Ferguson Q3 Sales Rise 9.5% to $9.0 Billion; Full-Year Guidance Raised After FloWorks Deal
Ferguson Enterprises' third-quarter sales rose 9.5% to $9.026 billion, and the plumbing and HVAC distributor raised its full-year outlook after closing its FloWorks acquisition, according to its 8-K filed Monday.
Organic growth contributed 7.0%, acquisitions added 2.7%, and Canadian divestments subtracted 0.2%, the company said. Non-residential sales grew 15% and residential sales rose 6%, Chief Executive Kevin Murphy said in the release.
Adjusted diluted earnings per share rose 7.9% to $3.43 from $3.18. Reported diluted EPS fell 4.9% to $3.08 from $3.24, which the company said was primarily due to the timing and extent of tax benefits in the year-earlier period.
Reported operating profit increased 4.9% to $885 million, while adjusted operating profit rose 8.9% to $962 million. Gross margin slipped 40 basis points to 30.9%, which Ferguson attributed to a prior-year quarter that was temporarily lifted by the timing and extent of supplier price increases.
Guidance moves up
Ferguson now expects 2026 net sales growth of an estimated 7%, up from mid-single-digit growth, the company said. It narrowed its adjusted operating margin outlook to 9.6% to 9.8% from 9.5% to 9.8%. The updated guidance includes FloWorks, which closed Aug. 31.
The company raised its interest expense estimate to an estimated $235 million from an estimated $200 million and put capital spending at an estimated $425 million.
"While our markets remain mixed, our year-to-date performance and the addition of FloWorks enable us to raise our full year guidance," Murphy said.
US strength, Canada soft
U.S. net sales grew 10.2% to $8.621 billion, with adjusted operating profit up 8.8% to $952 million. Ferguson said residential end markets, which it said represent an estimated half of sales, remained pressured by weak new construction and soft repair and remodeling work, while large capital project activity stayed healthy.
Canadian sales fell 4.5% to $405 million as divestments and currency offset 0.6% organic growth.
Deals and dividend
Ferguson completed three acquisitions in the quarter and one after it ended, bringing its 2026 total to 11 deals with aggregate annualized sales of an estimated $1.5 billion, the company said. It invested $1.7 billion in acquisitions during the quarter, and net debt rose to 1.7 times adjusted EBITDA from 1.0 times.
The company declared a quarterly dividend of $0.89 per share, payable Jan. 8, 2027, to holders of record Nov. 20. Share repurchases remain paused after the FloWorks deal, and Ferguson said it expects to resume buybacks as leverage trends back toward the low end of its 1 to 2 times target range.
By the numbers
- Net sales: $9.026 billion, up 9.5%
- Organic growth: 7.0%
- Adjusted diluted EPS: $3.43, up 7.9%
- Reported diluted EPS: $3.08, down 4.9%
- Adjusted operating margin: 10.7%, flat
- Quarterly dividend: $0.89
Sources
- Ferguson Enterprises Form 8-K with Exhibit 99.1 earnings release for the quarter ended Sept. 30, 2026, filed Nov. 9, 2026 (accession 0002011641-26-000042)
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