Plumbing, PVF, HVAC, infrastructure and industrial supplies distributor Ferguson Enterprises reported its 2025 fourth quarter and full year financial results on Feb. 24 — marking its first report since transitioning to a Jan. 1-Dec. 31 fiscal calendar following a five-month transition period (FY had previously ended July 31).

The results were led by continued strong sales and margin results that were powered by the company’s non-residential markets.

Full Year 2025

For all of 2025, Ferguson’s net sales of $31.3 billion were a new annual record and up 5.0% vs. 2025, driven by organic growth of 4.5% and acquisition growth of 1.0%, partially offset by 0.4% from one fewer sales day and 0.1% from foreign exchange and the Canada divestment. Price inflation was in the low single-digits.

2025 gross margin of 31.0% was up 70 bps annually, which Ferguson attributed to strong execution and supplier price increases. Operating profit of $2.8 billion (8.9% margin) was up 10.3% and adjusted operating profit of $3.0 billion (9.6% margin) was up 11.3%. Net profit of $2.01 billion jumped 21.5% annually, and adjusted EBITDA of $3.24 billion increased 11.6%.

During the year, Ferguson acquired eight companies with a combined annualized revenue of more than $300 million.

“Our associates delivered a strong year, continuing to provide essential water and air solutions for our customers,” CEO Kevin Murphy said in the company’s earnings release. “We are particularly pleased with double-digit non-residential growth during the year and our continued performance against a challenging residential market. Our scale-advantaged business model and strong balance sheet enable us to invest in organic growth, consolidate our markets through acquisitions and return capital to shareholders.

4Q25

For the fourth quarter, reported net sales of $7.5 billion that were up 3.6% year-over-year — topping expectations of 3.3% from Baird’s Industrial Distribution Equity Research unit. The figure was driven by 3.0% organic growth and 0.9% growth from acquisitions, partially offset by a -0.3% combined impact from foreign exchange and a divestment in Canada. Meanwhile, price inflation was low to mid-single digits, the company noted.

Ferguson’s 4Q U.S. sales results by customer group:

Ferguson said that 4Q U.S. residential end markets — representing about half of total U.S. business — remained weak, with revenue down about 2% year-over-year. Non-residential — representing the other half of U.S. business — performed considerably better with revenue up 10%. Ferguson said Nonres growth was driven by both waterworks and commercial/mechanical, including large capital project activity, where bidding and shipment activity remained solid.

4Q25 gross margin was 30.6% — up 90 basis points year-over-year and well ahead of Baird’s 29.5% estimate. Operating profit was $596 million (8.0% margin) was up 17.1% year-over-year, with adjusted operating profit of $625 million (8.3% margin) was up 13.8%. Net profit of $389 million topped the $356 million of a year earlier, while adjusted EBITDA of $686 million (8.3% margin) jumped 14.1% year-over-year and far outperformed Baird’s 6.7% estimate.

2026 Guidance

Looking ahead, Ferguson said it expects 2026 total sales to grow by low to mid-single digits; adjusted operating margin of 9.4%-9.8%; and capital expenditures of $350 million-$400 million.

“While our markets remain mixed as we enter 2026, we expect another year of outperformance, strong operational execution and continued investment to expand our market-leading capabilities and scale,” Murphy added. “We are confident in our ability to capitalize on long-term growth drivers across both residential and non-residential markets as we provide essential water and air solutions for the complex project needs of the specialized professional.”