Hello, everyone, and welcome to the Core & Main second quarter 2023 earnings call. My name is Bruno, and I'll be operating your call today. During the presentation, you can register to ask a question by pressing star one on your telephone keypad. I will now hand over to your host, Robin Bradbury. Please go ahead. Thank you. Good morning, everyone. This is Robyn Bradbury, Vice President of Finance and Investor Relations for Core & Main. We are thrilled to have you join us this morning for our second quarter earnings call. I am joined today by Steve LeClair, our Chief Executive Officer, and Mark Witkowski, our Chief Financial Officer. Steve will lead today's call with a business update, followed by an overview of our recent acquisitions. Mark will then discuss our second quarter financial results and full year outlook, followed by a Q&A session. We will conclude the call with Steve's closing remarks. We issued our second quarter earnings press release this morning and posted a presentation to the investor relations section of our website. As a reminder, our press release, presentation, and the statements made during this call include forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ from our expectations and projections. Such risks and uncertainties include the factors set forth in our earnings press release and in our filings with the Securities and Exchange Commission. We will also discuss certain non-GAAP financial measures, which we believe are useful in assessing the operating results of our business. A reconciliation of these measures can be found in our earnings press release and in the appendix of our investor presentation. Thank you for your interest in Core & Main. I will now turn the call over to Chief Executive Officer, Steve LeClair. Thanks, Robin. Good morning, everyone. Thank you for joining us today. If you're following along with our second quarter investor presentation, we'll begin on page 5 with a brief business update. Core & Main delivered another quarter of solid results as we maintain our focus on driving operational excellence across the business. Sales of $1.9 billion were equal to last year's record high and up 43% from the second quarter of fiscal 2021. End market demand has largely performed as expected through the first half of the year. Municipal repair and replacement demand has been resilient, supported by healthy municipal budgets and increased water and wastewater utility rates. Residential construction has been soft compared to last year's strong performance, but we are optimistic for the second half of the year as there continues to be a limited supply of developed lots, and builders look to invest in lot development to support continued demand from home buyers. The non-residential market was broadly flat through the second quarter. However, we are beginning to see pockets of softness for new project starts in select markets. Despite the potential for near-term softness in non-residential starts, our broad exposure to various project types within this market generally provides stability as demand for these projects can happen on different cycles. The need for more robust water management solutions remains highly relevant due to the increasing effects of extreme weather events and water scarcity. Core & Main is well-positioned to capitalize on these trends over the long term due to our size, scale, and technical expertise across the water sector. We delivered strong Adjusted EBITDA margins of 14.5% for the second quarter through our disciplined pricing and gross margin execution. Prices have sustained through the first half of the year, in part due to the non-discretionary nature of demand in our industry, coupled with the fact that most of our products are either highly specified or made specific for our sector, which provides a resilient pricing framework in our industry. Overall, we expect a slightly positive impact on pricing for the full year as we continue to anniversary the prior year price increases. Gross margins exceeded expectations yet again as we execute on our gross margin initiatives and continue to benefit from our prior inventory investments. We expect gross margins to continue normalizing in the second half of the year as our inventory costs catch up with market prices. We generated robust cash flow in the second quarter from our inventory optimization efforts, creating balance sheet capacity to reinvest in the business, pursue strategic M&A, and return capital to shareholders. To that end, we executed a $141 million share repurchase from our majority shareholder during the second quarter, reducing diluted share count by 5 million shares. This marks our second share repurchase transaction this year, having deployed over $470 million of capital and retiring 20 million shares. Turning to our recent acquisitions on page 6, we added 2 high-performing businesses to our family during the quarter, generating annual net sales of approximately $100 million on a combined basis. Foster Supply is a leading producer, installer, and distributor of specialty precast concrete products, storm drainage, and other erosion control solutions, operating out of seven locations across Kentucky, Tennessee, and West Virginia. Since 1981, the team at Foster Supply has been the partner of choice for contractors and municipalities, seeking innovative solutions for unique work site and infrastructure challenges. Bringing that team to Core & Main will allow us to combine our collective expertise and differentiated product and service offerings to meet the needs of our shared waterworks and geosynthetics customers.... D'Angelo is a leading provider of fire protection and waterworks products, with three locations in Southern California. Since 1987, the team at D'Angelo has provided underground and fire protection contractors with an extensive product and service offering, including water, sewer, storm drainage, and other related products. The breadth of knowledge, dedication to outstanding customer service, and complementary product offering gained through this acquisition will greatly enhance our presence and service capabilities in Southern California. Both of these businesses offer an expansion into new geographies, enhance our product line, and add key talent while aligning with our strategy of advancing reliable infrastructure. We are committed to driving sustainable growth through M&A, and we look forward to adding more high-quality businesses like these to the Core & Main family moving forward. Turning to page seven, I'll now discuss how we are well positioned to win in our industry. We play a critical role in the supply chain by connecting a large and diverse set of suppliers with a highly fragmented customer base. Our customers benefit from our technical expertise, customer service, purchasing capabilities, product breadth and availability, and the convenience of our branch locations, which allows us to provide consistent and timely delivery. Combined, these capabilities provide advantages relative to smaller local competitors and allow us to attract business from large, multi-regional contractors and municipalities with more complex projects. Our suppliers recognize our value proposition to customers, and we believe they increasingly view us as an integral partner, given our ability to extend their sales and geographic reach with deep technical knowledge of local specifications. This enables us to benefit from favorable supplier agreements and product availability, as well as opportunities for product line exclusivity and restrictive distribution arrangements. These exclusive and restrictive distribution rights limit new entrants into our industry and provide a significant and sustainable competitive advantage. At the local level, our branches carry a range of product lines, brands, and inventory levels tailored to local specifications to effectively respond to our customers' project needs. Our associates are specifically trained in project scoping and planning, often performing digital takeoffs by curating a product list and custom solution, leveraging our regional and national network of product specialists to develop a solution tailored to our customers' needs. We complement this knowledge and sales expertise with our proprietary technology platforms that incorporate decades' worth of experience and insight into customers' planning and sourcing needs. Our proprietary bidding platform and online customer portals build customer loyalty by facilitating a more seamless bidding, planning, materials management, and delivery experience. We also prioritize investments in the development and well-being of our people. Our award-winning training programs enable us to accelerate the development of our top talent to drive profitable growth while maintaining a supportive and mission-driven culture. Our dedication to developing industry leaders allows us to attract and retain the most qualified and motivated individuals in our industry. In addition, we provide attractive career growth opportunities to our associates while utilizing their knowledge and local expertise. The role of the specialized distributor within the value chain is becoming increasingly important, as our fragmented customer base demands higher levels of availability across a broad set of products, which are procured from a large number of suppliers. As our industry becomes more complex with new regulations and product specifications, our scalable competitive advantages position us to win over our smaller local competitors. Before I turn the call over to Mark, I'd also like to announce that we're hosting our inaugural Investor Day in New York City on October fourth. The event will be hosted both in person and virtually, and we plan to present our business strategy, growth drivers, and financial objectives. If you have any questions about the event, please reach out to us through our investor relations team. With that, I will now turn it over to Mark to discuss our financial results and full year outlook. Go ahead, Mark. Thanks, Steve. I'll begin on page 9 with highlights of our second quarter results. We reported net sales of roughly $1.9 billion for the quarter, which was in line with the prior year period and consistent with our expectations. This follows very strong comparative performance in the prior year, when net sales grew 43% compared with the first quarter of fiscal 2021. In aggregate, price contributed low single-digit sales growth, while organic volumes were down mid-single digits. Acquisitions are performing well and contributed approximately 3% to net sales on a year-over-year basis. Gross margin of 26.9% was consistent with the prior year period, and our performance reflects the execution of our margin enhancement initiatives and the benefit of accretive acquisitions, offset by selling higher-cost inventory compared with the prior year. As we have discussed in prior quarters, we expect gross margin to normalize in 2023 as our inventory costs catch up with market prices, and we have already seen a sequential gross margin reduction from last quarter. Selling, general, and administrative expenses increased 4% to $238 million for the second quarter. The increase in SG&A reflects the impact of cost inflation and acquisitions. SG&A as a percentage of net sales increased 40 basis points to 12.8%. Interest expense was $22 million for the second quarter, compared with $17 million in the prior year period. The increase was due to higher variable interest rates on the unhedged portion of our senior term loan. We recorded income tax expense of $40 million for the second quarter, compared with $38 million in the prior year period, reflecting effective tax rates of 19.6% and 17.3% respectively. The increase in the effective tax rate was due to a decrease in partnership interests of Core & Main Holdings held by non-controlling interest holders. We recorded $164 million of net income in the second quarter, compared with $182 million in the prior year period. The decrease was due to higher SG&A, higher interest expense, and higher income taxes. Diluted earnings per share in the second quarter was $0.66, down 2% compared with the prior year period. The decrease in earnings per share was due to lower net income, partially offset by lower share counts following the repurchase of 20 million shares. Adjusted EBITDA decreased 3% to $270 million, and adjusted EBITDA margin decreased 40 basis points to 14.5%. The decrease in adjusted EBITDA margin was due to an increase in SG&A. Turning to page 10. We delivered robust operating cash flow in the second quarter of $282 million, reflecting over 100% conversion from adjusted EBITDA. We continue to benefit from the inventory optimization we started in the middle of last year, generating $150 million of cash from inventory this quarter. On a year-over-year basis, net inventory was down about 23% for the quarter, even with higher product costs, inventory acquired through acquisitions, and new inventory to support our greenfields. We have generated over $700 million of operating cash flow over the last four quarters, and we expect to continue strong cash generation in the second half of the year as we continue to optimize inventory levels and experience normal seasonality. Net debt leverage at the end of the quarter was 1.7 times, and our available liquidity stands at more than $1.1 billion following the capital allocation actions we took during the quarter. The $141 million share repurchase we executed in June was done concurrently with a public secondary offering of 14 million shares by our majority shareholder. As a result of these transactions, we reduced our diluted share count by 5 million shares while increasing our public float. We maintain ample liquidity and capacity to continue investing in the business, and we expect to be a consistent participant in share repurchases from our majority shareholder as opportunities arise. Before we head to Q&A, I'd like to update you on the outlook for the remainder of fiscal 2023 on page 11. Our results through the second quarter played out as expected, with resilient demand and stable pricing. In terms of volume growth, municipal repair and replacement demand is expected to remain steady through the end of the year. Residential demand is expected to be stronger in the second half than the first half, as builder sentiment continues to improve and we face easier year-over-year comparisons. As Steve mentioned earlier, we are now beginning to see pockets of softness for new non-residential project starts in select markets. Based on our backlog, bidding activity, and order pace, we expect the non-residential market to be down low single digits for the year. Pricing in the second quarter was stable sequentially from the first quarter, and we expect it to remain resilient in the second half of the year, resulting in a price contribution and net sales that are slightly positive for the full year. Our margin initiatives and synergies from M&A continue to drive structural gains for our gross margins. However, we expect gross margins to continue normalizing in the third and fourth quarters as we have sold through most of our low-cost inventory. Taken altogether, we are narrowing our annual outlook based on results to date. We expect net sales to be in the range of $6.6 billion-$6.8 billion, and we are narrowing our expectation for Adjusted EBITDA to be in the range of $850 million-$880 million due to our strong gross margin performance in the second quarter. We are also raising our expectation for operating cash flow conversion to be in the range of 90%-110% of Adjusted EBITDA due to our accelerated inventory optimization efforts. As always, our focus will be on areas within our control, including customer service, technical expertise, productivity, and pricing execution. We will continue to deploy capital on initiatives that we expect will result in accelerated growth, including executing on our M&A pipeline and delivering on our organic growth initiatives. We are well positioned to outperform the market in this complex demand environment, creating value for our stakeholders. We look forward to helping our customers build more reliable infrastructure as we enter a key part of the construction season. At this time, I'd like to open it up for questions. Ladies and gentlemen, if you'd like to ask a question, please press star one on your telephone keypad. That's star one on your telephone keypad. To withdraw your question, press Star, followed by two, and please also remember to unmute your microphone when it's your turn to speak. Our first question comes from Matthew Boulay from Barclays. Matthew, your line is now open. Please go ahead. Hey, good morning, everyone. Thanks for taking the questions. Maybe just one on non-resi, since you called it out a few times, you know, seeing some pockets of softness. I'm just curious if you can elaborate on that a little bit. You know, what exactly are you seeing across different verticals and regions? You know, I think a decline of low single digits for the year is perhaps a little more sanguine than we might be seeing in other areas. So, just kind of curious, what are some of the puts and takes around that decline of low single digit expectations there in non-resi? Thank you. Yeah, thanks for the question, Matthew. Yeah, as we mentioned in the comments, we really saw it was pretty much flat and broad across the entire second quarter. But we started to see some pockets of softness. Geographically, it's been in different pockets around the country, so we've certainly seen it out west, seen in pockets in the Northeast as well for non-res. And it's possible that some of these projects are softening due to tightening lending standards. And just keep in mind that we're really on the front edge of a lot of these things. So, you know, what we'll be watching closely is how this shapes up with our bidding activities as we get into the back half of the year. But you know, overall, what I would say that we've got pretty broad exposure to various project types, everything from commercial construction to, you know, horizontal construction with roads and bridges. And so it generally provides stability for us, and we'll see how these demand for these projects can happen sometimes in different cycles. Got it. Okay. Thank you for that. And then, secondly, kind of zooming into the, to the gross margin expectation. Yeah. Just curious, you know, you're calling out expectation for normalization going forward, any color on sort of the cadence of that, you know, Q3 versus Q4? Or, are we already kind of fully normalized by Q3? And then maybe if you just kind of step back and sort of, you know, talk through some of the success you've been having with your structural gross margin initiatives. Thank you. Yeah, thanks, Matthew, for the question. In terms of the cadence of gross margins, you know, we've been pretty consistent with indicating, you know, we're looking at about 100-150 basis points of gross margin normalization, and that was off the full year 2022 number. So you did see in the second quarter, sequentially, we were down about 100 basis points off of a really strong Q1 that we had. So we're really now, based on what we're seeing, you know, as we finished Q2, you know, more confident that we're gonna see some of that normalization really start to happen in Q3 into Q4, probably kind of the trough at that point. Maybe lingering a little bit into Q1 of 2024, and then building back off of that, that base, as we progress through 2024. So that's kind of how we're thinking about it right now, based on what we're seeing. And, you know, continued really good progress on a lot of our initiatives, and in particular, private label continues to accelerate. We did see continued benefit in, in this quarter and expect that to continue through the balance of the year and into 2024, based on, you know, the products that, that we expect to continue to have available there for that, that particular initiative. I'd say still pretty early innings on a lot of our pricing initiatives. You know, do expect we'll start seeing some benefits from those later this year and into 2024. You know, that's you know, those are really the key, key items at this point. Great. Thanks, Mark. Thanks, Steve. Good luck, guys. Thank you. Thanks, Matthew. Our next question comes from David Manthey from Baird. David, your line is now open. Please proceed. Thank you. Good morning, everyone. First off, to clarify, Mark, I believe you just said that you're expecting 100-150 basis points of gross margin retrenchment off the 27% annual level last year, the level closer to 28 in the first quarter here, notwithstanding. So you're implying that gross margin on a quarterly basis should trough, hopefully, by the fourth quarter of this year in that 25.5-26% range, and then build from there. Is that your expectation? Yeah, Dave, that's fair. That's how to think about it, and, you know, do expect that to really, you know, kick in, in Q3, into Q4. And, you know, depending on, you know, the progress we make on more of these initiatives, hopefully building off that base as we get into early 2024. Okay. And then, second, if you could talk about the status of the IIJA dollars moving into State Revolving Funds. Are the most nimble of your municipalities already accessing those dollars? And how should we think about fiscal year ends, with the federal in September, certain municipalities are June or December? I mean, could you talk about how those dollars are flowing, how you expect them to build up from here? ... Yeah, Dave, this is Steve. So we really haven't seen much through second quarter. You know, we started to see some signs in first quarter of a couple projects, treatment plant projects and some, you know, lead service line replacements, a handful of them, and really didn't see much at all, evolved from there in the second quarter. So we do think this is gonna be a tailwind. It's hard to tell how this stuff is gonna fall into a lot of these bigger municipalities. What I would tell you is that we're certainly seeing that the current administration is really trying to build some urgency on this to get these dollars out to projects and see that start flowing. So, you know, we'll see kind of how it plays out, but as of right now, it just, it has been slow to come, and we just haven't seen it trickle through the way we would have anticipated for the back half of the year. Thank you very much. Thanks, Dave. Our next question comes from Kathryn Thompson from Thompson Research. Kathryn, your line is now open. Please proceed. Hey, good morning. This is actually Brian Biros on for Kathryn. Thank you for taking my questions. On the, on the non-res outlook, can you just touch more on the type of projects that you're seeing softness in? If it's light versus heavy non-res, or if it's office or something else, just any additional color on the types of projects would be helpful. Yeah, Brian, what we're seeing is certainly the multifamily projects, which we categorize into non-res, has been where we've seen a lot of softening happen. You know, manufacturing continues to move forward. You know, we're seeing some early signs right now of large data centers that are being scoped out. So we do think that there's you know, certainly a some things on the horizon that are coming. But obviously, the multifamily piece has been an area that's really softened in this last quarter. Okay. Makes sense. And I guess touching on the, the other ones you mentioned, the manufacturing, data centers, kind of maybe fits into the, the mega project category that seems to be a trend going forward for a, a long time. Where can Core & Main kind of grow in that mega project trend when there's more than just the, the non-res, but there's also just kind of all the stuff going around the project, if it's infrastructure, even residential built out for that? How does Core & Main see growing in the, the mega project trend going forward? Thank you. Yeah, there's a number of pockets where we participate in. Certainly, the most obvious is when we get into these mega projects and the fire protection systems, the commercial construction that goes up, the underground work that goes in there. And then also there's an immense amount of storm drainage activity that goes into preparing a lot of these commercial lots and facilities. So a lot of the regulatory changes that have come in place about retaining and detaining storm water from preventing it from a quick release into the systems, you know, that product category has been really big for us, and the ability to provide that product and train a lot of our contractors on how to install that has been instrumental. We definitely participate in a lot of those areas, in addition to the project and the surrounding areas as well. Eventually, what you see is, as that commercial construction and residential continues to grow, the enhancement and expansion of water treatment and wastewater treatment plants as well. Thank you. Our next question comes from Mike Dahl from RBC Capital. Mike, your line is now open. Please go ahead. Good morning. Thanks for taking my questions. I'm gonna stick with non-res. So I think just to clarify, Steve, based on those prior comments, I think a lot of the concerns out there around non-res are kind of in the broader core non-res commercial construction verticals. It seems like you're potentially just calling out that the weakness is in multifamily, which some people may categorize kind of separate from, from non-res. So if you think about kind of stripping out multifamily, is your expectation that non-res ex multifamily would still be flatter for the year, or how would you characterize that? Yeah, definitely flatter, and but we would also see that, you know, warehousing is another area that I think we've seen a decline as well too, that's been really strong over the last 12-18 months, for sure, for fire protection products. So that one's been an area that we've seen a decline as well. Okay. Got it. And then as a follow-up, you know, low single digits for the year in non-res, it seems like the first half. I know 2Q was stable. I think 1Q might have even been up a little or stable. So you know, it probably implies that the second half is down mid-single digits-ish. When we think about the cadence, are you already starting to see that hit in 3Q, or should we expect that 3Q is kind of somewhat weaker and then kind of a sharper decline as some of this manifests in 4Q? And, you know, any comments on kind of cadence for the second half on the non-res piece specifically, please? Yeah, Mike, I think as you think about non-resi, you know, also keep in mind, I mean, we're fairly balanced between starts and completions, so we're- ... I'd say we're still seeing strength on the completion side. That shows up a lot in our fire protection business. What we're seeing is the beginnings of softness on the start side, in particular in multifamily, a little bit in commercial, and, you know, as Steve mentioned, the warehousing. So I would expect, you know, from a cadence standpoint in Q3, we'll still see some volume pressure, but, you know, overall, I think that's still a relatively stable end market for us, just given the overall mix. So, you know, we'll see how the starts plays out. Could be temporary, but, you know, it was definitely something we started seeing here recently that we wanted to call out. I'd say from a, you know, the other factor there is, as we get into the second half of the year, we do start to run into much, yeah, easier comps on the residential side. Still expect a little pressure in Q3, but, you know, we really saw that start to drop off through the second half of last year. So we think the residential, optimism and then just the year-over-year trends there, provide some, some offset to some of that volume pressure. So we, we should see, I'd say, probably more of the pressure in Q3, and then, given some of those offsets, should be in a little better position from a volume perspective in Q4. Okay, that's very helpful. Thanks. Thanks, Mark. Thanks, Steve. Yep. Thanks. Our next question comes from Joe Ritchie from Goldman Sachs. Joe, your line is now open. Please go ahead. Hi, this is Vivek Srivastava in for Joe Ritchie. My first question is on just the fire protection sales decline this quarter and basically the pricing dynamics at play between the different product segments. Fire protection sales was down 9%. I think pricing was an attribute there, but in the other product segments, pricing was actually up. So can you provide some color on what's happening between the different pricing across these products, and how to think about it in second half and next year? Yeah, sure, Vivek. Thanks, thanks for the question. I guess first on the fire protection side, that, that's a product line that, that we do carry, steel pipe products that are used for that, that particular product line. That is one of the more, I'd say, commodity-type products that we have. It's smaller diameter, steel pipe that's used across various industries, and we've seen, I'd say, pretty significant, you know, pricing declines on, on that particular product line. So that's really a majority of what you're seeing with the fire protection product line being down, you know, 9%-10%, quarter-over-quarter. The other product categories, I'd say price has either been stable or up, as a whole, and, and, you know, been pretty consistent there. So, really, the big difference with the fire protection is that steel pipe category that makes up a lot of that revenue. Thanks. And maybe just shifting gear, a bit more longer term, the $55 billion water bill, I think previously you guys highlighted about $13 billion-$14 billion opportunity, from this bill. And just doing some back-of-the-envelope math on it, you have about 17% market share, suggests around over $2 billion opportunity for you guys specifically from a sales perspective. Is that a fair way to think about this $13-$14 billion opportunity? And just could we start seeing some of this, as early as next year, or maybe this will take a bit longer? Well, we would anticipate that we're gonna start seeing those funds flow here. You know, up to this point, it has been hard to get it in through the State Revolving Funds. Most of that has been distributed, and now the municipalities are starting to draw down on that or will be scoping projects for that. So our anticipation is that this should have a good tailwind effect for us, certainly in 2024 and 2025 and beyond. Great. Thanks. Thank you. Our next question comes from Patrick Baumann from J.P. Morgan. Patrick, your line is now open. Please go ahead. All right. Good morning. First one on operating costs, SG&A. Just talk about your ability to manage those expenses in the current environment. I imagine, you know, you're still seeing some inflation with respect to people costs, as well as facility costs. So just curious how you think about that, that bucket of costs. Maybe if you wanna talk about it, fixed versus variable, or, however you think is relevant in the performance in the quarter, as well as your expectation to be able to manage it, you know, over the next, for the rest of the year, I guess. Yeah. Thanks, Patrick, for the question. You know, operating costs for us is highly variable, but, you know, we—as you mentioned, we have experienced labor cost inflation, definitely inflation across a lot of our other facility and distribution costs, and some of that, you know, has even lagged our ability to get some of that price into the market. So we're seeing more of that, you know, pressure show up, but, you know, we've also invested and continue to invest in a lot of our growth initiatives. Greenfields, as an example, you know, that we highlighted for the quarter, and we continue to find new opportunities there to invest in growth.... I'd say, you know, as we experience some of the margin normalization that we're anticipating in the back half, we have a lot of costs that comes out relatively quickly, given our variable cost structure with our incentive comp plans. So that cost comes out very quickly as we experience some of that normalization. So that becomes a, you know, way to get that operating costs in line fairly quickly. So that's those are some of the, you know, easy levers. Obviously, we'll continue to look market by market and see where some of the softness materializes. And if we, you know, need to make adjustments there, we typically do that on a market-by-market basis. Helpful. And then, maybe just one on the balance sheet and capital allocation. So the leverage, I think, is 1.7 times as of this quarter. Just remind us what the target financial leverage is for the company, and, you know, how to think about your priorities for capital allocation, especially kind of just wondering if you can update us on the pipeline from an M&A perspective. Thank you. Yeah, thanks, Patrick. Yeah, you're right. We finished the quarter at about 1.7 times net debt leverage. You know, that's definitely an area that we're comfortable operating in. You know, we've said before, you know, we'd be willing to go up to 2-3 times leverage for the right opportunities. You know, our capital allocation priorities remain our organic growth initiatives that we have, though this is a fairly light capital-intensive business from that perspective. M&A continues to be our next priority. Pipeline there is very strong, very active. You've seen what we've completed this year. We've got several other opportunities that we're looking at currently and in the pipeline. So, that continues to be a priority. And then, obviously, we've reinvested in the share repurchases that we completed during the quarter. That will also continue to be a priority as opportunities arise. And then, you know, a little longer down the road, you know, we'll continue to evaluate dividends as another potential opportunity, just given the amount of excess capital that we expect to be able to generate and complete those growth initiatives and potential share repurchases. Thanks. Sorry, just one follow-up there, just more related to cash. On inventory, how much inventory, you know, still opportunity is there from a normalization perspective? Yeah, I would say, you know, we've made a lot of good progress here throughout 2023, and pretty significant progress in Q2. I do expect we'll continue to see inventory rightsizing throughout Q3. And then remember, Q4, typically, we're seasonally lowering inventory, so you'd expect, I would say, even more inventory rightsizing in Q4, just to align with the seasonal nature of the business. And, you know, hard to say yet if we'll get all the way where we want to be throughout 2023, but, you know, that could lead us to potentially some more in 2024. But we've been really pleased with the work that we've done here through the first half of this year. Great. Thanks so much. Best of luck. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. That's star one on your telephone keypad. Our next question comes from Anthony Pettinari from Citi. Anthony, your line is now open. Please go ahead. Good morning. On the 2023 net sales guidance, I guess, down 1 to +2, is it possible to, I don't know, put any finer point between price and volume in terms of the underlying assumptions there? And then, I think in the past, I mean, you, you've talked about kind of a growth algorithm of maybe sort of low single-digit market growth, and then, you know, Core & Main may be outgrowing that. Do you still see that as still kind of intact as we think about sort of, you know, 2024 and beyond? Just wondering kind of the long-term view there. Yeah. Thanks, Anthony. Yeah, on the sales guidance, down 1 to +2 for the full year. I'd say first, you know, one piece of that is acquisitions. We expect that to contribute, you know, in the 3-4 points for the full year. And then from an organic standpoint, you know, we do and have seen pricing very stable and expect that to be stable here through the second half of the year. So overall, price contributing in the low single-digit range for the full year. And then from a volume perspective, that leaves about, you know, in a down mid-single digit range for the full year. And again, that's primarily due to the, you know, the significant softness we've seen with resi in the first half. And then, as we mentioned, some beginnings of some of the softening we're seeing on the non-resi side. In terms of the above-market growth, we're very confident in our initiatives that we've got there across a lot of different product categories. That long-term target of 2-3 basis points of above-market growth, I say-- I would say, is intact. We continue to believe we've got that opportunity to, to, you know, continue to pick up share in that way. ... Okay, that's very helpful. And then just following up on an earlier question, is there a way, is there a way to think about sort of normalized SG&A margin or target SG&A margin, you know, as we think about the long term? Yeah, Anthony, you know, I think as we think about the SG&A margin, you know, we've been pretty consistent to say, you know, as we grow sales, we expect to be able to leverage that sales growth, either through gross margin enhancement or SG&A productivity, you know, at a rate of about 1.3-1.5 times that sales growth. So obviously, with some of the gross margin normalization and bouncing around, it makes that operating leverage target a little trickier to look at. But overall, I'd say we expect, as we grow this business, to be able to leverage our SG&A and that fixed cost portion of it. So that, that can equate to, call it, you know, 20-30 basis points a year, of, of, you know, improvement at that SG&A rate standpoint. So I, I think as you look at our SG&A rate from, from last year and then, you know, where we're tracking this year, as, as we see that, you know, we'll continue to leverage, as we can grow the business. Okay. That, that's very helpful. I'll turn it over. All right. Thank you. Our next question comes from Andrew Obin from Bank of America. Andrew, your line's now open. Please go ahead. Hi, this is David Ridley-Lane on for Andrew Obin. Just wanted to ask if you could bridge the change in the Adjusted EBITDA guidance. I think it was up about $15 million at the midpoint. How much of that was, you know, 2Q outperformance versus the additional acquisitions, versus any change in the outlook for the back half of the year? Yeah. Thanks, David. Yeah, you're right. At the midpoint, you know, we raised it from $8.85 to $8.65. I'd say, you know, a good portion of it was due to the better-than-expected gross margin rate that we achieved in the second quarter. I'd say from a pricing standpoint, we narrowed kind of the guidance because we're more confident in the stability of pricing in the sector. And then, you know, as an offset, you know, obviously, we've talked about the non-resi softness there. Really was the primary factor in terms of why we didn't increase the top end of that range as we kind of watched that end market in particular. I'd say, you know, more of that increase at the midpoint was related to the gross margin, you know, beat for the quarter. Got it. And just maybe more for background, but when you have your pricing or notifications from suppliers, I mean, I would imagine you have a pretty good handle on sort of what the pricing for the back half would be. But I just wanted to ask, you know, how much, you know, variability could there be in sort of your pricing expectations here, you know, over the next, call it, couple of months? Thanks, David. We've seen the pricing remain really firm, and that's why we have some confidence that it will continue through the second half. There may be some puts and takes on a couple different product categories, but for the most part, you know, just given the level of, From each of these suppliers, many of them are totally dedicated to this sector, so the supply-demand characteristics kind of hold true in that area and help carry a more resilient pricing mechanism. So, so we're pretty confident that we're gonna see, sustained pricing through the second half. Thank you very much. Okay. Thank you, David. We currently have no further questions, so I would like to hand over back to Steve LeClair for closing remarks. Steve, please go ahead. Thank you all again for joining us today. It was a pleasure to have you on the call. Our consistently strong performance quarter after quarter was a result of the hard work of our branches and functional support teams, our focus on operational excellence, and the diversity of our products and end markets. Our growth platform provides for significant value creation opportunity as our strategy is grounded in agility, innovation, and execution. We have a tremendous amount of opportunity ahead of us, and we look forward to providing a deeper look during our Investor Day next month. Thank you for your interest in Core & Main. Operator, that concludes our call. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines. Thank you.