Outlook
Continued Execution Drives Solid Results; Full Year Guidance IncreasedGuidance raised
Results
Second quarter highlights
- Sales of $8.8 billion, increased 4.6%.
3- Gross margin of 31.0%, down 20 bps from prior year.
- Operating margin of 10.2%, up 10 bps on prior year (10.7% on an adjusted basis, down 10 bps).
- Diluted earnings per share of $3.43, up 6.9% on prior year ( $3.39 on an adjusted basis, up 5.3% ).
Corporate events
6- Completed five acquisitions during the quarte r and signed a definitive purchase agreement to acquire FWI Holdings, Inc. (“FloWorks”).
Capital return
- Declared quarterly dividend of $0.89.
- Share r epurchases of $202 million durin g the quarter.
Results
- Balance sheet remains strong with net debt to adjusted EBITDA of 1.3x.
Management commentary
August 10, 2026, Newport News, VA— Ferguson Enterprises Inc. (NYSE: FERG).
Kevin Murphy, Ferguson CEO, commented, “Our associates continued to execute for our customers, driving market outperformance in the second quarter.
We delivered another strong quarter of non-residential growth and we returned to growth in residential despite the challenging market backdrop.
1We completed five acquisitions and signed a definitive purchase agreement to acquire FloWorks, a leading distributor of highly technical valves and flow control solutions.
Our scale-advantaged business model and consistent cash generation enable us to invest in organic growth, consolidate our markets through acquisitions and return capital to shareholders, all while maintaining a strong balance sheet.
Outlook
2“While the economic environment remains uncertain, our performance year-to-date enables the upward revision of our full year guidance.Guidance raised
We expect to continue delivering market outperformance by deploying scale locally and leveraging the long-term growth drivers of water infrastructure, large capital projects, climate and comfort and aging and underbuilt housing.
We remain confident in our ability to capitalize on these growth drivers as we provide essential water and air solutions for the complex project needs of the specialized professional.”
Calendar 2026 Guidance
Updated guidance does not include the expected impact of the FloWorks acquisition, expected to close during the third quarter.
Prior 2026 Guidance January 1 - December 31, 2026Updated 2026 Guidance January 1 - December 31, 2026
Net salesLow to mid-single digit growthMid-single digit growth
Adjusted operating margin*9.4% - 9.8%9.5% - 9.8%
Interest expense~$200 million~$200 million
Capital expenditures$350 - $400 million$375 - $425 million
Adjusted effective tax rate*~26%~26%
Summary of financial results
Results
Quarter ended June 30, 2026
Net sales of $8.8 billion were 4.6% ah ead of last year driven by organic revenue growth of 3.8% and acquisition growth of 1.0%, partially offset by 0.2% from a divestment in Canada.
Price inflation was in the low sin gle digits.
4Gross margin of 31.0% was 20 basis points below the prior year, which was temporarily elevated by the timing and extent of supplier price increases.
We continued to drive operating leverage by balancing disciplined cost management with investments for future growth.
Reported operating profit was $893 million (10.2% operating margin), 6.1% ahead of last year.
Adjusted operating profit of $932 million (10.7% adjusted operating margin) was 2.9% above last year.
Reported diluted earnings per share was $3.43, an increase of 6.9% compared to last year, while adjusted diluted earnings per share of $3.39 increased 5.3% due to the higher adjusted operating profit and the impact of share repurchases.
Net sales in the US business increased by 5.0%, with organic revenue growth of 4.0% and a further 1.0% contribution from acquisitions.
Management commentary
Residential end markets, representing approximately half of revenue, remained subdued.
New residential construction activity has been weak and repair, maintenance and improvement (“RMI”) work remains soft.
8We co ntinue to outperform our markets with residential revenue up 2% in the quarter.
Results
Our non-residential revenue increased 8% this quarter as our scale, expertise, multi-customer group approach and value-added solutions drove strong share gains in a mixed market.
Large capital project activity remained healthy with growth in open order volumes and strong bidding activity.
Adjusted operating profit of $925 million was 2.9% or $26 million above last year.
Corporate events
5We completed five acquisitions during the quarter, further strengthening our geographic footprint and specialized capabilities across our customer groups:
HVAC: Expanded our offering by adding Carrier Great Lakes, with seven locations across Michigan and Ohio, and Dealers Supply Company, with seventeen locations in the Southeast.
Commercial/Mechanical: Broadened our value-added capabilities with New England Applied Products, a manufacturer’s representative and engineering firm specializing in high-performance commercial HVAC systems in the Northeast.
Waterworks: Continued to diversify our portfolio by adding process solutions for water and wastewater treatment in Michigan through the acquisition of Hamlett Environmental Technologies Company.
Industrial: Strengthened our specialty valve, flow control, and process equipment offerings with ten locations across the country with PRD Technologies Group.
Subsequent to quarter-end, we entered into a definitive agreement to acquire FWI Holdings, Inc. (“FloWorks”), a leading industrial distributor and service provider of highly technical valves and flow control solutions.
We expect to complete this acquisition during the third quarter.
The aggregate annualized revenue of the eight acquisitions announced year-to-date is approximately $1.4 billion.
For more information on the FloWorks acquisition, see the press release dated July 13, 2026 on Ferguson’s corporate pressroom at https://www.fergusonpressroom.com.
Results
7Net sales decreased by 1.9% with organic growth of 1.7% fully offset by 3.6% from a non-core business divestment.
Markets have remained challenging in Canada, particularly in residential.
Adjusted operating profit of $22 million was $1 million below last year.
Segment overview
Financial position
Net debt to adjusted EBITDA at June 30, 2026 was 1.3x and during the quarter we invested $573 million in acquisitions and returned $202 million of surplus capital via share repurchases .
Capital return
We declared a quarterly divid end of $0.89.
The divid end will be paid on October 7, 2026 to stockholders of record as of August 21, 2026.
Corporate events
Cancellation of secondary listing on the London Stock Exchange
On June 16, 2026, Ferguson announced its intention to cancel its secondary listing on the London Stock Exchange.
This cancellation took effect on July 20, 2026.
Management commentary
(2) For the three and six months ended June 30, 2025, business restructuring expenses primarily related to the Company’s implementation of targeted actions to streamline operations, enhancing speed and efficiency to better serve customers and drive further profitable growth.
Results
Adjusted EBITDA (Rolling 12-month)
(1) For the rolling twelve months ended June 30, 2026, restructuring activities primarily related to incremental costs in connection with transition activities following the establishment of our parent company’s domicile in the United States, partially offset by a gain on the sale of a closed distribution center in November 2025 relating to previous business restructuring activities.
For the rolling twelve months ended June 30, 2025, restructuring expenses primarily related to the Company’s implementation of targeted actions to streamline operations, enhancing speed and efficiency to better serve customers and drive further profitable growth, as well as incremental costs in connection with transition activities following the establishment of our parent company’s domicile in the United States.
Management commentary
(3) For the three and six months ended June 30, 2025, business restructuring expenses primarily related to the Company’s implementation of targeted actions to streamline operations, enhancing speed and efficiency to better serve customers and drive further profitable growth.
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