Core & Main Reports Q3 Shortfall and Lowers Full-Year Outlook
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Core & Main Inc. Faces Challenges in Third Quarter
Core & Main Inc. (NYSE: CNM), an infrastructure products distributor, has reported earnings for the third quarter that did not meet analyst expectations. The company announced a reduction in its full-year guidance, attributing these adjustments to unexpected weather disruptions and declines in end market volumes. Following the announcement, shares of CNM saw a notable drop of 10.71% in premarket trading.
Performance Overview and Earnings Report
The company's adjusted earnings per share came in at $0.61, which was below the consensus estimate of $0.74. Total revenue was reported at $1.96 billion, reflecting a growth of 5.5% year-over-year; however, this figure also fell short of the anticipated $2.06 billion.
CEO's Insights on Financial Performance
CEO Steve LeClair commented on the results, stating, "We grew net sales by approximately 6% to a new quarterly record of $1.96 billion, reflecting strong growth from acquisitions. However, this growth was partially offset by project delays due to wet weather conditions and lower end-market volumes."
Gross Profit and Margin Analysis
Gross profit increased by 3.4%, amounting to $518 million, although the gross margin experienced a contraction of 50 basis points, reaching 26.4%. Moreover, the adjusted EBITDA saw a decline of 4.8%, totaling $257 million.
Revised Outlook for Fiscal 2024
Looking to the future, Core & Main revised its fiscal 2024 projections, now anticipating full-year net sales between $7.3 billion and $7.4 billion. This marks a decrease from the previous guidance which ranged from $7.4 billion to $7.6 billion. Additionally, the adjusted EBITDA forecast has been lowered to a range of $900 million to $930 million, down from the earlier expectation of $940 million to $990 million.
Long-term Optimism Amidst Current Setbacks
Despite the impact of weather and market conditions on short-term results, LeClair expressed optimism regarding the long-term demand in the company's end markets. He emphasized a belief in the recovery and resilience of the infrastructure sector.
Frequently Asked Questions
What led to the decline in Core & Main's share price?
The share price fell by 10.71% after the company reported Q3 earnings that missed expectations and lowered its full-year outlook.
How did Core & Main perform in terms of revenue?
The company reported revenue of $1.96 billion for Q3, which was a 5.5% increase year-over-year but still lower than the expected $2.06 billion.
What is the updated earnings per share for Core & Main?
Core & Main reported adjusted earnings per share of $0.61, below the consensus estimate of $0.74.
What are the company’s future sales expectations?
Core & Main now expects full-year net sales to be between $7.3 billion and $7.4 billion, down from earlier guidance.
Does Core & Main see a positive outlook in the long term?
Yes, despite current challenges, the CEO remains optimistic about long-term demand in the end markets.
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