Core & Main, Inc. (NYSE: CNM)

Core & Main, Inc. is a leading specialty distributor focused on advancing reliable infrastructure with local service, nationwide. The company specializes in water, wastewater, storm drainage, and fire protection products, catering to municipalities, private water companies, and professional contractors across municipal, non-residential, and residential end markets. Core & Main operates in a highly fragmented market, estimated to represent approximately $44 billion in annual sales, and is one of only two national distributors in this space. The company's extensive network includes over 370 branch locations across the United States and Canada, serving as a critical link between more than 5,000 suppliers and a diverse base of over 60,000 customers.

Core & Main generates revenue through the distribution of a comprehensive portfolio of more than 225,000 products. These products are used primarily in the maintenance, repair, replacement, and new construction of water, wastewater, storm drainage, and fire protection infrastructure. The company's primary products include pipes, valves & fittings, storm drainage products, fire protection products, and smart metering products. These offerings are tailored to meet municipal, state, and federal specifications and engineering standards. The company's customer base is diverse, including municipalities, private water companies, and professional contractors, all of whom rely on Core & Main for specialized solutions to address aging water infrastructure.

• Pipes, Valves & Fittings: This segment includes a variety of products such as PVC, ductile iron, fusible HDPE, and copper pipes, as well as valves, hydrants, and fittings. These products are essential for the distribution and flow control of water and wastewater transmission networks. This category accounted for approximately 67% of the company's net sales in fiscal 2025.

• Storm Drainage: Core & Main offers products used in the repair and construction of stormwater management systems, including corrugated HDPE and metal piping systems, retention basins, inline drains, manholes, grates, geosynthetics, and other related products. This segment represented approximately 16% of net sales in fiscal 2025.

• Fire Protection: This segment includes pipe, valves, fittings, sprinkler heads, and other accessories used in commercial, institutional, industrial, warehouse, and multi-family buildings to extinguish and prevent the spread of fires. Core & Main also offers customized fabrication and kitting services. Fire protection products accounted for approximately 8% of net sales in fiscal 2025.

• Meters: This segment includes products used for water volume measurement and regulation, including automated meter reading and advanced metering infrastructure technologies. Core & Main provides multi-stage metering solutions, including meter accessories, installation, network infrastructure, software installation, training, and long-term service contracts. Meter products accounted for approximately 9% of net sales in fiscal 2025.

Core & Main holds a strong position within the water, wastewater, storm drainage, and fire protection products distribution industry. The company faces competition on a national level from only one other distributor but is unique in its dedicated focus on water and fire protection infrastructure. The remainder of the market is served by hundreds of regional, local, and specialty niche distributors, as well as through direct sales by suppliers to end users. Core & Main's principal competitive factors 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. The company's national reach and extensive industry knowledge provide meaningful competitive advantages compared to smaller competitors.

Core & Main's customer base is highly fragmented, consisting of over 60,000 customers. The top 50 customers represented approximately 12% of the company's net sales in fiscal 2025, with the largest customer accounting for approximately 1% of net sales. Customers choose Core & Main for its breadth of products and services, extensive industry knowledge, familiarity with local municipal specifications, convenient branch locations, and project management capabilities. The company's deep supply chain relationships enable it to provide customers with a "one-stop-shop" experience and customized support in maintaining and constructing water, wastewater, storm drainage, and fire protection systems. Core & Main's scale and geographic footprint allow it to obtain preferred access to products for customers, even during periods of material shortages. The company serves both smaller, local customers and larger, national customers with relevant expertise and the right inventory on hand.