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NEWPORT NEWS, Va. - Ferguson Enterprises Inc. (NYSE:FERG; LSE:FERG), a leading distributor in the North American construction industry, reported a 3.0% increase in sales to $6.9 billion for the second quarter, driven by a 5% growth in sales volume. Despite challenging market conditions and a 2% deflation, the company achieved a gross margin of 29.7%, although this was a decrease of 70 basis points from the previous year.
The company’s operating margin stood at 6.0%, or 6.5% on an adjusted basis, with diluted earnings per share at $1.38, or $1.52 on an adjusted basis. Ferguson also declared a quarterly dividend of $0.83 per share, marking a 5% increase from the prior year, and announced a $1.0 billion increase to its share repurchase program.
Ferguson’s CEO, Kevin Murphy, noted the company’s continued market outperformance and volume growth rates, despite subdued markets and commodity price deflation. He stated that additional steps are being taken to streamline the business for increased efficiency and customer service. The company reaffirmed its full-year revenue guidance of low single-digit growth and updated its adjusted operating margin range to 8.3% - 8.8%.
The United States segment saw a 3.0% increase in net sales, with residential markets remaining stable and non-residential markets showing resilience. The company completed an acquisition in the quarter and signed an agreement to acquire Independent (LON:IOG) Pipe & Supply Corporation post-quarter. In Canada, net sales grew by 3.2%, with organic revenue growth of 3.1% and a contribution from acquisitions.
Ferguson’s balance sheet remains strong with a net debt to adjusted EBITDA ratio of 1.2x. The company repurchased $252 million in shares during the quarter and has an outstanding balance of approximately $1.4 billion for its share repurchase program.
The company will pay its declared dividend on May 6, 2025, to stockholders of record as of March 21, 2025. An investor conference call with CEO Kevin Murphy and CFO Bill Brundage was scheduled for today to discuss the results.
This news article is based on a press release statement.
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