Group 1 - Ferguson Enterprises Inc. shares surged over 10% after reporting much stronger than expected Q1 results [1] - The company had previously traded flat for a year before this significant increase [1] Group 2 - The article highlights the potential for contrarian investment strategies based on macro views and stock-specific turnaround stories [1]

Core Viewpoint - Ferguson Enterprises Inc. is conducting its Q3 2025 earnings conference call, indicating a focus on financial performance and future outlook [1][2][3]. Group 1: Company Overview - The conference call is led by Brian C. Lantz, Vice President of Investor Relations and Communications, who welcomes participants and introduces the session [2][3]. - The earnings announcement for Q3 2025 has been made available on the company's corporate website and SEC filings page, highlighting transparency in financial reporting [3]. Group 2: Forward-Looking Statements - The company reminds participants that some statements made during the call may be forward-looking and subject to risks and uncertainties that could lead to actual results differing from projections [4]. - The company disclaims any obligation to update forward-looking statements, emphasizing the importance of the current date in relation to expectations [4].

Financial Data and Key Metrics Changes - Net sales reached $7.6 billion, an increase of 4.3% year-over-year, driven by organic growth of 5% and acquisition growth of 1%, despite a 1.7% negative impact from one fewer sales day and foreign exchange [7][19] - Gross margin improved to 31%, up 50 basis points year-over-year, attributed to actions taken to capture value and moderating deflation [20] - Operating profit increased by 6.1% to $715 million, with an operating margin of 9.4%, expanding by 20 basis points [21] - Diluted earnings per share rose by 7.8% to $2.5, supported by operating profit growth and share repurchases [9][21] Performance by Business Lines - HVAC customer group saw a 10% revenue increase, primarily due to focused growth initiatives [12][15] - Residential trade plumbing revenues declined by 1%, consistent with recent trends, while repair and maintenance performed better [12] - Waterworks revenue grew by 12%, driven by public works and municipal activities [13][16] - Commercial Mechanical revenue increased by 10%, with strong activity in large capital projects [14] Performance by Markets - U.S. net sales grew by 4.5%, with organic growth of 5% and a 1% contribution from acquisitions [23] - Canadian net sales were down 0.3%, with organic growth of 3% offset by foreign exchange impacts [23] - Non-residential end markets showed stronger growth, particularly in large capital projects, with a 7% increase in revenue [11][23] Company Strategy and Industry Competition - The company continues to invest in key growth areas, including HVAC, Waterworks diversification, and large capital projects, while streamlining operations to enhance efficiency [31][32] - The launch of Ferguson Home aims to provide a seamless omnichannel experience for customers, integrating showroom and digital channels [17] - The competitive landscape remains challenging, but the company has managed to balance market share gains with gross margin improvements through strategic pricing and sales management [105] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in medium-term market conditions despite a dynamic and uncertain environment [9][28] - The company updated its full-year guidance to low to mid-single-digit revenue growth, reflecting strong performance in the third quarter [28] - Management noted that deflation moderated ahead of expectations, contributing to improved gross margins [31] Other Important Information - The company completed three acquisitions during the quarter, enhancing its market position [27] - A nonrecurring business restructuring charge of $68 million was incurred, expected to yield $100 million in annualized cost savings [21][78] - The company returned $759 million to shareholders through share repurchases year-to-date, reducing share count by approximately 4.1 million [27] Q&A Session Summary Question: How much of the organic volume strength is attributed to internal initiatives versus market improvement? - Management attributed the 5% organic growth to internal initiatives, particularly in non-residential markets, and noted that the market is expected to improve in the coming years [36] Question: What factors contributed to the strong gross margin of 31%? - Management indicated that the strong gross margin was due to actions taken in pricing strategy and moderating deflation, with expectations for margins to remain above 30% in the fourth quarter [38][39] Question: How is bidding activity progressing in the commercial industrial sector? - Management reported strong bidding activity, particularly in data centers, and noted that open order volumes in commercial mechanical continue to grow [45][46] Question: How is the company managing price increases in the current tariff environment? - Management emphasized a focus on value rather than price competition, with a strategy to work closely with customers to ensure project completion on time and budget [48][51] Question: Can you provide insights on the Waterworks business growth and bidding activity? - Management highlighted strong growth in Waterworks, particularly in public works and wastewater treatment, and noted supportive bidding activity in residential new construction [60][62] Question: What is the timeline for realizing benefits from the restructuring program? - Management indicated that the restructuring is largely complete, with expectations for operational improvements and cost savings to materialize in the near term [78]

Financial Data and Key Metrics Changes - Net sales for the quarter reached $7.6 billion, an increase of 4.3% year-over-year, driven by organic growth of 5% and acquisition growth of 1%, despite a 1.7% negative impact from one fewer sales day and foreign exchange [6][16][19] - Gross margin improved to 31%, up 50 basis points year-over-year, attributed to actions taken to capture value and moderating deflation [6][18] - Operating profit increased by 6.1% to $715 million, with an operating margin of 9.4%, expanding by 20 basis points [19][22] - Diluted earnings per share rose by 7.8% to $2.5, supported by operating profit growth and share repurchases [7][19] Performance by Business Lines - HVAC customer group saw a strong growth of 10% in the quarter, primarily due to focused investments and expansion efforts [10][13] - Waterworks revenue grew by 12%, driven by public works and municipal activities, reflecting diversification efforts [11][14] - Residential trade plumbing revenues declined by 1%, consistent with recent trends, facing challenges in new construction [10][12] Performance by Markets - In the U.S., net sales grew by 4.5%, with non-residential revenue growth of approximately 7% driven by large capital projects [8][21] - Canadian net sales were down 0.3%, with organic growth of 3% offset by foreign exchange impacts [21] Company Strategy and Industry Competition - The company continues to invest in key growth areas, including HVAC, Waterworks diversification, and large capital projects, while streamlining operations to enhance efficiency [29][30] - The launch of Ferguson Home aims to provide a seamless omnichannel experience, integrating showroom and digital channels [15][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in medium-term market conditions despite a dynamic and uncertain environment, with expectations for low to mid single-digit revenue growth for the full year [7][27] - The company anticipates continued strong performance in the fourth quarter, supported by solid bidding activity and market share gains [62][63] Other Important Information - The company completed three acquisitions during the quarter, enhancing its market position and capabilities [25] - A nonrecurring business restructuring charge of $68 million was incurred, expected to yield approximately $100 million in annualized cost savings [19][72] Q&A Session Summary Question: How much of the organic volume growth is attributed to internal initiatives versus market improvement? - Management indicated that the 5% organic growth is largely due to internal initiatives, particularly in the non-residential sector, and they expect the market to improve in the coming years [33][34] Question: What factors contributed to the strong gross margin of 31%? - Management noted that the strong gross margin was due to actions taken in pricing strategy and moderating deflation, with expectations to maintain margins above 30% in the fourth quarter [36][37] Question: How is bidding activity progressing in the commercial industrial sector? - Management reported strong bidding activity, particularly in data centers, and expressed optimism about the growth in large capital projects [42][43] Question: How is the company managing price increases in the current tariff environment? - Management emphasized their pricing strategy focuses on value rather than just price, and they are working closely with suppliers to manage costs effectively [44][45] Question: Can you provide insights on the Waterworks segment's growth and bidding activity? - Management highlighted strong growth in Waterworks, particularly in public works, and noted supportive bidding activity in residential new construction [55][56] Question: What is the outlook for HVAC growth and branch conversions? - Management stated that the majority of HVAC growth is organic, with ongoing counter conversions to enhance service for dual trade contractors [67][69] Question: How will the restructuring program impact future operations? - Management indicated that the restructuring is largely complete, with expected annualized savings and improved operational efficiency moving forward [72][73]

Financial Performance - Net sales increased by 43% to $7621 million in Q3 2025 compared to $7308 million in Q3 2024[16] - Adjusted operating profit rose by 61% to $715 million in Q3 2025 compared to $674 million in Q3 2024[16] - Adjusted diluted EPS increased by 78% to $250 in Q3 2025 compared to $232 in Q3 2024[16] - Adjusted EBITDA increased by 66% to $770 million in Q3 2025 compared to $722 million in Q3 2024[16] Segment Performance - US net sales increased by 45% to $7288 million in Q3 2025 compared to $6974 million in Q3 2024[19] - Canada net sales decreased slightly by 03% to $333 million in Q3 2025 compared to $334 million in Q3 2024[19] US End Markets - Residential net sales in the US increased by 2% in Q3 2025, representing 51% of US net sales[8] - Non-residential net sales in the US increased by 7% in Q3 2025, representing 49% of US net sales[8] Capital Allocation - Approximately $690 million was deployed in capital expenditures, dividends, acquisitions, and share repurchases during the quarter[6] - Share repurchases amounted to $251 million, and dividends totaled $166 million[6]

Core Points - Hyundai Motor Group announced the appointment of Drew Ferguson as Senior Vice President of Government Affairs, effective May 1, 2025 [1][7] - Ferguson will lead the Group's U.S. government affairs strategy and operations at both federal and state levels [2][7] - His experience includes nearly a decade in the U.S. House of Representatives, where he represented Georgia's 3rd Congressional District [2][3] - Ferguson's background includes serving as Chief Deputy Whip and being a member of the House Ways and Means Committee, focusing on tax, trade, and healthcare legislation [4] - He has also worked as a Senior Policy Advisor at Alston & Bird LLP, developing legislative strategies across various industries [5] Company Overview - Hyundai Motor Group is a global enterprise with a value chain encompassing mobility, steel, construction, logistics, finance, IT, and service [6] - The Group employs approximately 250,000 people worldwide and includes mobility brands such as Hyundai, Kia, and Genesis [6]

Group 1 - The previous investment stance on Ferguson Enterprises Inc. (NYSE: FERG) was a downgrade to a hold rating due to a lack of confidence in the near-term outlook [1] - The downgrade was validated as the focus is on long-term investments while also considering short-term opportunities for alpha generation [1] - The investment strategy emphasizes bottom-up analysis, assessing the fundamental strengths and weaknesses of individual companies [1] Group 2 - The investment horizon is medium to long-term, aiming to identify companies with strong fundamentals, sustainable competitive advantages, and growth potential [1]

Core Points - Wolseley Canada has appointed Laureen Cushing as Vice President of Human Resources, effective April 1, 2025 [1][3] - Laureen Cushing has extensive experience, having previously served as Global Vice President of Human Resources at Savaria Corporation and spent 17 years at Wolseley Canada in various HR roles [1][2] - The appointment aims to enhance HR strategy focusing on culture, engagement, talent development, and total rewards [2] Company Overview - Wolseley Canada is a leading wholesale distributor in plumbing, heating, ventilation, air conditioning, refrigeration, waterworks, fire protection, and industrial products, with approximately 2,500 employees and over 220 locations across Canada [4] - The parent company, Ferguson, is the largest value-added distributor in the $340 billion North American construction market, with sales of $29.6 billion in FY'24 and around 35,000 associates in nearly 1,800 locations [5]

Group 1 - Ferguson Enterprises (NYSE: FERG) has experienced a significant decline in stock performance, falling 21% over the past year and reaching a 52-week low due to disappointing earnings [1] - The company is recognized as a leading distributor of products to the construction industry, indicating its critical role within that sector [1]

Financial Data and Key Metrics Changes - Net sales for the second quarter reached $6.9 billion, a 3% increase year-over-year, despite commodity-led deflation of approximately 2% [8][24] - Adjusted operating profit was $449 million, down $71 million from the previous year, resulting in a 6.5% adjusted operating margin [9][26] - Adjusted diluted earnings per share decreased by 12.6% to $1.52 [26] Performance by Business Lines - HVAC customer group saw a revenue increase of 17%, driven by strategic investments [13][63] - Waterworks revenues increased by 10%, supported by robust activity in public works and municipal projects [15][63] - Residential trade plumbing revenues remained flat, reflecting challenges in new construction and ongoing price deflation [13][16] Market Performance Data - U.S. net sales grew by 3%, with organic growth of 2% and a 1% contribution from acquisitions [27] - Canadian net sales increased by 3.2%, with organic growth of 3.1% and a 5.4% contribution from acquisitions, partially offset by a 5.3% adverse impact from foreign exchange rates [28] Company Strategy and Industry Competition - The company is focused on balancing investments in customer-facing associates and capabilities while addressing near-term efficiency improvements [9][39] - Strategic growth initiatives include expanding HVAC counter locations and enhancing Waterworks capabilities through M&A and organic growth [17][34] - The company aims to leverage its size and scale to outperform in fragmented markets, particularly in residential and non-residential sectors [42][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in medium-term growth despite current market headwinds and commodity-led deflation [9][44] - The company anticipates continued market outperformance, with total sales growth expected in the low single-digit range for fiscal 2025 [36][37] - Adjusted operating margin guidance for fiscal 2025 is set between 8.3% to 8.8% [38] Other Important Information - The company announced a $1 billion increase to its share repurchase authorization, reflecting confidence in its business [9][35] - Capital expenditures for fiscal 2025 are revised to be between $325 million to $375 million due to extended project timelines [39] Q&A Session Summary Question: Growth investments and OpEx - Management discussed ongoing investments in HVAC and large capital projects, emphasizing the importance of counter conversions and geographic expansion [47][50] - They highlighted a focus on reducing costs in non-customer-facing roles while managing operational efficiency [59][60] Question: Customer group performance - The majority of growth in HVAC and Waterworks was organic, with minimal contribution from acquisitions [61][63] Question: Gross margins and pricing dynamics - Management attributed the decline in gross margins to persistent deflation and a challenging market environment [71][72] - They expect pricing levels to improve in the second half, although deflation is anticipated to continue in Q3 [125][126] Question: Demand trends and market conditions - February's top-line growth was consistent with Q2, but management noted potential pressures in the market [80][82] Question: Commodity impacts - Management provided insights on commodity trends, indicating ongoing deflation in steel and PVC, with expectations for stabilization due to tariffs [86][88] Question: Waterworks performance - Management noted balanced business mix in Waterworks, with no significant downturn in builder activity [105][106]