Group 1 - Ferguson Enterprises reported fourth-quarter 2024 sales of $8.5 billion, a 6.9% increase from last year, exceeding analyst estimates of $8.41 billion [1] - Adjusted earnings per share were $3.48, surpassing expectations of $2.88 and up 16.8% from the prior year [1] - GAAP diluted EPS was $3.55, reflecting a 59.2% increase from $2.23 [1] Group 2 - For calendar 2025, Ferguson expects mid-single-digit revenue growth and an adjusted operating margin projected between 9.2% and 9.6%, compared to 9.1% in calendar 2024 [2] - Interest expense is forecasted to be between $180 million and $200 million, with capital expenditures planned to range from $300 million to $350 million [2] - The adjusted effective tax rate is expected to be around 26% [2] Group 3 - CEO Kevin Murphy highlighted investments in key growth areas, completion of nine acquisitions, dividend growth, and execution of a share buyback program while maintaining a strong balance sheet [3] - Following the earnings announcement, Ferguson Enterprises shares fell 0.7% to $229.84 [3] Group 4 - Wells Fargo analyst maintained an Overweight rating and raised the price target from $250 to $275 [8] - Baird analyst maintained the stock with an Outperform rating and raised the price target from $260 to $262 [8] - RBC Capital analyst maintained an Outperform rating and raised the price target from $231 to $243 [8]

Core Viewpoint - Ferguson Enterprises' shares increased by as much as 9.8% following the release of mixed Q4 fiscal 2025 results, indicating a recovery from previous negative sentiment related to dividend announcements [1] Earnings, Revenue, and Dividend Support - Q4 revenue rose by 6.9% year over year, reaching $8.5 billion - Adjusted earnings per share increased from $2.98 to $3.48, marking a 17% rise, surpassing analyst expectations of approximately $3.29 per share on sales of around $8.7 billion [2] Management Guidance - Management provided mildly bullish guidance for fiscal year 2026, indicating expectations for widening adjusted operating margins and continued single-digit revenue growth [3] Investor Reassurance - The earnings release and conference call alleviated investor concerns regarding future dividends, despite previous warnings about challenges in cross-border cash movement affecting dividend payouts [4] Business Operations - Ferguson operates primarily in North America, benefiting from stricter air conditioning standards, which offset weaker demand for residential home improvement products in Q4 - Challenges include a slowing new construction market and uncertain long-term macroeconomic trends [6][7] Growth Strategy - The company completed nine acquisitions during the fiscal year and one additional acquisition after the period ended, indicating a commitment to ambitious growth plans [8]

Core Insights - The article discusses the earnings call insights compiled from various transcripts and content available on the Seeking Alpha website, emphasizing the limitations of AI-generated insights [1] Group 1 - The earnings call insights are based on transcripts and other content from Seeking Alpha, highlighting the reliance on AI tools for generating these insights [1] - There is a disclaimer regarding the accuracy, completeness, and timeliness of the earnings call insights, indicating that they have not been curated or reviewed by editors [1] - The insights are intended for informational purposes only and do not account for individual financial situations or objectives [1]

Core Insights - Ferguson Enterprises Inc. is a leading player in the plumbing supplies industry, focusing on a wide range of plumbing and heating products while employing strategic initiatives like acquisitions and financial management to strengthen its market position [1] Financial Performance - On September 16, 2025, Ferguson reported earnings per share of $3.48, exceeding the estimated $3, and revenue of approximately $8.5 billion, surpassing the estimated $8.4 billion, indicating strong sales capabilities [2][6] - The positive market reaction to Ferguson's fiscal fourth-quarter results resulted in a surge in its stock price, with CEO Kevin Murphy highlighting the completion of nine acquisitions throughout the year as a key factor in the company's strong financial performance [3] Valuation Metrics - Ferguson's price-to-earnings (P/E) ratio stands at approximately 26.47, indicating that investors are willing to pay a premium for its earnings, while the price-to-sales ratio is about 1.40, reflecting a favorable market valuation relative to annual sales [4] - The company's enterprise value to sales ratio is around 1.57, and the enterprise value to operating cash flow ratio is approximately 27.20, showcasing its total valuation and ability to cover enterprise value with operating cash flow [5] - Ferguson's debt-to-equity ratio is approximately 1.05, and its current ratio is about 1.64, demonstrating strong liquidity and financial stability [5]

Group 1 - Ferguson Enterprises Inc. (NYSE: FERG) has shown strong performance over the past year, with shares gaining over 20% [1] - The company reported excellent quarterly results, providing positive news for investors [1]

Seeking Alpha's transcripts team is responsible for the development of all of our transcript-related projects. We currently publish thousands of quarterly earnings calls per quarter on our site and are continuing to grow and expand our coverage. The purpose of this profile is to allow us to share with our readers new transcript-related developments. Thanks, SA Transcripts Team ...

Ferguson Enterprises Inc. (NYSE:FERG) shares surged after it reported fourth-quarter 2024 sales of $8.5 billion, a 6.9% increase from last year, beating analyst estimates of $8.41 billion. Adjusted earnings per share were $3.48, ahead of expectations of $2.88 and up 16.8% from the prior year. GAAP diluted EPS was $3.55, up 59.2% from $2.23. Gross margin expanded 70 basis points to 31.7%. Reported operating profit rose 14.1% to $925 million, while adjusted operating profit increased 13.4% to $972 million. ...

Ferguson Enterprises (NYSE:FERG) shares jumped 9.1% on Tuesday after the plumbing and HVAC distributor reported better-than-expected fiscal fourth-quarter results. The company posted quarterly sales of $8.5 billion, up 6.9% from a year earlier and ahead of Wall Street’s consensus forecast of $8.39 billion. ...

Financial Data and Key Metrics Changes - Sales for the fourth quarter reached $8.5 billion, a 6.9% increase year-over-year, driven by organic growth of 5.8% and acquisition growth of 1.1% [3][4][15] - Gross margin improved to 31.7%, up 70 basis points from the previous year [4][15] - Operating profit for the quarter was $972 million, reflecting a 13.4% increase year-over-year, with an operating margin of 11.4% [4][16] - Diluted EPS rose 16.8% to $3.48 compared to the prior year [4][16] - For the full year, revenue was $30.8 billion, a 3.8% increase, with operating profit of $2.84 billion, up 0.6% [8][9] Performance by Business Lines - HVAC revenue decreased slightly due to market conditions, but the overall HVAC segment grew 8% for the year [10][11] - Waterworks revenue increased by 10% for the fiscal year, driven by diversification efforts [12] - Commercial mechanical revenue grew 21%, while waterworks revenues increased 15% [8][12] - Residential trade plumbing revenues decreased by 2% due to headwinds in new construction and ongoing PVC price deflation [7][10] Market Performance Data - In the U.S. market, net sales increased by 7.1%, with non-residential revenue growth of approximately 15% [6][16] - The residential end market remained subdued, with flat revenue due to weakened new construction starts and soft demand in repair, maintenance, and improvement [6][10] - Non-residential markets showed resilience, particularly in large capital projects, contributing to overall growth [6][12] Company Strategy and Industry Competition - The company is focused on HVAC expansion, waterworks diversification, and large capital projects as key growth areas [11][23] - A multi-customer group approach is emphasized to enhance service delivery and project execution [34][35] - The company continues to consolidate fragmented markets through acquisitions, completing nine acquisitions in the fiscal year [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in medium-term market conditions despite current uncertainties, leveraging multi-year tailwinds in both residential and non-residential markets [5][23] - The outlook for the second half of calendar year 2025 anticipates softer growth due to ongoing challenges in new residential construction [28][81] - Management highlighted the importance of operational agility and strong contractor relationships in navigating complex project requirements [13][35] Other Important Information - The company announced a change in fiscal year-end from July 31 to December 31, allowing for better focus during peak seasons [20][21] - A quarterly dividend of $0.83 per share was declared, representing a 5% increase over the prior year [18] Q&A Session Summary Question: Growth and end market outlook - Management noted that while residential markets are expected to be down low to mid-single digits, non-residential markets showed strong growth, particularly in large capital projects [27][28] Question: Non-residential bidding activity - Management confirmed healthy backlogs across various segments, including commercial mechanical and waterworks, with strong bidding activity continuing [42][43] Question: Pricing and margin expectations - Management indicated that pricing has inflected positively, with expectations of modest inflation moving forward, while gross margins are expected to normalize around 30%-31% [46][49] Question: Residential remodel demand - Management acknowledged continued pressure in the remodel market but noted that the higher-end segment remains resilient, with Ferguson Home showing a 3% growth rate [72] Question: New residential construction trends - Management expects new residential construction to weaken slightly in the second half of the year, but does not foresee a dramatic decline [80][81]

Financial Data and Key Metrics Changes - In Q4, net sales reached $8.5 billion, a 6.9% increase year-over-year, driven by organic growth of 5.8% and acquisition growth of 1.1% [4][16] - Gross margin improved to 31.7%, up 70 basis points from the previous year [4][16] - Operating profit was $972 million, reflecting a 13.4% increase over the prior year, with a resulting operating margin of 11.4% [5][17] - Diluted EPS increased by 16.8% to $3.48 [5][17] - For the full year, revenue was $30.8 billion, a 3.8% increase, with operating profit of $2.84 billion, up 0.6% [10][11] Performance by Business Lines - HVAC revenue was slightly down due to market conditions, while residential trade plumbing revenues decreased by 2% [8][9] - Ferguson Home, a unified brand for residential building and remodel, saw a revenue growth of 3% [9] - Waterworks revenue grew by 10%, driven by diversification efforts [13] - Commercial mechanical revenue increased by 21%, and industrial grew by 5% [9][13] Performance by Markets - U.S. net sales increased by 7.1%, with non-residential revenue growth of approximately 15% [7][17] - Residential end markets remained subdued, with flat revenue due to weakened new construction starts [7][11] - Canada saw net sales increase by 4.8%, with a 4.9% contribution from acquisitions [17] Company Strategy and Industry Competition - The company is focused on HVAC expansion, waterworks diversification, and large capital projects [24] - A multi-customer group approach is emphasized to enhance project execution and customer service [35][36] - The company continues to consolidate fragmented markets through acquisitions, completing nine acquisitions in the fiscal year [20] Management's Comments on Operating Environment and Future Outlook - Management remains confident in medium-term market conditions despite current uncertainties [6][24] - The outlook for the second half of calendar year 2025 anticipates softer growth due to ongoing challenges in residential construction [29][82] - The company expects mid-single-digit revenue growth for calendar year 2025, with operating margins projected between 9.2% and 9.6% [23] Other Important Information - The company announced a change in fiscal year-end from July 31 to December 31, allowing for better focus during peak seasons [21][22] - A quarterly dividend of $0.83 per share was declared, reflecting a 5% increase over the prior year [19] Q&A Session Summary Question: Outlook on growth and end market trends - Management noted that while non-residential markets are strong, residential markets are expected to remain weak, particularly in new construction [28][29] Question: Details on bidding activity and project backlogs - Backlogs are healthy across various segments, with strong bidding activity in non-residential projects, including data centers and biotechnology [44][45] Question: Pricing and margin expectations - Management expects some modest inflation moving forward, with gross margins normalizing to the 30-31% range [49][50] Question: Insights on residential remodel demand - The remodel market is under pressure, but the higher-end segment remains resilient, with Ferguson Home performing well [72][73] Question: Trends in new residential construction - Management anticipates continued weakness in new residential construction, particularly in the Sunbelt region [81][82]