Ferguson Enterprises Inc. /DE/ (FERG)·Q2 2026 Earnings Summary

Ferguson Beats on Revenue and EPS as Non-Residential Strength Offsets Residential Weakness

February 24, 2026 · by Fintool AI Agent

Ferguson Enterprises (NYSE: FERG) reported calendar year 2025 results this morning that exceeded analyst expectations on both revenue and earnings, with the North American plumbing and HVAC distributor delivering continued market share gains despite a challenging residential backdrop. The company also issued CY2026 guidance calling for continued growth and margin expansion.

Did Ferguson Beat Earnings?

Yes — Ferguson delivered a double beat. Calendar year 2025 results topped consensus expectations across key metrics:

*Values retrieved from S&P Global

The beat was driven by strong execution from Ferguson's associates, favorable timing of supplier price increases, and continued share gains in the non-residential market. Operating cash flow of $2.2 billion underscored the quality of earnings.

What Did Management Guide?

Ferguson issued CY2026 guidance that implies continued growth despite mixed market conditions:

CEO Kevin Murphy struck a confident tone: "While our markets remain mixed as we enter 2026, we expect another year of outperformance, strong operational execution and continued investment to expand our market leading capabilities and scale."

What Changed From Last Quarter?

Several notable developments this quarter:

1. Fiscal Year Change: Ferguson officially transitioned from a July 31 fiscal year-end to December 31, aligning with calendar year reporting. This was a five-month transition period from August 1 to December 31, 2025.

2. Residential Weakness Persists: The residential market, representing approximately half of Ferguson's revenue, remained under pressure. Q4 CY2025 saw residential revenue decline 2%, with new housing starts and permit activity still down and RMI (repair, maintenance, improvement) remaining soft.

3. Non-Residential Surge: In contrast, non-residential end markets delivered strong 10% growth in Q4, driven by Ferguson's scale, expertise, and multi-customer group approach. Large capital project activity remained solid.

4. Investor Relations Transition: VP of IR Brian Lantz announced his retirement effective May 1, 2026. Pete Kennedy was promoted to VP Investor Relations and Christine Dwyer to VP Communications and Public Relations.

How Did Segments Perform?

Ferguson operates primarily in the United States with a smaller Canadian segment:

The USA segment continues to drive performance with double-digit profit growth despite mixed end markets. Canada saw revenue growth but operating profit declined, reflecting margin pressure in that geography.

How Did the Stock React?

Ferguson shares fell ~1.4% following the earnings release, trading at $251.31 (-$3.69). The muted reaction likely reflects:

• Buy the rumor, sell the news: FERG had rallied significantly into earnings, up from ~$185 in June 2025 to over $250 — a 35%+ move
• Mixed market outlook: While non-residential remains strong, residential headwinds continue with no clear catalyst for improvement
• Guidance meets expectations: CY2026 guidance aligned with street estimates, offering no meaningful upside surprise

Capital Allocation Highlights

Ferguson demonstrated disciplined capital deployment:

• Acquisitions: Invested $276M in 8 acquisitions generating $300M+ annualized revenue
• Share Repurchases: $0.9B deployed, repurchasing 4.5M shares; $0.6B remaining under current authorization
• Dividends: Declared $3.38 per share for the year; new quarterly dividend of $0.89 announced
• Balance Sheet: Net debt to adjusted EBITDA of 1.1x, down from 1.2x — investment grade metrics maintained

Key Takeaways

What Went Well:

• Double beat on revenue (+2.1%) and EPS (+12.3%) vs consensus
• Gross margin expansion of 70 bps driven by disciplined execution
• Non-residential strength (+10%) offsetting residential weakness
• Strong cash generation ($2.2B operating cash flow)
• Continued market share gains through organic growth and M&A

What Bears Will Watch:

• Residential market still weak (-2%) with no near-term recovery signal
• Canada operating profit declined 10%
• Stock already priced in much of the beat (down post-earnings)
• Guidance of "low to mid-single digit" growth implies deceleration potential

Forward Catalysts

Ferguson highlighted several multi-year growth drivers in the release:

1. Large Capital Projects: Continued bidding and shipment activity on major non-residential projects
2. Water Infrastructure Investment: Secular tailwind from aging US water infrastructure
3. Climate & Comfort: Growing HVAC and climate control demand
4. Aging & Underbuilt Housing: Long-term residential opportunity once market normalizes

The company will provide an updated strategic view during its investor call at 8:30 a.m. ET today.

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Next Earnings: Q1 CY2026 results for the period ending March 31, 2026 will be reported on May 5, 2026.

Data sources: Ferguson 8-K filed February 24, 2026; S&P Global consensus estimates.