Ferguson Signals Brighter Construction Outlook
Ferguson Enterprises defied industry pressures in its fiscal third quarter, reporting stronger than expected sales and profits as momentum returned to both residential and commercial construction markets. The plumbing and HVAC distribution leader posted revenue of $7.6 billion, a 4.3% increase year-over-year, despite one fewer selling days and ongoing pricing headwinds.
Net earnings came in at $462 million, down slightly from $572 million a year ago, due to one-time charges related to internal restructuring. Still, investors and analysts praised Ferguson’s underlying performance and operational resilience.
“We stayed focused on what matters most—our customers,” said CEO Kevin Murphy. “Despite a challenging environment, our teams delivered solid growth, continued to outperform the market, and made important progress in streamlining our business for the future.”
The U.S. market, which generates more than 95% of Ferguson’s total revenue, remained the primary growth driver. U.S. sales rose 4.5% to $7.3 billion, driven by steady improvement in residential activity and ongoing strength in commercial and infrastructure projects.
Residential markets—accounting for just over half of U.S. revenue—grew approximately 2%, with early signs of recovery in new home construction. Commercial sales jumped 7%, buoyed by demand from data centers, infrastructure initiatives, and other large-scale capital projects.
Key segment highlights include:
- Residential Plumbing: up 1%, showing signs of market stabilization.
- HVAC: up 4%, as demand remained strong across homes and businesses.
- Building and Remodeling Products: up 1%, driven by upscale renovations.
- Waterworks: up 7%, supported by public works and infrastructure spending.
- Commercial Mechanical: up 8%, reflecting growth in large-scale commercial builds.
- Industrial, Fire & Fabrication, and Facility Supply: combined growth of 2%, despite tough year-over-year comparisons.
In Canada, sales held flat at $333 million, down just 0.3% as fewer selling days and currency headwinds offset underlying gains. On an organic basis, Canadian sales increased 3%, and Ferguson completed its acquisition of National Fire Equipment, expanding its footprint to seven additional locations. Adjusted operating income in Canada surged 33% to $8 million.
Analysts were upbeat on the results, emphasizing the company’s strong execution during a volatile market.
“They’re navigating a difficult landscape better than most,” said Stephen Volkmann, equity analyst at Jefferies. “It’s clear the business restructuring is starting to pay off.”
Buoyed by its third-quarter performance, Ferguson raised its full-year outlook. The company now expects low- to mid-single-digit revenue growth, with operating margins between 8.5% and 9%. This is an upward revision from previous guidance and signals confidence heading into the fourth quarter, where Ferguson forecasts net profits between $900 million and $1 billion.
Murphy expressed optimism about the longer-term trajectory. “There are powerful tailwinds ahead,” he said. “Whether it’s new housing, commercial builds, or infrastructure upgrades, we’re ready to serve our customers and keep growing.”
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