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Equity-Based Compensation | 12 Months Ended
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Feb. 02, 2025
Share-Based Payment Arrangement [Abstract] |
Equity-Based Compensation | EQUITY-BASED COMPENSATION Equity-Based Compensation Plan Prior to the initial public offering, the board of Holdings approved the Core & Main Holdings, LP Equity Incentive Plan. Employees and independent directors of the Company previously received profits units and unit appreciation rights in Holdings indirectly through Management Feeder. These awards were issued from Management Feeder, which in turn received grants from Holdings in the amounts and terms that were identical to those that were issued to employees and independent directors. Treatment of Core & Main Holdings, LP Equity Incentive Plan In connection with the reorganization transactions performed as part of the initial public offering, Holdings was recapitalized and its common units and profits units were converted to a single class of Partnership Interests. Partnership Interests in the recapitalized Holdings, which correspond to prior profits units of Holdings, which were held by Management Feeder (which relate to profits units in Management Feeder held by the Company’s employees and directors), remain subject to the same time-based vesting requirements that existed prior to the reorganization transactions. As part of the recapitalization of Holdings, the quantity of Partnership Interests issued in the recapitalization contemplated the settlement of the historical benchmark prices and the public offering price of Class A common stock in the initial public offering. In addition, in connection with the reorganization transactions, unit appreciation rights of Holdings were converted to stock appreciation rights denominated in shares of Class A common stock with adjustments to the number of awards and benchmark prices. Partnership Interests A summary of the Partnership Interests is presented below (shares in thousands):
| Number of Shares |  | Weighted Average Benchmark Price
Outstanding as of January 28, 2024 | 8,669 |  |  | $ | — |
Exchanged | (1,546) |  |  | — |
Outstanding as of February 2, 2025 | 7,123 |  |  | $ | — |
| Number of Shares |  | Weighted Average Benchmark Price
Unvested as of January 28, 2024 | 387 |  |  | $ | — |
Vested | (165) |  |  | — |
Unvested as of February 2, 2025 | 222 |  |  | $ | — |
The estimated fair value of the profits units when granted was amortized to expense over the vesting period. The fair value for these profits units was estimated by management, after considering a third-party valuation specialist’s assessment, at the date of grant based on the expected life of the profits units, using a Black-Scholes pricing model. Stock Appreciation Rights A summary of the stock appreciation rights is presented below (shares in thousands):
| Number of Shares |  | Weighted Average Exercise Price |  | Aggregate Intrinsic Value
Outstanding as of January 28, 2024 | 332 |  |  | $ | 5.28 |  |  |
Exchanged | (160) |  |  | 4.46 |  |  |
Outstanding as of February 2, 2025 | 172 |  |  | $ | 6.03 |  |  | $ | 9 |
Exercisable as of February 2, 2025 | 109 |  |  | $ | 4.59 |  |  | $ | 6 |
The estimated fair value of the stock appreciation rights when granted was amortized to expense over the vesting or required service period. The fair value for these stock appreciation rights was estimated by management, after considering a third-party valuation specialist’s assessment, at the date of grant based on the expected life of the unit appreciation rights, using a Black-Scholes pricing model. Omnibus Incentive Plan In July 2021, in connection with the initial public offering, Core & Main’s sole stockholder approved and Core & Main’s board of directors adopted the 2021 Omnibus Equity Incentive Plan (the “Omnibus Incentive Plan”). Under the Omnibus Incentive Plan, 12.6 million shares of Class A common stock, plus 634 thousand shares of Class A common stock in respect of stock appreciation rights that were converted from unit appreciation rights of Holdings outstanding prior to the initial public offering, are reserved for the awards granted and available for future issuances. Restricted Stock Units A summary of the restricted stock units granted under the Omnibus Incentive Plan is presented below (shares in thousands):
| Number of Shares |  | Weighted Average Grant Date Fair Value
Outstanding and Unvested as of January 28, 2024 | 359 |  |  | $ | 23.10 |
Granted | 123 |  |  | 50.28 |
Distributed | (162) |  |  | 23.83 |
Forfeited | (3) |  |  | 32.92 |
Outstanding and Unvested as of February 2, 2025 | 317 |  |  | $ | 33.23 |
The restricted stock units generally vest over a three-year period. The estimated fair value of the restricted stock units when granted was amortized over the vesting period. The grant date fair value of RSUs was determined based on the price of the Company’s Class A common stock on the grant date. Stock Options A summary of the stock options granted under the Omnibus Incentive Plan is presented below (shares in thousands):
| Number of Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value
Outstanding as of January 28, 2024 | 1,720 |  |  | $ | 21.54 |  |  |  |  |
Granted | 512 |  |  | 50.32 |  |  |  |  |
Exercised | (135) |  |  | 21.36 |  |  |  |  |
Forfeitures | (4) |  |  | 36.11 |  |  |  |  |
Outstanding as of February 2, 2025 | 2,093 |  |  | $ | 28.56 |  |  | 8.0 |  | $ | 58 |
Exercisable as of February 2, 2025 | 698 |  |  | $ | 21.32 |  |  | 7.5 |  | $ | 25 |
The stock options generally vest over a three-year period and expire after ten years. The estimated grant-date fair value of stock options when granted was amortized to expense over the vesting period. The fair value for these stock options was estimated by management, after considering a third-party valuation specialist’s assessment, at the date of grant based on the expected life of the stock options, using a Black-Scholes pricing model with the following weighted-average assumptions:
| February 2, 2025 |  | January 28, 2024 |  | January 29, 2023
Risk-free interest rate | 4.04% |  | 3.87% |  | 1.85%
Dividend yield | 1.0% |  | 2.0% |  | —%
Expected volatility factor | 36.5% |  | 40.0% |  | 40.0%
Expected life in years | 6.0 |  | 6.0 |  | 6.0
Weighted-average fair value | $ | 19.15 |  | $ | 8.06 |  | $ | 8.55
The risk free interest rate was determined based on an analysis of U.S. Treasury zero-coupon market yields as of the date of the stock options grant for issues having expiration lives similar to the expected life of the stock options. The expected volatility was based on an analysis of the historical volatility of a peer group over the expected life of the stock options. The expected term in years for each stock option was calculated using a simplified method based on the average of each option’s vesting term of three years and contractual term of ten years. Employee Stock Purchase Plan In July 2021, Core & Main’s sole stockholder approved and Core & Main’s board of directors adopted the Employee Stock Purchase Plan (the “ESPP”). Under the ESPP, 2.5 million shares of Class A common stock are reserved and available for future purchase. For fiscal 2024, 92 thousand shares of Class A common shares were purchased under the ESPP at a weighted-average price of $47.41 per share, resulting in cash proceeds of approximately $4 million. For fiscal 2023, 108 thousand shares of Class A common shares were purchased under the ESPP at a weighted-average price of $33.28 per share, resulting in cash proceeds of approximately $3 million. Compensation Expense The Company evaluated the conversions of the profits units and unit appreciation rights as part of the reorganization transactions and concluded that each represented an accounting modification of the original awards. As such, the Company is required to recognize the incremental fair value immediately after each modification compared with immediately before as additional compensation expense. Incremental compensation expense for awards that were vested as of the reorganization transactions were recognized immediately and expense for unvested awards will be recognized over the remaining service period. The Company recognized compensation expense of $14 million, $10 million and $11 million during fiscal 2024, fiscal 2023 and fiscal 2022, respectively. As of February 2, 2025, the unrecognized share based compensation was $15 million which is expected to be recognized over a weighted average period of 0.9 years. Employee Benefit Plans The Company offers a comprehensive Health & Welfare Benefits Program (the “Program”) which allows employees who satisfy certain eligibility requirements to choose among different levels and types of coverage. The Program provides employees healthcare coverage in which the employer and employee share costs. In addition, the Program offers employees the opportunity to participate in various voluntary coverages, including flexible spending accounts and health savings accounts. The Company maintains a 401(k) defined contribution plan that is qualified under Sections 401(a) and 501(a) of the Internal Revenue Code. Employees of the Company who satisfy the plan’s eligibility requirements may elect to contribute a portion of their compensation to the plan on a pre-tax basis. The Company may match a percentage of the employees’ contributions to the plan based on eligible compensation deferred. Matching contributions are generally made shortly after the end of each pay period. The Company recorded expenses of $14 million, $12 million and $11 million related to matching contributions during fiscal 2024, fiscal 2023 and fiscal 2022, respectively.

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