Revenue Guidance Reduction
Q: What's causing the $200 million revenue guidance cut?
A: The revenue guidance was reduced by about $200 million, with $100 million due to second-quarter results below expectations, split evenly between weather impact and lower market volume growth. The remaining $100 million in the second half is due to lower expected volumes across all end markets. We revised our end market expectation from flat to slightly up, to flat to slightly down for the full year.

Gross Margin Outlook
Q: Will gross margins improve going forward?
A: We expect to grow gross margins from where we finished Q2, given our initiatives like private label and sourcing optimization. The sequential reduction from Q1 to Q2 was as expected, and the normalization we anticipated is now behind us.

Pricing Stability
Q: Is pricing expected to remain stable in the second half?
A: Yes, we experienced a stable pricing environment sequentially in Q2. We expect continued stable pricing through the end of the year, resulting in a very low single-digit headwind for the full-year guidance.

End Market Demand
Q: How is end-market weakness affecting volumes?
A: We observed softness across our end markets, partially due to weather and some projects being pushed into the back half of the year. In residential land development, projects are being phased differently, but long-term demand remains strong. Non-residential delays are tied to financing challenges, while DOT and infrastructure work remain robust.

SG&A Management
Q: Are there plans for cost reductions in SG&A?
A: We are closely monitoring end markets but are not anticipating any sizable reductions at this point. Excluding acquisitions, organic SG&A was roughly flat for the quarter. We continue to invest in growth initiatives and expect SG&A to align with typical growth patterns as we scale acquired businesses and realize synergies.

M&A Contributions
Q: What are the contributions from recent M&A?
A: Acquisitions contributed 9 percentage points to growth in the quarter. We added five locations through GoGreen and Green Equipment, expected to add $10–15 million in revenue per location. These acquisitions are not currently included in our guidance.

Share Repurchase Plans
Q: Will share repurchases continue or accelerate?
A: We expect to generate approximately $500 million of operating cash flow in the second half. With ample capacity, we may accelerate share repurchases if the share price is attractive, alongside investing in growth and M&A opportunities.

Private Label Penetration
Q: What's the current private label percentage and outlook?
A: Private label penetration is a little over 2% of COGS. We see significant runway to increase this in the back half of the year as adoption grows, which will contribute to margin enhancement.

Impact of Weather
Q: How did weather impact the quarter and outlook?
A: Unusually wet weather affected about 70 branches from Texas to the Upper Midwest, including top-performing locations. We estimate a $50 million headwind, about 3% of sales. While some recovery is expected, especially in Texas, it's uncertain if all delayed projects can be completed before the season ends.

PVC Pipe Business
Q: What's the exposure to PVC pipe and contingency plans?
A: Approximately 25–30% of our business is related to municipal pipe, split roughly evenly between PVC and ductile iron pipe. About 5% is commodity-type products like steel and copper. Our business is highly flexible, and we have contingency plans to manage through various cycles, leveraging our variable cost structure.