Ferguson Enterprises — Financial Results

Revenue Growth of 3.8% Driven by Volume and Acquisitions, Not Pricing

Ferguson grew sales by $1.1 billion, but pricing was actually slightly negative for the year — particularly in the first half — due to commodity deflation (falling prices for raw material-based products like copper pipes). The real engines were higher customer volumes and bolt-on acquisitions, which together contributed about 1% to growth. Non-residential markets like commercial construction, civil infrastructure, and industrial were the clear standout.

Gross Margins Nudged Higher Thanks to Pricing Discipline

Despite commodity deflation headwinds, Ferguson improved its gross margin (the percentage of each sales dollar kept after paying for products) by 0.2 percentage points. Management credits deliberate efforts to better reflect the value they provide to customers, as well as timing around supplier price increases. A small but meaningful improvement in a business this size.

Operating Costs Rose Faster Than Sales, Squeezing Profits

Selling, general and administrative (SG&A) expenses — the day-to-day costs of running the business — grew 5.6%, outpacing the 3.8% sales increase. Higher performance bonuses, wage inflation, and fleet costs all contributed. Combined with $73 million in one-time restructuring charges (a cost-cutting program launched in the second half of the year), reported operating profit actually fell 1.7%. Strip those one-time items out, and adjusted operating profit rose a modest 0.6%.

A $73 Million Restructuring Signals a Push for Leaner Operations

In the second half of fiscal 2025, Ferguson launched a targeted restructuring program — essentially a reorganization to simplify how the business operates and serve customers faster. The $73 million charge is treated as a one-time cost. Management's stated goal is to drive profitable growth going forward, suggesting the savings are expected to outweigh this upfront expense over time.

Share Buybacks Boosted Earnings Per Share

Ferguson spent $948 million buying back its own shares in fiscal 2025 — up sharply from $634 million the prior year. Fewer shares outstanding means each remaining share represents a bigger slice of the company's earnings, which is why diluted earnings per share (EPS) rose 9.3% even though total profits grew more modestly. The adjusted EPS gain of 2.6% is a cleaner read on underlying performance.

Strong Cash Generation Funds Growth and Returns to Shareholders

Ferguson generated $1.9 billion in cash from operations and maintained $674 million in cash on hand, plus $2.0 billion in undrawn credit lines. The business is investing in new distribution centers and technology while also continuing to acquire smaller companies. Total debt stands at $4.2 billion, and management states it expects no difficulty meeting obligations.