Core & Main Inc. (NYSE:CNM) Earnings Fall Short, Shares Drop 10.71% in Pre-market Trading
Core & Main Inc. reported third-quarter earnings below analyst expectations and revised its full-year guidance due to weather disruptions and softer end market volumes. CNM shares plunged by 10.71% in premarket trading following the announcement.
The infrastructure products distributor posted adjusted earnings per share of $0.61, missing the consensus estimate of $0.74. Revenue increased by 5.5% year-over-year to $1.96 billion but fell short of forecasts of $2.06 billion.
CEO Steve LeClair mentioned, "We grew net sales by approximately 6% to a new quarterly record of $1.96 billion, reflecting strong growth from acquisitions that was partially offset by project delays from wet weather conditions and comparably lower end-market volumes."
Gross profit rose by 3.4% to $518 million, although the gross margin contracted by 50 basis points to 26.4%. Adjusted EBITDA decreased by 4.8% to $257 million.
Looking ahead, Core & Main revised its fiscal 2024 outlook, now anticipating full-year net sales of $7.3 billion to $7.4 billion, down from the previous range of $7.4 billion to $7.6 billion. The company also lowered its adjusted EBITDA forecast to $900 million to $930 million from $940 million to $990 million previously.
Despite the near-term challenges posed by weather and market softness, LeClair expressed optimism about long-term demand in the company's end markets.
In conclusion, Core & Main Inc.'s disappointing earnings report and downward revision of its guidance have led to a significant drop in share prices. Investors should closely monitor the company's performance in the coming months to assess its recovery potential.
