CNM 10-K & 10-Q changes, risk factors and insider trading

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 20%18% and 38% of our net sales in fiscal 20242025 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 throughoutin calendar yearfiscal 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 thefiscal second2024 halfand offiscal 2024,2025, 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 suppressresult 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.

Fluctuations in and uncertainty surrounding the U.S. federal government’s budget and potential changes to budgetary priorities can also negatively impact municipal spending. In November 2024, President Trump announced an advisory commission, the “Department of Government Efficiency” to reform federal government processes and reduce expenditures. Reduced federal funding and corresponding reductions in federal fund appropriations may adversely affect many of our customers, who derive funding from federal, state and local bodies, which in turn may reduce the demand for our products and services. Conversely, increased federal funding may also adversely affect our business by slowing down state and local spending as a result of delays in appropriating such federal funding to our end customers. In November 2021, the IIJA, which includes $55 billion to invest in water infrastructure across the U.S., was signed into law. When such a large amount of federal funding for infrastructure projects is allocated at once, funds may not be efficiently distributed to the markets in which we operate on a timely basis. Many of our customers, including those in our municipal end market, may also choose or be forced to delay the commencement of infrastructure projects until such funds are allocated, may choose or be forced to re-scope construction-ready infrastructure projects to qualify for federal funding or may not be able to timely pay for products or services provided, which could delay any benefits we expect to receive from the IIJA. The majority of which, we believe, has yet to be realized. 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 conjunction with the IIJA, the Build America Buy America Act (“BABA”) was enacted, which requires that all iron, steel, manufactured products, and construction materials used in covered infrastructure projects are produced in the U.S. Should the products we distribute be deemed to not comply with BABA, we may not realize the potential benefits from the IIJA. Further, while our industries may benefit from increased federal funding, there is no certainty that we will receive benefits associated with such increase, as a disproportionate amount of funds could go to our competitors.

Our financial performance is impacted by price fluctuations in the cost to procure substantially all the products we sell and our ability to reflect these changes, in a timely manner, in our customer pricing. 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. The prices of products we purchase and sell increased in the fiscal year ended January 29, 2023 (“fiscal 2022”) due to several factors, including, but not limited to, constraints in the supply chain associated with labor, global logistics, general inflationary pressures and availability of raw materials, that are in part due to conflict in countries that export raw materials in our products and other weather events. These factors led to decreased availability of certain products that we purchase from our suppliers. In fiscal year ended January 28, 2024 (“fiscal 2023”),2023, we saw improvements in the supply chain and more predictable lead times for certain products,products that led to price stability, but for other products the supply chain remained constrained. This led to price stability in fiscal 2023. In fiscal 2024, certain suppliers and product lines experienced greater product availability that resulted in slightly lower selling prices for these product lines. Additional supply chain disruptions may result in increases in product costs which we may not be able to pass on to our customers, loss of sales due to lack of product availability or potential customer claims from the inability to provide products in accordance with contractual terms. Disruptions caused by natural disasters or similar extreme weather events may also affect our ability to both maintain key products in inventory and deliver products to our customers on a timely basis, which may in turn adversely affect the Company. Any material shortage of products in the market as a result of natural disasters or similar extreme weather events can negatively impact our net sales, and we may not be able to offset increased product costs via corresponding price increases. Additionally, the conflict in Ukraine resulted in increases in costs associated with products containing ductile iron and steel. A shortage of available manufacturing capacity, or excess capacity, in the industry can result in significant increases or declines in the supply of our products, which in turn results in fluctuations in the market prices for our products, sometimes within a short period of time. Although in some cases we have firm price quotes with our suppliers that fix the price at which we purchase products for a defined period of time, we have experienced termination of certain contracts through the enactment of force majeure contractual clauses.

We may experience price volatility associated with the implementation or rescission of tariffs or other restrictions placed on foreign imports by the U.S. or any related countermeasures taken by impacted foreign countries. Tariff-related activities may also impact the level of demand associated with products subject to tariffs as our customers may seek alternative products. PresidentThere Trumphave 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. In February 2026, the U.S. Supreme Court struck down certain of these tariffs, but the U.S. government has indicated anit intentmay impose replacement or supplemental tariffs in response to imposethe 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 increaseincreased tariffs on importedcertain goodsexports from severalthe geographicU.S. regions.There Theis impositioncurrently ofsignificant suchuncertainty tariffsabout maythe strainfuture internationalrelationship between the U.S. and other countries with respect to trade relationspolicies, or impact costscost of raw materials.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. It remains unclear what, and the timing of, future actions may be taken by the U.S. or other governments with respect to international trade agreements, the imposition or removal of tariffs on goods imported into or exported from the U.S., the creation or removal of barriers to trade, tax policy related to international commerce, or other trade matters, and the impact of those actions on the cost of products we purchase and sell.

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 requirementsrequirements, 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. Even after an inventory write-down we would likely not be able to sell the inventory at historical product margins. If we underestimate demand and purchase insufficient quantities of products, inventory shortages could result in delayed revenue, loss of sales opportunities, and/or reduced profit margins. Either of these scenarios could have a material adverse effect on our business or financial condition. These risks are elevated during periods of supply chain disruption as we may simultaneously be unable to obtain certain products in a timely manner and increase on-hand quantities of other products.

Acquisitions are an important component of our growth strategystrategy, and we regularly consider and enter into strategic transactions, including mergers, acquisitions, investments and other growth, market and geographic expansion strategies, with the expectation that these transactions will result in increases in net sales, cost savings, synergies and various other benefits. However, there can be no assurance that we will be able to continue to grow our business through acquisitions or other strategic transactions as we have done historically or that any businesses acquired will perform in accordance with expectations or that business judgments concerning the value, strengths and weaknesses of businesses acquired will prove to be correct. Our ability to deliver the expected benefits from any strategic transactions that we complete is subject to numerous uncertainties and risks, including our ability to integrate personnel, labor models, financial, supply chain and logistics, IT and other systems successfully; disruption of our ongoing business and distraction of management and other critical personnel; hiring additional management and other critical personnel; and increasing the scope, geographic diversity and complexity of our operations. If an acquired business fails to operate as anticipated or cannot be successfully integrated with our existing business, it could have a material adverse effect on our business or financial condition. Moreover, because we regularly consider and enter into strategic M&A transactions, the integration of businesses may create complexity in our financial systems and internal controls and make them more difficult to manage. Such integration into our internal control system could cause us to fail to meet our financial reporting obligations. We will continue to analyze and evaluate the acquisition of strategic businesses and other strategic transactions with the potential to strengthen our industry position or enhance our existing product offerings. Moreover, consolidation in our industry could make it more difficult for us to maintain operating margins and could also increase competition for our potential acquisition targets and result in higher purchase price multiples.

In connection with any acquisition, we may acquire liabilities or defects such as legal claims, including those not identified during due diligence, such as third-party liability and other tort claims; claims for breach of contract; employment-related claims; environmental, health and safety liabilities, conditions or damage; permitting, regulatory or other compliance with law issues; liability for hazardous materials; or trade liabilities. If we acquire any of these liabilities, and they are not adequately covered by insurance or an enforceable indemnity or similar agreement from a creditworthy counterparty or are otherwise mitigated, we may be responsible for significant out-of-pocket expenditures. In connection with any divestitures, we may incur liabilities for breaches of representations and warranties or failure to comply with operating covenants under any agreement for a divestiture. In addition, we may indemnify a counterparty in a divestiture for certain liabilities of the subsidiary or operations subject to the divestiture transaction. These liabilities, if they materialize, could have a material adverse effect on our business or financial condition.

We may be required to replace a supplier if their products do not meet our quality or safety standards. In addition, our suppliers could discontinue selling products at any time for reasons that may or may not be in our control or the suppliers’ control, including shortages of raw materials, environmental and social supply chain issues, labor disputes or weather conditions. Disruptions in transportation lines, such as the March 2021 blockage of the Suez Canal and the adverse impact to the global shipping industry,lines may also cause global supply chain issues that affect us or our suppliers. Global economic conditions and escalation of geopolitical conflicts may also result in global supply chain issues that adversely impact our access to products and supplies.

The rebate programs we negotiate with our suppliers often require us to purchase minimum quantities or dollar amount of purchases to qualify for the rebate and result in higher rebates with increased quantities or dollars purchased. Even if our rebate programs are not adversely affected through negotiation, we may not earn rebates at levellevels commensurate with historical periods, and our gross margin percentage may be adversely impacted. Changes to our end markets that decrease demand for products or planned inventory reductions due to more reliable lead times for products may cause us to fall short of minimum quantities or dollar amounts required to earn a rebate or preclude us from reaching the highest rebates offered by our suppliers. As many rebate programs are calculated as a percentage of dollars spent, deflation in product costs can adversely impact rebates earned relative to historical periods.

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 management, treatment, storage and disposal of hazardous materials and wastes, the investigation and remediation of contamination and the protection of our associates. We have incurred, and expect to continue to incur, capital expenditures in addition to ordinary course costs to comply with applicable current and future environmental, health and safety laws. More stringent or complicated federal, state or local environmental rules or regulations could increase our operating costs and expenses. Our failure to comply with environmental, health and safety laws may result in fines, penalties, enforcement actions and other sanctions as well as liability for response costs, property damages and personal injuries resulting from releases of, or exposure to, hazardous materials. We could also be held liable for the costs to address contamination at any real property we have ever owned or operated,operated or used as a storage or disposal site. In addition, 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, including additional investigation or other obligations with respect to any potential health hazards of our products or business activities, may lead to additional compliance or other costs that could have a material adverse effect on our business or financial condition.

Companies across all industries are facing increasing scrutiny from customers, regulators and other stakeholders related to their ESG and sustainability practices. Investor advocacy groups, proxy advisory firms, certain institutional investors and lenders, investment funds and other influential investors and rating agencies are also increasingly focused on ESG and sustainability practices and matters and on the implications and social cost of their investments and loans while other market participants have evidenced opposition to certain companies’ consideration of such practices and matters. New government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence and disclosure. Increased focus on ESG and sustainability matters could have a material adverse effect on our business or financial condition, and expose us to new or additional risks, including as described below.

We recognize that many of our shareholders, associates, suppliers, customers, regulators and other stakeholders expect us to continue to focus on long-term sustainable performance while considering the positive impact we can have on the environment and in our communities. This includes addressing significant, relevant ESG factors, further working to prioritize sustainable energy practices and reducing our carbon footprint. We must make strategic investments to ensure our sustainability goals and objectives are responsive to the broader market environment and directly tied to our overarching business priorities. We have incurred and expect to continue to incur costs and capital expenditures in doing so, and certain of such future costs and capital expenditures could be material. ForFrom example,time onto March 6, 2024,time, the SEC adoptedand finalstate rulesregulators thatin wouldCalifornia requireand newother U.S. states in which we sell our products have proposed, phased in, are phasing in, or may phase in, climate-related disclosureregulations. inSuch SECregulations 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 wouldcould 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. Such costs could have a material adverse effect on our business or financial condition. 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.

In particular, product quality issues as a result of our suppliers’ or manufacturers’ acts or omissions could negatively impact customer confidence in our brands and our products. As we do not have direct control over the quality of the products manufactured or supplied by such third-party suppliers, we are exposed to risks relating to the quality of the products we distribute. If our product offerings do not meet applicable safety standards or customers’ expectations regarding safety or quality,quality or are alleged to have quality issues or to have caused personal injury or other damage, we could experience lower revenue and increased costs and be exposed to legal, financial and reputational risks, as well as governmental enforcement actions. In addition, actual, potential or perceived product safety concerns could result in costly product recalls.

We provide medical coverage to some of our associates through a self-insured preferred provider organization. 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. Though we believe that we have adequate insurance coverage in excess of self-insured retention levels, our business or financial condition may be adversely affected if the number and severity of insurance claims increases.

Our intangible assets include costs capitalized for development, design and implementation of internal use software. The Company has capitalized $23$36 million associated with ongoing internal use software projects. These intangible assets are assessed for impairment when a triggering event occurs including at the point it is determined that the internal use software will not fulfil its intended use. If we cease development of the internal use software prior to finalizing the implementation, the Company’s determination would result in an impairment of the intangible asset.

Most of our net sales are made to customers that do not have contracts in place and are not contractually obligated to purchase products from us. Our repeat business with respect to these customers largely depends on these customers’ satisfaction with our products and our customer service. At any timetime, these customers can stop purchasing our products from us and cease doing business with us. We cannot be sure that any particular customer will continue to do business with us for any period of time.

In addition, the Senior ABL Credit Facility requires Core & Main LP to comply with a consolidated fixed charge coverage ratio under certain circumstances and contains other covenants customary for asset-based facilities of this nature. Core & Main LP’s ability to borrow additional amounts under the Senior ABL Credit Facility depends upon satisfactioncompliance ofwith these covenants. Events beyond our control can affect our ability to meetcomply with these covenants.

Our failure to comply with our obligations under the agreements governing our indebtedness as described above, as well as others contained in any future debt instruments from time to time, may result in an event of default under the agreements governing our indebtedness. AThe occurrence of an event of default, if not cured or waived, may permit acceleration of our indebtedness. If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds available to pay the accelerated indebtedness or that we will have the ability to refinance the accelerated indebtedness on terms favorable to us or at all. Being forced to refinance these borrowings on less favorable terms or not being able to refinance these borrowings could have a material adverse effect on our business or financial condition.

In addition, each of the Tax Receivable Agreements requires that any debt document that refinances or replaces our existing indebtedness be no more restrictive on our ability to make payments under each Tax Receivable Agreement than our current indebtedness, unless CD&R Waterworks Holdings, L.P., a Delaware limited partnership, and certain stockholders affiliated with CD&R that transferred all of their Partnership Interests at the time of the initial public offering (collectively, the “CD&R Investors”) otherwise consent. At the time of any such refinancing or replacing of our existing indebtedness, it may not be possible to include such terms in such debt documents, and a result, we may need the CD&R Investors’ consent to complete such refinancing or replacing of our existing indebtedness.

We are a holding companycompany, and our primary material assets are our indirect ownership of Core & Main LP, through its ownership interest in Holdings, and deferred tax assets associated with this ownership. As such, we have no independent means of generating revenue or cash flow, and our ability to pay our taxes and operating expenses or declare and pay dividends in the future, if any, will be dependent upon the financial results and cash flows of our current and future subsidiaries, including Core & Main LP. There can be no assurance that our subsidiaries will generate sufficient cash flow to distribute funds to us or that applicable state law and contractual restrictions, including covenants in the agreements that govern Core & Main LP’s indebtedness, will permit such distributions.

Holdings is treated as a partnership for U.S. federal income tax purposes and, as such, generally is not subject to any entity-level U.S. federal income tax. Instead, taxable income of Holdings, if any, will be allocated to holders of Partnership Interests, including us. Accordingly, we will generally incur U.S. federal income taxes on our allocable share of any net taxable income of Holdings. In addition, our allocable share of Holdings’ net taxable income will increase over time as Management Feeder continues to exchange its Partnership Interests for shares of our Class A common stock. Such increase in our taxable income may increase our tax expenses and may have a material adverse effect on our business or financial condition.

Under the terms of the Amended and Restated Limited Partnership Agreement of Holdings, Holdings is obligated to make tax distributions to holders of Partnership Interests, including us, to the extent that other distributions made by Holdings are otherwise insufficient to pay the tax liabilities of holders of Partnership Interests. In addition to tax expenses,obligations, we are also incur expenses relatedrequired to our operations, includingmake payments under the Tax Receivable Agreements.Agreements Because tax distributions are based on an assumed tax rate, Holdings may be required to make tax distributions that, in the aggregate,that could be significant. We intend, as its general partner, to cause Holdings to make cash distributions to the ownersholders of Partnership Interests, including us, in an amount sufficient to (i) fund all or part of their tax obligations in respect of taxable income allocated to them andthem, (ii) cover our operating expenses,expenses includingand (iii) fund payments made under the Tax Receivable Agreements. However, Holdings’ ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would either violate any contract or agreement to which Holdings is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering Holdings insolvent. If we do not have sufficient funds to pay taxes or other expenses or to fund our operations, we may have to borrow funds, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. To the extent that we are unable to make payments under any Tax Receivable Agreement for any reason, such payments generally will be deferred and will accrue interest until paid; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under such Tax Receivable Agreement and therefore accelerate payments due under such Tax Receivable Agreement. In addition, if Holdings does not have sufficient funds to make distributions, our ability to declare and pay cash dividends on our Class A common stock will also be restricted or impaired. See “—Risks Related to Our Class A Common Stock”.

In addition, if Management Feeder exchanged their remaining Partnership Interests on February 2,1, 2025,2026, utilizing assumptions described in Note 7 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we would recognize an additional deferred tax asset (subject to offset with existing deferred tax liabilities) of approximately $131$102 million and a Tax Receivable Agreement liability of approximately $111$87 million. The full exchange by Management Feeder will also decrease our aforementioned deferred tax asset associated with our investment in Holdings by $5 million. These amounts are estimates only and are subject to change. The actual amount and timing of any payments under the Tax Receivable Agreements will vary depending upon a number of factors, including the timing of exchanges by the holders of Partnership Interests, the amount of gain recognized by such holders of Partnership Interests, the amount and timing of the taxable income we generate in the future and the federal tax rates thenapplicable applicable.at the time of such exchanges.

As a result of the foregoing, (i) we could be required to make payments under such Tax Receivable Agreement that are greater than the actual benefits we ultimately realize in respect of the tax benefits that are subject to such Tax Receivable Agreement and (ii) if we elect to terminate or negotiate aan early settlement of the Tax Receivable Agreement early,Agreement, we would be required to make an immediate cash payment based on the present value of the anticipated future tax benefits that are the subject of such Tax Receivable Agreement, which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits. Based upon certain contractual assumptions, described in greater detail in Note 7 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we estimate that if we had exercised our termination right as of February 2,1, 2025,2026, the amount of the termination payment pursuant to the Tax Receivable Agreements recorded on the Consolidated Balance Sheets for the exchange of Partnership Interests would be approximately $517$553 million and the amount of the termination payment to Management Feeder holding the remaining exchangeable Partnership Interests would be approximately $76$62 million. The foregoing numbers are estimates and the actual payments could differ materially based on, among other things, the timing of an early termination election, the discount rate applicable at the time of the early termination election and material changes in relevant tax law. In these situations, our payments under such Tax Receivable Agreement could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. There can be no assurance that we will be able to fund or finance our payments under the Tax Receivable Agreements.

Our acquisitions of Partnership Interests in connection with the Exchange Agreement are expected to result in increases in our allocable tax basis in the assets of Holdings that otherwise would not have been available to us. These increases in tax basis are expected to reduce the amount of cash tax that we would otherwise have to pay in the future due to increases in depreciation and amortization deductions (for tax purposes). These increases in tax basis may also decrease gain (or increase loss) on future dispositions of certain assets of Holdings to the extent the increased tax basis is allocated to those assets. The Internal Revenue Service (the “IRS”) may challenge all or part of these tax basis increases, and a court could sustain such a challenge.

Payments under the Tax Receivable Agreements will be based on the tax reporting positions that we determine,determine. andThe Internal Revenue Service (the “IRS”) or another taxing authorityauthority, however, may challenge all or part of the tax basis increases, as well as other related tax positions we take, and a court could sustain such challenge. While the actual amount of an increase in tax basis, as well as the actual amount and timing of any payments under the Tax Receivable Agreements, will vary depending upon a number of factors, including the timing of exchanges, the price of shares of our Class A common stock at the time of the exchange, the extent to which such exchanges are taxable, future tax rates, and the amount and timing of our income, we expect that, as a result of the size of the increases in the tax basis of the tangible and intangible assets of Holdings attributable to our interests in Holdings, during the expected term of the Tax Receivable Agreements, the payments that we may make could be substantial.

The payment obligations under the Tax Receivable Agreements are our obligation and not an obligation of Holdings. In the event any tax benefits initially claimed by us and for which payment has been made are successfully challenged by a taxing authority, such prior payments under the applicable Tax Receivable Agreements will not be reimbursed but any such detriment will generally be taken into account as a reduction in future payments due under the applicable Tax Receivable Agreement. However, we might not determine that we have effectively made an excess cash payment for a number of years following the initial time of such payment and, if any of our tax reporting positions are challenged by a taxing authority, we will not be permitted to reduce any future cash payments under such Tax Receivable Agreement until any such challenge is finally settled or determined. As a result, payments could be made under such Tax Receivable Agreement in excess of the tax savings that we realize in respect of the tax attributes that are the subject of such Tax Receivable Agreement.

Additionally, pursuant to the terms of the Exchange Agreement and subject to certain restrictions set forth therein and as described elsewhere in this Annual Report on Form 10-K, Management Feeder (or its permitted transferees) has the right to exchange its Partnership Interests, together with the retirement of a corresponding number of shares of our Class B common stock, for shares of our Class A common stock on a one-for-one basis or, at the election of a majority of the disinterested members of our board of directors, for cash from a substantially concurrent public offering or private sale (based on the price of our Class A common stock sold in such public offering or private sale), net of any underwriting discounts and commissions, for each Partnership Interest exchanged, subject to customary conversion rate adjustments for stock splits, stock dividends, reclassifications and other similar transactions. The Exchange Agreement also provides that in connection with any such exchange, to the extent that Holdings has, since consummation of thecertain Reorganizationreorganization Transactionstransactions and our IPO,initial public offering, made distributions to Management Feeder that are proportionately lesser or greater than the distributions made to us, on a pro rata basis, the number of shares of Class A common stock to be issued or cash to be paid to Management Feeder will be adjusted to take into account the amount of such discrepancy that is allocable to the Partnership Interests, and Class B common stock, subject to such exchange. We expect to cause Holdings to make overall distributions to its partners in such a manner as generally to limit increases to the number of shares of Class A common stock to be issued or cash to be paid to Management Feeder in connection with the adjustment described in the preceding sentence. The amount of future partner distributions and the number of shares issuable pursuant to such provision of the Exchange Agreement will fluctuate based on a number of factors, including our financial performance, the actual tax rates applied to Management Feeder (or its permitted transferees), any changes in tax rates or tax laws and future share prices for our Class A common stock. Unless our board of directors elects to settle these obligations in cash pursuant to the terms of the Exchange Agreement, we expect that these arrangements will result in a substantial number of additional shares of Class A common stock being issued to Management Feeder.

In accordance with the terms of the Amended and Restated Limited Partnership Agreement of Holdings, Core & Main, as the general partner of Holdings, has the right to require the mandatory exchange of the remaining Partnership Interests held by Management Feeder for shares of Class A common stock in accordance with the Exchange Agreement. We continually evaluate the benefits and costs of our legal entity structure, including but not limited to its tax implications, administrative costs and clarity of financial reporting, and we may elect to initiate a mandatory exchange transaction in the future. A mandatory exchange of Partnership Interests constitutes a taxable transaction to members of Management Feeder, creates tax attributes for Core & Main and establishes obligations under our Tax Receivable Agreements. While a mandatory exchange by Holdings does not require members of Management Feeder to sell their Class A common stock, certain members of Management Feeder, in part to fund tax obligations, may elect to exchange their Partnership Interests and sell their Class A common stock in anticipation of a potential mandatory exchange event or may elect to sell their Class A common stock after a mandatory exchange event. The mandatory exchange, the potential sale of Class A common stock or actual sales of Class A common stock could cause the market price of our Class A common stock to decline. The timing and authorization of a potential future mandatory exchange are at the discretion of the Board of Directors of Core & Main.

While we may in the future consider approving a plan to pay dividends on our Class A common stock, we currently intend to use our future earnings, if any, to repay debt, to fund our growth, to develop our business, for working capital needs, make payments under the Tax Receivable Agreements, stock repurchases and for general corporate purposes. Therefore, there is no certainty as to the timing, frequency and magnitude of any dividends that we may pay on our Class A common stock for the foreseeable future, and the success of an investment in shares of our common stock depends upon any future appreciation in their value. There is no guarantee that shares of our Class A common stock will appreciate in value or even maintain the price at which our shareholders have purchased their shares. Payments of dividends, if any, are at the sole discretion of our board of directors after taking into account various factors, including general and economic conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal and tax restrictions and implications of the payment of dividends by us to our shareholders or by our subsidiaries to us, and such other factors as our board of directors may deem relevant. In addition, our operations are conducted almost entirely through our subsidiaries. As such, to the extent that we determine in the future to pay dividends on our Class A common stock, none of our subsidiaries will be obligated to make funds available to us for the payment of dividends. Further, the agreements governing our subsidiaries’ debt agreements significantly restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us, and we may enter into other debt agreements or borrowing arrangements in the future that restrict or limit our ability to pay cash dividends on our Class A common stock. In addition, Delaware law imposes additional requirements that may restrict our ability to pay dividends to holders of our Class A common stock.

On JuneDecember 12,1, 2024,2025, the Company’s board of directors authorized aan increase of $500 million to the share repurchase program (the “Repurchase Program”), pursuant to which the Company may purchase up to $500$1 millionbillion of the Company’s Class A common stock. The timing and amount of any share repurchases will be determined by the Company at its discretion based on ongoing evaluation of general market conditions, the market price of the Company’s Class A common stock, the Company’s capital needs and other factors the Company deems relevant. Under the Repurchase Program, share repurchases may be made through a variety of methods, which may include open market or privately negotiated transactions, including accelerated repurchase transactions, block trades or trading plans intended to comply with Rule 10b5-1 under the Exchange Act. The Repurchase Program does not obligate the Company to acquire any particular amount of Class A Common Stock, and it may be amended, suspended or terminated at any time at the Company’s discretion. The Company currently expects to fund the Repurchase Program using existing cash and cash equivalents, short-term borrowings and/or future cash flows. During fiscal 2024,2025 theand Companyfiscal repurchased2024 3,974,820we sharescompleted $155 million and $176 million, respectively, of repurchases of Class A common stock forunder athe totalRepurchase Program. As of $176February 1, 2026, $669 million throughof openthe marketauthorized transactions.amount remained available for use under the Repurchase Program.

Core & Main, Inc. (“Core & Main” and collectively with its subsidiaries, the “Company”) 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, nationwide.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 reach customers through a network of over 370 branches across 49the United States (“U.S.”) states.and Canada. Our products include pipes, valves, fittings, storm drainage products, fire protection products, meter products and other products. We complement our core products through additional offerings, including smart meter systems, fusible high-density polyethylene (“fusible HDPE “) piping solutions, specifically engineered treatment plant products, geosynthetics and erosion control products. The Company’s services and capabilities allow for integration with customers and form part of their sourcing and procurement function.

Our fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31st. Quarters within the fiscal year include 13-week periods, unless a fiscal year includes a 53rd week, in which case the fourth quarter of the fiscal year will be a 14-week period. The fiscal year ended February 1, 2026 (“fiscal 2025”) included 52 weeks, the fiscal year ended February 2, 2025 (“fiscal 2024”) included 53 weeks and the fiscal yearsyear ended January 28, 2024 (“fiscal 2023”) and January 29, 2023 (“fiscal 2022”) included 52 weeks. The next fiscal year ending FebruaryJanuary 1,31, 20262027 (“fiscal 20252026”) will include 52 weeks.

On June 12, 2024, the Company’s board of directors authorized a sharethe repurchase program (the “Repurchase Program”), pursuant to which the Company may purchaseof up to $500 million of the Company’s Class A common stock. Shares repurchasedstock under the Repurchase Program are retired immediately and are accounted for as a decrease to stockholders’ equity.Program. During fiscal 2024, the Company repurchased 3,974,820 shares of Class A common stock for a total of $176 million through open market transactions.

Historically, demand for our products has been tied to municipal infrastructure spending, non-residential construction and residential construction in the U.S. We estimate that, based on fiscal 20242025 net sales, our exposure by end market was approximately 42%44% municipal, 38% non-residential and 20%18% residential. Infrastructure spending and the non-residential and residential construction markets are subject to cyclical market pressures. Municipal demand has been relatively steady over the long termlong-term due to the consistent and immediate need to replace broken infrastructure; however, activity levels are subject to the availability of funding for municipal projects. Non-residential and residential construction activities are primarily driven by availability of credit, interest rates, general economic conditions, consumer confidence and other factors that are beyond our control. The length and magnitude of these cycles have varied over time and by market. Cyclicality can also have an impact on the products we procure for our customers or our related services, as further discussed under “—Price Fluctuations” below. Interest rate increases in fiscal 2023 slowed home buying and new lot development, which waswere a contributing factor to aslowing declinenew lot development and contraction in the residential end marketmarket. in fiscal 2023. InAlthough the secondFederal halfReserve Board of 2024Governors (“FRB”) cut certain benchmark interest rates werein cut,fiscal 2024 and fiscal 2025, it is uncertain if the FRB will raise or lower interest rates continuein the future and, if so, to declinewhat thislevel and for how long. Interest rate increases or the lack of anticipated interest rate decreases may result in increaseddecreased levels of activity in the U.S. residential and non-residential construction markets.

In November 2021, the Infrastructure Investment and Jobs Act (“IIJA”) was signed into U.S. law, which includesincluded an allocation of $55 billion to invest in water infrastructure across the U.S.U.S., Inthe Januarymajority 2025,of Presidentwhich Trumpwe issuedbelieve anhas executive orderyet to pausebe funding disbursements under IIJA; however this funding pause was not related to funding for water or road projects. While this pause is temporary, a more permanent reduction in IIJA funding may have an adverse effect on our business or financial condition.realized. In the coming years, including as a result of the IIJA, we expect, but cannot provide any assurance that, increased federal infrastructure investment to have a core focus on the upgrade, repair and replacement of municipal waterworks systems and to address demographic shifts and serve the growing population. We believe these dynamics, coupled with expanding municipal budgets,dynamics create the backdrop for a favorable funding environment and accelerated investment in projects that will benefit our business.

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. During fiscal 2022, we experienced supply chain disruption that contributed to significant price inflation and product surcharges with respect to certain products we sell. The supply chain disruption was due to several factors, including, but not limited to, unpredictable lead times and delays from our suppliers, labor availability, global logistics and the availability of raw materials. In fiscal 2023, we saw improvements in the supply chain and more predictable lead times for certain products,products that led to price stability, but for other products the supply chain remained constrained. This led to price stability in fiscal 2023 compared to the price inflation we experienced during fiscal 2022. In fiscal 2024,Subsequently, certain suppliers and product lines experienced greater product availability that resulted in slightly loweredlower selling prices for thesecertain product lines. Additional supply chain disruptions may result in increases in product costs which we may not be able to pass on to our customers, loss of sales due to lack of product availability or potential customer claims from the inability to provide products in accordance with contractual terms. Greater product availability from supply chain improvements may lead to increased competition that may result in price and volume declines. We continue to monitor all of these factors and the resulting price impacts. In addition, the cost of products we purchase and sell may be impacted by the imposition of additional tariffs on imported goods from several geographic regions.

Certain of our indebtedness, including borrowings under the Senior Term Loan Credit Facility (as defined in Note 6 to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K) and the Senior ABL Credit Facility, are subject to variable rates of interest and expose us to interest rate risk. The Senior Term Loan Credit Facility and the Senior ABL Credit Facility each bear interest based on term secured overnight financing rate (“Term SOFR”). If interest rates increase, our debt service obligations on our variable-rate indebtedness will increase and our net income would decrease, even though the amount borrowed under the facilities remains the same. As of February 2,1, 2025,2026, we had $2,283$2,166 million of outstanding variable-rate debt. We seek to mitigate our exposure to interest rate volatility through the entry into interest rate swap instruments, such as our interest rate swap,swaps, associated with borrowings under the Senior Term Loan Credit Facility, which effectively convertsconvert $800$700 million of our variable rate debt to fixed rate debt, with notional amount decreases to $700 million on July 27, 2025debt through the instrument maturity on July 27, 2026.2026 Onand February 12, 2024, Core & Main LP entered into an additionalthe interest rate swap, associated with borrowings under the Senior Term Loan Credit Facility,swap that has a starting notional amount of $750 million that increases to $1,500 million on July 27, 2026 through the instrument maturity on July 27, 2028. Despite these efforts, unfavorable movement in interest rates may further result in higher interest expense and cash payments.

Net income represents net sales less cost of sales, operating expenses, depreciation and amortization, interest expense, other expense and the provision for income taxes.

We define Adjusted EBITDA as EBITDA further adjusted for certain items management believes are not reflective of the underlying operations of our business, including but not limited to (a) loss on debt modification and extinguishment, (b) equity-based compensation, (c) expenses associated with the public offerings and subsequent secondary offerings, (d) expenses associated with acquisition activities.and other activities and (e) other (income)/expense. Adjusted EBITDA includes amounts otherwise attributable to non-controlling interests as we manage the consolidated Company and evaluate operating performance in a similar manner. We use Adjusted EBITDA to assess the operating results and effectiveness of our business. See “—Non-GAAP Financial Measures” below for further discussion of Adjusted EBITDA and a reconciliation to net income or net income attributable to Core & Main, Inc., the most directly comparable measure under U.S. generally accepted accounting principles (“GAAP”), as applicable.

Net sales for fiscal 20242025 increased $739$206 million, or 11.0%,2.8%, to $7,441$7,647 million compared with $6,702$7,441 million for fiscal 2023.2024. Net sales increased primarily due to acquisitions,a 4.8% increase in average daily net sales driven by higher volumes and contributions from the 53rd selling week in the current yearacquisitions partially offset by slightlyone lowerless selling prices.week Netcompared to prior year. Average daily net sales increased for pipes, valves & fittingsfittings, storm drainage and meters primarily due to acquisitionshigher partiallyvolumes offsetand byacquisitions. slightlyAverage lowerdaily selling prices. Netnet sales increased for storm drainage due to acquisitions and our ability to drive the adoption of advanced storm water management systems. Net sales for fire protection products declinedprimarily due to lowerhigher average selling prices and lower end-market volumes partially offset by acquisitions. Net sales of meter products benefited from our ability to drive the adoption of smart meter technology through municipalities, increased product availability and acquisitions.

Gross profit for fiscal 20242025 increased $162$79 million, or 8.9%,4.0%, to $1,980$2,059 million compared with $1,818$1,980 million for fiscal 2023.2024. Gross profit as a percentage of net sales for fiscal 20242025 was 26.6%26.9% compared with 27.1%26.6% for fiscal 2023.2024. The overall decreaseincrease in gross profit as a percentage of net sales was primarily attributable to larger prior year benefits from strategic inventory investments during an inflationary period partially offset by favorable impacts from the execution of our gross margin initiatives and accretivedisciplined acquisitions.purchasing and pricing management.

Depreciation and amortization (“D&A”) expense for both fiscal 2025 and fiscal 2024 was $183 millionmillion. comparedD&A with $147 million during fiscal 2023. The increaseexpense was primarilyflat attributableas todecreases in amortization on existing intangible assets was offset by recent acquisitions.

Operating income for fiscal 20242025 decreasedincreased $21$3 million, or 2.8%,0.4%, to $719$722 million compared with $740$719 million during fiscal 2023.2024. The decreaseincrease in operating income was primarily attributable to higher SG&Agross and D&A expensesprofit partially offset by higher grossSG&A profit.expenses.

The provision for income taxes for fiscal 20242025 increased $15$2 million, or 11.7%,1.4%, to $143$145 million compared with $128$143 million duringfor fiscal 2023.2024. The increase was primarily attributable to an increase in theoperating effective tax rateincome partially offset by lowera operatingdecrease income.in the effective tax rate. For fiscal 20242025 and fiscal 2023,2024, our effective tax rates were 24.8%23.9% and 19.4%,24.8%, respectively. The effective tax rate for each period reflects only the portion of net income that is attributable to taxable entities. The increasedecrease in the effective tax rate was primarily attributabledue to a decrease in the non-controlling interest ownership that increased the allocation of net incomebenefits tofrom taxabletax entities.credit investments and certain tax windfall benefits from equity award exercises.

Net income attributable to non-controlling interests for fiscal 20242025 decreasedincreased $137$28 millionmillion, or 6.5%, to $23$462 million compared with $160$434 million for fiscal 2023.2024. The decreaseincrease in net income was primarily attributable to exchangesa ofdecrease Partnership Interests by non-controllingin interest holdersexpense and aan declineincrease in netoperating income.

Net income attributable to Core & Main, Inc. for fiscal 20242025 increased $40$30 million, or 10.8%,7.3%, to $411$441 million compared with $371$411 million for fiscal 2023.2024. The increase was primarily attributable to aan decreased allocation to non-controlling interest holders following exchanges of Partnership Interests partially offset by a declineincrease in net income.

The Class A common stock basic earnings per share for fiscal 20242025 decreasedincreased 0.5%8.4% to $2.14$2.32 compared with $2.15$2.14 for fiscal 2023.2024. The Class A common stock diluted earnings per share for fiscal 20242025 decreasedincreased 0.9%8.5% to $2.13$2.31 compared with $2.15$2.13 for fiscal 2023.2024. The basic and diluted earnings per share decreasedincreased due to higher Class A share counts from exchanges of Partnership Interests partially offset by an increase in net income attributable to Core & Main, Inc. Diluted earnings per share decreased due to a decline in net income partially offset byand lower Class A share counts following the share repurchase transactions executed throughout fiscal 2023 and fiscal 2024.transactions.

Adjusted EBITDA for fiscal 20242025 increased $20$1 million, or 2.2%,0.1%, to $930$931 million compared with $910$930 million for fiscal 2023.2024. The increase in Adjusted EBITDA was primarily attributable to higher gross profit, in part due to contributions from the 53rd selling week,profit partially offset by higher SG&A expenses. For a reconciliation of Adjusted EBITDA to net income or net income attributable to Core & Main, Inc., the most comparable GAAP financial metric, as applicable, see “—Non-GAAP Financial Measures.”

Fiscal Year Ended JanuaryFebruary 28,2, 20242025 Compared with Fiscal Year Ended January 29,28, 20232024

A discussion of changes in our financial condition and results of operations during the fiscal year ended JanuaryFebruary 28,2, 2024,2025, compared to the fiscal year ended January 29,28, 20232024 has been omitted from this Annual Report on Form 10-K, but may be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended JanuaryFebruary 28,2, 2024,2025, filed with the SEC on March 19,25, 2024,2025, which discussion is incorporated herein by reference and which is available, free of charge, on the SEC’s website at www.sec.gov and on our website at www.coreandmain.com.

Historically, we have financed our liquidity requirements through cash flows from operating activities, borrowings under our credit facilities, issuances of equity and debt securities and working capital management activities. Our principal historical liquidity requirements have been for working capital, capital expenditures, acquisitions, servicing indebtedness, payments under the Tax Receivable Agreements, share repurchases (including under the Repurchase Program) and the Repurchase Transactions (as defined in Note 1 to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K).

As of February 2,1, 2025,2026, wethere hadwere $93 millionno outstanding borrowings on our Senior ABL Credit Facility, which provides for borrowings of up to $1,250 million, subject to borrowing base availability. As of February 2,1, 2025,2026, after giving effect to approximately $15$24 million of letters of credit issued under the Senior ABL Credit Facility, Core & Main LP would have been able to borrow approximately $1,142$1,226 million under the Senior ABL Credit Facility, subject to borrowing base availability. Our short term debt obligations of $24 million are related to quarterly principal payments on the Senior Term Loan Credit Facility.

In fiscal 2025, fiscal 2024 and fiscal 2023, the Company had a financing cash outflow related to the payment of $18 million, $11 million and $5 million, respectively, under the Tax Receivable Agreements. The annual payments under the Tax Receivable Agreements increased, and are expected to increasefurther increase, as a result of exchanges, including those exchanges made as part of thePartnership Secondary Offerings (as defined in Note 1 to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K)Interests completed in fiscal 2023.2023 and fiscal 2024. Payments under the Tax Receivable Agreements are only required to be made to the extent that we realize or are deemed to have realized the benefit of the corresponding tax deductions to reduce payments to federal, state and local taxing authorities. These payments are in an amount that represents 85% of the reduction in payments to federal, state and local taxing authorities. As such, the cash savings from the incremental tax deductions are expected to exceed the payments under the Tax Receivable Agreements over the life of these arrangements. Based on the anticipated filing date of income tax returns and contractual payment terms in the Tax Receivable Agreements, we expect these payments to occur two fiscal years after we utilize the corresponding tax deductions. The timing of payments associated with the Tax Receivable Agreements are summarized below:

In addition to making distributions to Core & Main, Inc. to fund tax obligations and payments under the Tax Receivable Agreements, in accordance with the Partnership Agreement, Holdings also makes distributions to Management Feeder representing the non-controlling interests of Core & Main, Inc. to fund their income tax obligations with various taxing authorities. The amount of these payments are dependent upon various factors, including the amount of taxable income allocated to them from Holdings, changes in the ownership percentage of the non-controlling interest holders, changes in tax rates and the timing of distributions relative to the corresponding tax year. Tax distributions to non-controlling interest holders were $7 million, $11 million and $41 million in fiscal 2025, fiscal 2024 and fiscal 2023, respectively. Further exchanges by Management Feeder may result in lower tax distributions subject to any changes to income before provision to income taxes.

Additionally, we regularly evaluate our approach to our capital allocation, which may include acquisitions, capital expenditures, greenfields, debt reduction (including through open market debt repurchases, negotiated repurchases, other retirements of outstanding debt and opportunistic refinancing of debt), stock repurchases, dividends, payments on Tax Receivable Agreements or other distributions. In fiscal 2025 and fiscal 2024, we completed $155 million and $176 millionmillion, respectively, of repurchases of Class A common stock under the Repurchase Program. For further details, refer to Note 1 to the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. We may continue to return capital to our shareholders through share repurchases, including pursuant to the Repurchase Program, or initiating dividend payments. The execution of these, and other, capital allocation activities may be at the discretion of, and subject to the approval by, our board of directors and will depend on our financial condition, earnings, liquidity and capital requirements, market conditions, level of indebtedness, contractual restrictions, compliance with our debt covenants, restrictions imposed by applicable law, general business conditions and any other factors that our board of directors deems relevant in making any such determination. Therefore, there can be no assurance that we will engage in any or all of these actions or to what amount of capital we will allocate to each option.

Net cash used in investing activities increaseddecreased by $518$643 million to $145 million for fiscal 2025 compared with $788 million for fiscal 2024 compared with $270 million for fiscal 2023,2024, primarily attributable to a $510$680 million increasedecrease in cash outflows for acquisitions during fiscal 2024.2025 partially offset by $37 million of investments in tax advantaged limited partnerships and an $11 million increase in capital expenditures.

Fiscal Year Ended JanuaryFebruary 28,2, 20242025 Compared with Fiscal Year Ended January 29,28, 20232024

A discussion of changes in our cash flows during the fiscal year ended JanuaryFebruary 28,2, 2024,2025, compared to the fiscal year ended January 29,28, 20232024 has been omitted from this Annual Report on Form 10-K, but may be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in our Annual Report on Form 10-K for the year ended JanuaryFebruary 28,2, 2024,2025, filed with the SEC on March 19,25, 2024,2025, which discussion is incorporated herein by reference and which is available, free of charge, on the SEC’s website at www.sec.gov and on our website at www.coreandmain.com.

(1)Aggregate amount of commitments under the asset-based revolving credit facility of $1,250 million overall, subject to borrowing base availability. There waswere $93 millionno outstanding borrowings under the Senior ABL Credit Facility as of February 2,1, 2025.2026.

As of February 2,1, 2025,2026, the Company had agreements in place with various suppliers to purchase goods and services, primarily inventory, in the aggregate amount of $1,225$992 million. These purchase obligations are generally cancellable, but the Company does not currently intend to cancel. Payment is dependent on lead times from our suppliers, and could be extended due to supply chain disruptions. Payment is generally expected to be made during fiscal 20252026 for these obligations.

In addition to providing results that are determined in accordance with GAAP, we present EBITDA, Adjusted EBITDA and Adjusted EBITDA,Diluted Earnings Per Share, which are non-GAAP financial measures. These measures are not considered measures of financial performance or liquidity under GAAP and the items excluded therefrom are significant components in understanding and assessing our financial performance or liquidity. These measures should not be considered in isolation or as alternatives to GAAP measures such as net income orincome, net income attributable to Core & Main, Inc.,Inc. or diluted earnings per share, as applicable, cash provided by or used in operating, investing or financing activities or other financial statement data presented in our financial statements as an indicator of our financial performance or liquidity.

We define EBITDA as net income, or net income attributable to Core & Main, Inc., as applicable, adjusted for non-controlling interests, depreciation and amortization, provision for income taxes and interest expense. We define Adjusted EBITDA as EBITDA as further adjusted for certain items management believes are not reflective of the underlying operations of our business, including but not limited to (a) loss on debt modification and extinguishment, (b) equity-based compensation, (c) expenses associated with the IPOinitial public offering and subsequent secondary offerings andofferings, (d) expenses associated with acquisition activities.and other activities and (e) other income. Net income attributable to Core & Main, Inc. is the most directly comparable GAAP measure to EBITDA and Adjusted EBITDA.

We use EBITDA, Adjusted EBITDA and Adjusted EBITDADiluted Earnings Per Share to assess the operating results and effectiveness and efficiency of our business. Adjusted EBITDA includesand Adjusted Diluted Earnings Per Share include amounts otherwise attributable to non-controlling interests as we manage the consolidated Company and evaluate operating performance in a similar manner. We present these non-GAAP financial measures because we believe that investors consider them to be important supplemental measures of performance, and we believe that these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Non-GAAP financial measures as reported by us may not be comparable to similarly titled metrics reported by other companies and may not be calculated in the same manner. These measures have limitations as analytical tools, and youinvestors should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. For example, EBITDA and Adjusted EBITDA:

In evaluating Adjusted EBITDA,EBITDA youand Adjusted Diluted Earnings Per Share, investors should be aware that, in the future, we may incur expenses similar to those eliminated in this presentation.

(2)Represents expenses associated with acquisition and other activities, including transaction costs, post-acquisition employee retention bonuses, severance payments, expense recognition of purchase accounting fair value adjustments (excluding amortization) and contingent consideration adjustments.

(3)Represents costs related to the IPO and subsequent secondary offerings reflected in SG&A expenses in our Statement of Operations.

Core & Main, Inc. (“Core & Main” and collectively with its subsidiaries, the “Company”) 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, nationwide.markets. Our specialty products and services are used primarily in the maintenance, repair, replacementreplacement, and new construction of water, wastewater, storm drainagewater and fire protection infrastructure. We reach customers through a network of over 370 branches across the United States (“U.S.”) and Canada. Our products include pipes, valves, fittings, storm drainage products, fire protection products, smart utility products and other products. We complement our core products through additional offerings, including smart meter systems, fusible high-density polyethylene (“fusible HDPE “”) piping solutions, specifically engineered treatment plant products,products and geosynthetics and erosion control products. Our services and capabilities allow for integration with customers and form part of their sourcing and procurement function.

The Company is a holding company and its primary material assets are its direct and indirect ownership interest in Core & Main Holdings, LP, a Delaware limited partnershipLP (“Holdings”) and deferred tax assets associated with this ownership. Holdings has no operations and no material assets of its own other than its indirect ownership interest in Core & Main LP, a Florida limited partnership,LP the legal entity that conducts the operations of Core & Main. The condensed consolidated financial information of Core & Main, within this Quarterly Report on Form 10-Q, includes the consolidated financial information of Holdings and its subsidiaries. The limited partner interests of Holdings (“Partnership Interests”) not held by Core & Main are reflected as non-controlling interests in the condensed consolidated financial statements.

The Company’s fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31st. Quarters within the fiscal year include 13-week periods, unless a fiscal year includes a 53rd week, in which case the fourth quarter of the fiscal year will be a 14-week period. Each of the three months ended MayAugust 3,2, 2026 and threeAugust months ended May 4,3, 2025 included 13 weeks and each of the six months ended August 2, 2026 and August 3, 2025 included 26 weeks. The current fiscal year ending January 31, 2027 (“fiscal 2026”) will include 52 weeks.

Significant Events During the ThreeSix Months Ended MayAugust 3,2, 2026

Certain of our indebtedness, including borrowings under the Senior Term Loan Credit Facility (as defined in Note 6 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q) and the Senior ABL Credit Facility, are subject to variable rates of interest and expose us to interest rate risk. The Senior Term Loan Credit Facility and the Senior ABL Credit Facility each bear interest based on term secured overnight financing rate (“Term SOFR”). If interest rates increase, our debt service obligations on our variable-rate indebtedness will increase and our net income would decrease, even though the amount borrowed under the facilities remains the same. As of MayAugust 3,2, 2026, we had $2,160$1,728 million of outstanding variable-rate debt. We seek to mitigate our exposure to interest rate volatility through the entry into interest rate swap instruments, such as our interest rate swap, associated with borrowings under the Senior Term Loan Credit Facility, which effectively converts $700$1,500 million of our variable rate debt to fixed rate debt through the instrument maturity on July 27, 2026 and the interest rate swap that has a starting notional amount of $750 million that increases to $1,500 million on July 27, 2026 through the instrument maturity on July 27, 2028. Despite these efforts, unfavorable movement in interest rates may further result in higher interest expense and cash payments.

We define Adjusted EBITDA as EBITDA further adjusted for certain items management believes are not reflective of the underlying operations of our business, including but not limited to (a) loss on debt modification and extinguishment, (b) equity-based compensation, (c) expenses associated with the initial public offering and subsequent secondary offerings,offerings and (d) expensesother associatedincome with acquisition andor other activities and (e) other income.expense. Adjusted EBITDA includes amounts otherwise attributable to non-controlling interests as we manage the consolidated Company and evaluate operating performance in a similar manner. We use Adjusted EBITDA to assess the operating results and effectiveness of our business. See “—Non-GAAP Financial Measures” below for further discussion of Adjusted EBITDA and a reconciliation to net income or net income attributable to Core & Main, Inc., the most directly comparable measure under U.S. generally accepted accounting principles (“GAAP”), as applicable.

We define Adjusted Diluted Earnings Per Share as diluted earnings per share adjusted for (a) amortization of intangible assets, (b) loss on debt modification and extinguishment, (c) equity-based compensation, (d) expenses associated with acquisition and other activities, (e) expenses associated with the initial public offering and subsequent secondary offerings, (fe) other income or other expense and (gf) the tax impact of these Non-GAAP adjustments, divided by the weighted-average number of shares of our common stock outstanding on a fully diluted basis for the applicable period. We use Adjusted Diluted Earnings Per Share to assess the operating results and effectiveness of our business. See “—Non-GAAP Financial Measures” below for further discussion of Adjusted Diluted Earnings Per Share and a reconciliation to diluted earnings per share, the most directly comparable measure under U.S. GAAP.

Three Months Ended MayAugust 3,2, 2026 Compared with Three Months Ended MayAugust 4,3, 2025

Net sales for the three months ended MayAugust 3,2, 2026 wasincreased $1,910$52 million , or 2.5% to $2,145 million compared with $1,911$2,093 million for the three months ended MayAugust 4,3, 2025. Net sales wereincreased essentiallywith flatcontributions primarilyacross duevolume, toprice decreased volume that was offset byand acquisitions. Net sales for pipes, valves & fittings andincreased due to acquisitions. Net sales for storm drainage decreasedwas dueessentially to lower volume partially offset by acquisitions.flat. Net sales of fire protection products increased due to higher volumevolumes and higher selling prices. Net sales of smart utility products increased primarily due to higher volume.selling prices.

Gross profit for the three months ended MayAugust 3,2, 2026 increased $10$13 million, or 2.0%,2.3%, to $520$573 million compared with $510$560 million for the three months ended MayAugust 4,3, 2025. Gross profit as a percentage of net sales for the three months ended MayAugust 3,2, 2026 was 27.2%26.7% compared with 26.7%26.8% for the three months ended MayAugust 4,3, 2025. The overall increase in gross profit as a percentage of net sales was primarily attributable to favorable impacts from the execution of our gross margin initiatives and disciplined purchasing and pricing management.

SG&A expenses for the three months ended MayAugust 3,2, 2026 increaseddecreased $6$1 million, or 2.0%,0.3%, to $299$301 million compared with $293$302 million during the three months ended MayAugust 4,3, 2025. SG&A expenses as a percentage of net sales were 15.7%14.0% for the three months ended MayAugust 3,2, 2026 compared with 15.3%14.4% for the three months ended MayAugust 4,3, 2025. The increaseimprovement was primarily attributable to the benefits of recent cost actions and lower variable compensation costs partially offset by higher distribution costs and investments to support long-term growth, including greenfield expansion and sales initiatives, partially offset by the benefits of recent cost actions.initiatives.

Operating income for the three months ended MayAugust 3,2, 2026 increased $6$14 million, or 3.5%,6.6%, to $177$227 million compared with $171$213 million during the three months ended MayAugust 4,3, 2025. The increase in operating income was primarily attributable to higher gross profit partially offset by higher SG&A expenses.profit.

Interest expense was $27$32 million for the three months ended MayAugust 3,2, 2026 compared with $30$31 million for the three months ended MayAugust 4,3, 2025. The decreaseincrease was primarily attributable to fiscal 2026 borrowings under the 2034 Notes and the write off of $3 million in deferred financing fees partially offset by fiscal 2026 amendment to the Senior Term Loan Credit Facility, a decrease in interest rates and decreased borrowings under the Senior ABL Credit Facility.

The provision for income taxes for the three months ended MayAugust 3,2, 2026 increased $1$2 million, or 2.8%4.9% to $37$43 million compared with $36$41 million for the three months ended MayAugust 4,3, 2025. The increase was primarily attributable to an increase in operating income partially offset by a decrease in the effective tax rate.income. For the three months ended MayAugust 3,2, 2026 and the three months ended MayAugust 4,3, 2025, our effective tax rate was 24.7%22.3% and 25.5%,22.5%, respectively. The decrease in the effective tax rate was primarily due to net benefits from tax credit investments and certain tax windfall benefits from equity award exercises.

Net income for the three months ended MayAugust 3,2, 2026 increased $8$9 million, or 7.6%,6.4%, to $113$150 million compared with $105$141 million for the three months ended MayAugust 4,3, 2025. The increase in net income was primarily attributable to an increase in operating income andpartially loweroffset interestby higher income tax expense.

Net income attributable to Core & Main, Inc. for the three months ended MayAugust 3,2, 2026 increased $8$10 million, or 8.0%,7.5%, to $108$144 million compared with $100$134 million for the three months ended MayAugust 4,3, 2025. The increase was primarily attributable to increased net income.

The Class A common stock basic earnings per share for the three months ended MayAugust 3,2, 2026 increased 7.5%8.5% to $0.57$0.77 compared with $0.53$0.71 for the three months ended MayAugust 4,3, 2025. The Class A common stock diluted earnings per share for the three months ended MayAugust 3,2, 2026 increased 9.6%10.0% to $0.57$0.77 compared with $0.52$0.70 for the three months ended MayAugust 4,3, 2025. The basic and diluted earnings per share increased due to an increase in net income and lower Class A share counts following share repurchase transactions.

Adjusted EBITDA for the three months ended MayAugust 3,2, 2026 increased $2$8 million, or 0.9%,3.0%, to $226$274 million compared with $224$266 million for the three months ended MayAugust 4,3, 2025. The increase in Adjusted EBITDA was primarily attributable to higher gross profit partially offset by higher SG&A expenses.profit. For a reconciliation of Adjusted EBITDA to net income or net income attributable to Core & Main, Inc., the most comparable GAAP financial metric, as applicable, see “—Non-GAAP Financial Measures.”

Adjusted Diluted Earnings Per Share for the three months ended MayAugust 3,2, 2026 increased 5.9%8.0% to $0.72$0.94 compared with $0.68$0.87 for the three months ended MayAugust 4,3, 2025. The increase in Adjusted Diluted Earnings Per Share was primarily attributable to an increase in net income and lower Class A share counts following share repurchase transactions. For a reconciliation of Adjusted Diluted Earnings Per Share to diluted earnings per share, the most comparable GAAP financial metric, as applicable, see “—Non-GAAP Financial Measures.”

As of MayAugust 3,2, 2026, our cash and cash equivalents totaled $150$312 million. We maintain our cash deposits according to a banking policy that requires diversification across a variety of highly-rated financial institutions. However, this could result in a concentration of cash and cash equivalents across these financial institutions in excess of Federal Deposit Insurance Corporation-insured limits.

As of MayAugust 3,2, 2026, there were no outstanding borrowings on our Senior ABL Credit Facility, which provides for borrowings of up to $1,250 million, subject to borrowing base availability. As of MayAugust 3,2, 2026, after giving effect to approximately $24 million of letters of credit issued under the Senior ABL Credit Facility, Core & Main LP would have been able to borrow approximately $1,226 million under the Senior ABL Credit Facility, subject to borrowing base availability. Our short term debt obligations of $24$17 million are related to quarterly principal payments on the Senior Term Loan Credit Facility.

In the threesix months ended MayAugust 3,2, 2026 and the threesix months ended MayAugust 4,3, 2025, the Company had a financing cash outflow related to the payment of $42 million and $18 million, respectively, under the Tax Receivable Agreements. The annual payments under the Tax Receivable Agreements increased as a result of exchanges of Partnership Interests completed in fiscal 2023 and fiscal 2024. Payments under the Tax Receivable Agreements are only required to be made to the extent that we realize or are deemed to have realized the benefit of the corresponding tax deductions to reduce payments to federal, state and local taxing authorities. These payments are in an amount that represents 85% of the reduction in payments to such taxing authorities. As such, the cash savings from the incremental tax deductions are expected to exceed the payments under the Tax Receivable Agreements over the life of these arrangements. Based on the anticipated filing date of income tax returns and contractual payment terms in the Tax Receivable Agreements, we expect these payments to occur two fiscal years after we utilize the corresponding tax deductions.

Additionally, we regularly evaluate our approach to our capital allocation, which may include acquisitions, capital expenditures, greenfields, debt reduction (including through open market debt repurchases, negotiated repurchases, other retirements of outstanding debt and opportunistic refinancing of debt), stock repurchases, dividends, payments on Tax Receivable Agreements or other distributions. During the threesix months ended MayAugust 3,2, 2026 and the threesix months ended MayAugust 4,3, 2025, we completed $88$257 million and $39$47 million, respectively, of repurchases of Class A common stock under the Repurchase Program. For further details, refer to Note 1 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. We may continue to return capital to our shareholders through share repurchases, including pursuant to the Repurchase Program or initiating dividend payments. The execution of these, and other, capital allocation activities may be at the discretion of, and subject to the approval by, our board of directors and will depend on our financial condition, earnings, liquidity and capital requirements, market conditions, level of indebtedness, contractual restrictions, compliance with our debt covenants, restrictions imposed by applicable law, general business conditions and any other factors that our board of directors deems relevant in making any such determination. Therefore, there can be no assurance that we will engage in any or all of these actions or to what amount of capital we will allocate to each option.

The execution of certain initiatives under our capital allocation policy may require distributions by Holdings and Core & Main LP. These entities’ ability to make distributions may be limited as a practical matter by our growth plans as well as Core & Main LP’s Senior Term Loan Credit FacilityFacility, 2034 Notes and Senior ABL Credit Facility. The Senior Term Loan Credit Facility may require accelerated repayment based upon cash flows generated in excess of operating and investing requirements when Core & Main LP’s netConsolidated totalSecured leverageLeverage ratioRatio (as defined in the agreement governing the Senior Term Loan Credit Facility) is greater than or equal to 3.25. In addition, the Senior ABL Credit Facility requires us to comply with a consolidated fixed charge coverage ratio of greater than or equal to 1.00 when availability is less than 10.0% of the lesser of (i) the then applicable borrowing base and (ii) the then aggregate effective commitments under the Senior ABL Credit Facility. Substantially all of Core & Main LP’s assets secure the Senior Term Loan Credit Facility and the Senior ABL Credit Facility.

Net cash provided by operating activities was $82$144 million for the threesix months ended MayAugust 3,2, 2026 compared with $77$111 million for the threesix months ended MayAugust 4,3, 2025. The $5$33 million increase was due to an increase in net incomeincome, lower tax payments and lower investmentchanges in working capital in the threesix months ended MayAugust 3,2, 2026 partially offset by the timing of certainhigher interest payments.

Net cash used in investing activities increased by $5$28 million to $21$56 million for the threesix months ended MayAugust 3,2, 2026 compared with $16$28 million for the threesix months ended MayAugust 4,3, 2025, primarily attributable to $3$17 million of investments in tax advantaged limited partnerships.partnerships and a $9 million increase in capital expenditures.

Net cash provided by financing activities was $4 million for the six months ended August 2, 2026 compared with net cash used in financing activities increasedof by $70 million to $131$66 million for the threesix months ended MayAugust 3, 20262025. comparedThe withchange $61of $70 million for the three months ended May 4, 2025,was primarily attributable to $298 million change in net debt activity offset by a $49$210 million increase in the repurchase of Class A common stock under the Repurchase Program and a $24 million increase in payments under the Tax Receivable Agreements.

As of MayAugust 3,2, 2026, our debt obligations (in millions) consisted of the following:

(1)Aggregate amount of commitments under the asset-based revolving credit facility of $1,250 million overall, subject to borrowing base availability. There were no outstanding borrowings under the Senior ABL Credit Facility as of MayAugust 3,2, 2026.

(2)Interest rate swap entered into on February 12, 2024 for a notional amount of $750 million. The notional amount increases to $1,500 million on July 27, 2026 through the instrument maturity on July 27, 2028.