Ferguson Enterprises Inc. /DE/
For the period ended Mar 31, 2026. Filed May 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 5, 2026
FERG$233.70-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-10-31; filed 2025-12-09.
0002011641-25-000059
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsNon-GAAP Reconciliations and Supplementary InformationCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-05.
0002011641-26-000030
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsNon-GAAP Reconciliations and Supplementary InformationThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 76 previous paragraphs and 79 current paragraphs.
42 unchanged; 30 reworded; 7 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
(2)For the three months ended March 31, 2025, business restructuring expenses primarily related to the Company’s implementation of targeted actions to streamline operations, enhancing speed and efficiency to better serve customers and drive further profitable growth.
Current report
(3)For the three months ended March 31, 2025, business restructuring expenses primarily related to the Company’s implementation of targeted actions to streamline operations, enhancing speed and efficiency to better serve customers and drive further profitable growth.
Current report
(4)For the three months ended March 31, 2026 and 2025, discrete tax adjustments were mainly related to interest on uncertain tax positions.
Current report
Dividends paid to shareholders were $174 million and $166 million for the three months ended March 31, 2026 and 2025, respectively.
Current report
Net payments from debt transactions were $300 million for the three months ended March 31, 2025 due to net repayments under the Receivables Facility. The Company did not have any debt transactions in the first quarter of 2026.
Current report
In November 2026, $150 million of private placement notes will mature.
Current report
(1)Includes income from intercompany transaction with non-guarantor subsidiaries, primarily from non-cash dividend transactions.
Removed paragraphs (4)
Previous report
(3)For the three months ended October 31, 2025, discrete tax adjustments mainly related to the release of uncertain tax positions following the lapse of statute of limitations and tax treatment of certain compensation items that are not material. For the three months ended October 31, 2024, discrete tax adjustments mainly related to the tax treatment of certain compensation items that are not material.
Previous report
Dividends paid to shareholders were $164 million for the three months ended October 31, 2025. The Company generally pays dividends in the fiscal quarter following the fiscal quarter in which the dividend was declared. However, the dividends declared in the fourth quarter of fiscal 2024 were also paid in the fourth quarter of fiscal 2024 in connection with the transaction to establish a new corporate structure to domicile our parent company in the United States. As such, no dividends were paid in the first quarter of fiscal 2025.
Previous report
Net payments from debt transactions were $28 million compared with net proceeds of $71 million for the three months ended October 31, 2025 and 2024, respectively. In the current quarter, the Company received $747 million from the issuance of the 2031 Senior Notes (as defined below). These proceeds were partially offset by debt repayments of $400 million in connection with the maturity of certain Private Placement Notes and net repayments of $375 million under the Company’s Receivables Facility (each, as defined below). In the first quarter of fiscal 2025, the Company received $746 million in net proceeds from the issuance of 2034 Senior Notes, partially offset by the repayment of the Company’s $500 million Term Loans and $175 million in net repayments under the Receivables Facility.
Previous report
In September 2025, the Company repaid $400 million related to the 3.73% private placement notes that matured.
Reworded paragraphs (30)
Previous wording
Management’s discussion and analysis of financial condition and results of operations (“MD&A”)is intended to convey management’s perspective regarding the Company’s operational and financial performance for the three months ended October 31, 2025 and 2024, respectively. This MD&A should be read in conjunction with the unaudited condensed consolidated financial statements and related notes appearing in “Item 1. Financial Statements” of this Quarterly Report (the “Condensed Consolidated Financial Statements”) and the consolidated financial statements and related notes in “Item 8. Financial Statements and Supplementary Data” of the Annual Report.
Current wording
Management’s discussion and analysis of financial condition and results of operations (“MD&A”)is intended to convey management’s perspective regarding the Company’s operational and financial performance for the three months ended March 31, 2026 and 2025, respectively. This MD&A should be read in conjunction with the unaudited condensed consolidated financial statements and related notes appearing in “Item 1. Financial Statements” of this Quarterly Report (the “Condensed Consolidated Financial Statements”) and the consolidated financial statements and related notes in “Item 8. Financial Statements and Supplementary Data” of the Transition Report.
Previous wording
Ferguson is a value-added distributor serving the water and air specialized professional in the residential and non-residential North American construction market. We help make our customers’ complex projects simple, successful and sustainable by providing expertise and a wide range of products and services from plumbing, HVAC, appliances, and lighting to PVF, water and wastewater solutions, and more. Ferguson is headquartered in Newport News, Virginia.
Current wording
Ferguson is a value-added distributor of essential water and air solutions, serving the specialized professional in the residential and non-residential North American construction markets. We help make our customers’ complex projects simple, successful and sustainable by providing expertise and a wide range of products and services from plumbing, HVAC, appliances, and lighting to PVF, water and wastewater solutions, and more. Ferguson is headquartered in Newport News, Virginia.
Previous wording
For the three months ended October 31, 2025, net sales increased by 5.1% compared with the first quarter of fiscal 2025, primarily due to price inflation, incremental sales from acquisitions and higher sales volume, partially offset by the impact of foreign exchange rates and an immaterial divestment in Canada.
Current wording
For the first quarter of 2026, net sales increased by 3.6% compared with the first quarter of 2025, primarily due to price inflation and incremental sales from acquisitions, partially offset by lower volume.
Previous wording
For the current quarter, operating profit increased by 15.9% (adjusted operating profit increased 14.4%), compared with the first quarter of fiscal 2025. The year-over-year change was driven by higher sales and the associated gross profit, partially offset by higher variable costs.
Current wording
For the first quarter of 2026, operating profit increased by 20.7% (adjusted operating profit increased 8.4%), compared with the first quarter of 2025. The year-over-year change was driven by higher sales and the associated gross profit, partially offset by higher variable operating costs.
Previous wording
For the current quarter, diluted earnings per share was $2.90 (adjusted diluted earnings per share: $2.84), increasing 23.9% (15.9% on an adjusted basis) compared with the first quarter of fiscal 2025 due to higher net income and the impact of share repurchases.
Current wording
For the first quarter of 2026, diluted earnings per share was $2.13 (adjusted diluted earnings per share: $2.28), increasing 23.1% (9.1% on an adjusted basis) compared with the first quarter of 2025 due to higher net income and the impact of share repurchases.
Previous wording
Net cash provided by operating activities increased to $430 million in the current quarter compared with $345 million in the first quarter of fiscal 2025, primarily reflecting higher net income after adjusting for non-cash items.
Current wording
Net cash provided by operating activities decreased to $772 million in the first quarter of 2026 compared with $874 million in the first quarter of 2025, primarily reflecting an increased investment in working capital, partially offset by higher net income after adjusting for non-cash items.
Previous wording
For the three months ended October 31, 2025, net sales were $8.2 billion, an increase of $0.4 billion, or 5.1%, compared with the first quarter of fiscal 2025. The increase in net sales was primarily driven by price inflation of approximately 3%, incremental sales from acquisitions of 1.0% and higher sales volume, partially offset by 0.1% from the combined impacts of foreign exchange rates and an immaterial divestment in Canada. The Company’s increase in net sales was driven by growth in non-residential markets in its United States segment.
Current wording
For the first quarter of 2026, net sales were $7.5 billion, an increase of $0.3 billion, or 3.6%, compared with the first quarter of 2025. The increase in net sales was primarily driven by mid-single digit price inflation and incremental sales from acquisitions of 0.8%, partially offset by lower sales volume. The Company’s increase in net sales was driven by growth in non-residential markets in its United States segment.
Previous wording
Gross profit in the current quarter increased $166 million, or 7.1%, compared with the first quarter of fiscal 2025, primarily reflecting increased net sales. Gross profit as a percentage of sales was 30.7% in the current quarter compared with 30.1% in the first quarter of fiscal 2025. The increase of 0.6% primarily reflected specific management actions to better capture the value provided to customers.
Current wording
Gross profit in the first quarter of 2026 increased $102 million, or 4.6%, compared with the first quarter of 2025, primarily reflecting increased net sales. Gross profit as a percentage of sales was 31.0% in the first quarter of 2026 compared with 30.7% in the first quarter of 2025. The increase of 0.3% primarily reflected solid execution across the business.
Previous wording
SG&A expenses in the current quarter increased $56 million, or 3.5%, compared with the first quarter of fiscal 2025. SG&A as a percentage of sales was 20.1% in the current quarter compared with 20.4% in the first quarter of fiscal 2025. The decrease in SG&A as a percent of sales primarily reflects operating leverage of the Company’s cost base, partially offset by the impact of performance driven variable incentive costs.
Current wording
SG&A expenses in the first quarter of 2026 increased $42 million, or 2.7%, compared with the first quarter of 2025. SG&A as a percentage of sales was 21.5% in the first quarter of 2026 compared with 21.7% in the first quarter of 2025. The decrease in SG&A as a percentage of sales primarily reflects improved productivity and operating leverage of the Company’s cost base.
Previous wording
Income tax expense was $142 million in the current quarter, a decrease of $12 million, or 7.8%, compared with the first quarter of fiscal 2025. The Company’s effective tax rate was 19.9% in the current quarter compared with 24.7% for the first quarter of 2025. These decreases were mainly related to the release of uncertain tax positions due to the lapsing of the statute of limitations offset by the tax impact of increased income before income taxes in the current fiscal period.
Current wording
Income tax expense was $146 million in the first quarter of 2026, an increase of $22 million, or 17.7%, compared with the first quarter of 2025 due to higher income before income taxes. The Company’s effective tax rate of 26.1% in the first quarter of 2026 was generally in-line with 26.4% for the first quarter of 2025.
Previous wording
Net income was $570 million in the current quarter, an increase of $100 million, or 21.3%, compared with the first quarter of fiscal 2025 due to the various elements described in the sections above.
Current wording
Net income was $414 million in the first quarter of 2026, an increase of $69 million, or 20.0%, compared with the first quarter of 2025, primarily due to the various elements described in the sections above.
Previous wording
Net sales for the United States segment were $7.8 billion in the current quarter, an increase of $388 million, or 5.3%, compared with the first quarter of fiscal 2025. The increase in net sales was due to price inflation of approximately 3%, incremental sales from acquisitions of 0.9% and higher sales volume. Net sales in non-residential markets, representing approximately half of revenue in the United States, increased approximately 12% compared with the first quarter of fiscal 2025. This increase was driven by waterworks and commercial/mechanical, including large capital project activity. Net sales in residential markets decreased approximately 1% compared with the first quarter of fiscal 2025 in light of weak housing starts and permit activity, along with soft repair, maintenance and improvement (“RMI”) work.
Current wording
Net sales for the United States segment were $7.1 billion in the first quarter of 2026, an increase of $242 million, or 3.5%, compared with the first quarter of 2025. The increase in net sales was primarily driven by mid-single digit price inflation and incremental sales from acquisitions of 0.6%, partially offset by lower sales volume. Net sales in non-residential markets, representing approximately half of revenue in the United States, increased approximately 8% compared with the first quarter of 2025. This increase was driven by commercial/mechanical, industrial and waterworks, including large capital project activity. Net sales in residential markets decreased approximately 1% compared with the first quarter of 2025 in light of weak new construction activity, along with soft repair, maintenance and improvement (“RMI”) work.
Previous wording
Adjusted operating profit for the United States segment was $806 million in the current quarter, an increase of $109 million, or 15.6%, compared with the first quarter of fiscal 2025, primarily reflecting higher sales and the associated gross profit, partially offset by higher operating costs.
Current wording
Adjusted operating profit for the United States segment was $656 million in the first quarter of 2026, an increase of $45 million, or 7.4%, compared with the first quarter of 2025, primarily reflecting higher sales and the associated gross profit, partially offset by higher variable operating costs.
Previous wording
Net sales for the Canada segment were $412 million in the current quarter, an increase of $9 million, or 2.2%, compared with the first quarter of fiscal 2025. This increase in net sales was primarily driven by incremental sales from acquisitions of 4.6% and price inflation of approximately 4%. These increases were partially offset by lower volume, the impact of foreign currency exchange rates of 1.6% and the impact of a non-core business divestment of 1.5%.
Current wording
Net sales for the Canada segment were $326 million in the first quarter of 2026, an increase of $17 million, or 5.5%, compared with the first quarter of 2025. This increase in net sales was primarily driven by incremental sales from acquisitions of 5.8%, the impact of foreign currency exchange rates of 4.6% and low to mid-single digit price inflation. These increases were partially offset by lower volume and the impact of a non-core business divestments of 4.6%.
Previous wording
Adjusted operating profit for the Canada segment decreased by $7 million compared with the first quarter of fiscal 2025 due to higher operating costs, partially offset by higher gross profit.
Current wording
Adjusted operating profit for the Canada segment decreased by $1 million in the first quarter of 2026, compared with the first quarter of 2025 due to higher operating costs, partially offset by higher gross profit.
Previous wording
(1)For the three months ended October 31, 2025 and 2024, corporate restructuring expenses primarily related to incremental costs in connection with transition activities following the establishment of our parent company’s domicile in the United States.
Current wording
(1)For the three months ended March 31, 2026, corporate restructuring expenses primarily related to incremental costs in connection with transition activities following the establishment of our parent company’s domicile in the United States.
Previous wording
(2)For the three months ended October 31, 2025 and 2024, corporate restructuring expenses primarily related to incremental costs in connection with transition activities following the establishment of our parent company’s domicile in the United States.
Current wording
(2)For the three months ended March 31, 2026, corporate restructuring expenses primarily related to incremental costs in connection with transition activities following the establishment of our parent company’s domicile in the United States.
Previous wording
(4)For the three months ended October 31, 2025 and 2024, the tax impact on non-GAAP adjustments primarily related to the amortization of acquired intangibles.
Current wording
(5)For the three months ended March 31, 2026, the tax impact on non-GAAP adjustments primarily related to the amortization of acquired intangibles. For the three months ended March 31, 2025, the tax impact on non-GAAP adjustments related to the restructuring expenses and the amortization of acquired intangibles.
Previous wording
The Company believes its current cash position coupled with cash flow anticipated to be generated from operations and access to capital should be sufficient to meet its operating cash requirements for the next 12 months and will also enable the Company to invest and fund acquisitions, capital expenditures, dividend payments, share repurchases, required debt payments and other contractual obligations through the next several fiscal years. The Company also anticipates that it has the ability to obtain alternative sources of financing, if necessary.
Current wording
The Company believes its current cash position coupled with cash flow anticipated to be generated from operations and access to capital should be sufficient to meet its operating cash requirements for the next 12 months and will also enable the Company to invest and fund capital expenditures, acquisitions, dividend payments, share repurchases, required debt payments and other contractual obligations through the next several years. The Company also anticipates that it has the ability to obtain alternative sources of financing, if necessary.
Previous wording
The Company’s material cash requirements include contractual and other obligations arising in the normal course of business. These obligations primarily include debt service and related interest payments, operating lease obligations, required pension obligations and other purchase obligations. The nature and composition of such existing cash requirements have not materially changed from those disclosed in the Annual Report other than items updated in this Quarterly Report.
Current wording
The Company’s material cash requirements include contractual and other obligations arising in the normal course of business. These obligations primarily include debt service and related interest payments, operating lease obligations and other purchase obligations. The nature and composition of such existing cash requirements have not materially changed from those disclosed in the Transition Report other than items updated in this Quarterly Report.
Previous wording
As of October 31, 2025 and July 31, 2025, the Company had cash and cash equivalents of $526 million and $674 million, respectively. In addition to cash, the Company had $2.4 billion of available liquidity from undrawn debt facilities as of October 31, 2025.
Current wording
As of March 31, 2026 and December 31, 2025, the Company had cash and cash equivalents of $820 million and $557 million, respectively. In addition to cash, the Company had $2.4 billion of available liquidity from undrawn debt facilities as of March 31, 2026.
Previous wording
Net cash provided by operating activities was $430 million and $345 million for the three months ended October 31, 2025 and 2024, respectively. The $85 million increase was mainly due to higher net income (adjusted for non-cash items), partially offset by the net increase in working capital compared with the prior year. The increase in working capital was primarily driven by a decrease in payables due to the timing of vendor payments compared with the prior year, partially offset by lower inventory purchases in order to appropriately manage customer demand, along with lower receivables due to the timing of collections year-over-year.
Current wording
Net cash provided by operating activities was $772 million and $874 million for the three months ended March 31, 2026 and 2025, respectively. The $102 million decrease was mainly due to an increased investment in working capital compared with the prior year, partially offset by higher net income (adjusted for non-cash items) and lower cash tax payments due to timing. The increase in working capital was primarily driven by an increase in receivables due to the timing of collections year-over-year, higher inventory purchases in consideration of customer demand, the timing of vendor payments compared with the prior year and the change in timing of cash incentive payouts in light of the Company’s change to a calendar year-end.
Previous wording
Capital expenditures totaled $118 million and $77 million for the three months ended October 31, 2025 and 2024, respectively. These investments were primarily for strategic projects to support future growth, such as new market distribution centers, our branch network and new technology. In addition, the Company invested $21 million and $22 million in new acquisitions for the three months ended October 31, 2025 and 2024, respectively.
Current wording
Capital expenditures totaled $92 million and $73 million for the three months ended March 31, 2026 and 2025, respectively. These investments were primarily for strategic projects to support future growth, such as new market distribution centers, our branch network and new technology. In addition, the Company invested $10 million and $150 million in new acquisitions for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
Share repurchases under the Company’s announced share repurchase program were $208 million and $256 million for the three months ended October 31, 2025 and 2024, respectively.
Current wording
Share repurchases under the Company’s September 2021 share repurchase program were $236 million and $207 million for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
The Company has issued $3.9 billion in various issuances of unsecured senior notes (collectively, the “Unsecured Senior Notes”), including the September 2025 issuance of $750 million aggregate principal amount of unsecured senior notes due March 2031 (the “2031 Senior Notes”).
Current wording
The Company has issued $3.85 billion in various issuances of unsecured senior notes.
Previous wording
The Company maintains a Receivables Securitization Facility with an aggregate total available amount of $915 million (the “Receivables Facility”). The Company has the ability to increase the aggregate total available amount under the Receivables Facility up to a total of $1.5 billion from time to time, subject to lender participation. As of October 31, 2025, no borrowings were outstanding under the Receivables Facility.
Current wording
The Company maintains a Receivables Securitization Facility with an aggregate total available amount of $900 million (the “Receivables Facility”). The Company has the ability to increase the aggregate total available amount under the Receivables Facility up to a total of $1.5 billion from time to time, subject to lender participation. As of March 31, 2026, no borrowings were outstanding under the Receivables Facility.
Previous wording
See Note 5, Debt to the Condensed Consolidated Financial Statements and the notes to the consolidated financial statements in “Item 8. Financial Statements and Supplementary Data” of the Annual Report for further details regarding the Company’s debt.
Current wording
See Note 5, Debt to the Condensed Consolidated Financial Statements and the notes to the consolidated financial statements in “Item 8. Financial Statements and Supplementary Data” of the Transition Report for further details regarding the Company’s debt.
Previous wording
Ferguson Enterprises Inc. (the “Issuer”) is the issuer of the 2031 Senior Notes and 5.000% Senior Notes due 2034. The obligations under both series of senior notes are unsecured and are fully and unconditionally guaranteed on an unsecured basis by Ferguson UK Holdings Limited (the “Guarantor” and together with the Issuer, the “Obligor Group”).
Current wording
Ferguson Enterprises Inc. (the “Issuer”) is the issuer of the 4.350% Senior Notes due 2031 and 5.000% Senior Notes due 2034. The obligations under both series of senior notes are unsecured and are fully and unconditionally guaranteed on an unsecured basis by Ferguson UK Holdings Limited (the “Guarantor” and together with the Issuer, the “Obligor Group”).
Previous wording
The following tables present the summarized financial information specified in Rule 1-02(bb)(1) of Regulation S-X for the Obligor Group on a combined basis, after elimination of intercompany transactions and balances between the Obligor Group, and excluding the investments in and equity in the earnings of any non-guarantor subsidiaries. The summarized financial information has been prepared in accordance with Rule 13-01 of Regulation S-X. The summarized financial information should be read in conjunction with the Condensed Consolidated Financial Statements and notes thereto included herein and the audited consolidated financial statements and notes thereto included in the Annual Report.
Current wording
The following tables present the summarized financial information specified in Rule 1-02(bb)(1) of Regulation S-X for the Obligor Group on a combined basis, after elimination of intercompany transactions and balances between the Obligor Group, and excluding the investments in and equity in the earnings of any non-guarantor subsidiaries. The summarized financial information has been prepared in accordance with Rule 13-01 of Regulation S-X. The summarized financial information should be read in conjunction with the Condensed Consolidated Financial Statements and notes thereto included herein and the audited consolidated financial statements and notes thereto included in the Transition Report.
Previous wording
There have been no material changes to our critical accounting policies as disclosed in the Annual Report.
Current wording
There have been no material changes to our critical accounting policies as disclosed in the Transition Report.