FERGUSON ENTERPRISES INC (NYSE:FERG) Beats Q4 Earnings Estimates Despite Revenue Miss

FERGUSON ENTERPRISES INC (NYSE:FERG) has reported its fourth quarter and full-year financial results for the period ending July 31, 2025, delivering a mixed performance relative to analyst expectations. The company, a leading distributor of plumbing and HVAC products, demonstrated resilience in a challenging market environment while navigating sector-specific headwinds.

Earnings Performance Versus Estimates

The company reported fourth-quarter net sales of $8.50 billion, falling slightly short of the $8.58 billion consensus estimate among analysts. This represents a 6.9% year-over-year increase, driven primarily by organic growth and strategic acquisitions. Despite the revenue miss, Ferguson outperformed on profitability metrics.

Adjusted earnings per share came in at $3.48, significantly exceeding the $2.94 analyst projection. This strong EPS performance was fueled by improved operational efficiency and effective cost management. The company's gross margin expanded by 70 basis points to 31.7%, while adjusted operating margin improved to 11.4% from 10.8% in the prior year period.

Market Reaction and Price Action

Following the earnings release, the market has responded positively with pre-market trading indicating a 7.9% upward movement. This reaction suggests investors are focusing on the earnings beat and improved profitability rather than the slight revenue miss. The stock's performance over recent weeks shows modest declines, with a 0.11% drop over the past week and 0.07% decreases over both the two-week and one-month periods, indicating relative stability ahead of the earnings announcement.

Full-Year Results and Strategic Initiatives

For the full fiscal year 2025, Ferguson achieved net sales of $30.76 billion, representing a 3.8% increase over the previous year. The company's performance was characterized by:

• Organic revenue growth of 3.2% supplemented by acquisitions
• Adjusted operating profit of $2.84 billion, slightly above prior year
• Completion of nine acquisitions adding approximately $300 million in annualized revenue
• Continued share repurchases totaling $0.9 billion for 5.0 million shares
• Dividend increase of 5% to $3.32 per share annually

CEO Kevin Murphy highlighted the company's strategic investments in growth areas and operational execution despite operating in "an uncertain environment." The company maintained a strong balance sheet with net debt to adjusted EBITDA remaining at 1.1x.

Segment Performance and Market Conditions

The company's U.S. operations, representing the majority of revenue, showed particular strength in non-residential markets with approximately 15% growth in the fourth quarter. This performance offset softness in residential markets, where revenue remained flat. The company noted continued solid demand in waterworks projects and strong growth in commercial and infrastructure segments.

Canadian operations grew 4.8% in the quarter, with acquisitions contributing significantly to this growth.

Forward Guidance and Fiscal Year Change

Ferguson provided guidance for calendar year 2025, projecting mid-single digit revenue growth with an adjusted operating margin range of 9.2% to 9.6%. The company also announced a change in its fiscal year-end from July 31 to December 31, with a transition period from August 1 to December 31, 2025.

This guidance compares to analyst estimates for fiscal 2026 revenue of $33.04 billion and EPS of $10.72, though direct comparisons are complicated by the fiscal year change.

For more detailed earnings information and future estimates, readers can review additional data at FERG Earnings and Estimates.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research and consult with financial advisors before making investment decisions.