Core & Main Faces Challenges: Sell Rating Amidst Declining EBITDA, Rising Costs, and Market DownturnWe find evidence that per-location rents have been increasing >10% y/y and show how this is likely to continue in FY26. Inflation everywhere but in PVC pipes Municipal PVC (polyvinyl chloride) price declines continued, falling 15% y/y. Given the importance of this category, this was enough to offset price increases in virtually all other product lines. Management continues to see pricing as “stable” in FY25 and “at least flattish” in FY26. Even after over two years of decline, PVC pipe prices remain significantly above pre-COVID levels and PVC pipe manufacturers expect further price declines. To be fair, despite flattish pricing, Core & Main posted its highest gross margin in three years. The company is offsetting price-related margin pressures through mix shift (primarily to private label), sourcing, and opportunistic purchase timing. 3QF25 in line; maintain FY25E adj.