Why This Matters to Distributors: Ferguson’s results show how large distributors are leaning on infrastructure, commercial construction, and major capital projects to offset slower residential demand. The quarter also highlights continued consolidation in HVAC, waterworks and industrial distribution as companies use acquisitions to expand technical capabilities and geographic reach.
Ferguson Enterprises reported higher first quarter sales and profit as growth in non-residential construction and large capital projects helped offset continued weakness in housing construction and home repair activity.
The Newport News, Virginia-based distributor, said net sales for the quarter ending March 31 increased 3.6% year over year to $7.47 billion from $7.21 billion in the prior quarter. Net income increased 20% to $414 million from $345 million a year earlier.
CEO Kevin Murphy said the company continued to gain share in nonresidential markets, particularly through large capital projects.
“We are particularly pleased with another quarter of strong nonresidential revenue growth, driven by our ability to serve large capital projects,” he said.
U.S. sales increased 3.5% to $7.15 billion from $6.9 billion a year earlier. Ferguson said organic revenue growth contributed 2.9% of the increase, while acquisitions added another 0.6%.
The company said residential markets, which account for about half of U.S. revenue, remained under pressure. Ferguson reported residential revenue declined 1% during the quarter as new home construction and repair, maintenance and improvement activity stayed weak.
By contrast, non-residential revenue increased 8% year over year, supported by infrastructure work, commercial projects and ongoing demand tied to large capital investments.
Canadian sales increased 5.5% to $326 million from $309 million a year earlier, though Ferguson said market conditions there also remained subdued, particularly in residential construction.
Gross profit rose to $2.32 billion from $2.22 billion in the prior year quarter. Gross margin increased to 31.0% from 30.7%. Operating profit increased 20.7% to $612 million from $507 million a year earlier.
Ferguson completed two acquisitions in its Waterworks customer group during the quarter: Technology Sales Associates Inc. and Chesapeake Environmental Equipment LLC. After the quarter ended, the company also acquired Carrier Great Lakes and signed agreements to acquire Dealers Supply Company, New England Applied Products and PRD Technologies Group.
The company said the six acquisitions are expected to contribute about $350 million in annualized revenue and expand Ferguson’s capabilities in water and wastewater treatment, HVAC, and industrial flow control markets.
Ferguson maintained its full-year 2026 outlook and continues to expect low- to mid-single-digit sales growth.
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