Ferguson, a value-added distributor in North America providing expertise, solutions and products from infrastructure, plumbing and appliances to HVAC, fire, fabrication and more, reported sales in the fiscal fourth quarter 2023 were $7.8 billion, 1.7% below last year.
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Organic sales fell 5.3% in the quarter, partly offset by acquisition growth of 2.2%. The company’s decrease in sales was mainly driven by declines in residential, partially offset by growth in non-residential sales compared to the prior year period. As expected, price inflation stepped down from 5% in the third quarter to 1% in the fourth quarter.
Full-year sales of $29.7 billion were 4.1% ahead of last year, 1.5% higher on an organic basis with an additional 2.5% from acquisitions.
Kevin Murphy, Ferguson CEO, said: “FY2024 financial guidance reflects a continued challenging market backdrop, particularly in the first half of our fiscal year against strong prior-year comparables. Our balanced end-market exposure positions us well to leverage emerging multi-year structural tailwinds such as non-residential megaprojects. We remain confident in the strength of our markets over the medium and longer term and expect to capitalize on attractive growth opportunities.”
U.S.
Sales in the U.S. business declined 1.5%, with an organic revenue decline of 5.5% partially offset by 2.4% from acquisitions.
Residential end-markets, which comprise just over half of U.S. revenue, slowed further during the quarter as expected. New residential housing start and permit activity has remained relatively stable on a sequential basis but remains below prior year levels, while repair, maintenance and improvement work remained more resilient. Overall, residential revenue declined by 4% in the fourth quarter.
Non-residential end-markets, representing just under half of U.S. revenue, continued to moderate with non-residential revenue growing by 2% in the fourth quarter. Industrial and non-residential waterworks projects saw continued strength in the quarter on top of difficult prior-year comparables and, as expected, we are seeing increased levels of megaproject-related bid activity.
Ferguson completed three acquisitions during the quarter that included Bruce Supply Corp., a plumbing distributor in the New York City Metro operating from six locations and The Kennedy Companies, a waterworks distribution business in the mid-Atlantic region with nine locations. Additionally, Ferguson completed the acquisition of S. G. Torrice, an HVAC distributor in the New England region with 15 locations. In aggregate, these businesses generate annualized revenue of approximately $450 million.
Canada
Sales compressed by 5.1% in Canada, with an organic revenue decline of 2.7. Similar to the U.S. segment, non-residential end-markets have been more resilient than residential end-markets.
