Ferguson Enterprises (FERG) Q2 2025 earnings summary

Executive summary

• Q2 net sales increased 3% year-over-year to $6.9 billion, driven by volume growth and acquisitions, but offset by commodity-led deflation and subdued demand.

• Adjusted operating profit declined 13.7% to $449 million, with a 6.5% margin, due to deflation, sales mix, and higher operating costs.

• Investments in digital, omnichannel, and value-added solutions, as well as efficiency improvements, are positioning the business for future growth.

• Net cash from operating activities for the first half was $685 million, down from $863 million in the prior year.

Financial highlights

• Q2 2025 net sales: $6.9B (+3.0%); gross margin: 29.7% (down 70 bps); adjusted operating profit: $449M (down 13.7%); adjusted EBITDA: $502M (down 11.6%).

• Adjusted diluted EPS was $1.52, down 12.6% year-over-year.

• Free cash flow for the first half was $545 million, down from $699 million in the prior year.

• SG&A expenses increased 4.8% to $1.54 billion, reflecting cost inflation and infrastructure investments.

• Net income for Q2 was $276 million, down from $322 million; six-month net income was $746 million, down from $841 million.

Outlook and guidance

• FY2025 sales growth expected in the low single-digit range, with adjusted operating margin guidance revised to 8.3%–8.8%.

• CapEx estimate revised to $325–$375 million due to extended project timelines.

• Cost actions underway to slow OpEx growth and improve efficiency in the second half.

• Management expects sufficient liquidity to meet operating and strategic needs for the next 12 months and beyond.