CNM

Core & Main, Inc.

NYSE · INDUSTRIALS · WHOLESALE-DURABLE GOODS, NEC

41.43

−0.16 −0.38%

USD · close Oct 21

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MKT CAP —P/E 17.0DIV YIELD —FCF YIELD —REV TTM $7.7B −0.5%NET INCOME $459M +6.5%NET DEBT $2.1B52W 40.35 – 59.09SEC XBRL · TTM TO Invalid Date

How CNM rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

Text kept

77%

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sentences removed

Length

+75

words, now 18,893

New in FY2026

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.
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.
Approximately 44% of our net sales in fiscal 2025 were related to the municipal market.
The costs to procure the products we sell are historically volatile and subject to fluctuations arising from changes in supply and demand, national and international economic conditions, labor and material costs, competition, market speculation, government regulation, weather events, trade policies and periodic delays in the delivery of our products.
If we are able to pass through price increases to our customers, our net sales will increase; conversely, during periods of deflation, our customer pricing may decrease to remain competitive, resulting in decreased net sales.
In fiscal 2023, we saw improvements in the supply chain and more predictable lead times for certain products that led to price stability, but for other products the supply chain remained constrained.
There have recently been significant changes to international trade policies and tariffs affecting imports.
The U.S. government has announced tariffs and trade restrictions on certain goods produced outside the United States.
Supreme Court struck down certain of these tariffs, but the U.S. government has indicated it may impose replacement or supplemental tariffs in response to the decision.
We believe our exposure to tariffs is limited as over three-quarters of products that we purchase are manufactured domestically.
In response to the tariffs announced by the U.S., other countries have imposed new or increased tariffs on certain exports from the U.S.
There is currently significant uncertainty about the future relationship between the U.S. and other countries with respect to trade policies, cost of raw materials, government regulations and tariffs.
We cannot predict whether, and to what extent, current tariffs will continue, or trade policies will change in the future.
We balance the need to maintain inventory levels that are sufficient to ensure competitive lead times against the risk of inventory obsolescence due to changing customer or consumer requirements, specification changes and fluctuating product costs.
If we overestimate demand and purchase too much of a particular product, we face a risk of having excess quantities on hand and that the price of that product will fall, leaving us with inventory that we cannot sell at historical profit margins or record a material charge if we are required to write-down inventory at net realizable value .
We may elect to divest certain assets or part of our business that do not align with our strategic direction.
A divestiture could result in the decrease in net sales and net income in future periods.
In addition, there are no assurances that we will receive a fair value that meets the expectations of shareholders in conjunction with a divestiture.
We estimate that our net sales accounted for approximatel y 17% of our $44 billion addres sable market in fiscal 2025.
In fiscal 2025, our top supplier accounted for approximately 7% of our product expenditures.
Our top ten largest suppliers accounted for approximately 45% of our total purchases in fiscal 2025.
Disruptions in transportation lines may also cause global supply chain issues that affect us or our suppliers.
Even if our rebate programs are not adversely affected through negotiation, we may not earn rebates at levels commensurate with historical periods, and our gross margin percentage may be adversely impacted.
Approximately 98% of our net sales volume in fiscal 2025 was facilitated through the extension of credit to our customers whose ability to pay is dependent, in part, upon the economic strength of the industry in the areas in which they operate.
Companies acro s s all industries are facing increasing scrutiny from customers, regulators and other stakeholders related to their ESG and sustainability practices.
New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence and disclosure.
From time to time, the SEC and state regulators in California and other U.S. states in which we sell our products have proposed, phased in, are phasing in, or may phase in, climate-related regulations.
Such regulations could cause us to incur additional compliance and reporting costs, certain of which could be material, including related to monitoring, collecting, analyzing and reporting new metrics and implementing systems and procuring additional internal and external personnel with the requisite skills and expertise to serve those functions and provide necessary attestation, as applicable.
Due to the nature of our business, we may be subject to legal proceedings, regulatory disputes, and governmental inquiries that could cause us to incur significant expenses, divert our management’s attention, and materially harm our business, financial condition, and operating results.
Although the majority of our overall product offerings relate to distribution for which we engage in no significant manufacturing, we do perform light fabrication services for certain product categories, including fire protection, storm drainage, geosynthetics and erosion control, meter sets and fusible HDPE piping products, which collectively accounted for less than 5% of our net sales in fiscal 2025 and which we believe are products with significant opportunities for growth.
As of February 1, 2026, we employed approximately 5,600 associates in total, a significant percentage of whom work at our branch locations.
In fiscal 2025 we experienced unfavorable trends in medical costs and incidence of high-dollar claims.
We may experience further increases in medical costs and unfavorable medical claim activity that could have a material adverse effect on our financial condition.
Our competitive environment may be impacted by technological innovation and we may be required to invest in technology to maintain our position in the industry.
To sustain and improve our competitive position, we are continually evaluating and investing in technology that can enhance our customer experience and minimize our cost structure.
The design, development, and implementation of new technology and systems carries inherent risks.
For example, the development and implementation of such technology and systems may distract management from operations or result in operational inefficiencies or other unforeseen complications that may adversely affect our business operations and customer relationships.
We may not realize the anticipated benefits associated with certain investments in technology and systems and may be required to record material non-cash impairment charges.

and 30 more.

Gone since FY2025

Approximately 20% and 38% of our net sales in fiscal 2024 were directly related to the U.S. residential and non-residential end markets, respectively.
For example, interest rate increases throughout calendar year 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 the second half of 2024, 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 suppress the U.S. residential and non-residential construction markets that could have a material adverse effect on our business or financial condition.
Approximately 42% of our net sales in fiscal 2024 were related to the municipal market.
In November 2024, President Trump announced an advisory commission, the “Department of Government Efficiency” to reform federal government processes and reduce expenditures.
In January 2025, President Trump issued an executive order to pause funding disbursements under IIJA, however this funding pause was not related to funding for water or road projects.
A permanent reduction in IIJA funding may have an adverse effect on our business or financial condition.
In fiscal year ended January 28, 2024 (“fiscal 2023”) , we saw improvements in the supply chain and more predictable lead times for certain products, but for other products the supply chain remained constrained.
This led to price stability in fiscal 2023.
Additionally, the conflict in Ukraine resulted in increases in costs associated with products containing ductile iron and steel.
President Trump has indicated an intent to impose or increase tariffs on imported goods from several geographic regions.
The imposition of such tariffs may strain international trade relations or impact costs of raw materials.
We balance the need to maintain inventory levels that are sufficient to ensure competitive lead times against the risk of inventory obsolescence due to changing customer or consumer requirements and fluctuating product costs.
If we overestimate demand and purchase too much of a particular product, we face a risk that the price of that product will fall, leaving us with inventory that we cannot sell at historical profit margins or record a material charge if we are required to write-down inventory at net realizable value .
We estimate that our net sales accounted for approximatel y 19% of our $39 billion addres sable market in fiscal 2024.
Effective March 31, 2025, Steve LeClair, our Chief Executive Officer, will transition to the role of Executive Chair, where he will act as an advisor to the business, while continuing to lead the board of directors as chair.
Mark Witkowski, our current Chief Financial Officer, will succeed Steve LeClair as our Chief Executive Officer and become a member of the board of directors.
Additionally, Robyn Bradbury, our current Senior Vice President of Finance and Investor Relations, will succeed Mark Witkowski as Chief Financial Officer.
If we are unable to successfully execute our leadership transition, we could experience disruption in the setting and execution of our operational and strategic objectives that could have a material adverse effect on our business or financial condition.
In addition, a leadership transition may cause volatility in our stock price regardless of the success of the transition.
In fiscal 2024, our top supplier accounted for approximately 7% of our product expenditures.
Our top ten largest suppliers accounted for approximately 43% of our total purchases in fiscal 2024.
Disruptions in transportation lines, such as the March 2021 blockage of the Suez Canal and the adverse impact to the global shipping industry, may also cause global supply chain issues that affect us or our suppliers.
Even if our rebate programs are not adversely affected through negotiation, we may not earn rebates at level commensurate with historical periods, and our gross margin percentage may be adversely impacted.
Approximately 98% of our net sales volume in fiscal 2024 was facilitated through the extension of credit to our customers whose ability to pay is dependent, in part, upon the economic strength of the industry in the areas in which they operate.
Companies across all industries are facing increasing scrutiny from stakeholders related to their ESG and sustainability practices.
For example, on March 6, 2024, the SEC adopted final rules that would require new climate-related disclosure in SEC filings, including certain climate-related metrics and greenhouse gas emissions, information about climate-related targets and goals, transition plans, if any, and extensive attestation requirements.
In April 2024, the SEC stayed the rules pending outcome of legal challenges to the final rules in the Eight Circuit Court of Appeals.
If the final rules are implemented, they would cause us to incur additional compliance and reporting costs, certain of which could be material, including related to monitoring, collecting, analyzing and reporting new metrics and implementing systems and procuring additional internal and external personnel with the requisite skills and expertise to serve those functions and provide necessary attestation, as applicable.
In addition to these proposed SEC rule changes, California passed a series of climate disclosure bills in October 2023, that require initial disclosures beginning in 2026, which may lead to other states proposing climate-related regulations that require additional climate-related disclosures.
Due to the nature of our business, from time to time we may be subject to legal proceedings, regulatory disputes, and governmental inquiries that could cause us to incur significant expenses, divert our management’s attention, and materially harm our business, financial condition, and operating results.
Although the majority of our overall product offerings relate to distribution for which we engage in no significant manufacturing, we do perform light fabrication services for certain product categories, including fire protection, storm drainage, geosynthetics and erosion control, meter sets and fusible HDPE piping products, which collectively accounted for less than 5% of our net sales in fiscal 2024 and which we believe are products with significant opportunities for growth.
As of February 2, 2025, we employed approximately 5,700 associates in total, a significant percentage of whom work at our branch locations.
As of February 2, 2025, goodwill and amortizing intangible assets, net of accumulated amortization, represented 32% and 16%, respectively, of our total assets.
The Company has capitalized $23 million associated with ongoing internal use software projects.
As of February 2, 2025, we had total consolidated indebtedness of $2,283 million and $275 million in outstanding lease commitments.
In addition, as of February 2, 2025, after giving effect to $15 million of letters of credit issued under the Senior ABL Credit Facility (as defined in Note 6 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K), Core & Main LP would have been able to borrow an additional $1,142 million under the Senior ABL Credit Facility, subject to borrowing base availability.
Core & Main LP’s ability to borrow additional amounts under the Senior ABL Credit Facility depends upon satisfaction of these covenants.
Events beyond our control can affect our ability to meet these covenants.

and 25 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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