Core & Main : Fiscal Year 2025 Annual Report

About this update from Core & Main, Inc.

FISCAL YEAR 2025 ANNUAL REPORT FISC III | FISCAL 2025 ANNUAL REPORT FISCAL 2025 ANNUAL REPORT | III MESSAGE TO OUR SHAREHOLDERS Mark Witkowski CHIEF EXECUTIVE OFFICER Dear Shareholders, Fiscal 2025 was a year of disciplined execution for Core & Main, as we continued to advance our mission of delivering essential infrastructure products and solutions that support communities' water, wastewater, storm drainage, and fire protection needs. In a dynamic operating environment, our teams delivered consistent performance by focusing on what we do best: serving our customers with deep local expertise, powered by continued investment in our people and enabled by our nationwide network that allows us to deliver precisely when and where our customers demand. Demand for reliable water, wastewater, storm drainage, and fire protection infrastructure remains essential. Long-term drivers - including aging infrastructure, population growth, and increasing system complexity - continue to support durable demand. Our diversified end-market exposure, resilient municipal demand, and expanding role as a solutions partner for increasingly complex projects enabled us to deliver our 16th consecutive year of sales growth. We generated approximately $7.6 billion in net sales, $931 million of Adjusted EBITDA, 7% growth in Adjusted Diluted EPS, and robust operating cash flow conversion from Adjusted EBITDA of 70%, reflecting steady execution across our portfolio. We continued to gain share by expanding higher-growth product lines, including meters, treatment plant solutions, fusible high-density polyethylene, and geosynthetics, strengthening our private label offering, and continuing to invest in our branch network through greenfields and acquisitions, as well as in our people and capabilities. We also sharpened our strategic focus and evolved our leadership team to support our next phase of growth, aligning the organization around expanding our solutions capabilities, scaling our footprint, and driving productivity through technology enhancements. A defining strength of Core & Main is our operating model. Our local teams build strong customer relationships and bring deep knowledge of their markets and a consultative sales approach, while our regional and national teams provide technical expertise and support for more complex projects. These teams are backed by our national scale across sourcing, logistics, technology, and product availability, ensuring reliable, efficient execution. This combination creates meaningful value for both customers and suppliers and continues to differentiate us in a highly fragmented market. During the year, we invested in technology to enhance productivity, improve efficiency, and support scalable growth while maintaining service levels and continuing to invest in growth-focused roles. Our strong cash generation enabled us to invest in the business while also returning $155M to shareholders through share repurchases. Looking ahead, our priorities are clear: drive profitable growth and margin enhancement, expand higher-growth product categories, scale through greenfields and disciplined M&A, and continue investing in technology and innovation to enhance productivity and elevate the customer experience. We also see opportunity to expand in underpenetrated markets and deepen our capabilities in more complex infrastructure solutions. We continue to generate strong cash flow, which enables us to invest in the business to drive organic sales growth, pursue disciplined M&A, and return capital to shareholders through share repurchases. These initiatives position Core & Main to continue gaining share and drive long-term value creation. I want to thank our associates for their dedication and execution. My time spent with our teams, customers and suppliers over the past year has reinforced what makes Core & Main special - our people, our culture, and our focus on execution. We are proud to play a critical role in advancing reliable infrastructure that communities depend on every day. Sincerely, Mark Witkowski Chief Executive Officer FISCAL 2025 ANNUAL REPORT | IV Advancing Reliable Infrastructure with Local Service, Nationwide. Core & Main is a leading specialty distributor of water infrastructure products and services in North America, supporting the repair, upgrade, and expansion of critical water systems. Through our network of 370+ branches across the U.S. and Canada, we serve 60,000+ municipalities, private water companies and professional contractors across municipal, non-residential and residential end markets. 370+ BRANCHES ~5,600 ASSOCIATES 60K+ CUSTOMERS 225K+ PRODUCTS 5K+ SUPPLIERS Headquarters Branch locations FISCAL 2025 ANNUAL REPORT | V HELPING COMMUNITIES THRIVE We provide specialized solutions that help communities access clean water, manage wastewater, mitigate flooding, and protect lives and property. Water and Wastewater Treatment Pipe, Valves and Fittings Lab, Plant and Field Operations Products Fabricated Fire Protection Pipe and Sprinklers Smart Metering Solutions Reclaimed Water Systems Geosynthetics Sewer Lines and Lift Station Equipment Storm Water Retention Systems Ductile Iron and PVC Pipe, Valves, Fittings and Hydrants Corrugated HDPE Pipe Storm Drainage, Manholes & Structures Fusible HDPE Pipe, Fittings and Fusion Rental Our products and services are critical in fostering stronger, more resilient communities. MITIGATE WATER SCARCITY IMPROVE WATER QUALITY REDUCE IMPACTS FROM FLOODING PROTECT LIVES & PROPERTY FROM FIRE FISCAL 2025 ANNUAL REPORT | VI FISCAL 2025 ANNUAL REPORT | VI UNPARALLELED VALUE PROPOSITION Largest customer for many suppliers Limited or exclusive distribution rights in key product categories Large, fragmented customer base Strong, recurring customer dynamic with long-standing relationships CUSTOMERS Broad product portfolio and differentiated services Deep knowledge of products and local specifications Consultative sales approach Proprietary technology platforms to enhance customer experience Differentiated delivery capabilities and jobsite support SUPPLIERS Broadens salesforce and geographic reach Access to fragmented customer base Greater understanding of market and growth opportunities Ability to drive adoption of new products and technologies Logistics of last-mile delivery and customer support VII FISCAL 2025 ANNUAL REPORT | VII CASE STUDY Water Main Repair Requires a Creative, Custom Solution A major water main break beneath Interstate 64 in St. Louis, Missouri caused flooding and significant disruption, highlighting the challenges of repairing aging infrastructure in dense urban environments. While the immediate emergency response was completed quickly, the permanent repair required a highly customized approach due to the size, age, and construction of the damaged pipe. Core & Main partnered closely with the contractor to assess site conditions and develop a unique solution. Our local team worked on site to take precise field measurements and evaluate repair options, then leveraged national supplier relationships to design and fabricate custom pipe-to-flange reducers engineered specifically for the project. These components were manufactured on an accelerated timeline to support efficient installation. During construction, unforeseen challenges emerged, requiring real-time problem solving. Core & Main responded quickly by sourcing alternatives and coordinating adjustments to keep the project moving with minimal delay. The result was a reliable, efficient repair that minimized labor, reduced disruption, and restored critical infrastructure-demonstrating how our combination of local expertise and national scale enables us to solve complex infrastructure challenges for the communities we serve. "They take care of us, and they do it over and over again. It doesn't matter how small or large the problem is, they take care of us." Tim, Bates Utility Company Inc, President "Our professional long tenured sales team quickly analyzed the situation and because of our vast knowledge and experience, was able to partner with a key supplier partner to prioritize the fabrication of two custom pipe-to-flange reducers." Jon, Core & Main, Outside Sales Representative SALES INITIATIVES DRIVING MARKET SHARE GAINS Meters Treatment Plant Solutions Fusible HDPE IX | FISCAL 2025 ANNUAL REPORT Industry-Leading Capabilities Drive Consistent Above Market Growth Geosynthetics Strategic Accounts Geographic Expansion DRIVING SUSTAINABLE GROWTH THROUGH M&A Deep & Actionable Acquisition Pipeline… of Acquisition Targets Opportunities in Pipeline at Any Point in Time $1B+ 50+ ~12 Hundreds $44B Addressable Market Actionable Opportunities Sales Opportunity Over Next 5 Years Regional & Local Distribution …Backed by a Proven Integration Playbook Clear strategic and financial criteria focused on geographic and product line expansion Proprietary acquisition sourcing model supported by deep industry relationships and detailed market mapping exercises Disciplined valuation framework targeting return-accretive transactions with executable synergies Flexible integration approach that preserves local operating model while unlocking scale benefits across sourcing and operations Seller benefits include broader product breadth , industry-specific technology , national scale and resources , shared administrative support , and best-in-class training and career development opportunities Significant Growth Opportunity in a Highly Fragmented Market FISCAL 2025 ANNUAL REPORT | X MULTIPLE LEVERS TO DRIVE MARGIN EXPANSION Private Label Sourcing & Pricing Optimization Technology & Innovation Internal master distributor platform enabling direct-sourcing of private and white-label products National buying expertise & proactive product management to enhance profitability Focused investment in core business processes Products enhanced to meet local specification requirements Equal or better products at similar market prices Utilize purchase history, market conditions and strong supplier relationships to optimize supplier terms Drive new product growth through our branch network National scale and industry expertise drive value-based pricing, supported by data insights and local decision-making Deploying new technology solutions that can deliver measurable impacts Significant long-term opportunity to improve efficiency and scale our growth XI | FISCAL 2025 ANNUAL REPORT FISCAL 2025 ANNUAL REPORT | XI ANNUAL GROWTH TARGETS +2-4% MARKET VOLUME GROWTH +2-4% ORGANIC ABOVE MARKET VOLUME GROWTH +2-4% GROWTH FROM ACQUISITIONS 30-50 bps ADJUSTED EBITDA MARGIN ENHANCEMENT (1) 60-70% OPERATING CASH FLOW CONVERSION (2) Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See page 49 in our 2025 Form 10-K for more information on our use of non-GAAP financial measures. Operating Cash Flow Conversion is a non-GAAP financial measure defined as net cash provided by (used in) operating activities divided by Adjusted EBITDA for the presented period. KEY BUSINESS HIGHLIGHTS ($ in millions) Net Sales Adjusted EBITDA (1) Adjusted Diluted EPS (1) Cumulative Capital Allocation Capital Expenditures Acquisitions Share Repurchases Product Mix Pipes, Valves, & Fittings Storm Drainage Meters Fire Protection End Market Exposure Municipal Non-Residential Residential New Construction vs. Repair & Replace New Construction Repair & Replacement Market Size & Share ~$44B TAM (2) CNM Market Share Remaining Addressable Market Adjusted EBITDA and Adjusted Diluted EPS are non-GAAP financial measures. See page XVII for more information and a reconciliation to the most comparable U.S. GAAP measure. Based on independent third-party research and management estimates. Total addressable market is inclusive of the United States and Canada. XIV FISCAL 2025 ANNUAL REPORT | XIV OUR LEADERSHIP Executive Team Mark Witkowski Chief Executive Officer Robyn Bradbury Chief Financial Officer Brad Cowles President Mike Huebert President J ackie Burkhardt General Counsel, Chief Compliance Officer & Secretary Jeff Giles Executive Vice President, Corporate Development Carla Harper SVP, Human Resources Board of Directors C I A I A G I T G I James Castellano RubinBrown, Former Chairman Mark Witkowski Core & Main, CEO Bhavani Amirthalingam Acuity, Inc., Chief Growth & Transformation Officer Robert Buck TopBuild, President & CEO Dennis Gipson Hussman International, Former CEO T I A I A G I G I T I Susan Hardwick American Water Works Company, Former CEO James Hope Performance Food Group Company, Former EVP & CFO Orvin Kimbrough Midwest BankCentre, Chairman & CEO Kathleen Mazzarella Graybar, Chairman, President & CEO Margaret Newman BrandSafway, Former Chief People Officer Independent Board Member I Nominating & Governance G Talent & Compensation A Audit T Committee Chair Chair of the Board C Committee Membership: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended February 1, 2026 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number 001-40650 Core & Main, Inc. (Exact name of registrant as specified in its charter) Delaware 86-3149194 (State or other jurisdiction of incorporation or organization) 1830 Craig Park Court St. Louis, Missouri 63146 (314) 432-4700 (I.R.S. Employer Identification Number) (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol Name of each exchange on which registered Class A common stock, par value $0.01 per share CNM The New York Stock Exchange Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ⌧ No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No ⌧ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ☐ Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ⌧ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒ State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter: $11,940 million. As of March 20, 2026, there were 188,072,306 shares of the registrant's Class A common stock, par value $0.01 per share, and 6,577,704 shares of the registrant's Class B common stock, par value $0.01 per share, outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the definitive Proxy Statement for the registrant's 2026 Annual Meeting of Stockholders have been incorporated by reference into Part III of this Annual Report on Form 10-K. Table of Contents Page Cautionary Note Regarding Forward-Looking Statements 1 Part I 2 Item 1. Business 2 Item 1A. Risk Factors 10 Item 1B. Unresolved Staff Comments 33 Item 1C. Cybersecurity 33 Item 2. Properties 34 Item 3. Legal Proceedings 35 Item 4. Mine Safety Disclosures 35 Part II 35 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 35 Securities Item 6. [ Reserved ] 37 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 38 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 52 Item 8. Financial Statements and Supplementary Data 54 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures 86 Item 9A. Controls and Procedures 86 Item 9B. Other Information 87 Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections 87 Part III 88 Item 10. Directors, Executive Officers and Corporate Governance 88 Item 11. Executive Compensation 88 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 88 Item 13. Certain Relationships and Related Transactions, and Director Independence 88 Item 14. Principal Accountant Fees and Services 88 Part IV 89 Item 15. Exhibits and Financial Statement Schedules 89 Item 16. Form 10-K Summary 93 Signatures 94 ‌CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements include, without limitation, all statements other than statements of historical facts contained in this Annual Report on Form 10-K, including statements relating to our intentions, beliefs, assumptions or current expectations concerning, among other things, our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding expected growth, future capital expenditures, capital allocation and debt service obligations, and the anticipated impact on our business. Some of the forward-looking statements can be identified by the use of forward-looking terms such as "believes," "expects," "may," "will," "shall," "should," "would," "could," "seeks," "aims," "projects," "is optimistic," "intends," "plans," "estimates," "anticipates" or the negative versions of these words or other comparable terms. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be outside our control. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of the market in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this Annual Report on Form 10-K. In addition, even if our results of operations, financial condition and cash flows, and the development of the market in which we operate, are consistent with the forward-looking statements contained in this Annual Report on Form 10-K, those results or developments may not be indicative of results or developments in subsequent periods. A number of important factors, including, without limitation, the risks and uncertainties discussed under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Annual Report on Form 10-K and other factors discussed in our filings with the United States ("U.S.") Securities and Exchange Commission (the "SEC"), could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements. Furthermore, new risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Annual Report on Form 10-K. You should read this Annual Report on Form 10-K completely and with the understanding that actual future results may be materially different from expectations. All forward-looking statements made in this Annual Report on Form 10-K are qualified by these cautionary statements. These forward-looking statements are made only as of the date of this Annual Report on Form 10-K, and we do not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, and changes in future operating results over time or otherwise. ‌PART I ‌Item 1. Business Our Company Core & Main, Inc. ("Core & Main" and collectively with its subsidiaries, the "Company," "we," "our" or "us") is a holding company and its primary material assets are its direct and indirect ownership interest in Core & Main Holdings, LP, a Delaware limited partnership ("Holdings"), and deferred tax assets associated with this ownership. Core & Main is a leading specialty distributor dedicated to advancing reliable infrastructure with local service, nationwide. With a focus on water, wastewater, storm drainage and fire protection products, and related services, we provide solutions to municipalities, private water companies and professional contractors across municipal, non-residential and residential end markets. Our specialty products and services are used primarily in the maintenance, repair, replacement and new construction of water, wastewater, storm drainage and fire protection infrastructure. We are one of only two national distributors operating across large and highly fragmented markets, which we estimate to represent approximately $44 billion in annual sales. As of February 1, 2026, we had a network of over 370 branch locations across the United States ("U.S.") and Canada, which serve as a critical link between more than 5,000 suppliers and a diverse and long-standing base of over 60,000 customers. Our sales reach, technical product knowledge, broad product portfolio, customer service, project planning and delivery capabilities, customer service and ability to provide local expertise, nationwide, make us a critical partner to both our customers and suppliers. We offer a comprehensive portfolio of more than 225,000 products covering a full spectrum of specialized solutions to address aging water infrastructure, including pipes, valves & fittings, storm drainage products, fire protection products and smart metering products. Our products are generally unique to our industry and must meet municipal, state and federal specifications and engineering standards. We have a balanced mix of sales across product categories, end markets and construction sectors. We estimate we derived approximately 44% of our net sales for the fiscal year ended February 1, 2026 ("fiscal 2025") from the municipal end market, 38% from the non-residential end market and 18% from the residential end market. Furthermore, we estimate we had a near-equal mix of sales related to construction on new projects and existing repair and replacement projects in fiscal 2025. Our mission is to deliver essential infrastructure products and solutions to communities for water, wastewater, storm drainage, and fire protection needs. We succeed by investing in our people to know their industries, products and customers, connecting local experts within our national network to deliver anytime, anywhere. We advance the future of water infrastructure with trusted expertise, innovative solutions, and reliable products and service. Our History Our first legacy distribution company dates back to 1874, and over the years, the Company has grown organically and through a series of mergers and acquisitions. In 2005, The Home Depot acquired National Waterworks Holdings and subsequently merged it with Hughes Supply Inc. to establish one of the leading waterworks distributors in the U.S. Under The Home Depot's ownership, we became HD Supply Waterworks and further expanded our geographic footprint. In 2007, a group of private equity investors acquired HD Supply from The Home Depot and subsequently executed an initial public offering in 2013. In August 2017, HD Supply Waterworks was acquired by Clayton, Dubilier & Rice, LLC ("CD&R") from HD Supply and was subsequently rebranded as Core & Main. On July 27, 2021, we completed our initial public offering of Class A common stock (the "IPO"). Since the IPO, we completed a series of secondary public offerings of shares of Class A common stock on behalf of the CD&R Investors (as defined below under Item 1A. "Risk Factors"), and as of January 25, 2024, the CD&R Investors no longer held any shares of our Class A common stock or our Class B common stock. Our End Markets We have diversified exposure across three primary end markets: (i) municipal; (ii) non-residential; and (iii) residential. Based on management's estimates, we believe that our addressable market in the U.S. and Canada for the distribution of water, wastewater, storm drainage and fire protection products, and related services, represented approximately $44 billion in sales in fiscal 2025. Growth in our industry is driven by a broad array of factors, including municipal water infrastructure spending, water and wastewater utility rates, interest rates, housing starts, commercial construction, population growth and other demographic trends. Municipal We estimate that approximately 44% of our net sales in fiscal 2025 were to contractors and municipalities for municipal projects, including the repair, replacement, upgrade and new construction of water and wastewater supply, filtration, storage and distribution systems. Municipalities establish local product specifications based on regulatory requirements and engineering standards. Given our extensive geographic footprint and knowledge of products and local municipal specifications, we believe we are well-equipped to anticipate and serve the needs of municipalities, private water companies and underground utility contractors who require a national reach and an extensive product offering. Municipal demand has exhibited steady growth over the long term due to the critical need to replace aged water infrastructure. Funding for municipal projects is derived from a variety of sources, including local utility rate revenues, municipal bonds, and state revolving fund programs administered by the U.S. Environmental Protection Agency. Historically, the majority of funding has been generated at the state and local level, which we believe contributes to the stability of the municipal end market across economic cycles. In November 2021, the Infrastructure Investment and Jobs Act ("IIJA") was signed into U.S. law, which included an allocation of $55 billion to invest in water infrastructure across the U.S., the majority of which we believe has yet to be realized. We believe these dynamics create the backdrop for a favorable funding environment and accelerated investment in projects that will benefit our business. Non-Residential We estimate that approximately 38% of our net sales in fiscal 2025 were directly related to water, wastewater, storm drainage and fire protection systems supporting non-residential construction activity, including commercial, industrial, institutional, warehousing, multi-family housing, and highway and street projects. Our products are often installed while breaking ground on new lot development during the initial construction phase, though some products are used during new construction and repair and replace activities. Our fire protection products are typically installed at later stages of construction projects compared to most of our other products, and they exhibit less seasonal patterns since they are generally installed indoors and are therefore less impacted by weather conditions. Demand across the non-residential end market has historically lagged residential construction activity as commercial development is necessary to support new housing development. Over the long term, we expect, but cannot provide any assurance that, non-residential construction activity to increase as suburban and rural communities expand, and demand for our products and services increases. Residential We estimate that approximately 18% of our net sales in fiscal 2025 were directly related to new land and lot development to support single-family housing, where our products are installed during the early stages of development prior to vertical home construction. Over the long-term, residential construction activity is expected to grow as a result of population growth, low housing inventory and demographic population shifts. The current under-build of housing in the U.S. compared with household formations implies significant pent-up demand and continued growth going forward. Our Strategies We intend to capitalize on our competitive strengths to deliver profitable growth and create shareholder value through the following core strategies: Replicate Successful Expansion in Underpenetrated Geographies We have demonstrated an ability to successfully expand in underpenetrated geographies. We intend to continue opening new branches in areas where we have an established footprint, as well as in certain underserved markets. We believe we are well-positioned to do so given our market intelligence and ability to attract and develop key talent. We can efficiently open new branches in attractive markets given our talent pool, scale, and learning curve advantages based on past successes in entering new geographies. We have identified a substantial number of areas where we believe we are underpenetrated and thus have opportunities to open new branches or offer more product lines and services. Increase Share with Strategic Accounts Through our strategic accounts program, we partner with national contractors and large private water companies who typically pursue large-scale, complex projects that require greater technical expertise and specialized procurement needs. Sales through our strategic accounts program represented approximately 5% of our fiscal 2025 net sales. We believe we are well-positioned to grow our share with these customers due to our dedicated sales team, which includes engineers and other experts who can provide valuable insights on large, complex projects, including cases in which our customers are asked to design and build new water systems or wastewater treatment plants. Our partnerships with these customers extend throughout the entire project lifecycle, from the pre-bidding design phase to post-project support. We believe our strategic partnerships and national supplier relationships will continue to generate cross-selling opportunities and future business, while driving adoption within our distribution model. Utilize National Platform to Accelerate New Product Adoption We utilize our vast geographic footprint, customer relationships, local industry knowledge and training capabilities to introduce and accelerate the adoption of new products and technologies in our industry. Examples include the advancement of smart metering, fusible high-density polyethylene ("fusible HDPE") and treatment plant solutions, fabrication and kitting assemblies, and geosynthetics products. We have identified a number of underpenetrated product categories within large and attractive end markets where we believe we can expand and enhance our market share. These categories complement our core product offerings and are often specified together on complex infrastructure projects. By leveraging our existing branch network, local market expertise, national scale and established supplier relationships, we are able to bundle products and services and deepen our role as a solutions partner for customers. We believe this approach allows us to scale these product lines efficiently and pursue incremental growth opportunities with modest capital investment and low working capital requirements. Strategically and Systematically Pursue Value-Enhancing Acquisitions Strategic acquisitions are a key component of our long-term growth strategy, executed through a disciplined, repeatable, process-driven approach. We have a proven track record of acquiring and integrating businesses that expand our geographic footprint, broaden our product and service offerings, and add high-quality talent. Our established acquisition platform meaningfully enhances our ability to consistently attract and acquire high-quality companies in our highly fragmented market. Our experienced mergers and acquisitions ("M&A") team proactively build and manage a robust pipeline of highly synergistic targets, working closely with field leadership to ensure alignment in our process. This structured approach has enabled us to consistently generate operational synergies and margin improvement from acquired businesses through broader product breadth, enhanced purchasing capabilities, facility optimization, and disciplined working capital management. See an overview of completed acquisitions for fiscal 2025, the fiscal year ended February 2, 2025 ("fiscal 2024") and the fiscal year ended January 28, 2024 ("fiscal 2023") in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Key Factors Affecting Our Business" of this Annual Report on Form 10-K. We believe we are widely recognized as the acquirer of choice in our industry, driven by our strong reputation, entrepreneurial culture, and unwavering commitment to the development and well-being of our people. Our integration philosophy centers on collaborative partnership with acquired company leadership, ensuring a thoughtful associate transition into our systems and processes, while safeguarding the local expertise, customer relationships and cultural strengths that underpin long-term success. Execute on Margin Enhancement Initiatives We have improved our gross margin over the years due to several initiatives, including private label product expansion, sourcing optimization, data-driven pricing strategies and an expansion of value-added products and services. We have complemented these initiatives with accretive acquisitions, which has resulted in sustainable margin expansion. Our private label initiative includes a highly scalable assortment of private label brands and products utilized in water, wastewater and fire protection applications. We believe our global sourcing capabilities and strong international supplier relationships, as well as the potential for automated distribution and logistics, will continue to create competitive pricing advantages. We are expanding our direct sourcing and distribution capabilities through the addition of private label products and incremental warehouse capacity in order to drive further margin expansion in the future. The terms on which we purchase products from many of our suppliers entitle us to receive a rebate based on the amount of our purchases, a discount for timely payment or other favorable terms reflected in our historical results. Our national category management team actively manages our spending with suppliers in order to optimize pricing and supplier incentives to expand gross margins. Additionally, we have a centralized team dedicated to driving margin improvement through pricing analytics. An end-to-end review of our pricing strategies identified key margin enhancement opportunities, including continued optimization of system-wide pricing through technology enhancements, and data-driven customer and product analysis that enable us to identify price optimization opportunities and mitigate potential margin impacts from changes in product costs. We believe these gross margin initiatives, in addition to our ability to drive productivity and leverage our fixed costs, create a path to drive a sustainable margin expansion over the long-term. Invest in Attracting, Retaining and Developing World-Class Talent We believe that our continued investment in the development and well-being of our people, together with our focus on our foundational core values of honesty and integrity, support our commitment to our associates and to customer service. Our award-winning training programs enable us to accelerate the development of our top talent to drive profitable growth while maintaining a supportive and mission-driven culture. We intend to continue investing in our already strong talent base by attracting and developing associates. Our training and leadership curricula and inclusion programs drive high associate engagement and a positive associate experience. In addition, we deliver attractive career growth opportunities to our associates while leveraging their knowledge and expertise. Our Products & Services Our comprehensive product portfolio consists of more than 225,000 products from over 5,000 suppliers. Our offering consists of pipes, valves & fittings, storm drainage products, fire protection products and smart metering products. Our customers value our product breadth and geographic reach, as well as our technical product knowledge and consultation services. While pricing is important to our customers, availability, convenience, reliability and expertise are also important factors in their purchase decisions. In addition, our project management capabilities provide us with a competitive advantage over many competitors who offer a more limited selection of services. Pipes, Valves & Fittings Pipes, valves, hydrants and fittings are used in the distribution and flow control of water and wastewater transmission networks. Our pipe products come in a variety of sizes and include materials such as PVC, ductile iron, fusible HDPE and copper. Our pipe products are manufactured specifically for our industry, and they must adhere to the local specifications and regulations of municipalities across the country. Our valves are used to control the flow of water within water transmission networks and are often specified to meet the needs of each project. Our hydrants provide a point-of-access for fire fighters to quickly tap into pressurized water systems, which vary based on local municipal specifications and regulations. Our fittings and restraints, made from a variety of materials depending on local municipal specifications and regulations, are used to connect pipe sections, valves and other devices to each other. This category also includes other complementary products and services used for the service, repair and replacement of underground water infrastructure. Pipes, valves & fittings products accounted for approximately 67% of our net sales in fiscal 2025. Storm Drainage Our storm drainage products are used in the repair and construction of stormwater management systems to retain, detain and divert stormwater runoff. Our storm drainage product offering includes corrugated HDPE and metal piping systems, retention basins, inline drains, manholes, grates, geosynthetics, and other related products. Our storm drainage product offering varies by market depending on local codes and engineering specifications. Storm drainage products accounted for approximately 16% of our net sales in fiscal 2025. Fire Protection Our fire protection products are used in commercial, institutional, industrial, warehouse and multi-family buildings to extinguish and prevent the spread of fires. A typical fire protection product offering includes pipe, valves, fittings, sprinkler heads and other accessories. We also offer customized fabrication and kitting services, providing a comprehensive solution for all fire protection product needs. Our fire protection products meet strict quality standards, and our offering varies by market based on local specifications, regulations and fire codes. Fire protection products accounted for approximately 8% of our net sales in fiscal 2025. Meters Our meters products are used for water volume measurement and regulation, and include automated meter reading and advanced metering infrastructure technologies. We offer multi-stage metering solutions to our customers, including meter accessories, meter installation, network infrastructure and software installation, training and long-term service contracts to deliver cost efficiencies to our customers. Our meters and advanced metering technology provide labor savings benefits for our municipal customers and help reduce water loss through leak detection. Meter products accounted for approximately 9% of our net sales in fiscal 2025. Our Customers We have a fragmented customer base that consists of over 60,000 customers. Our top 50 customers represented approximately 12% of our net sales in fiscal 2025, with our largest customer accounting for approximately 1% of net sales. Our customers choose us for our breadth of products and services, extensive industry knowledge, familiarity with local municipal specifications, convenient branch locations and project management capabilities. We utilize our deep supply chain relationships to provide customers with a "one-stop-shop" experience and customized support in their efforts to maintain and construct water, wastewater, storm drainage and fire protection systems. Our scale and geographic footprint allows us to obtain preferred access to products for our customers, even during periods of material shortages. We have the ability to serve both smaller, local customers and larger, national customers with relevant expertise and the right inventory on hand. Our local sales associates take a consultative sales approach, using knowledge of the local regulatory requirements and municipal specifications to provide customer-specific product and service solutions. We are deeply involved in our customers' planning processes, and we have the ability to support our customers by converting engineered drawings into accurate and comprehensive material project plans. For specific metering, treatment plant, storm drainage, geosynthetics, or fusible HDPE pipe solutions, our sales associates partner with a deep and dedicated team comprised of several hundred national and regional product specialists to assist customers in project scoping and specialized product selection. Our technical knowledge and experience are complemented by our proprietary technology tools, which enable us to work closely and efficiently with our customers in material management, timely inventory purchasing, quoting and coordinated jobsite delivery. We believe our technology tools build customer loyalty and drive repeat business, and also create a competitive advantage over smaller competitors who may not have the scale or resources to provide similar technology or services. Our Suppliers We have strong relationships with our suppliers due to our long history in the industry, substantial purchasing scale, national footprint and ability to reach a fragmented customer base. Our national footprint and reach to local communities are essential to our suppliers, as we have a highly developed understanding of the local markets, customer base and growth opportunities. We believe we are one of the largest volume customers for many of our suppliers, leading to favorable purchasing arrangements regarding product availability, payment terms and pricing. Our scale also enables us to secure distribution rights that are either exclusive or given to a limited number of distributors in key product categories, and to provide key products to customers that are unavailable to our competitors. Our size and national reach, supplier relationships, and technical knowledge of products and municipal specifications enable us to obtain preferred access to specialized products and preferred access to products during periods of material shortages, or when shorter-than-usual lead times are required for certain projects. This provides us with a competitive advantage versus smaller competitors, particularly for large and complex projects. Our largest single supplier represented approximately 7% of product expenditures in fiscal 2025, and our top ten suppliers represented approximately 45% of total product expenditures during the same period. We strategically conduct business with our top suppliers in order to optimize our purchasing advantages, but we also have the flexibility to source the majority of our products from a number of alternate suppliers when necessary. Our Competition The water, wastewater, storm drainage and fire protection products distribution industry, and the end markets we serve, are highly fragmented. We face competition on a national level from only one other distributor, but we are unique in our dedicated focus on water and fire protection infrastructure. The remainder of our market is served by hundreds of regional, local and specialty niche distributors, and through direct sales by suppliers to end users. We estimate that our net sales accounted for approximately 17% of our $44 billion addressable market in fiscal 2025. The principal competitive factors in our industry include the breadth, availability, access and pricing of products and services, technical knowledge and project planning capabilities, local expertise, as well as delivery capability and reliability. We believe we are a leader in our industry, and our national reach gives us meaningful competitive advantages compared to our smaller competitors. Our Operating Structure We strategically organize our branch network to meet the specific needs of our customers in each local market, and we support our branches with the resources of a large company, delivered through district and regional management, including company-wide sales, operations and back-office functions. We believe this allows each local branch manager to tailor his or her branch's strategy, marketing, and product and service offerings to address the specific needs of customers in each market, while maintaining many of the benefits of our Company's scale. Our branch associates have the opportunity to earn competitive compensation through our performance-based compensation plans, which are based on local performance. We support our network of over 370 branches with the following company-wide resources: sales management, technical product specialists, sourcing, finance, tax, marketing, human resources, legal and information technology, among others. Nearly all of our branches operate on an integrated technology platform, allowing us to utilize our combined capabilities for procurement, inventory management, financial support, data analytics and performance reporting. We routinely invest in new technology, data and security systems to enhance and protect the business over the long-term. Our branch operational structure is organized by district and then by region to optimize both the oversight and sharing of resources and products. Each region is led by a regional vice president who manages a multi-state territory. This regional structure enables us to address the specific management, strategic and operational needs of each region. Our Distribution Network Our branch-based business model is the core of our operations and the primary component of our distribution network. Our branches are strategically located near our customers and vary in size depending on local demand and customer needs. Our branches employ an average of 12 associates including branch management, sales representatives, warehouse staff, drivers and other support staff. Each branch sells approximately 4,500 products on average, with many of them on hand as inventory and the rest available for delivery. Our branch managers have the autonomy to optimize their product and service offerings based on the local specifications, regulations and customer preferences within each market. Our branch network connects large suppliers with smaller volume customers whose consumption patterns tend to make them uneconomical to be served directly by our suppliers. Our branches receive products in both large and small quantities from our suppliers and stock products in warehouses and yards for purchase. Our specialized fleet of delivery equipment enables delivery of materials to our customers' worksites in a timely and cost-efficient manner. We also offer direct distribution options to our customers on a wide range of products. This value-added service includes logistics and sourcing for larger products and quantities between our suppliers and our customers, which we believe helps our customers with inventory management and delivery scheduling, particularly when working on large-scale projects with multiple phases and delivery schedules. Contractors work with our teams throughout all phases of the project life cycle, including estimating and material "take-off," product sourcing and bid preparation through delivery. Leveraging our vast supplier network, we are able to arrange convenient direct shipment to jobs, which can be aligned to each phase of the project. Our Sales Force We employ a large network of customer support representatives, the majority of whom are inside sales representatives based at local branches. Inside sales representatives are responsible for project management, coordinating incoming orders, providing estimates and ordering material. Our customer support representatives also include over 600 field sales representatives who routinely visit existing customers, potential customers and jobsites. These field sales representatives remain attuned to activity in their local market, identifying and tracking active projects, and they are responsible for generating sales and identifying new customers and projects. They also directly assist and educate customers, taking a consultative approach and helping with custom projects and product solutions tailored to our customers' needs. Our field sales representatives are highly experienced with in-depth product and technical knowledge, significant local insights and strong long-term customer relationships, all of which are critical to our success. On average, our field sales representatives have over 14 years of experience in the water, wastewater, storm drainage and fire protection industries. Our Human Capital We believe our associates are the key drivers of our success. We are focused on attracting, training, promoting and retaining industry-leading talent. Our people-first culture enables our associates to thrive in our company and our industry. We have a strong track record of developing our associates for success and driving high associate engagement. Our ability to attract and retain talent is based on four foundational pillars: pay-for-performance philosophy, training and development, associate engagement and benefits. As of February 1, 2026, we employed approximately 5,600 associates, the majority of whom are assigned to local branches to support our customers and their project needs. Approximately 116 of our associates were covered by collective bargaining agreements. Pay for Performance We believe that our culture, consistent investment in our people and competitive compensation programs help to retain talent across key roles. Sales associates have the opportunity to earn competitive compensation through our performance-based compensation structure, which aligns our interests with those of our associates. Our incentive programs link compensation levels, based on individual roles, to the achievement of branch or region-specific profitability and working capital efficiency goals. Our "local service, nationwide" philosophy incentivizes both our sales force and our operations team to be entrepreneurial, making decisions grounded in a customer-centric approach. Most other associates also participate in a profit-sharing program that aligns their compensation to profitability and working capital efficiency. Training and Development Our associates are the most essential resource to our Company. Their knowledge, expertise and growth are critical to our Company's success. We believe that our continued investment in the development and well-being of our people, and our focus on our foundational core values of honesty and integrity, support our commitment to hands-on customer service. Our associates develop by learning from the best of the best-on the job, in our national learning center, through in-house subject matter experts and with virtual and online academies. Our learning team offers a wide range of award-winning sales, operations, product expertise, leadership and safety training programs and courses. We also provide customized training, talent reviews and early career rotational programs for college graduates to develop as future leaders. We partner with our suppliers to enhance our knowledge base as new products and best practices are continually introduced. This talent-first approach enables us to develop and promote top talent to drive profitable growth while maintaining a supportive culture. Year after year, associates rate our learning opportunities as one of the most valuable aspects of working at Core & Main. Associate Engagement We believe our associate engagement efforts are important to the success of our talent strategy. A core element of our mission is to build strong relationships with one another and in the communities we serve. Some of our efforts are well established, such as our Women's Network, which is intended to develop women in our industry. We have developed an internal inclusion and belonging advisory group called Culture+, which serves as an umbrella to our mental health council, philanthropic activity and a recently established Veteran's Network. Through our training programs, we are taking a proactive approach to grow and retain our own talent and develop leaders with varying backgrounds in our industry. We frequently check the pulse of our associates, in addition to our annual engagement survey to listen and act on feedback. This ongoing, two-way dialogue provides our associates with a voice in creating and improving our culture, and the overall associate experience. We believe being included and having a voice is vital for associate engagement and underscores our core principle: Team members are family. Benefits Our comprehensive benefits program reflects our overall belief that benefits should address the whole associate experience, including health and well-being. We offer associates a comprehensive benefits package, which includes access to a concierge service to help them navigate their benefits. These efforts are representative of our focus on promoting a consistent, positive experience for all associates. Our Intellectual Property We rely on trademarks, trade names and licenses to maintain and improve our competitive position. We believe that we have the trademarks, trade names and licenses necessary for the operation of our business as we currently conduct it. We rely on both trademark registration and common law protection for trademarks. Trademark rights may potentially extend indefinitely and are dependent upon national laws and our continued use of the trademarks. Except for the Core & Main trademark and licenses of commercially available third-party software, we do not consider our trademarks, trade names or licenses to be material to the operation of our business as a whole. As we continue to execute on our private label distribution growth strategy, we anticipate the associated trademarks will grow in value. We nevertheless face intellectual property-related risks and may be unable to obtain, maintain and enforce our intellectual property rights. Assertions by third parties that we violate their intellectual property rights could have a material adverse effect on our business, financial condition and results of operations. Regulation We are subject to various federal, state, and local laws and regulations, compliance with which increases our operating costs and subjects us to the possibility of regulatory actions or proceedings. Noncompliance with these laws and regulations can subject us to penalties, fines or various forms of civil, administrative, or criminal actions, any of which could have a material adverse effect on our financial condition, results of operations, cash flows or competitive position. These federal, state, and local laws and regulations relate to wage and hour requirements, permitting and licensing, state contractor requirements, workers' safety, transportation, tax, SEC regulations, business with disadvantaged business enterprises, collective bargaining and other labor matters, environmental and associate benefits. Our facilities and operations are subject to a broad range of federal, state and local environmental, health and safety laws, including those relating to the release of hazardous materials into the environment, the emission or discharge of pollutants or other substances into the air, water, or otherwise into the environment, the management, treatment, storage and disposal of hazardous materials and wastes, the investigation and remediation of contamination and the protection of the health and safety of our associates. Our failure to comply with environmental, health and safety laws may result in fines, penalties and other sanctions as well as liability for response costs, property damages and personal injuries resulting from past or future releases of, or exposure to, hazardous materials. The cost of compliance with environmental, health and safety laws and capital expenditures required to meet regulatory requirements is not currently anticipated to have a material adverse effect on our financial condition, results of operations, cash flows or competitive position. New laws or changes in or new interpretations of existing laws, the discovery of previously unknown contamination or the imposition of other environmental, health or safety liabilities or obligations in the future may lead to additional compliance or other costs, which could have a material adverse effect on our financial condition, results of operations, cash flows or competitive position. Organizational Structure Core & Main was incorporated on April 9, 2021 for the purpose of facilitating the IPO and other related transactions in order to carry on the business of Holdings and its consolidated subsidiaries. Core & Main is a holding company that indirectly owns Core & Main LP through its ownership interest in Holdings. Core & Main's primary material assets are its direct and indirect ownership interest in Holdings and deferred tax assets associated with such ownership. For more information regarding our holding company structure, see Note 1 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K. As of February 1, 2026, Core & Main held a 96.7% ownership interest in Holdings with the remaining ownership interest held by Core & Main Management Feeder, LLC ("Management Feeder") . Available Information Our principal executive offices are located at 1830 Craig Park Court, St. Louis, MO 63146, and our telephone number is (314) 432-4700. Our website is https://www.coreandmain.com . We use our website as a routine channel for distribution of information that may be material to investors, including news releases, financial information, presentations and corporate governance information. None of the information contained on, or that may be accessed through, our website or any other website identified herein is part of, or incorporated into, this Annual Report on Form 10-K, and you should not rely on any such information in connection with your decision to invest in our Class A common stock. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available on our website, free of charge, as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the SEC. Additionally, the SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us, at https://www.sec.gov . ‌Item 1A. Risk Factors You should carefully consider the factors described below, in addition to the other information set forth in this Annual Report on Form 10-K. These risk factors are important to understanding the contents of this Annual Report on Form 10-K and of other reports. Should one or more of these risks be realized, it could result in a material impact to our operations, liquidity or financial position, results of operations and/or cash flows. Our reputation, business, financial position, results of operations and cash flows are subject to various risks. The risks and uncertainties described below are not the only ones relevant to us. Additional risks and uncertainties not currently known to us or that we currently believe are immaterial may also adversely impact our reputation, financial position, results of operations and cash flows. Risk Factors Summary The following is a non-exhaustive summary of principal risks factors you should carefully consider that, if realized, could result in a material impact to our operations, liquidity or financial position, results of operations and/or cash flows. These risks are discussed in more detail in "Risk Factors." These risks include: declines, volatility and cyclicality in the U.S. residential and non-residential construction markets; slowdowns in municipal infrastructure spending and delays in appropriations of federal funds; our ability to competitively bid for contracts; price fluctuations in our product costs (including effects of tariffs); our ability to manage our inventory effectively, including during periods of supply chain disruptions; risks involved with acquisitions and other strategic transactions, including our ability to identify, acquire, close or integrate acquisition targets successfully; the fragmented and highly competitive markets in which we compete and consolidation within our industry; the development of alternatives to distributors of our products in the supply chain; our ability to hire, engage and retain key personnel, including sales representatives, qualified branch, district and regional managers and senior management; our ability to identify, develop and maintain relationships with a sufficient number of qualified suppliers and the potential that our exclusive or limited supplier distribution rights are terminated; changes in supplier rebates or other terms of our supplier agreements; the availability of freight; the ability of our customers to make payments on credit sales; our ability to identify and introduce new products and product lines effectively; the spread of, and response to public health crises and the inability to predict the ultimate impact on us; costs and potential liabilities or obligations imposed by environmental, health and safety laws and requirements; regulatory change and the costs of compliance with regulation; changes in stakeholder expectations in respect of environmental, social and governance ("ESG") and sustainability practices; exposure to product liability, construction defect and warranty claims and other litigation and legal proceedings; potential harm to our brand or reputation; difficulties with or interruptions of our fabrication services; safety and labor risks associated with the distribution of our products; interruptions in the proper functioning of the Company's and our third-party service providers' information technology systems, including from cybersecurity threats; impairment in the carrying value of goodwill, intangible assets or other long-lived assets; our ability to continue our customer relationships with short-term contracts; risks associated with operating internationally including exporting and importing of certain products; our indebtedness and the potential that we may incur additional indebtedness that might restrict our operating flexibility; the limitations and restrictions in the agreements governing our indebtedness, the Amended and Restated Limited Partnership Agreement of Holdings, as amended, and the Tax Receivable Agreements (each as defined herein); increases in interest rates on our variable rate indebtedness; changes in our credit ratings and outlook; our ability to generate the significant amount of cash needed to service our indebtedness; our organizational structure, including our payment obligations under the Tax Receivable Agreements, which may be significant; our ability to sustain an active, liquid trading market for our Class A common stock; and risks related to other factors discussed under "Risk Factors" in this Annual Report on Form 10-K. Risks Related to Our Business We have been, and may continue to be, adversely impacted by declines and volatility in the U.S. residential and non-residential construction markets, which may result in reduced net sales. Our business is largely dependent on activity in the U.S. residential and non-residential construction markets, which are volatile and subject to cyclical market pressures. The length and magnitude of these cycles have varied over time and by market. Approximately 18% and 38% of our net sales in fiscal 2025 were directly related to the U.S. residential and non-residential end markets, respectively. The level of activity in the U.S. residential and non-residential construction markets is based on numerous factors such as availability of credit, interest rates, general economic conditions, consumer confidence and other factors that are beyond our control. For example, interest rate increases in fiscal 2023 were a contributing factor to slowing new lot development and contraction in the residential end market. Although the Federal Reserve Board of Governors ("FRB") cut certain benchmark interest rates in fiscal 2024 and fiscal 2025, it is uncertain if the FRB will raise or lower interest rates in the future and, if so, to what level and for how long. Interest rate increases or the lack of anticipated interest rate decreases may result in decreased levels of activity in the U.S. residential and non-residential construction markets that could have a material adverse effect on our business or financial condition. We cannot predict the duration of the residential or non-residential construction industry market conditions or the timing of the recovery of residential or non-residential construction activity back to historical averages. Participants in the U.S. residential and non-residential construction industries may postpone spending in response to tighter credit, negative financial news or declines in income or asset values, which could have a material negative effect on the demand for our products. We also cannot provide any assurances that the operational strategies we have implemented to address current or future market conditions will be successful. Due to these factors and the potential volatility in the residential and non-residential construction markets, there may be fluctuations in our operating results, and the results for any historical period may not be indicative of results for any future period. This uncertainty about current or future economic conditions and potential volatility in U.S. residential and non-residential construction markets may lead to reduced demand for our products, which could have a material adverse effect on our business or financial condition. Our business and the market for our products and services generally are subject to slowdowns in municipal infrastructure spending which may result in reduced net sales. The market for the distribution of our products and services is affected by national, regional and local slowdowns in the amount spent by municipalities on infrastructure. We supply many of our products to contractors in connection with municipal projects. Approximately 44% of our net sales in fiscal 2025 were related to the municipal market. Many of the factors that influence municipal infrastructure spending are not within our control. Municipal infrastructure spending depends largely on availability and commitment of public funds for municipal spending, interest rates, water system capacity and general economic conditions. Economic downturns in any of our markets could reduce municipal tax revenues and the level of infrastructure spending and construction activity and thus our net sales. Attention : This is an excerpt of the original content. To continue reading it, access the original document here .

View stock analysis, news, and events for Core & Main, Inc.