Core & Main Inc Q3 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Matthew Bouley - Barclays Services Corp - Analyst : Good morning, everyone. Thank you for taking the questions. I wanted to follow up on the end market side. Obviously, you just touched on muni. What I'm getting at is if you have any kind of early thoughts on 2026. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 09, 2025 / 12:30PM, CNM.N - Q3 2025 Core & Main Inc Earnings Call So given where municipal is, I think I heard you say residential might have been some signs of stabilization in Q3. Obviously, you got non-reservoir it sounds like the data center piece is driving things. So just I don't know, any help on kind of early thoughts and directional trends into 2026 there? Thank you.

Question: Matthew Bouley - Barclays Services Corp - Analyst : Okay. Got it. Second one, kind of jumping into the margins. Obviously, a solid gross margin result there above 27%. So if I heard you correctly, I think you said SG&A would be down $25 million sequentially in Q4. And correct me if I'm wrong, but that seems to imply the gross margin probably ends up fairly similar sequentially. So I'm just curious if this kind of 7% level is sort of a new normal here? And any sort of additional color there on what's driving this there? Thank you.

Question: Matthew Bouley - Barclays Services Corp - Analyst : Great. Thanks, Robin. Good luck, guys.

Question: David Manthey - Robert W. Baird & Co Inc - Analyst : Thank you. Good morning, everyone. First question on the top line. Last quarter, you said you expected residential to continue to soften through the second half. And Robyn, if I heard you right, you said you're seeing stabilization at the end of the third quarter. I don't want to read too much into that, and I know it's not getting stronger, but is that a slightly more optimistic residential view than you were expecting 90 days ago?

Question: David Manthey - Robert W. Baird & Co Inc - Analyst : Okay. Thank you. And Second, on gross margin. With private label at 5% of the mix, it doesn't seem large enough to move the needle. I know you talked about it a lot, and I'm sure there's a wide disparity between all other products and private label. But could you maybe talk about the magnitude of that in terms of stack ranking relative to gross margin benefit? And then you mentioned some of the other sourcing and pricing initiatives. Could you really lean into those a little bit and give us an idea of maybe some of those other buckets that are lifting gross margin? And how much opportunity remains in the coming, say, one to three years?

Question: David Manthey - Robert W. Baird & Co Inc - Analyst : Terrific. Thank you.

Question: Nigel Coe - Wolfe Research. - Analyst : Thanks, good morning, guys. Just want to go back to SG&A. So the guide for 4Q, does that fully embed the run rate of SG&A savings? That $30 million analyzed that will be baked into 4Q? And then on the one hand, you're talking about you're running very lean right now. But then I think the slides, and you referenced you're exploring further opportunities. So it's actually wondering what kind of direction you're moving in, in terms of looking at further productivity?

Question: Nigel Coe - Wolfe Research. - Analyst : Yeah. The second part of the question was really around -- on the one hand, you're talking about you're running very lean, you're not going to sacrifice growth initiative, et cetera. But then you also then talk about other productivity actions you're exploring. So I'm just wondering what direction you see above and beyond that $30 million?

Question: Nigel Coe - Wolfe Research. - Analyst : Okay. I'll leave it there. Thanks.

Question: Joe Ritchie - Goldman Sachs - Analyst : Hi, good morning, guys. So, I wanted to touch on the private label discussion again. Can you just -- maybe just elaborate on what the constraint is on potentially moving private label in that initiative since you are seeing some good gains from that? And then where are you seeing the biggest penetration across your product lines or systems?

Question: Joe Ritchie - Goldman Sachs - Analyst : Got it. That's helpful, Mark. And then I guess my follow-on question, look, it's interesting to hear you talking about the data center opportunity. Clearly, that is going to continue to accelerate, and there's a lot of momentum in the market. I guess as you think about your positioning, your capabilities, whether you need to make investments in certain regions in order to participate in a more meaningful way going forward. Maybe just kind of talk a little bit through like whether there is additional investment that's necessary. And then also, to some degree, why it's such a small portion of your business today, given that there has been development over the last few years?

Question: Anthony Pettinari - Citi - Analyst : Good morning. Robyn, you had talked about cost inflation running kind of mid-single digit versus maybe more typical low single-digit rate. And I'm wondering if you could give any more context in terms of the drivers there? And then just maybe in terms of cadence, like when those comps get easier when you might expect that rate to normalize or any other color there? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 09, 2025 / 12:30PM, CNM.N - Q3 2025 Core & Main Inc Earnings Call

Question: Anthony Pettinari - Citi - Analyst : Okay. That's very helpful. And then just following up on data centers. Mark, I think that you made a reference to these being quick projects. I'm not sure if I heard that right. But in terms of kind of visibility into these projects, maybe time line, I'm sure it's hard to generalize, but is it possible to talk about sort of maybe what a typical project looks like in terms of your visibility into the demand and the time line and completing that?

Question: Anthony Pettinari - Citi - Analyst : Very helpful. I'll turn it over. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 09, 2025 / 12:30PM, CNM.N - Q3 2025 Core & Main Inc Earnings Call

Question: Patrick Baumann - JPMorgan Chase & Co. - Analyst : Good morning. Had a couple cleanups here. Just on pricing, I think you said muni PVC pipe down about 15% in the quarter year-over-year kind of implies everything else was up like low single digits. Is that -- is that right? And then is that kind of that algo? Do you expect that to continue into '26 such that prices on net will remain stable?

Question: Patrick Baumann - JPMorgan Chase & Co. - Analyst : What are you seeing in other commodity products outside of the PVC stock? Yeah...

Question: Patrick Baumann - JPMorgan Chase & Co. - Analyst : And Doctor Iron is also up?

Question: Patrick Baumann - JPMorgan Chase & Co. - Analyst : Okay. And then on the M&A pipeline, can you just talk about like what you're seeing there? We've been a little bit of a lull here in terms of activity, what's causing that? And what -- how should we think about you guys deploying capital to M&A over the next 6 to 12 months? . LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 09, 2025 / 12:30PM, CNM.N - Q3 2025 Core & Main Inc Earnings Call

Question: Sam Reid - Wells Fargo Securities LLC - Analyst : Thanks for taking my question. Just looking for a little bit more detail on the SG&A cuts. And perhaps could you just give us a sampling of some of the, call it, maybe more back-office type jobs that you're eliminating as part of this process? Are they concentrated at the branch level more skewed towards corporate? Just love some additional perspective there.

Question: Sam Reid - Wells Fargo Securities LLC - Analyst : That helps, Robyn. And then to switch gears here, just want to drill down a little bit on the muni -- or the meter business, I should say. It sounds like you were awarded a meter contract this quarter, if I'm not mistaken. Just maybe a little additional context on that. And then talk to the high single-digit growth -- just maybe give me some context on whether that's coming from newer projects or whether that's more kind of just recurring from kind of some of your longer-term meter contracts? Thanks.

Question: Sam Reid - Wells Fargo Securities LLC - Analyst : All really helpful. Thanks so much.

Question: Matthew Johnson - UBS - Analyst : Hey, good morning, guys. Appreciate the time. I guess first half, if we could just talk a little bit about Greenfields. I think you guys have opened five year-to-date is what you said. I guess could you guys provide a little more color on, I guess, your ambitions for the rest of the year. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 09, 2025 / 12:30PM, CNM.N - Q3 2025 Core & Main Inc Earnings Call Are there any specific markets that you're targeting, whether it be in the U.S. or Canada? And then its target for FY26 also to open 5 to 10 new Greenfields?

Question: Matthew Johnson - UBS - Analyst : That's great. Thanks Mark. And then I guess just one more for me. You guys talked a little bit about some of the different state funding that's gone, I think, across Texas, New York and Arkansas. And I think the number in Texas is far larger around $20 billion. So I guess, could you guys talk a little bit about how large the Texas market is for you guys and kind of what your participation rate looks like in that state and kind of how impactful you think this new bill could be for you guys moving forward?