Ferguson Enterprises (FERG) Earnings Date & Reports

Ferguson posted net sales of $7.47 billion for the first quarter ended March 31, 2026, a 3.6% increase from $7.21 billion prior year. Organic growth contributed 2.8%, acquisitions 0.8%, with mid-single-digit price inflation. Gross profit reached $2.32 billion, lifting margin to 31.0% (up 30 bps YoY), thanks to productivity gains and cost discipline.

Reported operating profit climbed 20.7% to $612 million (8.2% margin, +120 bps), or adjusted $647 million (8.7% margin, +40 bps and exceeding expectations). Adjusted diluted EPS of $2.28 (+9.1% YoY) topped consensus of $2.14 (MarketBeat) to $2.20 (Yahoo Finance, 18 analysts), aided by profit growth and buybacks. Revenue slightly missed some estimates near $7.44-$7.65 billion but beat others.

US sales (96% of total) rose 3.5% to $7.15 billion, with non-residential up 8% on projects, residential down 1%. Canada grew 5.5% to $326 million. Operating cash flow was $772 million. Net debt fell to $3.31 billion (1.0x adjusted EBITDA, from 1.1x). Three acquisitions closed or agreed (~$350 million annualized sales), bolstering HVAC and waterworks.

Full-year guidance held steady: low/mid-single-digit sales growth, adjusted operating margin 9.4%-9.8%, interest ~$200 million, capex $350-400 million, tax rate ~26%.

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Market Reaction and Investor Sentiment

FERG shares fell 3-4% post-earnings on May 5, 2026, despite EPS beat and margin gains. Investors focused on residential softness, perceived revenue shortfall versus higher expectations (~$7.65B in some previews), and lower operating cash flow ($772M vs. $874M prior). Unchanged guidance amid flat markets tempered enthusiasm, though non-residential strength and buybacks provided support. Sentiment remains cautious but positive on long-term drivers like infrastructure spending.

Forward Outlook and Key Factors to Monitor

Ferguson's reaffirmed 2026 guidance assumes broadly flat markets, with residential down low-to-mid single digits and non-residential up similarly. Investors should track end-market trends, particularly US housing recovery signals and non-residential project backlogs in waterworks and HVAC.

Acquisitions remain a growth lever; six deals since year-start (~$350M+ annualized sales) target high-margin areas like wastewater and industrial. Monitor integration success and pipeline for bolt-ons leveraging Ferguson's local scale.

Balance sheet strength (1.0x leverage) supports the new $2B share repurchase (no expiry) and $0.89 quarterly dividend. Free cash flow generation will be key amid capex ($350-400M) and potential M&A (mergers and acquisitions).

Risks include economic slowdowns, interest rates impacting residential repair/maintenance/improvement (RMI), supply chain costs, and competition. Positives: margin discipline, water infrastructure tailwinds, and climate-driven HVAC demand. Next catalyst: Q2 results August 10, 2026.

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