Good: Ferguson tops EPS and sales; wider margins and non‑residential strength lift Q4, shares jump
Verdict: Good. Ferguson’s fiscal Q4 (ended July 31) beat on both revenue and EPS, margins widened, and the stock jumped in early trading. Sales rose 6.9% to about $8.50 billion and adjusted EPS came in at $3.48 versus the $3.01 consensus; shares were up roughly 9% premarket. (marketscreener.com)
What drove it: strong U.S. non‑residential demand. Non‑residential revenue grew about 15% while residential was flat, helping lift gross margin to 31.7% and adjusted operating margin to 11.4%. GAAP EPS rose 59% to $3.55, but last year’s Q4 included a one‑time tax charge, so the 17% gain in adjusted EPS is the cleaner comparison. (markets.financialcontent.com)
Key drivers this quarter
- Revenue and mix: Sales growth was volume‑led and boosted by non‑residential projects; pricing for the full year was slightly down, but mix and scale offset that. (markets.financialcontent.com)
- Profitability: Gross margin expanded 70 basis points to 31.7%; adjusted operating margin rose 60 bps to 11.4%. (marketscreener.com)
- Cash returns and balance sheet: Dividend held at $0.83; $189 million in buybacks; four bolt‑on deals closed; net debt/adjusted EBITDA at about 1.1x. (marketscreener.com)
| Metric | Q4 FY25 | Y/Y | Consensus | Beat/Miss |
|---|---|---|---|---|
| Revenue | $8.50B | +6.9% | $8.42B | Beat |
| Adjusted EPS | $3.48 | +16.8% | $3.01 | Beat |
| Gross margin | 31.7% | +70 bps | n/a | — |
| Adj. operating margin | 11.4% | +60 bps | n/a | — |
Context vs. expectations and full‑year picture
Versus expectations, Ferguson beat on both lines: $8.50B vs. $8.42B revenue consensus and $3.48 vs. $3.01 adjusted EPS. The stock reacted positively, up about 9% premarket. (benzinga.com)
Versus last year, Q4 revenue grew 6.9% and adjusted EPS rose 16.8% as margins improved. GAAP EPS growth was flattered by the prior‑year deferred tax hit, so adjusted results better reflect the underlying trend. (marketscreener.com)
Full year FY25: revenue $30.8B (+3.8%), adjusted EPS $9.94 (+2.6%), and adjusted operating margin 9.2% (down 30 bps). Notably, management had guided in Q3 to an 8.5%–9.0% adjusted operating margin; they finished above that range. (marketscreener.com)
The company also said it is changing its fiscal year‑end to December 31 after a five‑month transition (Aug. 1–Dec. 31, 2025), so reporting shifts to a calendar year in 2026. (markets.financialcontent.com)
What to watch next
- Transition reporting: With the move to a Dec. 31 year‑end, look for how management frames guidance through the five‑month stub period and for 2026. (markets.financialcontent.com)
- End‑markets: Non‑residential projects are carrying results; sustainability depends on project starts and funding. Residential remains soft; a housing pick‑up would be a tailwind. Q4 commentary highlighted non‑residential strength and flat residential. (markets.financialcontent.com)
- Pricing/deflation: Pricing was slightly down for the year; margins will benefit if deflation abates. (markets.financialcontent.com)
- Cost actions: Management targeted roughly $100 million of annualized savings from streamlining moves announced earlier in FY25—watch how much drops to earnings in the transition period. (corporate.ferguson.com)
- M&A integration: Nine small acquisitions closed in FY25; execution and synergies matter as the pipeline remains active. (corporate.ferguson.com)
Company snapshot
Ferguson (NYSE: FERG) is North America’s largest distributor serving plumbers, HVAC contractors, and waterworks customers, with about 1,800 locations and ~35,000 employees. (corporate.ferguson.com)