Core Insights - Ferguson Enterprises Inc. is a leading player in the plumbing supplies industry, focusing on a wide range of plumbing and heating products while employing strategic initiatives like acquisitions and financial management to strengthen its market position [1] Financial Performance - On September 16, 2025, Ferguson reported earnings per share of $3.48, exceeding the estimated $3, and revenue of approximately $8.5 billion, surpassing the estimated $8.4 billion, indicating strong sales capabilities [2][6] - The positive market reaction to Ferguson's fiscal fourth-quarter results resulted in a surge in its stock price, with CEO Kevin Murphy highlighting the completion of nine acquisitions throughout the year as a key factor in the company's strong financial performance [3] Valuation Metrics - Ferguson's price-to-earnings (P/E) ratio stands at approximately 26.47, indicating that investors are willing to pay a premium for its earnings, while the price-to-sales ratio is about 1.40, reflecting a favorable market valuation relative to annual sales [4] - The company's enterprise value to sales ratio is around 1.57, and the enterprise value to operating cash flow ratio is approximately 27.20, showcasing its total valuation and ability to cover enterprise value with operating cash flow [5] - Ferguson's debt-to-equity ratio is approximately 1.05, and its current ratio is about 1.64, demonstrating strong liquidity and financial stability [5]

Group 1 - Ferguson Enterprises Inc. (NYSE: FERG) has shown strong performance over the past year, with shares gaining over 20% [1] - The company reported excellent quarterly results, providing positive news for investors [1]

Core Insights - The company is focused on the development of transcript-related projects, indicating a commitment to enhancing their offerings in this area [1] Group 1 - The company publishes thousands of quarterly earnings calls each quarter, showcasing significant growth and expansion in their coverage [1]

Core Insights - Ferguson Enterprises Inc. reported strong fourth-quarter 2024 results with sales of $8.5 billion, a 6.9% increase year-over-year, surpassing analyst expectations of $8.41 billion [1] - Adjusted earnings per share (EPS) were $3.48, exceeding expectations of $2.88 and reflecting a 16.8% increase from the previous year [1] - GAAP diluted EPS rose 59.2% to $3.55 from $2.23 [1] Financial Performance - Gross margin expanded by 70 basis points to 31.7% [2] - Reported operating profit increased by 14.1% to $925 million, while adjusted operating profit rose 13.4% to $972 million [2] - Adjusted EBITDA reached $1.03 billion [2] Segment Performance - U.S. sales grew 7.1% to $8.1 billion, with non-residential revenue up approximately 15% and residential revenue remaining flat [3] - Adjusted operating profit in the U.S. increased by 14% to $962 million [3] - Canada experienced a 4.8% sales growth to $438 million, with adjusted operating profit rising to $24 million from $22 million [3] Annual Overview - For the full fiscal year ended July 31, sales rose 3.8% to $30.8 billion, with 3.2% organic growth and a 1% contribution from acquisitions [4] - Reported operating profit fell 1.7% to $2.6 billion, while adjusted operating profit increased by 0.6% to $2.84 billion [4] - Reported EPS was $9.32, a 9.3% increase, while adjusted EPS rose 2.6% to $9.94 [4] - Adjusted EBITDA for the year was $3.06 billion [4] Cash Flow and Investments - The company generated $1.9 billion in operating cash flow for the year [5] - Ferguson invested $301 million in nine acquisitions, generating approximately $300 million in annualized revenue [5] - The company repurchased $948 million of stock and declared total dividends of $3.32 per share, a 5% increase from the previous year [5] - Net debt stood at $3.49 billion, with a net debt to adjusted EBITDA ratio of 1.1x [5] Strategic Changes - Ferguson will change its fiscal year-end from July 31 to December 31, with a five-month transition period ending December 31, 2025 [6] - This change aims to align reporting with the calendar year and focus on peak customer demand during the traditional fiscal fourth quarter [6] Future Outlook - The company expects mid-single-digit revenue growth for calendar 2025 [7] - Adjusted operating margin is projected to be between 9.2% and 9.6%, compared to 9.1% in calendar 2024 [7] - Interest expense is forecasted to be between $180 million and $200 million [7] - Planned capital expenditures range from $300 million to $350 million, slightly lower than the previous year [7] - The adjusted effective tax rate is expected to be around 26% [7]

Core Insights - Ferguson Enterprises (NYSE:FERG) shares increased by 9.1% following the release of better-than-expected fiscal fourth-quarter results [2] - The company reported quarterly sales of $8.5 billion, representing a 6.9% increase compared to the same period last year, surpassing Wall Street's consensus forecast of $8.39 billion [2]

Financial Data and Key Metrics Changes - Sales for the fourth quarter reached $8.5 billion, a 6.9% increase year-over-year, driven by organic growth of 5.8% and acquisition growth of 1.1% [3][4][15] - Gross margin improved to 31.7%, up 70 basis points from the previous year [4][15] - Operating profit for the quarter was $972 million, reflecting a 13.4% increase year-over-year, with an operating margin of 11.4% [4][16] - Diluted EPS rose 16.8% to $3.48 compared to the prior year [4][16] - For the full year, revenue was $30.8 billion, a 3.8% increase, with operating profit of $2.84 billion, up 0.6% [8][9] Performance by Business Lines - HVAC revenue decreased slightly due to market conditions, but the overall HVAC segment grew 8% for the year [10][11] - Waterworks revenue increased by 10% for the fiscal year, driven by diversification efforts [12] - Commercial mechanical revenue grew 21%, while waterworks revenues increased 15% [8][12] - Residential trade plumbing revenues decreased by 2% due to headwinds in new construction and ongoing PVC price deflation [7][10] Market Performance Data - In the U.S. market, net sales increased by 7.1%, with non-residential revenue growth of approximately 15% [6][16] - The residential end market remained subdued, with flat revenue due to weakened new construction starts and soft demand in repair, maintenance, and improvement [6][10] - Non-residential markets showed resilience, particularly in large capital projects, contributing to overall growth [6][12] Company Strategy and Industry Competition - The company is focused on HVAC expansion, waterworks diversification, and large capital projects as key growth areas [11][23] - A multi-customer group approach is emphasized to enhance service delivery and project execution [34][35] - The company continues to consolidate fragmented markets through acquisitions, completing nine acquisitions in the fiscal year [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in medium-term market conditions despite current uncertainties, leveraging multi-year tailwinds in both residential and non-residential markets [5][23] - The outlook for the second half of calendar year 2025 anticipates softer growth due to ongoing challenges in new residential construction [28][81] - Management highlighted the importance of operational agility and strong contractor relationships in navigating complex project requirements [13][35] Other Important Information - The company announced a change in fiscal year-end from July 31 to December 31, allowing for better focus during peak seasons [20][21] - A quarterly dividend of $0.83 per share was declared, representing a 5% increase over the prior year [18] Q&A Session Summary Question: Growth and end market outlook - Management noted that while residential markets are expected to be down low to mid-single digits, non-residential markets showed strong growth, particularly in large capital projects [27][28] Question: Non-residential bidding activity - Management confirmed healthy backlogs across various segments, including commercial mechanical and waterworks, with strong bidding activity continuing [42][43] Question: Pricing and margin expectations - Management indicated that pricing has inflected positively, with expectations of modest inflation moving forward, while gross margins are expected to normalize around 30%-31% [46][49] Question: Residential remodel demand - Management acknowledged continued pressure in the remodel market but noted that the higher-end segment remains resilient, with Ferguson Home showing a 3% growth rate [72] Question: New residential construction trends - Management expects new residential construction to weaken slightly in the second half of the year, but does not foresee a dramatic decline [80][81]

Financial Data and Key Metrics Changes - In Q4, net sales reached $8.5 billion, a 6.9% increase year-over-year, driven by organic growth of 5.8% and acquisition growth of 1.1% [4][16] - Gross margin improved to 31.7%, up 70 basis points from the previous year [4][16] - Operating profit was $972 million, reflecting a 13.4% increase over the prior year, with a resulting operating margin of 11.4% [5][17] - Diluted EPS increased by 16.8% to $3.48 [5][17] - For the full year, revenue was $30.8 billion, a 3.8% increase, with operating profit of $2.84 billion, up 0.6% [10][11] Performance by Business Lines - HVAC revenue was slightly down due to market conditions, while residential trade plumbing revenues decreased by 2% [8][9] - Ferguson Home, a unified brand for residential building and remodel, saw a revenue growth of 3% [9] - Waterworks revenue grew by 10%, driven by diversification efforts [13] - Commercial mechanical revenue increased by 21%, and industrial grew by 5% [9][13] Performance by Markets - U.S. net sales increased by 7.1%, with non-residential revenue growth of approximately 15% [7][17] - Residential end markets remained subdued, with flat revenue due to weakened new construction starts [7][11] - Canada saw net sales increase by 4.8%, with a 4.9% contribution from acquisitions [17] Company Strategy and Industry Competition - The company is focused on HVAC expansion, waterworks diversification, and large capital projects [24] - A multi-customer group approach is emphasized to enhance project execution and customer service [35][36] - The company continues to consolidate fragmented markets through acquisitions, completing nine acquisitions in the fiscal year [20] Management's Comments on Operating Environment and Future Outlook - Management remains confident in medium-term market conditions despite current uncertainties [6][24] - The outlook for the second half of calendar year 2025 anticipates softer growth due to ongoing challenges in residential construction [29][82] - The company expects mid-single-digit revenue growth for calendar year 2025, with operating margins projected between 9.2% and 9.6% [23] Other Important Information - The company announced a change in fiscal year-end from July 31 to December 31, allowing for better focus during peak seasons [21][22] - A quarterly dividend of $0.83 per share was declared, reflecting a 5% increase over the prior year [19] Q&A Session Summary Question: Outlook on growth and end market trends - Management noted that while non-residential markets are strong, residential markets are expected to remain weak, particularly in new construction [28][29] Question: Details on bidding activity and project backlogs - Backlogs are healthy across various segments, with strong bidding activity in non-residential projects, including data centers and biotechnology [44][45] Question: Pricing and margin expectations - Management expects some modest inflation moving forward, with gross margins normalizing to the 30-31% range [49][50] Question: Insights on residential remodel demand - The remodel market is under pressure, but the higher-end segment remains resilient, with Ferguson Home performing well [72][73] Question: Trends in new residential construction - Management anticipates continued weakness in new residential construction, particularly in the Sunbelt region [81][82]

Financial Data and Key Metrics Changes - Sales for the fourth quarter reached $8.5 billion, a 6.9% increase year-over-year, driven by organic growth of 5.8% and acquisition growth of 1.1% [3][4][15] - Gross margin improved to 31.7%, up 70 basis points from the previous year [4][15] - Operating profit for the quarter was $972 million, reflecting a 13.4% increase year-over-year, with an operating margin of 11.4% [4][16] - Diluted EPS increased by 16.8% to $3.48 [4][16] - Full-year revenue was $30.8 billion, a 3.8% increase from the previous year, with operating profit of $2.84 billion, up 0.6% [8][9] Performance by Business Lines - HVAC revenue decreased slightly due to market conditions, but overall HVAC revenue for the year increased by 8% [10][11] - Waterworks revenue grew by 10% for the fiscal year, driven by diversification efforts [12] - Commercial mechanical revenue increased by 21%, while waterworks revenues rose by 15% [8][12] - Residential trade plumbing revenues decreased by 2% due to headwinds in new construction and ongoing PVC price deflation [7][10] Performance by Markets - In the U.S. market, net sales increased by 7.1%, with non-residential revenue growth of approximately 15% [6][16] - Residential end markets remained subdued, with flat revenue due to weakened new construction starts and soft demand in repair, maintenance, and improvement [6][10] - Canada saw net sales increase by 4.8%, with a 4.9% contribution from acquisitions [16] Company Strategy and Industry Competition - The company is focused on HVAC expansion, waterworks diversification, and large capital projects as key growth areas [11][23] - The merger of residential building and remodel with residential digital commerce into Ferguson Home aims to enhance customer experience and drive growth [8][14] - The company continues to consolidate fragmented markets through acquisitions, completing nine acquisitions in the fiscal year [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in medium-term market conditions despite current uncertainties, leveraging multi-year tailwinds in both residential and non-residential markets [5][23] - The company anticipates mid-single-digit revenue growth for calendar year 2025, with an operating margin range of 9.2% to 9.6% [22] - Management acknowledged challenges in the residential market, particularly in new construction and repair, maintenance, and improvement [28][81] Other Important Information - The company plans to change its fiscal year-end from July 31 to December 31, allowing for better focus during peak seasons [20][21] - The board declared a quarterly dividend of $0.83 per share, reflecting a 5% increase over the prior year [18] Q&A Session Summary Question: Growth and end market outlook - Analyst inquired about growth assumptions and market trends, particularly regarding residential and non-residential sectors [26] - Management noted that while residential markets are expected to remain weak, non-residential markets are showing resilience, particularly in large capital projects [27][28] Question: Non-residential bidding activity - Analyst asked for details on bidding activity and momentum in non-residential markets [41] - Management confirmed healthy backlogs across various segments, including commercial mechanical and waterworks, with strong bidding activity [42][44] Question: Pricing and margin expectations - Analyst sought clarification on pricing trends and gross margin expectations [45] - Management indicated that while pricing has improved, commodity prices remain volatile, and gross margins are expected to normalize [46][49] Question: Residential remodel demand - Analyst questioned the demand trends in the residential remodel market [71] - Management acknowledged continued pressure in the remodel market but noted positive growth in the higher-end segment [72] Question: New residential construction market - Analyst asked about trends in new residential construction and expectations for the second half of the year [80] - Management anticipated a slight decline in new residential construction activity but did not foresee a dramatic drop [81]

Financial Data and Key Metrics Changes - Sales for the fourth quarter reached $8.5 billion, a 6.9% increase year-over-year, driven by organic growth of 5.8% and acquisition growth of 1.1% [3][4] - Gross margin improved to 31.7%, up 70 basis points from the previous year [3][4] - Operating profit for the quarter was $972 million, reflecting a 13.4% increase year-over-year [4][16] - Diluted EPS rose 16.8% to $3.48 compared to the prior year [4][16] - For the full year, revenue was $30.8 billion, a 3.8% increase, with operating profit of $2.84 billion, up 0.6% [7][8] Performance by Business Lines - HVAC revenue slightly declined due to market conditions, while commercial mechanical revenue grew 21% and waterworks revenue increased 15% [6][7] - Ferguson Home, a unified brand for residential building and remodel, saw a revenue growth of 3% in the fourth quarter [7][14] - The industrial, fire and fabrication, and facility supply customer groups delivered a combined net sales growth of 5% [7] Performance by Markets - U.S. net sales increased by 7.1%, with non-residential revenue growth of approximately 15% [5][16] - Residential end markets remained subdued, with flat revenue due to weakened new construction starts and soft demand in repair, maintenance, and improvement [5][6] - Canada saw net sales growth of 4.8%, with a 0.3% organic growth and a 4.9% contribution from acquisitions [16] Company Strategy and Industry Competition - The company is focused on HVAC expansion, waterworks diversification, and large capital projects, which are key growth areas [4][10] - The multi-customer group approach is emphasized as a competitive advantage in managing complex projects [12][35] - The company completed four acquisitions in the fourth quarter, enhancing its capabilities in HVAC and waterworks [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in medium-term market conditions despite current uncertainties, leveraging multi-year tailwinds in both residential and non-residential markets [5][24] - The outlook for calendar year 2025 anticipates mid-single-digit revenue growth, with operating margins expected to improve slightly [23][24] - Management acknowledged challenges in the residential market but highlighted strong performance in non-residential sectors, particularly large capital projects [30][80] Other Important Information - The company plans to change its fiscal year-end from July 31 to December 31, allowing for better focus during peak seasons [21][22] - A quarterly dividend of $0.83 per share was declared, representing a 5% increase over the prior year [18] Q&A Session Summary Question: Outlook on growth and end market dynamics - Management noted that while residential markets are expected to be down low to mid-single digits, non-residential markets showed resilience with a 7% growth in Q4 [29][30] Question: Details on large capital projects and bidding activity - Management confirmed strong bidding activity across various sectors, including data centers and biotechnology, with healthy backlogs in commercial mechanical and waterworks [41][42] Question: Pricing and margin expectations - Management indicated that pricing is expected to stabilize with modest inflation anticipated, while gross margins are expected to normalize around 30% to 31% [44][47] Question: Insights on residential remodel market - Management acknowledged continued pressure in the remodel market but noted that higher-end projects are performing better, with Ferguson Home showing a 3% growth [71] Question: Performance in the industrial market - Management explained that the industrial market is experiencing slower growth due to commodity deflation but remains optimistic about market share gains [81]

Financial Performance - Q4 2025 - Net sales reached $8.5 billion, a 6.9% increase compared to Q4 2024, driven by market outperformance[6] - Organic growth contributed 5.8% and acquisitions added 1.1% to the net sales growth[6] - Adjusted operating profit was $972 million, up 13.4% from Q4 2024, with an adjusted operating margin of 11.4%, a 60 bps increase[6] - Adjusted diluted EPS increased by 16.8% to $3.48[6] Financial Performance - FY2025 - Net sales for FY2025 totaled $30.8 billion, a 3.8% increase compared to FY24[13] - Adjusted operating profit was $2.8 billion, a 0.6% increase compared to FY24[13] - Adjusted diluted EPS reached $9.94, a 2.6% increase compared to FY24[13] - The company generated $1.9 billion in operating cash flow[13] Capital Deployment & Balance Sheet - Capital deployment included $483 million, with 4 acquisitions completed during the quarter, share repurchases of $189 million, and dividends of $165 million[6] - The balance sheet remains strong, with net debt to adjusted EBITDA at 1.1x[6] - Share repurchases completed during the fiscal year totaled $948 million, with approximately 5.0 million shares repurchased[36] - The share repurchase program has an outstanding balance of approximately $1.0 billion[36] Market Performance & Outlook - US net sales grew by 7.1% in Q4 2025, compared to a 1.3% growth in Q4 2024[8] - For FY2025, the company estimates a market decline of approximately 2% in the US, while Ferguson US organic revenue grew by 3.2%[16] - Calendar year 2025 guidance includes mid-single digit growth in net sales and an adjusted operating margin between 9.2% and 9.6%[39]