Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported September 9, 2026 · Beat 5 of last 7 quarters
Core & Main, Inc. reported Q2 FY2026 revenue of $2.15B, in line with consensus, and EPS of $0.94, a beat of 3.4%.
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Data center-related activity nearly doubled year-over-year and now represents a mid-single-digit share of total sales and high single digits of nonresidential work, positioning Core & Main as a direct beneficiary of AI-driven construction through water, wastewater, storm drainage and fire protection content. Management noted these projects also drive second-order municipal water and treatment plant demand as communities expand capacity around new facilities. The affirmed full-year outlook and record greenfield openings suggest the company is investing capacity to capture a multiyear project pipeline, though residential softness and light commercial weakness remain offsets.
Core & Main reported Q2 FY2026 net sales of approximately $2.1B, up 2.5% year-over-year, with volume, price and acquisitions each contributing positively. Adjusted EBITDA grew about 3% to $274M and adjusted EBITDA margin expanded 10 basis points to 12.8%, as SG&A dollars were held roughly flat while sales grew. Adjusted diluted EPS rose 8% to $0.94. Growth was led by treatment plant solutions and fire protection (up 14%), with data center-related activity nearly doubling year-over-year, while residential lot development remained challenged and light commercial and retail stayed soft. The company repurchased $169M of shares in the quarter, its second consecutive quarter of record open market buybacks, and ended with net debt of ~$2.2B and leverage of ~2.3x.
Management affirmed full-year guidance for net sales of $7.8B-$7.9B, adjusted EBITDA of $950M-$980M and operating cash flow conversion of 60%-70%, saying results are in line with expectations. They expect second-half EBITDA margin expansion versus prior year, weighted toward Q4 given a tougher Q3 margin comparison, with a little improvement in both gross margin and SG&A for the full year. Residential is expected to be flat to down slightly in the back half as comparisons ease, landing down mid-single digits for the full year, while municipal stays strong and stable in the low single digits. The M&A pipeline has accelerated over the last 3-6 months, with several opportunities advanced through the LOI stage and in diligence; management reiterated a long-term expectation of 2-4 points of sales growth from M&A and said the pickup should set up good growth in 2027. Greenfield openings remain on track for a record year, with 7 opened so far including 2 recent additions, and the company completed the acquisition of Walker Industries in Hawaii after quarter end.
“Growth in the quarter was driven by continued strength in treatment plant solutions and fire protection, along with a growing contribution from data center projects, which has nearly doubled year-over-year.”
on Data center growth
“We've seen that, I'd say, pick up pretty significantly here over the last 3 to 6 months, and I've been really excited about the opportunities that have come across our desk that our team has sources from a proprietary standpoint, and then we've seen some other ones kind of come to market.”
on M&A pipeline
“The data center is now in the high single-digit range as a percentage of our nonresidential work. So it's great for us. We're well positioned. It looks a lot like our core business.”
on Data center mix
The full-year guide is unchanged — can you dive into the moving pieces, including positive price versus lighter gross margin, and what offsets are within the guide?
Robyn Bradbury said everything is in line with expectations, with margins down from Q1 but made up for in SG&A. She expects second-half EBITDA rate to be positive year-over-year, mostly driven by Q4, with a little improvement in gross margin and SG&A for the full year.
Can you update on municipal PVC pipe pricing and HDPE pricing given resin cost disruption?
Brad Cowles said PVC price increases did not stick and pricing has stabilized in a flattish mode, with no indication of change until demand picks up. Mark Witkowski said corrugated HDPE storm drainage pricing has been relatively steady, while fusible HDPE — a small percentage of sales — has seen some spikes tied to Middle East resin disruption.
Can you size major commercial and data center projects as a percentage of sales, and does the data center cooling approach (evaporative versus closed loop) matter to Core & Main?
Brad Cowles said data center run rate doubled year-over-year, moving from low single digits to mid-single digits of total business and high single digits of nonresidential. He said almost all data centers need water, and the biggest variable is whether the local municipality is prepared to supply treated water or whether private investment in treatment is needed, which can create second-order municipal water demand.