Income Taxes |
6 Months Ended |
|---|---|
Aug. 02, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | INCOME TAXES For the three months ended August 2, 2026 and three months ended August 3, 2025 the Company’s effective tax rate was 22.3% and 22.5%, respectively. For the six months ended August 2, 2026 and six months ended August 3, 2025 the Company’s effective tax rate was 23.3% and 23.8%, respectively. Tax Receivable Agreements The Company is party to a tax receivable agreement with certain stockholders affiliated with Clayton, Dublier & Rice (“CD&R”) that transferred all of their Partnership Interests at the time of the initial public offering (the “Former Limited Partners Tax Receivable Agreement”) and a tax receivable agreement with certain stockholders affiliated with CD&R and Core & Main Management Feeder, LLC (“Management Feeder”) that continued to own Partnership Interests beyond the time of the initial public offering (the “Continuing Limited Partners Tax Receivable Agreement”) (collectively, the “Tax Receivable Agreements”). The Company has generated tax attributes, and expects to generate additional tax attributes with future exchanges of Partnership Interests, that will reduce amounts that it would otherwise pay in the future to various tax authorities. The Tax Receivable Agreements provide payments to the parties subject to the Tax Receivable Agreements, or their permitted transferees, of 85% of the tax benefits realized by the Company, or in some circumstances are deemed to be realized. The Company recorded payables to related parties pursuant to the Tax Receivable Agreements of $685 million and $720 million as of August 2, 2026 and February 1, 2026, respectively. Payments under the Tax Receivable Agreements within the next 12 months are expected to be $41 million, which is included within other current liabilities in the Balance Sheet. The actual amount and timing of any payments under the Tax Receivable Agreements will vary depending upon a number of factors, including the timing of exchanges by the holders of Partnership Interests, the amount of gain recognized by such holders of Partnership Interests, the amount and timing of the taxable income the Company generates in the future and the federal tax rates then applicable. Assuming (i) that Management Feeder exchanged all of its remaining Partnership Interests at $43.97 per share of our Class A common stock (the closing stock price on July 31, 2026), (ii) no material changes in relevant tax law, (iii) a constant corporate tax rate of 24.9%, which represents a pro forma tax rate that includes a provision for U.S. federal income taxes and assumes the highest statutory rate apportioned to each state and local jurisdiction and (iv) that the Company earns sufficient taxable income in each year to realize on a current basis all tax benefits, the Company would recognize an additional deferred tax asset (subject to offset with existing deferred tax liabilities) of approximately $77 million and a liability of approximately $66 million, payable over the life of the Continuing Limited Partners Tax Receivable Agreement. The full exchange will also decrease Core & Main's aforementioned deferred tax asset associated with its investment in Holdings by $4 million. The foregoing amounts are estimates and subject to change. Investment Tax Credits In the six months ended August 2, 2026, the Company invested $17 million in tax advantaged limited partnerships involved in the construction and operation of renewable energy projects. The provision for income taxes for the six months ended August 2, 2026, in the Consolidated Statements of Operations, includes $39 million of benefits from income tax credits and other income tax benefits partially offset by $35 million of amortization expense associated with our investments in these partnerships. The income tax credits and other income tax benefits received are included in accrued liabilities in net cash provided by operating activities in the Consolidated Statements of Cash Flows. As of August 2, 2026, the carrying value of these investments was $43 million which is included within other assets in the Balance Sheets and the related tax investment payable of $55 million is included within other current liabilities in the Balance Sheets.
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