Third quarter highlights 

• Sales of $7.6 billion, increased 4.3% despite one fewer sales day and foreign exchange (1.7% impact).
• Gross margin of 31.0%, up 50 bps from prior year. 
• Operating margin of 8.0% (9.4% on an adjusted basis).
• Diluted earnings per share of $2.07 ($2.50 on an adjusted basis).
• Declared quarterly dividend of $0.83, reflecting a 5% increase over the prior year. 
• Completed three acquisitions during the quarter. 
• Share repurchases of $251 million during the quarter.
• Balance sheet remains strong with net debt to adjusted EBITDA of 1.2x.
• Actions taken to streamline and reduce complexity within the business, resulted in non-recurring charges of $68 million with expected annualized savings of approximately $100 million.

Ferguson Enterprises Inc. Kevin Murphy, Ferguson CEO, commented, “Our associates continued to take care of our customers, outperform the market and drive solid growth in the third quarter. The combination of strong volume growth, gross margin actions, moderating deflation and the early benefits of streamlining our business drove adjusted operating profit growth and adjusted operating margin expansion. 

“While we are in a dynamic and uncertain environment, given the strong performance in the quarter we are updating our full year guidance to low to mid-single digit revenue growth with an adjusted operating margin range of 8.5% to 9.0%. We remain confident in our markets over the medium term and continue to balance investment in key strategic opportunities, leveraging multiyear tailwinds in both residential and non-residential markets as we support the complex project needs of our specialized professional customers.”  

_{The Company uses certain non-GAAP measures, which are not defined or specified under U.S. GAAP. See the section titled “Non-GAAP Reconciliations and Supplementary Information.”}

Summary of financial results 

Third quarter

Net sales of $7.6 billion were 4.3% ahead of last year driven by organic revenue growth of 5.0% and acquisition growth of 1.0%, partially offset by 1.7% from the adverse impact of one fewer sales day and foreign exchange rates. Improvement in finished goods pricing was offset by continued weakness in certain commodity related categories, resulting in overall pricing being broadly flat in the quarter.

Gross margin of 31.0% was 50 basis points above last year driven by specific actions taken to better capture the value the company delivers to customers while also maintaining market share gains, as well as moderating deflation. Ferguson continued to tightly manage the cost base with expense growth driven by higher volumes, cost inflation and continued selective investment in core capabilities for future growth. 

Reported operating profit was $606 million (8.0% operating margin), 3.0% below last year due to the non-recurring business restructuring charges. Adjusted operating profit of $715 million (9.4% adjusted operating margin) was 6.1% above last year.

Reported diluted earnings per share was $2.07 (Q3 2024: $2.18), a decrease of 5.0% compared to last year, while adjusted diluted earnings per share of $2.50 increased 7.8% due to the higher adjusted operating profit and the impact of share repurchases.

US - third quarter

Net sales in the US business increased by 4.5%, with organic revenue growth of 5.0% and a further 1.0% contribution from acquisitions, partially offset by a 1.5% adverse impact from one fewer sales day.

Residential end markets, which comprise just over half of US revenue, remained subdued across both new construction and repair, maintenance and improvement. Overall, our residential revenue grew approximately 2% in the third quarter.

Non-residential end markets, representing just under half of US revenue, were stronger than residential end markets with increased activity on large capital projects. Ferguson continued to grow share with non-residential revenue growth of approximately 7% in the third quarter. They delivered mid to high-single digit growth across commercial and industrial end markets, with low double-digit growth in our civil/infrastructure end markets. 

Adjusted operating profit of $726 million was 6.0% or $41 million above last year.

The company completed two US acquisitions during the quarter, Independent Pipe & Supply Corp., a leading commercial/mechanical distributor in the Northeast and Light Innovations Inc., a residential building and remodel showroom located in Little Rock, Arkansas that will further support the Ferguson Home strategy.

Canada - third quarter 

Net sales decreased by 0.3%, with organic revenue growth of 3.0% and a 2.8% contribution from acquisitions, partially offset by a 4.4% adverse impact from foreign exchange rates and a 1.7% adverse impact of one fewer sales day. Residential activity has continued to be soft with non-residential activity remaining more resilient. Adjusted operating profit of $8 million was $2 million above last year.

During the quarter we completed the acquisition of National Fire (collectively, National Fire Equipment Ltd. and National Fire Fabrication Ltd.), a market leader of fire and fabrication products and services operating from seven locations across eastern and western Canada.

Business Restructuring 

Ferguson has implemented targeted actions to streamline operations, enhancing speed and efficiency to better serve customers and drive further profitable growth. As a result of these actions, non-recurring charges of $68 million were incurred in the quarter with these measures expected to generate annualized savings of approximately $100 million.

Financial position 

Net debt to adjusted EBITDA at April 30, 2025 was 1.2x. During the quarter, Ferguson completed share repurchases of $251 million, bringing year to date repurchases to $759 million. They have a remaining outstanding balance of approximately $1.1 billion under the current share repurchase program. 

The company declared a quarterly dividend of $0.83 representing a 5% growth over prior year. The dividend will be paid on August 6, 2025 to stockholders of record as of June 20, 2025.

There have been no other significant changes to the financial position of the company. 

Read the full report here.