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Ferguson (FERG) is trading nicely higher after posting its Q4 (Jul) results this morning. EPS came in well ahead of estimates, while revenue grew 6.9% yr/yr to $8.5 bln, above consensus and its strongest pace in more than two years.

• US sales +7.1%, as non-residential strength offset flat residential performance. Residential (~50% of US sales) stayed pressured by weak new construction, slower permit activity, and soft RMI demand.
• The other half of US revenue was a bright spot, with non-residential growing 15% on large capital projects, including commercial +17%, civil infrastructure +13%, and industrial +5%.
• By customer group: HVAC was slightly lower on efficiency standard changes and weak residential construction; Residential Trade Plumbing -2% on new construction softness and PVC deflation; Ferguson Home (~19% of US sales) +3%. Waterworks +15% and Commercial/Mechanical +21%, both benefitted from strong project activity.
• Fiscal year-end moving to Dec. 31; CY25 guidance calls for mid-single digit revenue growth and operating margin improvement.

Briefing.com Analyst Insight

FERG delivered a solid quarter despite an uncertain environment and subdued residential market, benefiting from its multi-customer approach. Most of the upside was driven by non-residential end markets, where large capital projects remain resilient. Looking ahead, management expects to leverage multi-year tailwinds across both residential and non-residential segments, positioning the company for further share gains. FERG could also see incremental benefit if rate cuts stimulate residential construction activity. For now, the company continues to execute well, supported by its diversified model.