Core & Main misses profit expectations, sees 'pockets of softness' in new projects

Shares of Core & Main Inc. (CNM) slumped 2.0% in premarket trading Wednesday, after the provider of water, storm drainage and fire protection products and services to contractors and municipalities missed fiscal second-quarter profit expectations and trimmed its full-year sales growth outlook, citing "pockets of weakness" in new projects. Net income for the quarter to July 30 slipped to $110 million, or 66 cents a share, from $115 million, or 67 cents a share, in the year-ago period, to miss the FactSet consensus for earnings per share of 67 cents. Sales were flat at $1.86 billion, in line with expectations, as acquisitions and higher selling prices were offset by lower volume. For fiscal 2023, the company lowered its sales guidance range to $6.6 billion to $6.8 billion from $6.6 billion to $6.9 billion, compared with the current FactSet consensus of $6.7 billion. "Pricing and margins are sustaining against improving supply chains, but we are beginning to see pockets of softness for new non-residential project starts in select markets," said Chief Executive Steve LeClair. The stock, which closed at a record high $33.02 on Aug. 30, has climbed 12.4% over the past three months through Tuesday, while the S&P 500 has gained 5.0%.

-Tomi Kilgore

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09-06-23 0822ET

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