Why This Matters to Distributors: Core & Main is using acquisitions and new branch openings to expand despite weaker residential and commercial construction demand. Three recent acquisitions add more than $250 million in combined annual sales and strengthen their position in stormwater management, specialized piping, and utility technology. The expansion highlights how distributors are investing in technical services and infrastructure markets to generate growth while higher transportation and operating costs pressure earnings.
Core & Main has acquired three businesses with more than $250 million in combined annual sales, expanding its water infrastructure distribution operations as weaker residential and commercial construction demand and higher transportation costs weigh on earnings.
The St. Louis-based distributor announced the acquisitions Nov. 10, along with preliminary third-quarter results showing sales growth of approximately 3% and a decline in net income. The company also lowered the upper end of its full-year earnings forecast, citing higher transportation expenses and investments in new branches.
The acquisitions, completed between September and November, add 16 locations across the United States and Canada. They expand Core & Main’s presence in stormwater management, specialized piping and utility metering technology while adding technical services for municipalities, utilities, and contractors.
The company also opened eight new branches during the first nine months of fiscal 2026, a record for that period.
“We continue to execute our strategy across multiple avenues for growth, strengthening our platform through acquisitions in storm drainage, fusible HDPE and smart utility solutions and completing another record quarter of open market share repurchases,” CEO Mark Witkowski said.
“We also continue to invest organically in our business, opening a record eight greenfield locations year to date,” he said.
Core & Main’s latest acquisitions expand their product offerings and technical capabilities in three areas of infrastructure distribution.
In September, the company acquired Southwest Stormwater Solutions, a Phoenix-based provider of underground stormwater vault systems used by municipalities, contractors, and civil engineers. The acquisition adds specialized stormwater management products used to control runoff and support municipal infrastructure projects.
In October, Core & Main acquired Gajeske LLC, a Houston-based distributor of high-density polyethylene pipe and fittings.
Gajeske operates eight locations across Texas and Oklahoma. In addition to distributing piping products, the company provides fabrication, equipment rental, and other services. The acquisition expands Core & Main’s technical capabilities and geographic coverage in the Southwest, particularly for contractors working on water and infrastructure projects.
In November, Core & Main acquired KTI Limited and KTI Utility Services, based in Toronto.
KTI operates seven locations across Ontario and Alberta, distributing utility metering products and providing installation and related field services. Its offerings include advanced metering infrastructure, which allows utilities to collect and manage water usage information electronically.
The acquisition expands Core & Main’s Canadian operations and adds utility technology and installation capabilities to its existing distribution business.
Core & Main did not disclose the individual purchase prices or annual sales of the acquired businesses. Together, the three companies generate more than $250 million in annual revenue.
The acquisitions come as Core & Main faces uneven demand across its construction and infrastructure markets.
The company expects third-quarter sales of $2.12 billion to $2.13 billion, compared with $2.06 billion a year earlier, an increase of 2.8% to 3.3%.
Net income is expected to range from $128 million to $140 million, compared with $143 million in the third quarter of fiscal 2025. That represents a decline of 2.1% to 10.5%.
Core & Main attributed the earnings pressure partly to higher transportation costs and investments in new locations. Municipal demand remained stable, but residential lot development and light commercial construction activity were weaker than anticipated.
The company said acquisitions helped support sales growth despite the uneven demand.
The preliminary results cover the quarter ended Nov. 1 and remain subject to revision as Core & Main completes its financial review. The company expects to release final third-quarter results Dec. 8.
Core & Main maintained its fiscal 2026 sales forecast of $7.8 billion to $7.9 billion but lowered the upper end of its adjusted earnings outlook.
The company now expects adjusted earnings before interest, taxes, depreciation, and amortization of $950 million to $960 million, compared with its previous forecast of $950 million to $980 million. The revised forecast reduces the upper end of the range by $20 million.
Core & Main cited higher transportation expenses, investments in new locations and softer-than-expected residential and light commercial construction demand. The company expects stable municipal demand and sales from recently acquired businesses to partially offset those pressures.
Core & Main did not provide a revised full-year net income forecast.
The company is also expanding its distribution network through new branch openings. Core & Main opened eight locations during the first nine months of fiscal 2026, its highest number for that period.
The expansion is intended to increase geographic coverage and improve access to customers in water, wastewater, storm drainage, and fire protection markets. New branches require investments in facilities, staffing, inventory, and transportation before reaching their expected sales levels.
Core & Main identified spending on new locations as one factor affecting third-quarter earnings.
The company operates more than 370 locations across the United States and Canada and employs approximately 5,600 people. Its customers include municipalities, private water companies and contractors serving residential, commercial, and public infrastructure markets.
Core & Main also reported a third consecutive quarter of record open-market share repurchases. The company bought back $171 million of its shares during the third quarter, bringing its fiscal year-to-date total to approximately $428 million.
About $240 million remained available under its existing share repurchase authorization. The repurchases come as Core & Main continues to invest in acquisitions and new distribution locations.
The company did not disclose the combined purchase price of its three latest acquisitions.
Core & Main’s acquisitions reflect its strategy of expanding beyond traditional waterworks distribution into specialized infrastructure products and services.
Southwest Stormwater Solutions adds stormwater management systems. Gajeske brings specialized piping, fabrication, and equipment rental capabilities. KTI expands the company’s utility metering technology and installation services.
The businesses also increase Core & Main’s exposure to municipal infrastructure and utility markets, where demand has remained more stable than in residential lot development and light commercial construction.
The strategy comes as distributors serving construction markets face uneven demand and higher operating costs. Core & Main’s preliminary results show that acquisitions and new branch openings are supporting sales growth but have not prevented earnings from declining.
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