Core & Main Inc. posted stronger sales and earnings numbers in its latest fiscal quarter but lowered its forecast for the year as it takes steps to mitigate current market dynamics.
The waterworks and fire protection distributor â no. 6 on IDâs most recent Big 50 list â reported net sales of $2.09 billion for the quarter ending Aug. 3, up 6.6% compared to the same period last year.
Company officials credited higher volumes and recent acquisitions for the increase, particularly in its pipes, valves and fittings, storm drainage and fire protection lines. Those categories combined to offset a decline in its meter product sales.
Net income during the latest quarter rose 11.9% from last year up to $141 million, while gross profit climbed 8.1% to $560 million over that span. Gross profit margin increased from 26.4%to 26.8% year-over-year.
Core & Main CEO Mark Witkowski said that the company benefited from its balanced exposure to end markets, which allowed higher demand from municipalities and stable non-residential construction conditions to offset soft residential lot development.
Witkowski, however, also said that the company has implemented âtargeted actionsâ to improve margins and productivity in an environment âmarked by higher operating expenses and softer residential demandâ â prompting officials to curb their full-year projections.
Core & Main officials now anticipate annual net sales of $7.6 billion to $7.7 billion, down from the $7.6 billion to $7.8 billion range outlined at the end of its first quarter. That would represent full-year sales growth of 2% to 3%.
âWe remain confident in our long-term growth and margin expansion opportunities, and in our ability to balance strategic investments with disciplined cost control to drive continued growth and efficiency,â Witkowski said in a statement. âWith our broad portfolio of products and services, Core & Main is well-positioned to benefit from sustained investment in U.S. water infrastructure.â
