Ferguson Enterprises (FERG) Q3 2025 earnings summary

Executive summary

• Net sales for Q3 2025 rose 4.3% year-over-year to $7.6 billion, driven by 5.0% organic growth and 1.0% from acquisitions, partially offset by fewer sales days and flat pricing.

• Adjusted operating profit increased 6.1% to $715 million, with adjusted operating margin expanding 20 basis points to 9.4%; adjusted diluted EPS rose 7.8% to $2.50.

• Gross margin improved to 31.0%, up 50 basis points year-over-year, reflecting pricing actions and moderating deflation.

• Streamlining actions incurred $68–$70 million in non-recurring restructuring charges, expected to yield $100 million in annualized cost savings.

• Three acquisitions completed in Q3 and five year-to-date; Ferguson Home omnichannel platform launched.

Financial highlights

• U.S. net sales grew 4.5% year-over-year; Canada was flat or declined 0.3% due to FX and fewer sales days.

• Q3 adjusted EBITDA increased 6.6% to $770 million; net income was $410 million, down 7.4% year-over-year due to restructuring costs.

• Year-to-date net sales up 2.7% to $22.3 billion; adjusted operating profit down 4.9%.

• Free cash flow for the period was $1.15 billion; CapEx totaled $235 million year-to-date.

• Net debt to adjusted EBITDA at 1.2x, with $519 million in cash and equivalents at quarter end.

Outlook and guidance

• FY2025 guidance raised to low to mid-single-digit revenue growth (from low single-digit), and adjusted operating margin range increased to 8.5%-9.0%.

• Capital expenditures forecasted at $300–$350 million; interest expense and tax rate guidance unchanged.

• Management expects sufficient liquidity for operations, acquisitions, and shareholder returns.

• Expect gross margins to remain above 30% in Q4 despite ongoing market uncertainty.