01—Abstract
Summary
Summary of the 10-Q filed June 3, 2025. Cited figures are marked; the original filing is the authoritative source.
Ferguson Enterprises Inc. (FERG) reported its third-quarter results for fiscal year 2025, ending April 30, 2025.
The company saw a 4.3% increase in net sales, reaching $7.6 billiona, driven by higher sales volumes and contributions from acquisitions. This growth was observed across both residential and non-residential markets, particularly in the United States. Despite top-line growth, operating profit experienced a 3.0% decline to $606 million, largely due to $70 million in non-recurring business restructuring expenses aimed at streamlining operations.
However, adjusted operating profit, which excludes these charges, rose by 6.1%, indicating underlying operational strength. Diluted earnings per share (EPS) fell 5.0% to $2.07b, but adjusted diluted EPS increased by 7.8% to $2.50, reflecting the impact of restructuring costs on reported earnings. For the nine-month period, net sales grew 2.7% to $22.3 billion, while net income decreased by 10.0% to $1.2 billion.
The decline in net income and EPS is significantly influenced by the aforementioned restructuring charges and other non-recurring items. The company's balance sheet remains robust, with total assets increasing to $17.3 billionc. Cash flow from operations for the nine months was $1.4 billion, demonstrating continued operational cash generation.
Ferguson also actively managed its capital structure, with significant share repurchases and debt management activities throughout the period. The company maintains a strong liquidity position and expects its current cash flow and access to capital to cover its operational and investment needs.
02—Key points
Key Highlights
- Net sales increased by 4.3% to $7.6 billion for the third quarter of fiscal year 2025, driven by higher sales volume and acquisitions.
- Operating profit decreased by 3.0% to $606 million due to $70 million in business restructuring expenses; however, adjusted operating profit increased by 6.1%.
- Diluted earnings per share decreased by 5.0% to $2.07, but adjusted diluted EPS increased by 7.8% to $2.50.
- For the nine months ended April 30, 2025, net sales grew 2.7% to $22.3 billion, while net income decreased by 10.0% to $1.2 billion.
- The United States segment continues to be the primary driver of sales growth, with both residential and non-residential markets showing improvement.
- The company utilized $759 million for share repurchases in the nine-month period, reflecting a commitment to returning capital to shareholders.
- Ferguson maintains a strong liquidity position with $519 million in cash and cash equivalents and $2.1 billion in available liquidity from undrawn debt facilities as of April 30, 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, Ferguson Enterprises Inc. kept $0.05.
- Revenue$7.21B100.0%
- Cost of revenue−$5.00B69.3%
- Gross profit$2.22B30.7%
- Operating costs−$1.71B23.7%
- Operating income$507.0M7.0%
- Interest, other & tax−$162.0M2.2%
- Net income$345.0M4.8%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed June 3, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $7.21B$7.31B | −1.3% |
| Cost of Revenue | $5.00B$5.08B | −1.6% |
| Gross Profit | $2.22B$2.23B | −0.7% |
| SG&A Expenses | $1.56B$1.51B | +3.6% |
| Operating Income | $507.00M$625.00M | −18.9% |
| Net Income | $345.00M$443.00M | −22.1% |
| EPS (Basic) | $1.74$2.19 | −20.5% |
| EPS (Diluted) | $1.73$2.18 | −20.6% |
| Shares Outstanding (Basic) | 198.80M202.60M | −1.9% |
| Shares Outstanding (Diluted) | 199.00M203.20M | −2.1% |
05—Questions
Frequently Asked Questions
What is the primary driver behind the recent increase in net sales?
Ferguson's net sales increased primarily due to higher sales volume and incremental revenue from recent acquisitions. The company saw growth across both residential and non-residential markets, particularly within its United States segment.
Why did operating profit decline despite sales growth?
The reported operating profit declined due to significant non-recurring business restructuring expenses of $70 million incurred in the third quarter of fiscal year 2025. These expenses were related to targeted actions to streamline operations for enhanced efficiency and growth. Excluding these charges, adjusted operating profit actually increased.
How is the company managing its capital structure and returning value to shareholders?
Ferguson is actively managing its capital structure. In the nine-month period, the company spent $759 million on share repurchases. The company also maintains a strong liquidity position and has access to significant undrawn debt facilities, ensuring it can meet its financial obligations and fund strategic initiatives.
What is the impact of the recent restructuring expenses on the company's earnings?
The $70 million in business restructuring expenses had a notable impact on reported net income and diluted earnings per share for the quarter and the nine-month period. While reported diluted EPS decreased, adjusted diluted EPS, which excludes these restructuring costs and other non-GAAP adjustments, showed an increase, indicating the underlying operational performance remains strong.
06—Continue