Ferguson Enterprises (FERG) Q3 2025 earnings summary

Executive summary

• Q3 net sales rose 4.3% to $7.6B, driven by 5% organic growth and acquisitions, partially offset by fewer sales days and flat pricing.

• Adjusted operating profit increased 6.1% to $715M, with margin expanding to 9.4%; adjusted EPS up 7.8% to $2.50.

• Gross margin improved to 31.0%, up 50 bps year-over-year, reflecting value-capture actions and moderating deflation.

• Three acquisitions completed in Q3; $251M in share repurchases; quarterly dividend increased 5% to $0.83.

• Streamlining actions incurred $68M-$70M in non-recurring charges, expected to yield $100M in annualized savings.

Financial highlights

• Q3 adjusted operating profit up 6.1% to $715M; reported operating profit down 3% due to restructuring charges.

• Q3 adjusted EBITDA increased 6.6% to $770M; net income was $410M, down from $443M last year.

• Year-to-date net sales up 2.7% to $22.3B; adjusted operating profit down 4.9% to $1.87B.

• Free cash flow for the year was $1.15B, with $235M in CapEx.

• Net debt to adjusted EBITDA at 1.2x; $519M in cash and cash equivalents at quarter end.

Outlook and guidance

• FY2025 guidance updated to low to mid-single digit revenue growth (previously low single digit).

• Adjusted operating margin guidance raised to 8.5%-9.0% (from 8.3%-8.8%).

• Capital expenditures expected at $300-$350M; effective tax rate around 26%.

• Management expects sufficient liquidity for operations, investments, and capital returns.

• Anticipates solid Q4 performance, with mid-single digit growth as the likely midpoint.