Financial Data and Key Metrics Changes - Sales for the quarter reached $8.2 billion, representing a 5% increase year-over-year, driven by organic growth of 4% and acquisition growth of 1% [5][10] - Gross margin improved to 30.7%, an increase of 60 basis points compared to the previous year [6][11] - Operating profit grew by 14% to $808 million, with an operating margin of 9.9%, reflecting an 80 basis points expansion [6][11] - Diluted earnings per share rose nearly 16% to $2.84 [6][11] - The company maintained a strong balance sheet with a net debt to EBITDA ratio of 1.1 times [6][11] Performance by Business Lines - Residential end markets, which account for about half of U.S. revenue, faced challenges with a 1% decline in revenue [7] - Non-residential end markets performed better, with revenue increasing by 12% due to strength in large capital projects [7] - Waterworks revenues grew by 14%, driven by large capital projects and public works [8] - Ferguson Home experienced a 1% growth, while residential trade plumbing and HVAC declined by 4% and 6% respectively [9] Market Data and Key Metrics Changes - U.S. net sales increased by 5.3%, with organic growth of 4.4% and a 0.9% contribution from acquisitions [11] - Canadian net sales were up 2.2%, with organic growth of 0.7% and a 4.6% contribution from acquisitions, but faced a 1.6% adverse impact from foreign exchange [12] Company Strategy and Development Direction - The company is focused on leveraging multi-year tailwinds in both residential and non-residential markets, particularly in waterworks and HVAC sectors [6][17] - Ferguson aims to consolidate fragmented markets through acquisitions, with the recent acquisition of Moore Supply Company enhancing its HVAC presence [13][17] - The company is committed to returning surplus capital to shareholders while maintaining flexibility for strategic opportunities [14][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in medium-term market performance despite current challenges, particularly in residential housing starts and HVAC markets [6][17] - The company anticipates approximately 5% revenue growth for the year and an operating margin range of 9.4% to 9.6% [15][17] - Management noted that the early part of 2026 is expected to see similar market conditions as the end of 2025, with growth rates around 3% [25][26] Other Important Information - The company declared a 7% increase in its quarterly dividend to $0.89 per share [6][13] - Capital expenditures for the quarter were $118 million, contributing to a free cash flow of $325 million [13] Q&A Session Summary Question: On data center and large capital projects - Management estimates that large capital projects account for mid- to high-single-digits percentage of total revenue, with data centers making up over 50% of that [20] Question: Outlook for November and early 2026 - Management indicated that Q4 growth rates are expected to be around 3%, consistent with prior expectations [25][26] Question: HVAC market conditions - The HVAC market is currently under pressure, with challenges expected to persist, but management remains optimistic about long-term growth [43] Question: SG&A investments and impacts - The company continues to invest in trainees and HVAC counter expansions, with positive impacts on performance despite a challenging market [46][50]

Financial Performance - Net sales reached $8.2 billion, a 5.1% increase compared to 2024, driven by market outperformance with organic growth of 4.2% and acquisition growth of 1.0%[6] - Adjusted operating profit increased by 14.4% to $808 million, with an adjusted operating margin of 9.9%, up 80 bps[6] - Adjusted diluted EPS increased by 15.9% to $2.84[6] - Adjusted EBITDA increased by 14.4% to $867 million[13] Capital Allocation - Capital deployment totaled $511 million, including a quarterly dividend of $0.89 per share, a 7% increase year-over-year[6] - $372 million was returned to shareholders through share repurchases and dividends[6] - The company completed one acquisition during the quarter[6] - The company invested $118 million in capital expenditures[25] - The company has an outstanding balance of approximately $800 million in share repurchase program[26] Segment Performance (US) - US net sales increased by 5.3%[8] - Residential sales declined by 1%, while non-residential sales increased by 12%[8] - Waterworks customer group sales increased by 14%, while Commercial/Mechanical increased by 21%[10] Guidance - The company updated its calendar 2025 net sales growth guidance to approximately 5%[27] - The company updated its calendar 2025 adjusted operating margin guidance to 9.4%-9.6%[27]

Core Insights - Ferguson Enterprises Inc. reported strong financial results, achieving a net sales increase of 5.1% year-over-year, driven by organic revenue growth of 4.2% and acquisition growth of 1.0% [4][11] - The company is optimistic about its performance in calendar year 2025, expecting mid-single digit growth in net sales and maintaining a strong balance sheet while returning capital to shareholders [2][12] - Non-residential revenue grew by 12% during the quarter, significantly outperforming the residential market, which faced challenges [8][7] Financial Performance - For the quarter ended October 31, 2025, net sales reached $8.2 billion, up from $7.8 billion in the same period last year [4][37] - Gross margin improved to 30.7%, a 60 basis point increase from the previous year, while operating profit rose to $771 million, reflecting a 15.9% increase [5][37] - Diluted earnings per share increased by 23.9% to $2.90, compared to $2.34 in the prior year [6][37] Segment Analysis - In the U.S. market, net sales increased by 5.3%, with organic revenue growth of 4.4% and a 0.9% contribution from acquisitions [7][11] - The residential market, which constitutes about half of U.S. revenue, showed a decline of 1%, while non-residential markets saw a 12% increase, supported by large capital project activities [8][7] - In Canada, net sales grew by 2.2%, with organic growth of 0.7% and a 4.6% contribution from acquisitions, although the market remained subdued [10][11] Guidance and Future Outlook - The company updated its guidance for calendar year 2025, projecting mid-single digit growth in net sales and an adjusted operating margin of 9.4% to 9.6% [2][12] - Interest expenses are expected to be between $180 million and $200 million, with capital expenditures projected at approximately $300 million to $350 million [2][12] Capital Management - Ferguson completed share repurchases totaling $208 million during the quarter and has approximately $0.8 billion remaining under its current share repurchase program [12][13] - The company declared a quarterly dividend of $0.89, representing a 7% increase from the previous year, to be paid on February 27, 2026 [13][12] Financial Position - As of October 31, 2025, the net debt to adjusted EBITDA ratio was 1.1x, indicating a strong financial leverage position [12][26] - Total assets were reported at $17.7 billion, with total liabilities of $11.6 billion, resulting in stockholders' equity of $6.1 billion [38][37]

Core Viewpoint - Ferguson Enterprises Inc. is expected to report first-quarter fiscal 2026 results on December 9, with earnings estimated at $2.77 per share and revenues at $8.2 billion, reflecting year-over-year growth [1][2][7]. Earnings Estimates - The earnings estimates for the fiscal first quarter have remained stable over the past 60 days, indicating a 13.1% increase from the previous year, while revenues are projected to grow by 5.3% year-over-year [2][7]. - The Zacks Consensus Estimate for U.S. business revenues is pegged at $7.74 billion, and for Canada, it is estimated at $416 million [9][10]. Earnings Surprise History - Ferguson has a mixed earnings surprise history, with an average surprise of 7.7%. In the last reported quarter, the company earned $3.48 per share, exceeding the consensus estimate of $3.00 [3][4]. Earnings Prediction - The company has a positive Earnings ESP of +2.53%, suggesting a likelihood of an earnings beat, with the Most Accurate Estimate at $2.84 [4]. Business Performance Factors - The U.S. business is expected to benefit from strong demand in non-residential markets, particularly in waterworks and large capital projects, while the Canadian business is likely to see positive contributions from recent acquisitions [8][10]. - However, challenges such as rising operating costs and currency headwinds may pressure margins [7][12]. Acquisitions Impact - Recent acquisitions are anticipated to contribute positively to revenues, with a noted impact of approximately 1% and 4.9% on U.S. and Canada business sales, respectively, from four acquisitions completed in the fourth quarter of fiscal 2025 [11]. Price Performance - Ferguson shares have increased by 4.5% over the past three months, outperforming the Zacks Manufacturing - General Industrial industry and the S&P 500 [13]. Valuation - The company is trading at a forward P/E ratio of 22.42X, higher than the industry average of 21.86X, which may pose risks if market sentiment declines [17]. Investment Thesis - The solid momentum in the U.S. business and strategic acquisitions are expected to support long-term growth, despite concerns over rising operating expenses and high valuation [20][21].

Core Insights - Ferguson plc is a leading distributor of plumbing and heating products, primarily operating in North America and the UK, competing with major players like Home Depot and Lowe's [1] Financial Performance Expectations - Ferguson is scheduled to release its quarterly earnings on December 9, 2025, with analysts expecting earnings per share (EPS) of $2.77 and projected revenue of approximately $8.1 billion [2] Financial Metrics - The company's price-to-earnings (P/E) ratio is around 26.76, indicating investor confidence in future earnings potential [3] - The price-to-sales ratio is 1.59, suggesting investors are paying $1.59 for every dollar of sales [3] - The enterprise value to sales ratio is approximately 1.76, reflecting the company's total valuation compared to its sales [4] - The enterprise value to operating cash flow ratio stands at about 28.20, highlighting the relationship between valuation and cash flow from operations [4] Financial Stability - Ferguson's debt-to-equity ratio is 1.02, indicating a balanced proportion of debt to shareholders' equity [5] - The current ratio of 1.68 suggests the company's strong liquidity position, as it can cover short-term liabilities with short-term assets [5]

Group 1 - Major earnings reports are scheduled for next week, including Broadcom and Costco on Thursday, and Adobe and Synopsys on Wednesday [1] - Tuesday is expected to be the busiest day with over 10 companies reporting, including AutoZone and Ferguson Enterprises [1]

Core Thesis - Ferguson Enterprises Inc. is viewed positively due to its strong market position and financial performance, with shares trading at $251.54 as of December 1st, and trailing and forward P/E ratios of 26.99 and 22.62 respectively [1][2] Company Overview - Ferguson Enterprises is the largest plumbing and HVAC distributor in North America, demonstrating durable market leadership and earning a narrow moat rating from Morningstar [2] - The company has undergone a reorganization and relocated its headquarters to the U.S., enhancing its operating profile and returning significant capital to shareholders through dividends and a $4.0 billion repurchase program [3] Financial Performance - Ferguson's five-year annualized revenue growth has been in the high single digits, reflecting resilience despite trailing the S&P 500 [4] - The company maintains mid-single-digit net margins and robust returns on equity, which are twice QVI's target, alongside returns on invested capital exceeding its cost of capital [4] - Owners' earnings growth, combining EPS and dividend growth, has achieved double-digit annualized rates, indicating consistent shareholder value creation [4] Market Position and Outlook - Despite recent revenue growth of 3.8% lagging the broader market, Ferguson's financial strength, cash generation, and leadership position support a bullish outlook [5] - The company's fundamentals remain solid, characterized by effective management execution and sustainable profitability, making it a quality compounder aligned with QVI's long-term investment framework [5] - Ferguson's scale-driven stability in essential infrastructure distribution is emphasized as a key factor in its positive outlook [6]

Core Viewpoint - AGCO Corporation, a leader in agricultural machinery, recognizes community contributions through its annual Sowing Good Deeds™ contest, awarding Prescott Frontier Days Rodeo with a Massey Ferguson® 4700 Series tractor for their community service efforts [1][4]. Group 1: Company Overview - AGCO Corporation is a global leader in the design, manufacture, and distribution of agricultural machinery and precision ag technology [6]. - The company had net sales of approximately $11.7 billion in 2024 [6]. Group 2: Community Engagement - Prescott Frontier Days Rodeo exemplifies western tradition and community service, impacting over 30 organizations in 2024 through donations and support [2]. - The committee's initiatives include youth development programs, veteran organizations, food banks, and local schools [2]. - Events organized by the committee, such as the Heritage Parade and Cowboy Church, promote community unity and agricultural values [3]. Group 3: Award Significance - The Sowing Good Deeds award recognizes rodeo committees that excel in community involvement and volunteerism [4]. - Prescott Frontier Days is the ninth organization to receive this award, highlighting their commitment to enriching their community [4][5].

Core Viewpoint - Taranis Resources Inc. is providing an update on its exploration activities at the Thor project, indicating growth and progress in its operations [1] Group 1 - The company is actively engaged in exploration activities at the Thor site [1] - Taranis Resources Inc. is listed on both TSXV and OTCQB exchanges, highlighting its accessibility to investors [1]

Core Points - Ferguson Enterprises Inc. will release its financial results for the quarter ended October 31, 2025, on December 9, 2025 [1][5] - The results will be available on Ferguson's corporate website at 6:45 a.m. ET/11:45 a.m. GMT [1][5] - A conference call and webcast for analysts and investors will take place on the same day at 8:30 a.m. ET/1:30 p.m. GMT [2][5] Company Overview - Ferguson is the largest value-added distributor in the North American construction market, which is valued at $340 billion [3] - The company reported sales of $30.8 billion for FY'25 and employs approximately 35,000 associates across over 1,700 locations [3]