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Ferguson shares drop 3.5% on earnings, revenue miss

EditorRachael Rajan
Published 05/03/2024, 11:58
© Reuters.

WOKINGHAM, England - Ferguson plc (NYSE:FERG), a leading value-added distributor in North America, reported a decline in its second-quarter earnings and revenue, falling short of Wall Street estimates.

The company's adjusted earnings per share (EPS) came in at $1.74, which was $0.08 below the analyst consensus of $1.82. Revenue for the quarter also missed expectations, totaling $6.67 billion against the forecasted $6.72 billion.

The stock responded negatively to the earnings news, with shares down 3.58% in premarket trading.

The company's sales saw a 2.2% decline compared to the same quarter last year, primarily due to approximately 2% deflation. Despite the sales dip, Ferguson's gross margin improved by 20 basis points YoY, attributed to effective pricing execution. The adjusted operating profit for the quarter was $520 million, a 10.7% decrease from the previous year, with the adjusted operating margin at 7.8%. The reported diluted EPS of $1.58 marked a 12.2% decrease YoY, while the adjusted diluted EPS of $1.74 decreased by 8.9%.

Ferguson CEO Kevin Murphy commented on the results, stating, "Our associates continued to execute well during our seasonally lightest quarter. While sales were slightly lower than the prior year, organic performance improved from the first quarter." He also noted that the company is managing costs effectively and is prepared for the seasonally stronger second half.

Looking ahead, Ferguson's financial guidance for FY2024 remains unchanged, with net sales expected to be broadly flat. The company anticipates leveraging structural tailwinds in non-residential construction and further supporting the residential trade professional.

Ferguson said it remains committed to its strategy of organic growth, sustainable dividend growth, market consolidation through acquisitions, and returning capital to shareholders, as evidenced by the declared quarterly dividend of $0.79, reflecting a 5% increase over the prior year.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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