Core & Main Inc., the St. Louis-based distributor of water, wastewater, storm drainage and fire protection products, is leaning on infrastructure projects and acquisitions to drive growth in 2025 while residential demand cools.
“For the quarter, our teams delivered strong growth in critical infrastructure despite a slowdown in housing,” CEO Mark Witkowski told analysts during the company’s second-quarter update. “We’re investing in new markets and capabilities, strengthening customer relationships, and building a platform for long-term growth.”
Municipal demand remained steady, supported by repair and replacement work, metering infrastructure conversions, and new water and wastewater treatment facilities. Nonresidential activity also held up, with highway, street, and institutional projects leading the way. Data centers, while still a small part of the sales mix, are emerging as a growth driver.
By contrast, residential lot development—about 20% of Core & Main’s revenue—slowed as higher interest rates and affordability concerns weighed on homebuilding, particularly in Sunbelt markets. Witkowski said the company has lowered its residential outlook for the remainder of the year.
Core & Main is advancing targeted initiatives, including treatment plant projects and fusible high-density polyethylene applications, which it says continue to win share. Meter product sales fell due to project delays, but executives expect a backlog in contracts to lift results in the second half. The company is also strengthening ties with large regional and national contractors that need consistent service and supply across multiple markets.
The distributor continues to expand its footprint. It recently opened branches in Kansas City, Kansas, and Columbus, Wisconsin, and plans additional locations this year. Last month, it announced the acquisition of Canada Waterworks, a three-branch distributor in Ontario, its fifth location in the province since entering Canada. Witkowski said the deal expands Core & Main’s platform in the multibillion-dollar Canadian infrastructure market.
For the quarter ending Aug. 3, net sales rose 6.6% to $2.09 billion, up from $1.96 billion a year earlier. Net income climbed 11.9% to $141 million, compared with $126 million last year. Diluted earnings per share increased to $0.70, from $0.61. Gross profit grew 8.1% to $560 million, while operating income edged up 4.4% to $213 million.
Year-to-date results also showed gains. For the first half of fiscal 2025, net sales rose 8.1% to $4.0 billion from $3.71 billion a year earlier. Net income increased 8.4% to $246 million, while diluted earnings per share rose to $1.22 from $1.11. Gross profit grew 8.5% to $1.07 billion.
The company is also working to rein in expenses after higher employee benefits and distribution costs weighed on margins. Witkowski said targeted cost reductions are expected to yield savings in the second half of 2025 and into 2026.
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