Shares of Core & Main Inc. (CNM) dropped 2.0% in premarket trading on Wednesday. The company, which provides water, storm drainage, and fire protection products and services, reported lower-than-expected profits for the fiscal second quarter and revised down its full-year sales growth outlook. Core & Main cited “pockets of weakness” in new projects as the reason for the disappointing results.
Fiscal Second Quarter Results
Core & Main’s net income for the quarter ending July 30 declined to $110 million, or 66 cents per share, compared to $115 million, or 67 cents per share, in the same period last year. This fell short of the FactSet consensus estimate of 67 cents per share. Sales remained flat at $1.86 billion, meeting expectations. The company’s acquisitions and higher selling prices were offset by lower volume.
Revised Sales Guidance for Fiscal 2023
In light of the challenges faced in the second quarter, Core & Main adjusted its sales guidance for fiscal year 2023. The company now expects sales in the range of $6.6 billion to $6.8 billion, down from the previous range of $6.6 billion to $6.9 billion. The current FactSet consensus estimate for sales in fiscal 2023 is $6.7 billion.
Chief Executive’s Statement
Chief Executive Steve LeClair commented on the company’s performance, stating, “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.”
Stock Performance
Despite the recent setback, Core & Main shares have been performing well in the market. The stock reached a record high of $33.02 on August 30 and has gained 12.4% over the past three months. In comparison, the S&P 500 has seen a 5.0% increase during the same period.