Ferguson Enterprises (FERG) Q1 2026 earnings summary

Executive summary

• Net sales reached $7.5 billion, up 3.6% year-over-year, driven by 2.8% organic growth and 0.8% from acquisitions.

• Adjusted operating profit rose 8.4% to $647 million, with adjusted operating margin improving by 40 bps to 8.7%.

• Adjusted diluted EPS increased 9.1% to $2.28; $410 million returned to shareholders via buybacks and dividends.

• Completed two acquisitions in the quarter, with three more signed and one closed post-quarter, expanding capabilities across key segments.

• Balance sheet remains strong, with net debt to adjusted EBITDA at 1.0x.

Financial highlights

• Gross margin improved by 30 bps to 31.0% year-over-year.

• Adjusted EBITDA grew 9.2% to $711 million.

• Free cash flow for the quarter was $688 million after $92 million in CapEx.

• Operating cash flow was $772 million, down $100 million due to working capital investments.

• Capital deployment totaled $512 million, including $236 million in share repurchases and $174 million in dividends.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: net sales expected to grow low to mid-single digits, with adjusted operating margin forecasted at 9.4%-9.8%.

• Capital expenditures projected at $350–$400 million; interest expense around $200 million; effective tax rate ~26%.

• Expect slightly higher inflation and volume pressure than initially anticipated.