Ferguson Enterprises Stock Earnings Reports

Ferguson reported a solid quarter with sales of $8.2 billion, up 5% YoY (4% organic, 1% acquisition). Gross margin expanded 60 bps to 30.7%, operating profit rose 14% to $808 million, and diluted EPS increased ~16% to $2.84. U.S. revenue grew 5.3%; Waterworks (+14%) and commercial mechanical (+21%) drove strength while residential, HVAC and residential trade plumbing remained pressured. Large capital projects (including data centers) are an expanding opportunity (estimated mid-to-high single-digit % of revenue). Cash generation was strong: EBITDA $867M, operating cash flow $430M, free cash flow $325M. Capital deployment included $118M CapEx, $511M invested overall this quarter (including acquisitions), a 7% dividend increase to $0.89/quarter, and $208M of share repurchases (about 1M shares); net debt/EBITDA remained low at 1.1x. Updated 2025 calendar guidance: approx. 5% revenue growth and operating margin 9.4%–9.6%; interest ~$190M; CapEx ~$350M; effective tax rate ~26%. Management emphasized disciplined cost control, continued investments (trainees, HVAC counter conversions, digital/tools, fabrication/value-added services) and an active M&A pipeline to consolidate fragmented markets. They cautioned near-term headwinds in new residential and HVAC but remain confident in medium-term markets and their ability to outperform.