Why This Matters to Distributors: Ferguson is growing despite weak residential construction, with nonresidential sales up 8% and acquisitions expanding their reach in HVAC, waterworks, and industrial markets.
Ferguson Enterprises Inc. reported higher second-quarter sales and profits as strong non-residential demand, and acquisitions helped the distributor overcome continued weakness in residential construction.
Second-quarter sales increased 4.6% to $8.75 billion from $8.36 billion a year earlier. Net income rose 5.0% to $666 million from $634 million. For the first six months of 2026, sales increased 4.2% to $16.22 billion from $15.58 billion a year earlier. Net income rose 10.3% to $1.08 billion from $979 million.
The results were driven primarily by Ferguson’s U.S. business, where second-quarter sales increased 5.0%. Sales from existing operations grew 4.0%, while acquisitions added another 1.0%.
Ferguson continued to contend with a sluggish residential construction market, which accounts for about half of its revenue. The company said new-home construction remained weak, and repair, maintenance and improvement activity was soft. Even so, residential sales increased 2% during the quarter.
Nonresidential sales increased 8%, supported by large construction and infrastructure projects. Ferguson said orders for large projects increased and bidding activity remained strong.
“Our associates continued to execute for our customers, driving market outperformance in the second quarter,” CEO Kevin Murphy said. He said Ferguson posted another quarter of strong nonresidential growth and returned to growth in residential markets despite challenging conditions.
Ferguson also continued an aggressive acquisition push, completing five deals during the quarter that expanded its HVAC, waterworks, commercial and industrial operations.
In HVAC, Ferguson acquired Carrier Great Lakes, which has seven locations in Michigan and Ohio, and Dealers Supply Co., which operates 17 locations across the Southeast.
The company also acquired New England Applied Products, a manufacturer’s representative and engineering firm specializing in commercial HVAC systems in the Northeast; Hamlett Environmental Technologies Co., a Michigan water and wastewater treatment company; and PRD Technologies Group, which added 10 locations focused on specialty valves, flow control and process equipment.
Ferguson’s acquisition activity is expected to continue.
The distributor in July agreed to acquire FWI Holdings Inc., the parent of FloWorks International, an industrial distributor specializing in valves and flow-control products. The deal is expected to close during the third quarter.
Ferguson said the eight acquisitions it has announced so far this year represent about $1.4 billion in combined annual sales.
The acquisition strategy is giving Ferguson another source of growth as some of its core construction markets remain uneven. The company said acquisitions contributed 1.0% to second-quarter sales growth, while sales from existing operations increased 3.8%.
Ferguson’s U.S. operations generated $8.34 billion in second-quarter sales, up 5.0% from $7.95 billion a year earlier.
For the first six months of the year, U.S. sales increased 4.3% to $15.49 billion from $14.85 billion.
Canada remained weaker. Second-quarter sales declined 1.9% to $408 million from $416 million as the impact of a business divestiture outweighed growth from existing operations. Ferguson said Canadian markets remained challenging, particularly in residential construction.
Ferguson raised its sales expectations for 2026 following the stronger first half.
The company now expects sales to increase at a mid-single-digit rate for the year, compared with its previous forecast for low- to mid-single-digit growth. Ferguson also increased its planned spending on facilities, equipment, and other investments to $375 million to $425 million from $350 million to $400 million.
The forecast does not include the pending FloWorks acquisition.
Murphy said economic conditions remain uncertain but cited Ferguson’s year-to-date performance and longer-term demand tied to water infrastructure, large construction projects, heating and cooling systems and an aging U.S. housing stock.
Ferguson, based in Newport News, is North America’s largest distributor of plumbing and HVAC products and serves waterworks, industrial and other specialized construction markets. The company generated $31.3 billion in sales in calendar 2025 and has about 35,000 employees at more than 1,700 locations.
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