Ferguson Enterprises Reports Slight Increase in Net Sales, Decrease in Net Income for Q1 Fiscal 2025

Ferguson Enterprises Inc. reported a slight increase in net sales for the first quarter of fiscal 2025, reaching $7.772 billion, up 0.8% from $7.708 billion in the same period last year. The company's gross profit also saw a marginal rise, totaling $2.340 billion compared to $2.331 billion in the prior year. However, net income decreased to $470 million, down 9.4% from $519 million, resulting in diluted earnings per share of $2.34, a decline from $2.54 in the previous year. The decrease in profitability was attributed to higher operating costs driven by inflation and increased sales volume, despite a rise in sales.

In terms of operational performance, Ferguson's adjusted operating profit fell by 10% to $665 million, reflecting the impact of rising costs associated with labor and infrastructure. The company reported a significant increase in selling, general, and administrative expenses, which rose by 4.8% to $1.585 billion. The effective tax rate for the quarter was 24.7%, slightly lower than the 24.9% reported in the same quarter last year, primarily due to a discrete tax benefit.

Ferguson has also undergone strategic changes, including the completion of a merger that established its corporate domicile in the United States. This merger resulted in Ferguson plc becoming a wholly owned subsidiary of Ferguson Enterprises Inc. and the cancellation of all ordinary shares of Ferguson plc. The company has initiated a supplier financing program to enhance its cash flow management, allowing certain suppliers to receive early payments at a nominal discount.

Geographically, the United States segment generated $7.369 billion in sales, a 0.5% increase from the previous year, while the Canada segment reported $403 million, a 6.3% increase. The company noted that the growth in the U.S. was primarily driven by non-residential sales, particularly in the industrial and civil/infrastructure markets. Ferguson's total assets increased to $16.858 billion as of October 31, 2024, compared to $16.572 billion at the end of the previous fiscal year, with cash and cash equivalents rising to $601 million.

Looking ahead, Ferguson anticipates continued challenges from inflation and market conditions but remains focused on leveraging its operational capabilities and strategic initiatives to drive growth. The company has expressed confidence in its ability to manage supply chain challenges and maintain its market position, supported by a robust liquidity position with $2.4 billion in available credit facilities.