12:43 PM EDT, 03/19/2024 (MT Newswires) -- Core & Main ( CNM ) guided for stronger-than-expected revenue in the ongoing year following a top-line beat in the fiscal fourth quarter that was attributable to volume growth and the impact of acquisitions.

The water, sewer and fire protection product distributor expects fiscal 2024 revenue of $7.4 billion to $7.6 billion, outpacing the $7.08 billion average analyst estimate on Capital IQ. The company reported $6.7 billion in sales for last year. Its shares climbed 7% in Tuesday midday trade.

It sees adjusted earnings before interest, taxes, depreciation and amortization between $925 million and $975 million. That implies a gain from the $910 million in adjusted EBITDA it posted for 2023, which was down 2.7% year over year.

"We expect end market volumes to improve in fiscal 2024, providing a foundation for us to gain market share through the execution of our product, customer and geographic expansion initiatives," Chief Executive Steve LeClair said in a statement.

Mergers and acquisitions that will be completed "during and after the year" are expected to contribute 6% to 7% of total sales growth in fiscal 2024, he said. The company closed on its acquisition of Dana Kepner earlier this month. In a recent note, RBC Capital Markets analyst Mike Dahl predicted that Dana Kepner would add roughly $250 million in run-rate sales.

For the fourth quarter, revenue rose to $1.44 billion from $1.37 billion the year earlier and topped the $1.43 billion average analyst estimate on Capital IQ. Net sales increased primarily due to volume growth and acquisitions, the company said. Core & Main ( CNM ) closed its acquisition of Eastern Supply in February and Lee Supply Co. in January.

Earnings per share edged up to $0.34 for the three months ended Jan. 28 from $0.31 last year. As a percentage of sales, gross profit slipped to 26.7% from 27.1%, attributable to a normalization from a prior-year benefit tied to inflation-fueled strategic inventory investments.

Fire protection sales were boosted by volume gains and acquisitions that were partially offset by lower selling prices for steel pipe. Meter products sales benefited from increasing adoption of smart meter technology by municipalities, acquisitions and an improving supply chain.

For the full year, sales increased a bigger-than-expected 0.8% to $6.7 billion, reflecting higher selling prices and acquisitions that was partially offset by lower volumes from comparably lower end-market volumes, Core & Main ( CNM ) said. LeClair called fiscal 2023 an "exceptional year" given the company's performance against "softer market conditions."

Price: 54.27, Change: +3.58, Percent Change: +7.06