Core & Main Gains As Increased Demand Drives Profit Higher

Core & Main Inc CNM reported third-quarter FY22 sales growth of 29.4% year-on-year, to $1.82 billion, beating the consensus of $1.71 billion.
Gross profit margin increased 110 basis points to 27.5%, and the gross profit rose 35% to $500 million.
Selling, general and administrative expenses climbed 22.9% to $231 million.
Operating margin was 12.8%, and operating income for the quarter rose 59% to $234 million.
Net cash provided by operating activities for nine months totaled $94 million. Inventories at the end of Q3 jumped 34% to $1.1 billion.
Adjusted EBITDA increased 45.5% to $275 million, and the margin expanded 160 basis points to 15.1%.
EPS of $0.65 beat the analyst consensus of $0.57.
"We delivered our eighth consecutive quarter of double-digit year-over-year net sales growth, with third quarter net sales exceeding our expectations due to healthy end-market demand, robust performance across our growth initiatives and continued price realization," said CEO Steve LeClair.
Outlook: Core & Main sees FY22 adjusted EBITDA of $910 million - $930 million (prior view $840 million - $890 million).
Price Action: CNM shares are trading higher by 3.25% at $21.26 on the last check Tuesday.

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