Key insights
- Core & Main (CNM) reported Q1 FY2026 results with flat revenue but improved margins and EPS, driven by operating discipline rather than high growth. Despite a slight revenue miss and minimal growth, the company demonstrated strong cost management, leading to higher net income and adjusted EBITDA. Reaffirmed guidance suggests continued focus on profitability. The results indicate resilience in a challenging environment but lack strong forward momentum for the broader market.
CNM Q1 FY2026:
Revenue: $1.91B vs. $1.90B expected Adjusted EPS: $0.70 vs. $0.68 expected EPS surprise: +2.9% Revenue growth: -0.1% Gross margin: 27.2%, up 50 bps Operating cash flow: $82M
Net sales were basically flat as weaker pipe, valve, fitting, and storm drainage volumes offset acquisition benefits.
But the company still expanded margins.
Gross profit rose 2% to $520M.
Net income increased 7.6% to $113M.
Diluted EPS rose 9.6% to $0.57.
Adjusted EBITDA increased to $226M, with adjusted EBITDA margin improving to 11.8%.
The company also repurchased $88M of stock during the quarter and another $37M after quarter-end.
Guidance was reaffirmed:
FY2026 revenue: $7.8B to $7.9B Adjusted EBITDA: $950M to $980M Adjusted EBITDA margin: 12.2% to 12.4%
This was not a high-growth quarter.
It was an operating discipline quarter.
Flat revenue, better margins, higher EPS, cash generation, and buybacks.