Ferguson Posts $30.8B Sales, Shifts Fiscal Year End to Calendar Basis

Ticker: FERG · Form: DEF 14A · Filed: Oct 15, 2025 · CIK: 2011641

Sentiment: bullish

Topics: Distribution, Construction Market, Fiscal Year Change, Shareholder Returns, Corporate Governance, Acquisitions, Cash Flow

Related Tickers: FERG

TL;DR

**FERG is a cash-generating machine, growing sales and returning capital, making it a solid long-term hold despite a slight dip in operating profit.**

AI Summary

Ferguson Enterprises Inc. (FERG) reported strong fiscal year 2025 performance with net sales reaching $30.8 billion, a 3.8% increase over the prior year, driven by market consolidation and high-quality acquisitions. Operating profit was $2,606 million, a $46 million decrease, while diluted earnings per share increased by 9.3% to $9.32. Adjusted operating profit rose by $18 million to $2,842 million, and adjusted diluted earnings per share grew 2.6% to $9.94, partly due to share repurchases. The company generated approximately $1.9 billion in operating cash flow, investing $0.3 billion in capital expenditures, paying $0.5 billion in dividends, and allocating $0.3 billion to nine acquisitions. Ferguson also repurchased 5.0 million shares totaling $0.9 billion, and the Board declared total annual dividends of $3.32 per share, reflecting 5% growth. The Board approved a change in the fiscal year end from July 31st to December 31st, effective January 1, 2026, to align with the calendar year and U.S. corporate headquarters. The company debuted at 146th position on the 2025 Fortune 500 list, reinforcing its position as the largest value-added distributor in the $340 billion North American construction market.

Why It Matters

Ferguson's robust sales growth of 3.8% to $30.8 billion and strategic acquisitions demonstrate its ability to expand market share in the competitive $340 billion North American construction market, providing a positive signal for investors. The shift to a December 31st fiscal year end, effective January 1, 2026, simplifies financial reporting and aligns with industry standards, potentially improving comparability for investors and analysts. For employees, the company's continued growth and strategic investments in acquisitions and capital expenditures suggest stability and opportunities within the largest value-added distributor in its sector. Customers benefit from Ferguson's expanded product and service offerings through acquisitions and its commitment to being the 'ultimate project success company,' enhancing project simplicity and sustainability.

Risk Assessment

Risk Level: low — The company demonstrates strong cash generation with approximately $1.9 billion in operating cash flow and a balanced market exposure across residential and non-residential construction. While operating profit decreased by $46 million, adjusted operating profit increased by $18 million, indicating underlying business resilience and effective management of market challenges.

Analyst Insight

Investors should consider Ferguson's consistent cash generation and strategic capital allocation, including $0.9 billion in share repurchases and $0.5 billion in dividends, as indicators of financial health. The fiscal year change to December 31st should be noted for future financial reporting comparisons, but the company's strong market position and growth through acquisitions suggest continued stability.

Financial Highlights

debt To Equity
N/A
revenue
$30.8B
operating Margin
N/A
total Assets
$N/A
total Debt
$N/A
net Income
$N/A
eps
$9.32
gross Margin
N/A
cash Position
$N/A
revenue Growth
+3.8%

Executive Compensation

NameTitleTotal Compensation
N/ACEO$N/A
N/ACFO$N/A
N/AOther Named Executive Officers$N/A

Key Numbers

Key Players & Entities

FAQ

What were Ferguson Enterprises Inc.'s net sales for fiscal year 2025?

Ferguson Enterprises Inc. reported net sales of $30.8 billion for fiscal year 2025, representing a 3.8% increase compared to the previous year, driven by market consolidation and strategic acquisitions.

What is the new fiscal year end for Ferguson Enterprises Inc. and when does it take effect?

The Board of Ferguson Enterprises Inc. approved a change in the company's fiscal year end from July 31st to December 31st, with the new fiscal year commencing on January 1, 2026.

How much operating cash flow did Ferguson Enterprises Inc. generate in fiscal year 2025?

Ferguson Enterprises Inc. generated approximately $1.9 billion in operating cash flow during fiscal year 2025, demonstrating strong cash generation capabilities.

Who are the key executives standing for re-election at Ferguson's 2025 Annual Meeting?

Key executives standing for re-election at Ferguson's 2025 Annual Meeting include Kevin Murphy, President & Chief Executive Officer and Director, and Bill Brundage, Chief Financial Officer and Director.

What was Ferguson's diluted earnings per share in fiscal year 2025?

Ferguson's diluted earnings per share for fiscal year 2025 was $9.32, which represents a 9.3% increase compared to the prior year.

What is the purpose of the fiscal year end change for Ferguson Enterprises Inc.?

The change in fiscal year end to December 31st is a natural extension of Ferguson's corporate headquarters move to the U.S. and allows associates to remain focused on customers during their busiest season, aligning with the calendar year.

How many shares did Ferguson Enterprises Inc. repurchase in fiscal year 2025?

In fiscal year 2025, Ferguson Enterprises Inc. repurchased 5.0 million of its outstanding shares, equating to $0.9 billion.

What is Ferguson's position in the North American construction market?

Ferguson is the largest value-added distributor serving the water and air specialized professional in the $340 billion residential and non-residential North American construction market.

What are the main items of business for Ferguson's 2025 Annual Meeting?

The main items of business for Ferguson's 2025 Annual Meeting are the election of 11 Director nominees, ratification of Deloitte & Touche LLP as the independent registered public accounting firm, and an advisory vote to approve executive compensation.

How does Ferguson Enterprises Inc. manage compensation-related risks?

Ferguson Enterprises Inc. manages compensation-related risks through a robust annual risk assessment of executive compensation programs, a comprehensive clawback policy for incentive-based compensation, and stock ownership guidelines for Non-Employee Directors and Executive Officers.

Risk Factors

Industry Context

Ferguson operates as the largest value-added distributor in the $340 billion North American construction market, serving both residential and non-residential sectors. The industry is characterized by fragmentation, which Ferguson aims to consolidate through strategic acquisitions. Key strengths include a robust supply chain, digital tools, and expert associates, enabling the company to provide specialized solutions.

Regulatory Implications

The primary regulatory implication highlighted is the change in fiscal year end from July 31st to December 31st, effective January 1, 2026. This shift aims to align with the calendar year and U.S. corporate headquarters, which may necessitate adjustments in financial reporting and compliance processes during the transition period.

What Investors Should Do

  1. Monitor acquisition integration success
  2. Evaluate operating profit trends
  3. Assess capital allocation strategy
  4. Understand the impact of fiscal year change

Key Dates

Glossary

Value-added distributor
A distributor that provides additional services beyond basic product delivery, such as technical support, customization, or inventory management, to enhance customer value. (Ferguson positions itself as the largest value-added distributor in the North American construction market, highlighting its competitive advantage through specialized services.)
Adjusted Operating Profit
Operating profit that excludes certain items, such as acquisition-related costs or other non-recurring expenses, to provide a clearer view of ongoing operational performance. (Ferguson reported an Adjusted Operating Profit of $2,842 million, an increase of $18 million, which offers a performance metric excluding specific adjustments.)
Adjusted Diluted Earnings Per Share (EPS)
Diluted earnings per share adjusted to exclude the impact of certain items, providing a measure of profitability on a per-share basis that reflects ongoing business operations. (Ferguson's Adjusted Diluted EPS grew 2.6% to $9.94, influenced by operating profit growth and share repurchases.)
Operating Cash Flow
The cash generated from a company's normal business operations, excluding financing and investing activities. (Ferguson generated approximately $1.9 billion in operating cash flow, demonstrating strong cash generation capabilities to fund investments and shareholder returns.)
Share Repurchases
The act of a company buying back its own shares from the open market, which can reduce the number of outstanding shares and potentially increase earnings per share. (Ferguson repurchased 5.0 million shares totaling $0.9 billion, contributing to the increase in adjusted diluted EPS.)

Year-Over-Year Comparison

Ferguson reported a 3.8% increase in net sales to $30.8 billion in fiscal year 2025, indicating continued revenue growth. However, operating profit saw a slight decrease of $46 million to $2,606 million, while diluted EPS rose by 9.3% to $9.32. Adjusted operating profit increased by $18 million to $2,842 million, and adjusted diluted EPS grew 2.6% to $9.94, partly due to share repurchases. The company also continued its practice of returning capital to shareholders through dividends and share buybacks, with a declared annual dividend per share of $3.32, reflecting a 5% growth.

Filing Stats: 4,404 words · 18 min read · ~15 pages · Grade level 14.2 · Accepted 2025-10-15 06:01:31

Key Financial Figures

Filing Documents

Executive Compensation

Executive Compensation 35 Compensation Discussion and Analysis 35 Executive Summary 37 Compensation Determination Process 39 Elements of Our Compensation Program 42 Management of Compensation Related Risks 60 Severance and Change in Control Arrangements 62

Executive Compensation Changes after Fiscal 2025 for the Transition Period

Executive Compensation Changes after Fiscal 2025 for the Transition Period 63 2025 Summary Compensation Table 64 2025 Grants of Plan-Based Awards 66 Outstanding Equity Awards at 2025 Fiscal Year-End 67 Option Exercises and Stock Vested in the 2025 Fiscal Year 69 2025 Non-Qualified Deferred Compensation 69 Potential Payments Upon Termination or a Change in Control 70 CEO Pay Ratio 73 Pay Versus Performance 74

Security Ownership of Certain Beneficial Owners and Management

Security Ownership of Certain Beneficial Owners and Management 78 Other Information 80 Communications with the Board 80 Process for Shareholder Recommendation and Nomination of Directors 80 Shareholder Proposals for 2026 Annual Meeting 80 Special Meetings 81 Householding 81 Questions and Answers About the 2025 Annual Meeting 82 Cautionary Note Regarding Forward-Looking Statements 88 Non-GAAP Reconciliations and Supplementary Information 90 2025 PROXY STATEMENT Proxy Statement Summary Ferguson at a Glance Ferguson is the largest value-added distributor serving the water and air specialized professional in our $340B 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. Core Strengths World-class supply chain Value-added solutions Digital tools Expert associates Through scale deployed locally utilizing our world-class supply chain, value-added solutions and digital tools, along with our expert associates, we help meet our customers' unique needs. We look to generate long-term shareholder value by investing for organic growth, consolidating our fragmented markets through acquisitions and returning surplus capital to shareholders. Overview $30.8B Revenue ~1m Customers 1,700+ Locations ~35,000 Associates ~37,000 Suppliers $12B+ Returned to shareholders over the past ten years Balanced Market Exposure* Our balanced approach to end markets allows us to leverage scale in attractive markets with a resilient business model. * Residential/non-residential and RMI/new construction proportions are approximates and derived from management estimates as of July 31, 2025. 2025 PROXY STATEMENT 1 2025 Proxy Statement Summary Fiscal 2025 Performance We delivered a s

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