Ferguson plc Q3 2026 Earnings Call Summary Moby Intelligence Mon, November 9, 2026 at 4:53 PM EST 3 min read NVDA -3.76% FERG +11.68% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
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Revenue growth of 9.5% was underpinned by strong volume momentum and disciplined operational execution across diverse customer groups despite mixed market conditions.
Non-residential outperformance of 15% was primarily driven by large capital projects in high-growth sectors like data centers, pharmaceuticals, and biotechnology.
The industrial segment's 55% growth reflects the strategic integration of FloWorks and robust organic demand in power generation and mining infrastructure.
Residential revenue grew 6% despite a challenging macro environment, aided by strength in the premium showroom channel and HVAC expansion strategy.
Management attributed resilient operating margins to productivity initiatives and cost management that offset rising freight, fuel, and healthcare cost headwinds.
The multi-customer group approach allows the company to capture unique market tailwinds while maintaining a balanced, cycle-resistant business model.
Gross margin of 30.9% was supported by value-added solutions like fabrication and valve automation, which help mitigate labor productivity challenges for customers.
Full-year net sales guidance was raised to approximately 7% growth, incorporating year-to-date momentum and the inclusion of the FloWorks acquisition.
Management expects continued pressure on new residential construction as weakening permits and starts begin to impact the Waterworks and residential trade businesses.
The non-residential open order book provides approximately 6 to 9 months of visibility, supporting a bullish outlook for large capital projects entering 2027.
Share repurchases are temporarily paused to manage leverage post-acquisition but are expected to resume as net debt trends back toward the 1.0x level.
Guidance assumes price inflation will remain in the low to mid-single-digit range, driven by steady finished goods pricing and volatile commodity baskets like copper and steel.
The FloWorks acquisition expanded the total addressable market from $340 billion to $400 billion, adding technical depth in specialized flow control and recurring MRO revenue.
Interest expense guidance increased to approximately $235 million to reflect higher debt balances associated with financing recent strategic acquisitions.
A vendor transition and tough prior-year comparables led to an 8% decline in the Fire and Fabrication customer group during the quarter.
Net debt to adjusted EBITDA rose to 1.7x following $2 billion in capital deployment, remaining within the target range of 1 to 2x.
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Organic growth of 32% was split evenly between large capital projects and maintenance, repair, and operations (MRO).
Key drivers included power generation, refining, and mining, with industrial capabilities also supporting data center construction through other customer groups.
Outperformance is driven by a multi-pronged approach targeting dual-trade contractors, geographic expansion, and deepening OEM relationships.
Management is investing in technical training for associates to better serve specialized air professionals and capture long-term climate and comfort trends.
Management noted it is too early to see material impacts from the recent election, but backlogs remain strong with no significant cancellations observed.
The company is monitoring potential shifts in tax incentives and power rate protections that could influence future project sequencing.
The long-term gross margin target remains 30% to 31%, supported by high-margin value-added solutions like valve automation and custom fabrication.
These services address the trade labor shortage by providing labor-saving products directly to job sites, allowing for premium pricing.
