Hello everyone, and welcome to the Core & Main Q3 2023 earnings call. My name is Seb, and I'll be the operator for your call today. If you would like to ask a question on today's call, you may do so by pressing star one on your telephone keypad, or if you would like to withdraw your question, please press star two. I will now hand the floor over to Robyn Bradbury, VP, Finance and Investor Relations. Please go ahead. Thank you. Good morning, everyone. This is Robyn Bradbury, Vice President of Finance and Investor Relations for Core & Main. We are excited to have you join us this morning for our fiscal 2023 third 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 and long-term value creation targets. Mark will then discuss our third quarter financial results and full year outlook, followed by a Q&A session. We will conclude with Steve's closing remarks. We issued our fiscal 2023 third 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 the 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, Robyn. Good morning, everyone. Thank you for joining us today. If you're following along with the third quarter investor presentation, I'll begin on page 5 with a brief business update. Core & Main delivered another quarter of strong results. Sales in the third quarter were just ahead of the prior year and up 30% from the third quarter of fiscal 2021. Demand from our customers remains resilient, and we continue to execute our organic and inorganic growth initiatives. Municipal repair and replacement activity in the third quarter remained stable on a year-over-year basis. Despite still being below prior year levels, new residential lot development improved sequentially from the second quarter. There continues to be a shortage of existing homes for sale, which is driving a need for new lot development and new home construction. Many national home builders have been reporting resilient results by providing incentives such as interest rate buydowns to ease affordability challenges and attract prospective buyers, which provides tailwinds for our business. We began to see non-residential volumes stabilize late in the third quarter due to our balanced exposure across various non-residential project types. We continue to see good growth in highway and street projects, an increasing trend of mega projects across the country, both of which are included in our non-residential end market and have offset some of the softness in multifamily and warehouse work. Price contribution to net sales was flat for the quarter when compared to the prior year. Most of our products are either highly specialized or made specific for our sector, which provides a resilient pricing framework for our industry, especially when roughly half of the demand for our products and services is non-discretionary in nature. Gross margin in the third quarter was 50 basis points lower than last year, as inventory costs continue to catch up with the current market prices. While we expect to see additional gross margin normalization in the fourth quarter, we have confidence in our ability to offset a portion of it through underlying gains from our margin initiatives. Cash generation is a key strength of our business. We have delivered nearly $1.1 billion of operating cash flow over the last 4 quarters. This cash flow has provided us with significant capacity to reinvest in organic growth, pursue strategic M&A, and return capital to shareholders. We opened 2 new greenfields in the third quarter, one in Spokane, Washington, and another in Fontana, California. These new locations extend our product offerings in under-penetrated markets, building on our commitment to make our products and expertise more accessible in every region we serve. Greenfields are a powerful way for us to expand geographically. We are well positioned to do so, given our scale and talent pool. Each time we add a new location, we are adding new sales resources and reducing the average distance and time for us to serve our customers' orders. This enhances our overall value proposition, giving us the opportunity to gain local market share. We have opened four greenfields so far this year. We will continue to use greenfields as a lever to drive above-market growth in attractive markets going forward. We continue to target attractive M&A opportunities using our disciplined approach, announcing three new acquisitions after the quarter: Enviroscape, Granite Water Works, and Lee Supply Company. So far this year, we have signed or closed 8 acquisitions with combined annualized net sales of over $330 million. These acquisitions enhance our product offering and help us achieve a leading position in desirable markets. We are committed to our goal of driving 2%-4% annual net sales growth from M&A each year over the next several years, and I will provide more details on our recent acquisitions shortly. Lastly, on capital deployment, we executed one share repurchase transaction during the quarter and another after the quarter, deploying nearly $300 million of capital to retire 10 million shares. We have deployed $770 million of capital so far this year to repurchase and retire 30 million shares in total. Our capital allocation strategy is clear: We expect to continue investing in organic growth and margin enhancement, execute on our robust M&A pipeline, and return excess cash back to shareholders through share repurchases or dividends. Now turning to page six, I'll provide an overview of our recent acquisitions. Enviroscape is a leading provider of geosynthetics and erosion control products operating out of one location in Ohio. Since 2003, the team at Enviroscape has established themselves as a trusted partner within the geosynthetics market due to their expertise and reputation for first-class service. Their specialty products complement our existing business, and this opportunity provides additional capacity to expand our geosynthetics reach and capabilities. Granite Water Works is a leading distributor of pipes, valves, and fittings, and storm drainage products for contractors and municipalities in central Minnesota. Since 1990, their experienced team has consistently delivered high-quality products and personalized service to their customers from their Waite Park, Minnesota, location. The local relationships and commitment to dependable service that Granite Water Works will bring to Core & Main will greatly amplify our capabilities and presence throughout Minnesota. Lee Supply is a leading specialty distributor and fabricator of high-density polyethylene pipe and other related services, including HDPE fusion equipment rentals and custom fabrication capabilities. For nearly 70 years, Lee Supply Company has been delivering innovative solutions and providing top-quality products to municipalities, contractors, and other environmental and industrial customers. They operate out of four locations in Pennsylvania, South Carolina, and West Virginia, primarily serving the Eastern United States. Their products and fabrication capabilities significantly enhance our HDPE product offering while providing our customers with additional expertise in fusible pipe applications. Each of these businesses offer expansion into new geographies, enhance our product lines, and add key talent while aligning with our strategy of advancing reliable infrastructure across the U.S. Our pipeline of potential acquisitions remains robust. We expect to continue adding and integrating businesses to support our growth. Given the fragmented nature of our industry and our modest market share, we have a significant opportunity to continue growing through acquisitions for many years to come. On page 7, we highlight the value creation story we discussed at our recent Investor Day. Our long-term growth algorithm starts with our end markets. We have diversified end market exposure between municipal, non-residential, and residential construction markets nationwide. We maintain a balanced mix of sales between new development and repair and replacement projects. Each of our end markets have grown in the low single-digit range historically, and we expect the fundamental demographic trends and drivers of growth in our markets to continue. We expect multiyear tailwinds in the residential and non-residential end markets. When coupled with healthy municipal budgets and the potential for significant federal proceeds, we believe end market volume growth over the long term will be between 2%-4% per year. We've also demonstrated a history of organic above-market volume growth, producing three points of market outperformance over the last five years. We believe that our long runway of growth opportunities in underpenetrated geographies and underpenetrated product lines, coupled with our industry-leading capabilities and operational excellence, will continue to drive organic above-market growth in the range of 2%-4% annually. Our M&A pipeline is robust, and we continue to acquire businesses in our highly fragmented markets through bolt-on and complementary acquisitions. We are confident we can continue to drive another 2%-4% of annual net sales growth from M&A over the next several years. Collectively, our end markets, above-market growth capabilities, and M&A strategy result in average annual net sales growth ranging from 6%-12%. In terms of margins, we expect to continue executing on our private label, sourcing optimization, and pricing analytics initiatives while leveraging our scale, productivity, and operational excellence to drive 30-50 basis points of adjusted EBITDA margin expansion annually. We believe that our profitable growth, agile business model, and focus on efficiency will continue to generate strong operating cash flow at a rate of 60%-70% of Adjusted EBITDA, underpinned by a strong balance sheet to provide robust capital deployment. We are better positioned than any other distributor in our industry to capitalize on these growth levers, and we are excited about the opportunities ahead. As part of our Investor Day event, we released five-year financial targets and provided additional details on the growth, profitability, and cash flow initiatives we have in place to continue operating this business with success while driving shareholder value. I'd like to thank everyone who either attended in person or listened virtually. If you haven't seen it yet, the replay is posted on the Investor Relations section of our website, and I highly encourage you to watch it to get a deeper understanding of what makes our business so special and the opportunities that we have for long-term profitable growth. With that, I will now turn it over to Mark to discuss our financial results and full year outlook. Go ahead, Mark. Thanks, Steve, and good morning, everyone. Our third quarter results reflect our operational excellence and the resilience of our business model. We maintain a healthy balance sheet and are prudently deploying capital to the highest return opportunities. We're leveraging our sustainable competitive advantages and financial position to drive future growth and value creation. I will cover a few topics with you this morning. First, I'll recap our third quarter earnings, followed by an update on our cash flow and balance sheet highlights. Then I'll provide our updated financial outlook for fiscal 2023 and a preliminary framework for fiscal 2024. I'll begin on page 9 with highlights of our third quarter earnings. We reported net sales of just over $1.8 billion for the quarter, which was just above the prior year period and consistent with our expectations. Price contribution was flat for the quarter, while organic volumes were down low single digits. The cumulative effect of acquisitions over the past year contributed approximately 3 points of growth to net sales. Gross margin of 27% was 50 basis points lower than last year, as inventory costs continue to catch up with current market prices. Our local teams have executed very well to sustain our margins by optimizing inventory levels, reacting with discipline to market prices, and continuing to drive our gross margin initiatives. Selling, general, and administrative expenses increased 4% to $240 million for the third quarter. The increase in SG&A reflects the impact of acquisitions and cost inflation. Interest expense was $20 million for the third quarter, compared with $16 million in the prior year period. The increase was due to higher variable rates on the unhedged portion of our senior term loan. We recorded income tax expense of $39 million for the third quarter, compared with $40 million in the prior year period, reflecting effective tax rates of 19.8% and 18.3% respectively. The increase in effective tax rates was due to a decrease in partnership interests held by non-controlling interest holders. We recorded $158 million of net income in the third quarter, compared with $178 million in the prior year period. The decrease was primarily due to lower operating income. Diluted earnings per share in the third quarter was $0.65, which was in line with the prior year period. Diluted earnings per share decreased due to lower net income, offset by lower share counts following the share repurchase transactions executed throughout the year. Adjusted EBITDA decreased approximately 5% to $260 million, and adjusted EBITDA margin decreased 90 basis points to 14.2%. The decrease in adjusted EBITDA was due to the reduction in gross margin and the impact of cost inflation on SG&A. Turning to page 10, we delivered excellent operating cash flow in the third quarter of $373 million, reflecting over 140% conversion from adjusted EBITDA. We continue to optimize inventory levels now that supply chains have improved. On a year-over-year basis, net inventory was down about $325 million, or roughly 28%, even with higher product costs, inventory acquired through acquisitions, and new inventory to support greenfields. We expect strong operating cash flow conversion again in the fourth quarter as we continue to optimize inventory levels and deliver a normal seasonal reduction of working capital. Net debt leverage at the end of the quarter was 1.5 times, and our available liquidity stands at more than $1.3 billion, providing ample liquidity to continue investing in growth and returning capital to shareholders. The share repurchases we executed in September and November were done concurrently with public secondary offerings by our largest shareholder. As a result of these transactions, we retired 10 million shares while increasing our public float. As Steve mentioned earlier, we have deployed $770 million of capital for share repurchases so far this year, and we'll continue to evaluate share repurchases as opportunities arise. Before we head to Q&A, I'd like to update you on our outlook for the remainder of fiscal 2023 on page 11 and provide a preview of our views on fiscal 2024. Our sales results through the third quarter have largely played out as expected. Looking ahead, we expect normal seasonal volume trends in the fourth quarter, which tend to be impacted by colder weather and shorter daylight hours. Municipal repair and replacement activity in the fourth quarter is expected to remain stable on a year-over-year basis. We expect new residential lot development growth to improve sequentially and benefit from easier year-over-year comparisons. Furthermore, we expect non-residential volumes in the fourth quarter to be flat to slightly down on a year-over-year basis, similar to what we experienced in the third quarter. Price contribution to net sales growth was flat in the third quarter, and we expect it to be roughly flat again in the fourth quarter, resulting in low single-digit price contribution for the full year.... We expect additional gross margin normalization in the fourth quarter as we cycle through the rest of our low-cost inventory. However, we now expect full-year gross margins to be better than previously anticipated, due to strong performance across our margin initiatives and synergies from M&A. Taken all together, we are narrowing our expectation for fiscal 2023 net sales to be in the range of $6.65 billion-$6.75 billion. We're raising our expectation for Adjusted EBITDA to be in the range of $890 million-$910 million, due to our margin performance in the third quarter, as well as confidence in our ability to better sustain margins through the end of the year. We are also raising our expectation for operating cash flow conversion to be in the range of 110%-115% of Adjusted EBITDA, due to our disciplined inventory optimization efforts. As we look beyond this year, we plan to provide our full-year outlook for fiscal 2024 during next quarter's earnings call. However, as we sit here today, we generally expect end market volumes to be roughly flat to up low single digits, depending on the broader economic conditions, including the effects of interest rate movements and progress on the federal infrastructure proceeds. We remain committed to our market outperformance, driven by our organic and inorganic growth strategies. From a margin perspective, we anticipate further margin normalization that wasn't fully realized this year to impact our results in the first half of fiscal 2024, while we continue to drive our margin initiatives to offset these impacts. Our focus will continue to be on the areas within our control, including customer service, technical expertise, productivity, and pricing execution. We'll continue deploying capital and initiatives that will result in accelerated growth, including executing on our M&A pipeline and delivering on our organic growth strategies. We'll maintain significant liquidity and expect to continue driving shareholder value through share repurchases or dividends. We are well positioned to outperform the market in this complex demand environment, creating value for all our stakeholders. We look forward to helping our customers build more reliable infrastructure as we close out fiscal 2023. At this time, I'd like to open it up for questions. Thank you. If you'd like to ask a question, please press star one on your telephone keypad, or press star two if you'd like to withdraw your question. Our first question today comes from Joe Ahlersmeyer from Deutsche Bank. Please go ahead. Yeah. Thanks very much for taking my question, and congrats on the strong results. Can you guys hear me? Thanks, Joe. Thanks for the question. Yeah. We can hear you now. Thanks. Hey, sure. Okay, great. Yeah, thanks a lot for the early insights into next year's volumes, flat to up, low singles. That's pretty good. I'm interested in just kind of getting into what the different thoughts are around the end markets. Maybe at the low end of that and at the high end of that, kind of what you see R&R, non-res, and, and new res doing next year. Yeah, sure, Joe. Thanks for that question, and yeah, we did you know, for 2024, we think overall the end markets are... But this, at least at this point, looking to be kind of flat to low single-digit. And you know, as we've talked about our municipal base, which you know, is roughly 40% or so of the business, we believe is gonna continue to be very stable going into next year in that kind of low single-digit range. We're coming off a really weak residential year as you know, we've talked about on prior quarters calls, so we do expect some growth coming out of resi. Now, that does assume that, you know, we do see, you know, mortgage rates in a, in a, you know, in an environment where maybe those come down a little bit. You know, Fed stabilizes some of the rate movements that they've been looking at. And then from a non-residential exposure, like we talked about, you know, that's a very broad exposure for us, and while there's different, you know, pockets within there, we believe that's gonna be flattish, you know, as we go into 2024. Understood. Thanks a lot for that detail. And then just thinking about the share purchase commentary, I'm wondering: in a year where, going forward, M&A activity may be below your annual target, in any given year, would you be sort of more programmatic about letting that excess capital flow to the purchases? Just kind of thinking about your philosophy around letting cash build and letting leverage come down. Yeah, Joe, the way we're thinking about capital deployment right now is, you know, as you've seen, we've really generated some really strong cash flow here throughout 2023. Expect 2024 and beyond to be really strong cash flow generation years for us. And with our current debt leverage at about 1.5 times, I believe that provides us ample, you know, capital to be able to deploy, not only to M&A, which, you know, you've heard Steve talk about the healthy pipeline that we have, but also give us that opportunity to be opportunistic with share repurchases, you know, as opportunities arise there. And then, you know, beyond that, potentially being able to do dividends and at some point in the future. So we're gonna look to do all those things to return capital to shareholders. We think those are all attractive opportunities for us, and, you know, we'll continue to look at it that way. ... All right. Thanks for all the detail. Good luck in the fourth quarter. Yeah, thanks, Joe. Our next question is from David Manthey, from Baird. Please go ahead. Hello, David, your line is now open. Could you please check you're not on mute? Unfortunately, we're not able to hear anything from David's line, so we'll move on to the next question. The next question comes from Kathryn Thompson at Thompson Research Group. Kathryn, please go ahead. Hi, thank you for taking my questions today. Focusing, looking forward into next year, and thinking, tagging on the question on M&A. First, could you give a little bit more color in terms of how the appetite may have changed for targets as you go into next year? You know, what's the difference, and how do you feel about M&A environment next year? And then, have your priorities changed in terms of types of end markets, given the changing landscape for mega projects? Thank you. Hey, thanks, Kathryn. Yeah, you know, as we look at certainly the existing pipeline that we had and that we've executed on this year and what we've got in store, as we look through in the future here, we really haven't seen much of a change at all in what our appetite is. We continue to see great businesses out there across a broad spectrum, whether they're simple bolt-ons or getting us access to new products and new categories for us. So I think we'll continue to build on that. And so we don't really see a change in that, in our appetite for that. And then, sorry, can you give me your second part of that question again? It's just really, how has the appetite changed or have there been any changes in terms of your targets, in terms of, being more or less open to, to M&A? Yeah, you know, I would say that, Just give- ... the business environment, many of the sellers have operated in and many of our competitors have operated in, have been pretty challenging. So you know, I would say we're starting to see that break loose, a little bit more. And you know, certainly, like, you look at the volume of deals that we've done this year, you know, we think that's pretty indicative of what we see in the pipeline ahead. We've been, you know, if you look back over the last several years, it looks pretty consistent in terms of the amount of volume we've been able to do accretively to each year. In that 2%-4%, we're certainly in the high end of that, at this point, and I think we continue to see that going into certainly 2024 and beyond. Okay. And then finally, we're getting a, from just based on our industry context, getting a wide range of feedback in terms of on the non-res, in terms of, cancellations or pushing out projects. But in general, on, on your lighter non-res, you are seeing some pushout or cancellations, but for larger, not. What are you seeing in terms of project delays, and/or cancellations in the more in the traditional com, non-res end market? Thank you. Yeah, we saw softness really continue in Q3, but we did see the volume stabilize late in the quarter. You know, if you look at a couple of the areas that have been very strong for us, we look at, you know, highways and street projects have been very robust. While we've had some had to offset, you know, obviously, warehouse construction, and multifamily has been softer than normal. But I think if you look at what a broad category that is for us with non-residential, it really gives us a lot of stability as we as we go forward. And we think we're incredibly well-positioned, you know, as we get into 2024. Okay, great. Thank you. Thanks, Kathryn. Our next question comes from Nigel Coe from Wolfe Research. Please go ahead. Thanks. Good morning. Thanks for the question. Sneak another one on the back end of that. You know, the unit cost of inventory- Hey, hey- Not looking- Hey, Nigel? Nigel, Nigel, you cut out on us, if you wouldn't mind- Yeah ... answering or asking that question again. Sure, just on the inventory, you know, good, good progress on working down inventory from, you know, where it was, you know, this time last year. How much further there is to go on this inventory rebalancing process? And I'll ask a follow-up question. Yeah, great. Thanks for the question, Nigel. You know, on yeah, we heard you on that one. Okay. Appreciate the question. On inventory, I would tell you that we did make a lot of good progress, you know, in the third quarter on inventory. You know, we've had, I'd say, some movement on certain product categories that's, you know, really allowed us to work through a lot of the excess, you know, stock that we had while we were, you know, cushioning for some of the supply chain challenges. I'd say there's still a handful of product categories that we're working down yet. Expect us to make continued progress, you know, in the fourth quarter. But, you know, as we've talked about seasonally, you know, volumes do come down in the fourth quarter, so it's hard to say how much progress we'll make against those remaining product categories. ... you know, as we wrap up this year. So, I think we'll make good progress, but, you know, there could be some of that that leaks into 2024 yet that we'll continue to work to optimize. Okay. So it sounds like there might be a slight tailwind in 2024, but it looks like we're in good shape. But then the second part of that question is really around the cost of inventory. And what I'm trying to get at here is, you know, obviously, we're getting close to the back end of the price cost sort of headwind. I'm just curious if we're now at the point now where we're seeing the unit cost of inventory, you know, really stabilizing Q over Q at this point? Yeah, Nigel, thanks for the question on that. In terms of inventory, you know? Yeah. Yeah. Yeah. I think, I think similarly, you know, as it relates to margins, you know, the inventory is working similarly. I mean, we have experienced some of that gross margin normalization across certain product categories that we've been able to really flush through and get current on. There's still a handful of categories that, you know, we're still carrying some low-cost inventory and, you know, expect we'll work through the remainder of that, you know, as we get into, you know, Q4 and into next year. So still think there's a little bit of normalization that that's gonna happen here. But we've been able to offset a lot of that. We've been you know, we've had some accretive M&A come through here in 2023. You know, we've been able to deliver synergies on top of that at the Gross Margin level, and then, you know, frankly, made a lot of really good progress on some of our Gross Margin initiatives, especially here, you know, in the third quarter. So, those are some areas we'll continue to work to offset that normalization, but I do expect some of that to continue here into Q4 and into the first half of 2024. Okay, I'll leave it there. Thank you. Yeah. Thanks, Nigel. Our next question is from Anthony Pettinari from Citigroup. Please go ahead. Hi, this is Asher Sohnen on for Anthony. Thanks for taking my question. You talked about volumes flat to up low single digit in 2024, but I was just wondering if you could share your outlook maybe for price in 2024, at least directionally, and if you've announced or planning any kind of pricing actions? Yeah, you know, we continue to watch the price, obviously, in the current market and, you know, spend a lot of time talking to our suppliers about what their plans are going forward. And, you know, at this point, we're as we look into 2024, we're really assuming a neutral price environment. So we could see some ups and downs in any particular product category there, but really believe overall, from a price contribution standpoint, it just should be really a neutral environment into 2024. But, you know, we'll provide some more color on that as we get into next quarter's earnings call and, you know, whether or not we see any other price movements, especially as we roll into the early part of 2024. Got it. That's super helpful. And then just another one: You know, can you provide maybe an update around what you're seeing in terms of, you know, IIJA spending flow-through to your end markets? You know, your expectations around that for 2024, maybe how that plays into your, your volume framework for 2024. Yeah, thanks. The IIJA funds have certainly been slower than we would have liked or anticipated as we've gotten into the back half of this year. What I would say is that we're starting to see some green shoots in this, particularly in the upper Midwest, as a couple of the states have started to see projects break loose and actually funding go through, particularly in, you know, Michigan, Wisconsin, and the Dakotas, there's been some projects that have been utilizing that funding. So we're really anticipating that we'll see some more volume start to break loose in 2024, and that should be some tailwind for us on the municipal side. Thanks. That's very helpful. I'll turn it over. Thank you. Our next question is from Joe Ritchie from Goldman Sachs. Please go ahead. Hi, this is Vivek Srivastava on for, Joe, and, thank you for the question. Maybe just starting with gross margins. Your gross margin performance has been pretty impressive for the last few quarters, and just wanted to understand how much are synergies typically, after you close a deal, when do you start realizing some of those, gross margin synergies? Yeah. Thanks, Vivek, for the question. You know, as we talked about, we expected, you know, some gross margin normalization throughout 2023, kind of in that 100-150 basis point range, and, you know, we did definitely experience, you know, some of that pressure on some of these product categories, like I've talked about, that we've flushed through that lower cost inventory. And really, the offsets that we've seen there have been, as you mentioned, you know, some of the accretive M&A, which has also brought some synergy with it. I'd say probably more so just given the timing of some of those acquisitions, more of it's just been the accretive nature of it. There's some, you know, work that we'll do yet to deliver on some of those synergies to drive some more of the, you know, gross margin improvement. And then, you know, I'd say a lot of good progress in the quarter on some of our sourcing optimization work, you know, that's brought in some nice, you know, overperformance, more so than I'd say we were expecting in the third quarter. So those are really the elements of it. You know, in terms of breaking them all out specifically, we're not necessarily gonna do that, but I did want to give you some additional color there on what some of those drivers are. ... Oh, that's helpful. Thanks for that. And just on the SG&A front, it looks like last four quarters, your SG&A has been growing faster than the revenue growth. How long can this trend continue, and when do you expect it to normalize? Yeah, sure. You know, as it relates to SG&A, there's really a handful of factors in there. I'd say some of these M&A, you know, acquisitions that we've done, while they've brought us higher gross margins, many of those also have had a little higher SG&A base, so that's put a little more pressure on SG&A. And then I would say some of the cost inflation of SG&A has trailed, you know, some of the product cost inflation that we've seen. So there's still a little bit more, I think, to flow through from an SG&A perspective. And then, you know, we've made a handful of, I'd say, growth investments that have been SG&A impacting into the results. So I'm expecting some more SG&A pressure in Q4, and I think, you know, normally, we'd expect some SG&A productivity for a full year in 2024. But just given the timing of the M&A that I talked about and some of these investments, we're probably gonna see a little bit more pressure, you know, as we look out, throughout 2024, but those are really the drivers of it. Great. Thanks. Yep, thank you. Our next question is from Ryan Connors, from Northc oast Research. Please go ahead. Great, thanks for taking my question. I wanted to ask about the private label side, and if you can give us an update on your progress there. It looks like Enviroscape is a private label deal, and also, I assume the greenfields help you to accelerate that somewhat. So you've talked about going from 2%- 10% private label. Can you talk about where... like, if we're 12 months from now, kind of 2024, what the vision is? Do some of these things move the needle, and we're, you know, what inning are we gonna be in as we move through 2024? Is it a material improvement from the 2%? Yeah, Ryan, this is Steve. So appreciate the question. Yeah, certainly, Enviroscape has, you know, some private label, you know, content to it, for our geosynthetics, business, for sure. You know, as we look at how we expand that, there's just a broad assortment of products and accessories out there that we've been able to develop, beyond certainly geosynthetics, but when we get into, you know, other accessory kits and things along those lines. So we'll continue to do that. You know, the long-term plan we had was getting into this, 10%+ in terms of private label. So we'll be making investments, and we'll continue to enhance that performance through next year. We'll have a little bit more color to share on that as we wrap up the year-end. Got it. Okay. And then my other question was on specific line, which is water metering, and AMI. Can you give us any update on what you're seeing there, both in terms of the near-term demand cadence and also M&A? It seems like metering was more of an M&A focus a few years ago, but kind of the recent deal flow doesn't seem like metering's really been as much of a part of that. So is that... Just curious whether that's intentional or whether that's just a function of what's for sale out there. Yeah. You know, if you look at our quarterly results that we had, meters was an incredibly strong quarter, and a lot of that was you know, backlog that we've had for projects that were executed, where now we're starting to see that supply chain ease up with a couple of our key manufacturers and getting that product out to go execute. Bidding activity remains incredibly strong. You know, you're certainly seeing where you know, AMI and advanced metering has become much more broadly accepted, and we play a key role in helping to get that out to those customers, whether they're small rural customers looking at AMI systems or even some of the large metropolitan areas. So we continue to see really you know, a lot of strength in that end market. From an M&A perspective, we did a couple acquisitions early on to get access to certain lines. You know, as we look across the country right now, we certainly have coverage of many different lines all across the country at this point. So from an M&A perspective, you know, you may not see a whole lot of activity in that, as we feel pretty secure with the access to the products that we've got across the broad portion of the country. Got it. Very helpful. Thanks for your time this morning. Thanks, Ryan. Our next question comes from David Manthey from Baird. Please go ahead. Yeah, thank you. Good morning, guys. Mark- Good morning. On the flat to low single digits, just so understanding that clearly, I believe you're talking about market volume growth there. And if you can just give us a little bit of color in terms of what informs that outlook. Understanding it's preliminary, but is this discussion with your larger builders some visibility into municipalities' fiscal year budgets? How do you, how do you build that up? Yeah, Dave, thanks for the question. Glad we got you, got you back. You know, yeah, as we look out into 2024, Dave, it's really all, all those factors. We look at a large amount of external data sources, you know, but which is important for us. But we have a large volume of internal data that, that we look at from bidding activity, you know, that's likely to, you know, produce results into 2024. And then a lot of discussion with our local teams that are, you know, looking out and, and talking to their customers about what to expect for 2024, and then obviously also comparing, you know, those expectations relative to the numbers that, you know, have flown through in 2023. So, you know, it's a lot, a lot of different sources that we're looking at there. I'd say we always place the most reliance on the internal data that we get from our teams and that we track, which really helps inform us for, like we talked about, at least at this stage, what to expect for 2024. But we do plan to update everybody on that in our, in our call here for the full year of 2023 and, and next quarter's call. Got it. Thank you. And second, a little bit more of a broad question here: Could you talk about technology and, how important that is relative to your long-term outgrowth versus your competition? Yeah, I'd say, you know, from a technology standpoint, you know, a major driver of our business is, you know, productivity and effectiveness of quoting our customers. That's really the starting point. You know, we laid out a lot of that technology in our Investor Day presentation. And then, you know, we have a number of tools available for our customers to really drive some stickiness, you know, from our perspective with those customers, that just make it easy to do business with us. I'd say less so from a driver of, you know, revenue growth or e-commerce related. You know, while we have capabilities for that, that's really not a driver of majority of the revenue that, you know, that we have as a company. So really, I think as it relates to being more productive, getting in front of our customers faster than our competitors, and then having technology that drives stickiness with tools like Online Advantage, and others that you know really provide that stickiness, is how we think about it from a technology perspective. Perfect. Thank you. All right. Thanks, Dave. Our next question comes from Andrew Obin at Bank of America. Please go ahead. Hi, this is, David Ridley-Lane on for Andrew Obin. At the Investor Day, the slide on the bridge to the 15% EBITDA margin goal included, you know, a 30 basis point decline in fiscal 2024, given some of the gross margin normalization. You know, given you're raising, fiscal 2023 EBITDA margin by about 55 basis points, should we think about that as being, you know, more like an 80-90 basis points decline in 2024? Or are some of these margin improvements, sustainable, i.e., is this sort of a timing impact, or have you been sustainably outperforming your plan on gross margin? Yeah, David, thanks for the question on that. You know, I'd say we've definitely been, you know, pleasantly surprised with the Gross Margin performance throughout 2023, and definitely the pricing stability that we've seen in the market has helped drive some of that. So while we're seeing some low-cost inventory, you know, catch up with market prices, the stability of pricing, I would say, has provided better results than we had anticipated early on, you know, when we kinda laid out the Gross Margin normalization. You know, there's still risk, and we'll watch that. You know, while prices are stable, you know, that can put some pressure on margins. So we're still guiding towards, you know, Gross Margin normalization in Q4 and some of that spilling into 2024. You know, if we can keep executing on our gross margin initiatives, you know, we're gonna be in a good position to offset, you know, as much of that as we can and hopefully minimize, you know, what that impact looks like, you know, in these out years. Got it. I mean, I guess another way of asking it, you know, you talked, I think, in the past, about 100-150 basis points of one-time gross margin benefit. Are you thinking now, you know, more closely to the 100 basis point piece of that range? Yeah, David, you know, like I said, I think with, with you know, the pricing stability that's resulting in better margins than we had anticipated, you know, I wouldn't say we're ready to update that range yet of expectations. But, you know, definitely something that'll be a focus as we lay out our kinda more detailed planning for 2024 on next quarter's call. But I think you can gauge from my comments that, you know, at this point, we're pleasantly surprised with how that's come in here for 2023. If I could sneak one more in. You did mention sourcing optimization- Sure has been helpful. I'm just thinking, you know, all your... You know, you, your peers, everyone is, is destocking. So I'm wondering if some of the benefit there is suppliers or, you know, have suppliers offered any incentive to take product, right? Because, you know, if, if all the distributors are destocking, the suppliers are, are seeing lower orders, right? So, are you seeing any of that kind of incentive activity? Yeah, I would say as we think about sourcing optimization and the benefits we saw there, definitely going into a year where we were reducing inventory pretty significantly, and you've seen our inventory come way down. We do have certain volume incentive tiers with, you know, suppliers, and we kind of think about it as getting spend into the most preferred programs and getting into the right buckets. And, you know, as we started the year, I think we had some concerns that we could really achieve all of the benefits there that our suppliers provide us, just given the reductions in volume. But I think our sourcing teams have really done a great job of getting the spend in the right buckets, and that's driven some better margin performance than we had anticipated. Thank you very much. All right. Thank you. Our next question comes from Patrick Baumann from JP Morgan. Please go ahead. Hi. Well, thanks for taking my question. Sorry, I missed some of the call, but, did you provide any update on kind of what you're seeing from a non-res perspective in terms of multifamily? I know that that was a reason why you, you know, tweaked down your outlook, maybe that was a quarter ago from a top-line perspective. So I'm wondering if you have an update on what you're seeing in terms of starts activity, you know, in specific verticals like multifamily. Yeah, Patrick, this is Steve. Yeah. We definitely saw softness coming into Q3, and we saw it stabilize as we got into the back half of the quarter. So, multifamily was challenging, as was warehousing, but really started to see some good growth in highways and projects. And so when we looked out across, you know, the whole spectrum that what we cover, particularly look at some of these big mega projects, we really saw that stabilize towards the back half of the quarter, and we're pretty pleased with kinda how that came in. Okay. And then the 2024 outlook there, you had—you described, I'm just looking at notes that someone sent me, as kinda flattish for non-res. Is that the way you're describing 2024? Yeah, I would say it. You know, we provided a range of market, you know, for 2024, kinda saying flat to up low single digit. I think on the low end of that, it's probably down a little, on the high end of that, it's probably flattish in that range. That's non-res, or that's total markets? Non-res. Overall market would be flat to up low single digit. Okay. Got it. Got it. Thank you. I'm sorry for having to rehash that. Yeah. And then, in terms of, you know, not to beat the dead horse on the gross margin dynamic, but so 27% or so, you know, in 2022, and like year to date, similar to that, has been the level that you've been able to achieve. So you're not ready to update kinda that 100-150 basis point of drag, so potentially. So we should, you know, for lack of an update, kind of assume that that is, that's a reasonable base case to think about for gross margin in terms of drag from that, and then maybe some offset will come from your initiatives. You know, something down, you know, in the 100 basis points in terms of gross margin next year is kind of like a reasonable base case? Is that fair? Pat, probably the way I would think about it is we've experienced some of that gross margin normalization in 2023, which we've been able to offset, and we'll experience some of that into 2024. So, you know, it kinda gets split period over period, so it's probably not the full amount into 2024, but that's the piece, you know, we do plan to provide obviously a lot more guidance on as we get into our full year release for 2024. But that's the way we're thinking about it right now, is we definitely know we've experienced some of it, a lot of which we've been able to offset, and we're likely to experience the balance of it in 2024, but it's probably not a full year impact of it. Okay. That's different than I interpreted it, so appreciate the color there. Thanks a lot, and best of luck. Sure. All right. Thank you. We have no further questions on the call, so I will hand back to Steve LeClair for closing remarks. Thank you all again for joining us today. It was a pleasure to have you on the call. Our consistent execution quarter after quarter is 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. We have more levers than ever for driving growth and profitability, the cash flow generation to capitalize on it, and the team to execute on it. Thank you for your interest in Core & Main. Operator, that concludes our call. Thank you all for joining today's conference call. You may now disconnect your lines.