Core & Main’s third quarter was met with a positive reaction from the market, reflecting modest growth and stable margins despite ongoing pressures in certain end markets. Management pointed to continued strength in municipal construction, as well as disciplined pricing and gross margin expansion, as key drivers. CEO Mark Witkowski emphasized Core & Main’s resilience, citing the company’s “national scale and resources, local market expertise, and comprehensive product solutions” as central to its performance. While residential demand remained subdued—particularly in the Sun Belt—the company benefited from acquisitions and solid execution in nonresidential and municipal segments.
Is now the time to buy CNM? Find out in our full research report (it’s free for active Edge members).
Core & Main (CNM) Q3 CY2025 Highlights:
- Revenue: $2.06 billion vs analyst estimates of $2.05 billion (1.2% year-on-year growth, in line)
- Adjusted EPS: $0.72 vs analyst estimates of $0.71 (1.8% beat)
- Adjusted EBITDA: $274 million vs analyst estimates of $269.5 million (13.3% margin, 1.7% beat)
- The company reconfirmed its revenue guidance for the full year of $7.65 billion at the midpoint
- EBITDA guidance for the full year is $930 million at the midpoint, in line with analyst expectations
- Operating Margin: 10.7%, in line with the same quarter last year
- Organic Revenue was flat year on year vs analyst estimates of flat growth (19 basis point beat)
- Market Capitalization: $10.47 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Core & Main’s Q3 Earnings Call
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Brian Biros (Thompson Research Group) asked about growth in large complex projects, especially data centers, and CEO Mark Witkowski explained that local relationships and geographic reach have helped capture demand, with data center-related sales quickly growing from a small base.
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Matthew Bouley (Barclays) inquired about margin sustainability and SG&A trends. CFO Robyn Bradbury clarified that third quarter gross margin may be the peak for the year, but ongoing initiatives should support annual expansion, while fourth quarter SG&A will reflect partial realization of cost actions.
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David Manthey (Baird) questioned the outlook for residential softness and private label impact. Bradbury stated residential activity remained subdued in key Sun Belt markets and private label, now 5% of sales, is expected to drive further margin gains as it grows toward the long-term target.
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Nigel Coe (Wolfe Research) focused on the timeline and further scope for SG&A productivity. Bradbury confirmed that some cost actions will continue to benefit results into next year, with future gains aimed at back-office automation and technology-driven efficiencies.
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Joseph Ritchie (Goldman Sachs) asked about constraints on scaling private label and the strategy for deeper data center participation. Witkowski cited ongoing investments in engineering, logistics, and customer acceptance as key to accelerating private label, while continued geographic and customer relationship investments are needed to expand in data centers.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch (1) the pace of spending from state and federal infrastructure funds, (2) the rate of private label product adoption and its margin impact, and (3) the realization of SG&A cost savings and further productivity gains from technology investments. Progress on greenfield branch openings and the integration of the Canadian acquisition will also be important to track.
Core & Main currently trades at $55.43, up from $50.52 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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