Ferguson on Tuesday reported stronger-than-expected sales in its latest quarter — prompting the plumbing and industrial supply giant to raise its forecast heading into the final quarter of its fiscal year.
The company posted $7.62 billion in net sales, up 4.3% from $7.31 billion in the same quarter of last year. Ferguson officials highlighted 5% organic growth and a 1% contribution from recent acquisitions; those totals were partially offset by fewer sales days in the quarter, along with foreign exchange rates.
U.S. quarterly net sales were up 4.5% year-over-year to $7.29 billion after “increased activity” in larger capital projects overcame a “subdued” residential construction market.
The company’s gross margin also rose by 50 basis points in the quarter, but operating profit, operating margin and diluted earnings each slipped. Company officials attributed the profit decline to charges tied to a “business restructuring” effort, and all three measures were up year-over-year on an adjusted basis.
The company raised its outlook for the full year from “low single-digit growth” to “low to mid-single digit growth,” and bolstered its operating margin forecast from between 8.3% and 8.8% up to 8.5% to 9%.
“We remain confident in our markets over the medium term and continue to balance investment in key strategic opportunities, leveraging multi-year tailwinds in both residential and non-residential markets as we support the complex project needs of our specialized professional customers,” Ferguson CEO Kevin Murphy said in a statement.
Ferguson also disclosed a third acquisition completed during the quarter: Northeast and Light Innovations Inc., an Arkansas residential building and remodel showroom, will support the company’s new Ferguson Home segment. The company previously announced its additions of Independent Pipe & Supply in Massachusetts and National Fire Equipment and National Fire Fabrication in Ontario.
