Key Takeaways
- Adjusted earnings per share reached $3.39, surpassing the analyst consensus of $3.30
- Revenue climbed 4.6% year-over-year to $8.75 billion, exceeding the $8.68 billion estimate
- Annual sales growth forecast increased to mid-single digit from previously low to mid-single digit
- Non-residential segment delivered 8% revenue growth during the quarter; residential segment turned positive despite market headwinds
- Company finalized five acquisitions in Q2 and entered an agreement to purchase FloWorks
Shares of Ferguson Enterprises climbed 1.3% to approximately $260 in premarket trading Monday following the company’s better-than-expected second-quarter performance and improved annual outlook.
The plumbing and HVAC distribution giant reported adjusted earnings per share of $3.39, representing a year-over-year increase from $3.22 and topping Wall Street’s $3.30 projection. Revenue advanced 4.6% to $8.75 billion, outperforming the analyst estimate of $8.68 billion.
The company’s US operations saw organic revenue expand 4% during the period, while strategic acquisitions contributed an additional 1% to overall growth.
Chief Executive Officer Kevin Murphy highlighted the company’s “market outperformance” throughout the second quarter, noting that Ferguson achieved positive residential growth despite operating in what he characterized as a “challenging market backdrop.”
The residential segment, representing approximately half of Ferguson’s total revenue, continued facing pressure. New construction activity remained subdued while repair and maintenance demand showed little improvement.
Non-Residential Segment Powers Performance
The non-residential business emerged as the primary growth driver, posting an impressive 8% revenue increase for the quarter. Activity in large-scale capital projects remained robust, supported by expanding open order volumes and vigorous bidding momentum.
Gross profit margin landed at 31.0%, declining 20 basis points compared to the prior year. Management attributed the year-over-year compression to elevated margins in the comparable period resulting from supplier price increase timing.
Reported diluted earnings per share totaled $3.43, marking a 6.9% year-over-year improvement. Adjusted EBITDA for the period hit $994 million, representing a 3.2% gain.
Enhanced Outlook and M&A Activity
Ferguson elevated its full-year net sales growth projection to mid-single digit levels, an improvement from the previous low to mid-single digit forecast. The company also refined its adjusted operating margin guidance to a range of 9.5% to 9.8%, narrowing from the earlier 9.4% to 9.8% band.
Capital expenditure expectations were increased as well, now targeting $375 million to $425 million compared to the prior $350 million to $400 million range.
During the second quarter, Ferguson finalized five strategic acquisitions, including Carrier Great Lakes, Dealers Supply Company, and PRD Technologies Group. These transactions expanded the company’s capabilities in HVAC, waterworks, and industrial valve sectors across various US markets.
Following quarter-end, Ferguson executed a definitive agreement to acquire FWI Holdings, operating as FloWorks, which specializes in technical valves and flow control technologies. The transaction is anticipated to close during the third quarter. Combined annualized revenue from all eight acquisitions announced year-to-date approximates $1.4 billion.
Ferguson also terminated its secondary listing on the London Stock Exchange, which became effective on July 20, 2026.
The board approved a quarterly dividend of $0.89 per share, scheduled for payment on October 7, 2026, to shareholders of record as of August 21, 2026.
FERG joined the S&P 500 index last week, taking the spot previously held by Electronic Arts. Shares have appreciated more than 15% since the beginning of the year, exceeding broader market performance.
Analyst consensus currently projects fiscal 2026 revenue of $32.74 billion, implying 4.6% growth versus 2025 results.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
