Core & Main, Inc., a leading specialty distributor dedicated to advancing reliable infrastructure, has announced its fiscal 2026 first quarter results, showcasing strong EPS growth, significant share repurchases, and a reaffirmed full-year outlook. Despite operating in a dynamic macroeconomic environment, the company delivered solid results, underscoring its disciplined execution and strategic priorities.
During the quarter, Core & Main's net sales remained essentially flat at $1,910 million, compared to $1,911 million in the same period last year. However, this stability was achieved amidst decreased volume, which was offset by strategic acquisitions. The company's sales initiatives, particularly in the treatment plant solutions and smart utility categories, drove double-digit and high-single-digit growth, respectively. This growth reflects the ongoing demand for integrated solutions to support aging water infrastructure, a critical aspect of Core & Main's business.
The company's gross profit increased by $10 million, or 2.0%, to $520 million, with gross profit as a percentage of net sales rising to 27.2% from 26.7% in the prior year. This improvement was primarily driven by the execution of gross margin initiatives and disciplined purchasing and pricing management. Core & Main also expanded its footprint with five new greenfield locations in attractive markets, demonstrating its commitment to growth and strategic expansion.
In terms of operational expenses, selling, general, and administrative (SG&A) expenses increased by $6 million, or 2.0%, to $299 million. This increase was largely attributable to higher distribution costs and investments in long-term growth initiatives, including greenfield expansion and sales initiatives. However, the company also benefited from recent cost actions, which helped to partially offset these increased expenses.
Operating income for the quarter increased by $6 million, or 3.5%, to $177 million, driven by higher gross profit and partially offset by higher SG&A expenses. Net income also rose by $8 million, or 7.6%, to $113 million, highlighting the company's ability to generate strong earnings amidst a challenging market environment.
Core & Main's CEO, Mark Witkowski, attributed the company's success to the disciplined execution of its teams across the country, which has advanced the company's strategic priorities and strengthened its position with customers. Witkowski also emphasized the company's continued focus on executing growth initiatives, expanding margins, and supporting customers on complex infrastructure projects, all of which are critical to creating long-term value for shareholders.
As the company looks ahead to the remainder of fiscal 2026, it remains focused on its growth initiatives, including the expansion of its smart utility and treatment plant solutions categories. With its strong balance sheet and disciplined approach to capital allocation, Core & Main is well-positioned to navigate the dynamic market conditions and deliver long-term value to its shareholders. The company's commitment to advancing reliable infrastructure and supporting local service, nationwide, underscores its dedication to creating a sustainable and resilient future for its customers and stakeholders.
In conclusion, Core & Main's fiscal 2026 first quarter results demonstrate the company's ability to deliver strong EPS growth, execute significant share repurchases, and reaffirm its full-year outlook, despite operating in a challenging market environment. With its disciplined execution, strategic priorities, and commitment to growth and expansion, Core & Main is poised for continued success in the specialty distribution industry.
Core & Main's history dates back to 2017, when it was formed through the combination of several leading waterworks distributors. Since then, the company has undergone significant transformations, including a successful initial public offering (IPO) in 2021. Today, Core & Main is one of the largest specialty distributors in the United States, with a strong presence in the water, wastewater, and storm drainage markets.
The company's business model is centered around providing a comprehensive range of products and services to its customers, including pipes, valves, fittings, and other infrastructure-related products. Core & Main's customers include municipal and private water and wastewater utilities, as well as contractors and engineers who work on infrastructure projects. The company's focus on local service, nationwide, enables it to provide personalized support to its customers, while also leveraging its national scale to drive efficiency and innovation.
In terms of its competitors, Core & Main operates in a highly fragmented industry, with several smaller players competing for market share. However, the company's strong brand reputation, extensive product offerings, and commitment to customer service have enabled it to maintain a leadership position in the market. As the industry continues to evolve, Core & Main is well-positioned to capitalize on emerging trends and opportunities, including the growing demand for smart utility and treatment plant solutions.
Core & Main delivered strong EPS growth and significant share repurchases in fiscal 2026 Q1, despite a dynamic macroeconomic environment.
The company's net sales remained essentially flat, driven by decreased volume offset by acquisitions, while gross profit increased by 2.0% to $520 million.
Core & Main expanded its footprint with five new greenfield locations, demonstrating its commitment to growth and strategic expansion.
The company's operating income increased by 3.5% to $177 million, driven by higher gross profit and partially offset by higher SG&A expenses.
Core & Main's CEO emphasized the company's continued focus on executing growth initiatives, expanding margins, and supporting customers on complex infrastructure projects.