Ferguson Enterprises (FERG) investor relations material

Executive summary

• Q3 net sales rose 9.5% YoY to $9.026B, with 7.0% organic growth and 2.7% acquisition growth; adjusted diluted EPS increased 7.9% to $3.43.

• Adjusted operating profit grew 8.9% to $962M, while adjusted operating margin held at 10.7%.

• Full-year 2026 net sales growth guidance increased to ~7%; U.S. non-residential demand led growth despite residential and Canadian market pressure.

Financial highlights

• Q3 gross margin was 30.9%, down 40 bps YoY; adjusted EBITDA increased 9.0% to $1.028B.

• Q3 reported net income was $598M vs. $638M, and diluted EPS was $3.08 vs. $3.24; adjusted net income was $664M vs. $626M.

• 9M net sales rose 6.0% to $25.249B; adjusted operating profit increased 6.5% to $2.541B and adjusted diluted EPS rose 7.2% to $9.09.

• 9M operating cash flow was $1.472B vs. $1.884B and free cash flow was $1.147B vs. $1.693B; working capital investment, cash taxes and incentive payout timing pressured cash flow.

Outlook and guidance

• Calendar 2026 net sales growth guidance increased from mid-single digits to ~7%; adjusted operating margin guidance rose to 9.6%–9.8% from 9.5%–9.8%.

• Calendar 2026 interest expense guidance is ~$235M, capex ~$425M and adjusted effective tax rate ~26%.

• Q4 total growth was expected in the high-single-digit to low-double-digit range, with organic growth similar to Q3 and a full quarter of FloWorks.

• Price inflation was expected to remain in the low- to mid-single-digit range into Q4 and early 2027; finished-goods inflation was expected in the low-single digits.