-year fiscal 2026 outlook reaffirmed, citing strong municipal demand, robust acquisition pipeline, and ongoing investment in growth initiatives.

Financial highlights

• Q2 net sales increased 2.5% year-over-year to $2,145 million, with all growth drivers contributing.

• Gross profit for Q2 increased 2.3% to $573 million, with gross margin at 26.7%.

• SG&A expenses decreased 0.3% to $301 million, improving as a percentage of sales to 14.0%.

• Operating income rose 6.6% to $227 million in Q2.

• Free cash flow yield reached 7.5% of market capitalization over the last 12 months.

Outlook and guidance

• Fiscal 2026 net sales guidance reaffirmed at $7.8–$7.9 billion, with Adjusted EBITDA expected between $950–$980 million and margin of 12.2–12.4%.

• Operating cash flow conversion targeted at 60–70%.

• Expects EBITDA margin expansion in the back half, driven by gross margin and SG&A leverage, with most improvement in Q4.

• Residential expected to be flat to slightly down in the second half, with easier comps supporting overall growth.

• M&A expected to contribute 2–4 points of incremental sales growth long-term as pipeline activity accelerates.