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- **Revenue Growth**: 5% YoY driven by nonresidential projects, with Commercial/Mechanical up 21%.
- **Margin Expansion**: Operating margin 9.9% (+80 bps), EBITDA +13% to $867M.
- **Cash Flow Strength**: Free cash flow $325M, below 1.1x debt/EBITDA target.
- **Strategic Investments**: 650+ HVAC counter expansions, trainee programs, and digital tools.
- **Challenges**: Residential weakness, 3% inflation, and lumpiness in large projects.


**【CEO Summary Section】**
- Q1 2026 revenue of $8.2 billion, up 5% YoY, driven by 4% organic growth and 1% acquisition growth. Nonresidential end markets outperformed, with Commercial/Mechanical customer group growing 21%.
- Gross margin improved 60 bps to 30.7%, supported by disciplined cost management and operating profit up 14% to $808 million. Dividend increased 7% to $0.89/share.
- Residential markets remain challenging, but nonresidential large capital projects (e.g., data centers) are key growth drivers.

**【CFO Financial Commentary】**
- GAAP net sales $8.2 billion (+5.1% YoY), with 3% price inflation offsetting 0.1% FX headwinds. Operating margin expanded 80 bps to 9.9%, with EBITDA up 13% to $867 million.
- Free cash flow $325 million (+19%), supporting $440 million in working capital and $118 million CapEx. Guidance updated for 5% revenue growth and 9.4-9.6% operating margin.
- Canada sales +2.2% YoY, but residential weakness persists. Net debt/EBITDA at 1.1x, below target range of 1-2x.

**【Q&A Highlights】**
- **Large Capital Projects**: Represent ~5-10% of revenue, with data centers leading. Open orders and bidding activity strong, but lumpiness expected.
- **Pricing Trends**: 3% YoY inflation in Q1, normalizing to 30-31% gross margin. 2026 may see modest price increases post-deflation.
- **Residential Challenges**: New home starts weak, but Ferguson outperforming with 1% decline vs. broader market. HVAC pressured by A2L transition but long-term bullish.
- **Investments**: Trainee programs, HVAC expansion (650+ counters), and digital tools driving future growth. Inventory levels stable.


Ferguson Enterprises Inc. (FERG) Q1 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

FERG

FERG fundamentals

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