Ferguson Enterprises (FERG) Transition period summary

Executive summary

• Net sales reached $8.2 billion for the quarter ended October 31, 2025, up 5.1% year-over-year, with 4.2% organic and 1% acquisition growth.

• Gross margin improved by 60 basis points to 30.7%, and adjusted operating profit rose 14.4% to $808 million.

• Diluted EPS increased 23.9% to $2.90; adjusted EPS rose 15.9% to $2.84, and quarterly dividend increased 7% to $0.89 per share.

• $372 million returned to shareholders via dividends and share repurchases; balance sheet strong with net debt to EBITDA at 1.1x.

• Double-digit non-residential revenue growth and continued investment in growth initiatives despite market uncertainty.

Financial highlights

• Adjusted EBITDA reached $867 million, up 14.4% year-over-year; free cash flow was $325 million, up from $274 million.

• Operating margin expanded 80 basis points to 9.9%; U.S. segment margin at 10.4%.

• Net income for the quarter was $570 million, up from $470 million a year ago.

• Declared a quarterly dividend of $0.89, a 7% increase over the prior year.

• Share repurchases totaled $208 million, with $800 million remaining under the current program.

Outlook and guidance

• 2025 net sales expected to grow ~5%, with adjusted operating margin guidance of 9.4%-9.6%.

• Interest expense forecast at $190 million; CapEx at $350 million; effective tax rate ~26%.

• Early 2026 expected to see similar market conditions and growth rates as year-end 2025.

• Guidance reflects confidence in medium-term market prospects despite ongoing uncertainty.