Core & Main Reports 11.5% Revenue Growth to $2,038 Million in Q3 Fiscal 2024

Core & Main, Inc. reported a significant increase in financial performance for the third quarter of fiscal 2024, with net sales reaching $2,038 million, an 11.5% increase from $1,827 million in the same period last year. The company's gross profit also rose to $543 million, up from $494 million, although the gross profit margin slightly decreased to 26.6% from 27.0%. The increase in sales was primarily driven by acquisitions and higher end-market volumes, particularly in the pipes, valves, and fittings segment, which saw a 13.4% increase in sales. However, the company experienced a decline in sales for fire protection products, attributed to lower selling prices and reduced market volumes.

In terms of profitability, Core & Main's net income attributable to the company increased by 18.8% to $133 million, compared to $112 million in the prior year. This increase was offset by higher interest expenses, which rose to $36 million from $20 million, and a higher provision for income taxes, which increased to $47 million from $39 million. The effective tax rate for the quarter was 25.1%, up from 19.8% in the previous year, primarily due to a decrease in non-controlling interest ownership, which increased the allocation of net income to taxable entities.

Strategically, Core & Main has been active in acquisitions, completing transactions valued at $748 million in the first nine months of fiscal 2024, compared to $161 million in the same period of the previous year. Notable acquisitions included Green Equipment Company and HM Pipe Products, which are expected to enhance the company's product offerings and market reach. The company operates approximately 350 branches across 49 states, serving around 60,000 customers, including municipalities and private water companies.

Operationally, Core & Main's total assets increased to $6,215 million as of October 27, 2024, up from $5,069 million at the end of the previous fiscal year. The company reported a significant rise in receivables, which reached $1,378 million, reflecting increased sales activity. However, cash and cash equivalents were relatively low at $10 million, indicating a tight liquidity position. The company’s long-term debt also increased to $2,384 million, up from $1,863 million, reflecting its strategy to finance acquisitions and growth initiatives.

Looking ahead, Core & Main anticipates continued growth driven by federal infrastructure investments, particularly in water infrastructure, as outlined in the Infrastructure Investment and Jobs Act. The company remains focused on integrating its recent acquisitions and optimizing its operations to enhance profitability. However, it also faces challenges from fluctuating interest rates and potential supply chain disruptions, which could impact its financial performance in the coming quarters.