Ferguson Enterprises Reports 3% Sales Growth but 14% Decline in Net Income for Q2 Fiscal 2025

Ferguson Enterprises Inc. reported its financial results for the second quarter and first half of fiscal 2025, revealing a net sales increase of 3.0% to $6.9 billion for the quarter, compared to $6.7 billion in the same period last year. For the six months ended January 31, 2025, net sales reached $14.6 billion, up from $14.4 billion in the prior year. However, net income for the quarter decreased by 14.3% to $276 million, down from $322 million, while year-to-date net income fell to $746 million from $841 million. The diluted earnings per share for the quarter was $1.38, a decline from $1.58 in the previous year.

The company experienced a notable increase in operating costs, which rose by 14.0% in the second quarter, primarily due to inflation and higher sales volume. This contributed to a decrease in operating profit, which fell to $410 million from $477 million year-over-year. The gross profit margin also declined slightly, with gross profit as a percentage of sales at 29.7% compared to 30.4% in the prior year. The company attributed the sales growth to higher volumes and incremental revenue from acquisitions, although this was partially offset by price deflation in certain commodity categories.

Ferguson has made strategic moves to enhance its market position, including the acquisition of two businesses during the first half of fiscal 2025, which contributed $10 million to net sales. The company has also implemented a supplier financing program to optimize cash flow. As of January 31, 2025, Ferguson's total assets stood at $16.5 billion, with cash and cash equivalents increasing to $764 million from $571 million at the end of the previous fiscal year. The company’s employee headcount remained stable, reflecting its commitment to maintaining operational efficiency.

Looking ahead, Ferguson anticipates continued challenges from inflation and market conditions but remains optimistic about its growth trajectory. The company plans to leverage its acquisitions and expand its product offerings to capture additional market share. Management expressed confidence in its ability to navigate supply chain challenges and maintain profitability, supported by a strong cash position and access to capital. The outlook for fiscal 2025 includes a focus on operational efficiencies and strategic investments to drive long-term growth.