Core & Main, Inc (NYSE:CNM) reported its Q1 results last week, with EPS of $0.31 coming in slightly worse than the Street estimate of $0.32. Revenue of $1.37 billion was in line with expectations. Shares have gained more than 7% since then.
According to Deutsche Bank analysts, pricing grew in low-double-digit percentage, and along with an M&A benefit, more than offset a 5% volume decline against a difficult prior year comp.
Price outperformance again drove stronger gross margins than anticipated, although the company continues to expect 100-150bps of benefit to prove temporary as higher-cost inventory flows through and aligns with current pricing.
With a leveling off of pricing largely complete by now, the analysts do expect to see the gross margin reset begin to flow through most prominently starting in Q2 and into Q3. The analysts raised their price target to $42 from $40 while maintaining their Buy rating.