Ferguson Enterprises (FERG) Q4 2024 earnings summary

Executive summary

• Q4 sales reached $7.9B, up 1.4% year-over-year despite 2% deflation, with adjusted operating profit up 5.3% to $857M and margin at 10.8%.

• FY24 sales were $29.6B, down 0.3% year-over-year, with strong cash flow of $1.9B and market share gains.

• Ten acquisitions completed, adding ~$400M in annualized revenue; $1.4B returned to shareholders via dividends and buybacks.

• Outperformed end markets, returning to volume growth and expanding gross margins despite challenging conditions.

• New US corporate domicile established, raising effective tax rate to 26% and resulting in a $137M one-time, non-cash deferred tax charge.

Financial highlights

• Q4 gross margin rose 40 bps to 31%; adjusted EPS increased 7.6% to $2.98.

• FY24 gross margin improved 10 bps to 30.5%; operating cash flow was $1.9B, and free cash flow $1.5B.

• FY24 adjusted operating profit was $2.8B (9.5% margin); adjusted EPS was $9.69, down 1.5%.

• Net debt to adjusted EBITDA ended at 1.1x, within the 1–2x target range.

• FY24 share repurchases totaled $634M; $900M remains under current program.

Outlook and guidance

• FY2025 revenue expected to grow in the low single-digit range, with adjusted operating margin guidance of 9.0%–9.5%.

• CapEx planned at $400–$450M; effective tax rate expected at 26%; interest expense projected at $180–$200M.

• End markets anticipated to decline in the low double-digit range, with ongoing deflation, especially early in the year.

• Guidance assumes current market conditions, with potential upside if rate cuts or market recovery materialize.

• Market environment anticipated to remain challenging near term, but multi-year structural tailwinds expected.