Ferguson Enterprises 2025 Q3 Earnings Net Income Declines 7.4%

Ferguson Enterprises (FERG) reported its fiscal 2025 Q3 earnings on Jun 03rd, 2025. Ferguson Enterprises has announced a 4.3% increase in revenue to $7.62 billion for Q3 2025, surpassing expectations slightly. The company has raised its fiscal 2025 guidance, now anticipating low to mid-single-digit revenue growth. The operating margin outlook has been revised upward to a range of 8.5% to 9.0%, indicating a stronger-than-expected performance.

Revenue
Ferguson Enterprises reported a 4.3% increase in total revenue, reaching $7.62 billion in Q3 2025, compared to $7.31 billion in Q3 2024. The growth was driven by a 5% organic increase and a 1% contribution from acquisitions, offset by the adverse impact of fewer sales days and foreign exchange rates.

Earnings/Net Income
Ferguson Enterprises's EPS declined by 5.5%, falling to $2.07 in Q3 2025 from $2.19 in Q3 2024. Net income decreased to $410 million, marking a 7.4% drop from the $443 million reported in Q3 2024. Despite the decline, Ferguson's consistent profitability over five years highlights stable business performance.

Price Action
The stock price of Ferguson Enterprises has climbed 4.97% during the latest trading day, surged 15.56% during the most recent full trading week, and increased 24.55% month-to-date.

Post-Earnings Price Action Review
Investors who adopted the strategy of buying Ferguson Enterprises shares post-revenue increase on financial report release date and holding for 30 days experienced moderate returns, albeit with significant volatility. The strategy delivered a CAGR of 12.99% with a total return of 43.77%, outperforming the benchmark by 5.35%. However, with a maximum drawdown of -34.83% and a Sharpe ratio of 0.45, it posed considerable risks. Despite these challenges, the returns highlighted the potential for profit, reinforcing the importance of strategic investment decisions in response to earnings reports.

CEO Commentary
Kevin Murphy, CEO of Ferguson Enterprises, emphasized the strong performance in Q3, citing sales of $7.6 billion driven by 5% organic growth. He highlighted the company's ability to outperform the market despite residential sector challenges, attributing success to nonresidential growth and strategic investments in HVAC, Waterworks diversification, and large capital projects. Murphy expressed optimism regarding medium-term market opportunities and reiterated the commitment to delivering customer value to sustain market share.

Guidance
Ferguson Enterprises has updated its fiscal 2025 guidance, forecasting low to mid-single-digit revenue growth, an increase from previous expectations. The operating margin is now anticipated to be between 8.5% to 9.0%, revised upward from 8.3% to 8.8%. The effective tax rate is projected at approximately 26%, with capital expenditures estimated to range between $300 million and $350 million, reflecting proactive capital management.

Additional News
Ferguson Enterprises has actively pursued strategic acquisitions, completing two notable transactions in recent weeks. The company acquired Independent Pipe & Supply Corp., enhancing its commercial and mechanical distribution footprint in the Northeast, and National Fire Equipment Ltd., expanding its fire and fabrication business across Canada. Additionally, Ferguson's Board declared a quarterly dividend of $0.83 per share, maintaining a 5% increase from the previous year, reflecting confidence in ongoing financial stability. These developments underscore Ferguson's commitment to growth through strategic mergers and capital returns, while navigating the competitive landscape.