Ferguson Releases Fourth Quarter and Full-Year Financial Results
Ferguson Enterprises Inc. has announced its financial results for the fourth quarter and full year ended July 31, 2025. Despite operating in a complex and uncertain macroeconomic environment, the company delivered solid growth, strengthened its market position, and continued to execute on its long-term strategy.
Kevin Murphy, Chief Executive Officer of Ferguson, praised the company’s performance and resilience:
“Our associates delivered strong results to finish the year, as they continued to serve our customers and execute our strategy in a challenging market environment. Throughout the year, we invested in key growth areas to drive further organic growth, completed nine acquisitions, grew our dividend, and continued to execute our share buyback program, while maintaining a strong balance sheet. While we continue to operate in an uncertain environment, we remain confident in our markets over the medium term, leveraging multiyear tailwinds in both residential and non-residential markets as we invest to support the complex project needs of the water and air specialized professional.”
Fourth Quarter Results
Ferguson closed its fiscal year on a high note with fourth quarter net sales of $8.5 billion, representing a 6.9% increase compared with the prior year. Organic revenue growth contributed 5.8%, while acquisitions added another 1.1%. Price inflation during the quarter was estimated at around 2%, showing a more stable pricing environment compared to earlier periods.
Profitability and Margins
- Gross margin improved to 31.7%, a gain of 70 basis points from the previous year. This increase reflected strong execution from Ferguson’s associates and favorable timing of supplier price adjustments.
- Operating expenses were carefully managed even as the company continued to invest in capabilities to support long-term growth.
- Reported operating profit reached $925 million, equating to a 10.9% operating margin—a year-over-year increase of 14.1%.
- On an adjusted basis, operating profit was $972 million with an 11.4% margin, up 13.4% versus last year.
Earnings Performance
- Reported diluted earnings per share (EPS) rose sharply to $3.55, compared to $2.23 in Q4 2024—an increase of 59.2%. This significant jump was partly due to higher operating profit and also because the prior-year results were impacted by one-time, non-cash deferred tax charges related to corporate restructuring.
- Adjusted diluted EPS stood at $3.48, an improvement of 16.8%, reflecting stronger operating profit and the effect of ongoing share repurchases.
Full-Year 2025 Results
For the fiscal year ended July 31, Ferguson reported net sales of $30.8 billion, an increase of 3.8% compared to fiscal 2024. Organic revenue contributed 3.2%, with acquisitions adding another 1.0%. The company noted that one fewer selling day reduced growth by approximately 0.4%, while overall pricing for the year was slightly negative.
Margins and Operating Profit
- Gross margin improved modestly to 30.7%, up 20 basis points from the prior year.
- Reported operating profit was $2.6 billion (8.5% margin), which represented a slight decline of 1.7% compared to 2024.
- Adjusted operating profit, however, was stronger at $2.8 billion (9.2% margin), edging up 0.6% year-over-year.
Earnings and Shareholder Value
- Reported diluted EPS for the year was $9.32, up 9.3% from $8.53 in 2024.
- Adjusted diluted EPS reached $9.94, an increase of 2.6%, benefiting from both profit improvements and the share repurchase program.
- Ferguson also completed nine acquisitions during the year, which collectively generate approximately $300 million in annualized revenue, strengthening the company’s presence across key regional and specialty markets.
Regional Highlights
United States
The U.S. business, Ferguson’s largest market, recorded 7.1% sales growth in the fourth quarter, with 6.1% organic growth and a further 1.0% from acquisitions.
- Residential markets (around half of U.S. revenue) remained muted. New housing starts and permits weakened in the second half of the fiscal year, and the repair, maintenance, and improvement (RMI) segment also remained subdued. Overall, residential sales were flat for the quarter.
- Non-residential markets demonstrated significant strength, with revenues growing approximately 15%. Demand was robust in commercial, civil, and infrastructure projects, supported by healthy bidding activity and shipments on large-scale capital projects.
Ferguson reported an adjusted operating profit of $962 million from its U.S. operations, up 14% or $118 million compared with last year.
During the quarter, Ferguson also completed four U.S.-based acquisitions:
- HPS Specialties, LLC – a representative of HVAC, plumbing, and hydronic supplies for commercial mechanical and industrial engineering clients in the Northeast and Mid-Atlantic regions.
- Ritchie Environmental Solutions, LLC – serving the water and wastewater treatment sector in Virginia.
- Manufactured Duct & Supply Company – an HVAC supplies and parts distributor in the Atlanta metropolitan area.
- Water Resources, Inc. – an exclusive distributor of Neptune Technology Group products and water meters in the greater Chicago market.
These acquisitions expand Ferguson’s capabilities in waterworks, HVAC, and environmental solutions while strengthening its geographic reach.
Canada
In Canada, net sales grew by 4.8% during the fourth quarter. Organic growth was modest at 0.3%, while acquisitions contributed 4.9%. A 0.4% foreign exchange headwind slightly offset these gains.
Similar to the U.S., non-residential markets outperformed residential segments. Adjusted operating profit rose to $24 million, which was $2 million higher than the prior year.
Balance Sheet and Capital Allocation
Ferguson maintained a healthy balance sheet with net debt to adjusted EBITDA at 1.1x as of July 31, 2025. The company continued to allocate capital in line with its disciplined financial strategy:
- $0.3 billion invested in capital expenditures.
- $0.5 billion returned to shareholders through dividends.
- $0.3 billion spent on nine acquisitions.
- $0.9 billion deployed to repurchase 5 million shares.
At the end of the fiscal year, Ferguson still had $1.0 billion remaining under its current share repurchase authorization.
Dividend Update
Ferguson declared a quarterly dividend of $0.83 per share, payable on November 7, 2025, to shareholders of record on September 26, 2025. This brings the total annual dividend to $3.32 per share, representing a 5% increase over the previous year.
About Ferguson
Ferguson is the largest value-added distributor serving the water and air specialized professional in our $340B residential and non-residential North American construction market. We help make our customers’ complex projects simple, successful and sustainable by providing expertise and a wide range of products and services from plumbing, HVAC, appliances, and lighting to PVF, water and wastewater solutions, and more.
