10:26 AM EDT, 09/09/2025 (MT Newswires) -- Core & Main ( CNM ) lowered the top end of its full-year sales outlook on Tuesday amid higher operating costs and weak residential demand, while the water, sewer and fire protection product distributor's fiscal second-quarter revenue fell short of market expectations.

The company now anticipates sales to be in a range of $7.6 billion to $7.7 billion for fiscal 2025, reflecting a lower top end than the previous estimate of $7.8 billion. The new guidance range represents annual growth of 2% to 3%. The current consensus on FactSet is for $7.78 billion.

The firm is working in an environment "marked by higher operating expenses and softer residential demand" and has implemented targeted actions to improve its productivity and operating margins in response to these trends, Chief Executive Mark Witkowski said in a statement. "We remain confident in our long-term growth and margin expansion opportunities, and in our ability to balance strategic investments with disciplined cost control to drive continued growth and efficiency."

Core & Main's ( CNM ) stock dropped 23% in Tuesday trade.

Adjusted earnings for the three months through Aug. 3 rose to $0.87 a share from $0.77 the year before, topping the Street's view for $0.78. Total operating expenses rose to $347 million from $314 million, the company said.

Sales improved 6.6% to $2.09 billion, but missed the average analyst estimate on FactSet for $2.12 billion. The topline benefited from volume gains and acquisitions, the company said. Sales were up for pipes, valves and fittings, storm drainage and fire protection products, while revenue for meter products declined due to project delays in the current quarter following significant growth in the prior-year period, the firm added.

"Our balanced end market exposure served us well, with strength in municipal demand and stability in non-residential demand helping to offset softness in residential lot development," according to Witkowski. "We also continued to expand gross margins, both sequentially and year-over-year, through better price realization and the execution of our private label and sourcing initiatives."

Gross profit as a percentage of sales rose to 26.8% from 26.4% in the 2024 quarter.

Price: 51.66, Change: -14.94, Percent Change: -22.43