Core & Main Clocks 36% Sales Growth In Q2, Notes Margin Expansion

  • Core & Main Inc CNM reported second-quarter FY21 sales growth of 35.7% year-over-year to ~$1.29 billion, attributable to strong volume growth and price inflation, with price inflation representing approximately half of the net sales increase.
  • The gross margin expanded by 100 bps to 25.1%, reflecting sourcing and pricing improvements.
  • The operating income increased by 67.7% Y/Y to $99.8 million, and the margin expanded by 147 bps to 7.7%.
  • Adjusted EBITDA increased by 56.8% Y/Y to $155.2 million, and margin expanded by 160 bps to 12%.
  • Net Debt Leverage decreased to 3.3x as of August 1, 2021, compared with 5.2x as of May 2, 2021.
  • The company’s outlook for end markets remains positive, and it is confident to deliver above-market results for its stakeholders in 2021 and beyond.
  • Core & Main held $66.6 million of cash and cash equivalents as of August 1, 2021. Net cash used in operating activities year-to-date of $99.1 million, compared to cash generated of $93.2 million a year ago.
  • FY21 Outlook: Core & Main expects Adjusted EBITDA of $470 million - $510 million, representing a year-over-year increase of 37% - 49%.
  • Price Action: CNM shares are trading higher by 0.71% at $26.99 on the last check Tuesday.
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