Core & Main (NYSE:CNM) Posts Q3 CY2025 Sales In Line With Estimates, Stock Soars

Water and fire protection solutions company Core & Main (NYSE:CNM) met Wall Streets revenue expectations in Q3 CY2025, with sales up 1.2% year on year to $2.06 billion. The company’s outlook for the full year was close to analysts’ estimates with revenue guided to $7.65 billion at the midpoint. Its non-GAAP profit of $0.89 per share was 26% above analysts’ consensus estimates.

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“I want to thank our teams across the country for their disciplined execution, which continues to advance our strategic priorities and strengthen our position as the partner of choice for our customers,” said Mark Witkowski, CEO of Core & Main.

Company Overview

Formerly a division of industrial distributor HD Supply, Core & Main (NYSE:CNM) is a provider of water, wastewater, and fire protection products and services.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, Core & Main’s sales grew at an incredible 17% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Core & Main’s annualized revenue growth of 8.2% over the last two years is below its five-year trend, but we still think the results were respectable.

This quarter, Core & Main grew its revenue by 1.2% year on year, and its $2.06 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 1.6% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.

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Operating Margin

Core & Main has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.1%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Looking at the trend in its profitability, Core & Main’s operating margin rose by 1.9 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Core & Main generated an operating margin profit margin of 10.7%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Core & Main’s full-year EPS grew at a remarkable 12.4% compounded annual growth rate over the last four years, better than the broader industrials sector.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

Core & Main’s EPS grew at an astounding 23.4% compounded annual growth rate over the last two years, higher than its 8.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into Core & Main’s quality of earnings can give us a better understanding of its performance. A two-year view shows that Core & Main has repurchased its stock, shrinking its share count by 11.9%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

In Q3, Core & Main reported adjusted EPS of $0.89, up from $0.69 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Core & Main’s full-year EPS of $2.46 to stay about the same.

Key Takeaways from Core & Main’s Q3 Results

It was good to see Core & Main beat analysts’ EPS expectations this quarter. We were also happy its EBITDA outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 8.6% to $54.87 immediately after reporting.

Indeed, Core & Main had a rock-solid quarterly earnings result, but is this stock a good investment here? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.