Ferguson Enterprises Inc. Reports Third Quarter Results

Ferguson Enterprises Inc., a leading value-added distributor in the North American construction market, has released its financial results for the third quarter of fiscal year 2025. The company reported strong performance driven by market outperformance, moderating deflation, and targeted actions to streamline operations.

Financial Highlights

For the third quarter, Ferguson reported net sales of $7.6 billion, marking a 4.3% increase compared to the same period last year. The gross margin improved by 50 basis points to 31.0%, while the operating margin stood at 8.0% on a reported basis and 9.4% on an adjusted basis. Diluted earnings per share (EPS) were $2.07, with an adjusted EPS of $2.50. The company declared a quarterly dividend of $0.83, reflecting a 5% increase over the prior year.

Business and Operational Highlights

Ferguson completed three acquisitions during the quarter, contributing to its growth. The US business saw a 4.5% increase in net sales, driven by organic revenue growth and acquisitions. The non-residential end markets showed stronger performance compared to residential markets, with significant growth in commercial, industrial, and civil/infrastructure segments. In Canada, net sales decreased slightly by 0.3%, impacted by foreign exchange rates and fewer sales days.

Strategic Initiatives and Corporate Developments

The company undertook actions to streamline operations, resulting in non-recurring charges of $68 million. These measures are expected to generate annualized savings of approximately $100 million. Ferguson also repurchased $251 million worth of shares during the quarter, bringing the year-to-date total to $759 million. The balance sheet remains strong with a net debt to adjusted EBITDA ratio of 1.2x.

Management's Perspective

Kevin Murphy, CEO of Ferguson, commented on the results, highlighting the company's ability to outperform the market and drive solid growth despite a dynamic and uncertain environment. He emphasized the benefits of streamlining the business and the company's confidence in its markets over the medium term. Murphy also updated the full-year guidance to low to mid-single digit revenue growth with an adjusted operating margin range of 8.5% to 9.0%.

Future Outlook

Ferguson has updated its guidance for fiscal year 2025, projecting low to mid-single digit revenue growth and an adjusted operating margin between 8.5% and 9.0%. The company remains focused on balancing investment in key strategic opportunities and leveraging multiyear tailwinds in both residential and non-residential markets.

SEC Filing: Ferguson Enterprises Inc. /DE/ [ FERG ] - 8-K - Jun. 03, 2025