PVF, plumbing, HVAC, infrastructure and industrial supplies distributor Ferguson reported results for its 2024 third quarter that ended April 30, showing a modest gain in year-over-year sales and gross margin.

The company posted total 3Q sales of $7.3 billion, up 2.4% year-over-year. Organic revenue fell 0.9%, more than offset by acquisitions contribution of +1.7% and an additional selling day that contributed 1.6% growth.

Ferguson said that weakness in certain commodity-related categories persisted in the quarter, driving modest overall price deflation of about 2%. Meanwhile, organic volumes were up about 1%.

Ferguson Inks 4 New Acquisitions (May 23)

The company’s 3Q gross margin of 30.5% was up 50 basis points year-over-year and up 10 points from 2Q. Operating profit of $625 million on 8.6% margin (9.2% adjusted) topped the $497 million and 7.0% (9.2% adjusted) of a year earlier. 3Q adjusted EBITDA of $722 million improved 2.4% year-over-year.

Ferguson completed three acquisitions during the quarter — AVCO Supply, Safe Step Tubs of Minnesota and Yorkwest Plumbing Supply. Since the end of the quarter, Ferguson acquired Southwest Geo-Solutions and GAR Engineering. Through the end of May, Ferguson had acquired eight acquisitions during its fiscal 2024, with aggregate annualized revenues of about $350 million, the company said in its 3Q report.

Premium – Ferguson to Position Closer to Contractors with Market Distribution Centers (April 15)

U.S.

In the U.S. — where Ferguson did 95.4% of its business in 3Q — sales were up 2.2% year-over-year, with organic revenue down 0.9%.

Outlook

Looking forward, Ferguson repeated its previous fiscal guidance of broadly flat 2024 sales, while narrowing its adjusted operating margin range from 9.2-9.8% to 9.2-9.6%.

“Our fiscal 2024 financial guidance reflects continued volume growth and resilient gross margin despite the impact of continuing mild deflation expected for the remainder of the fiscal year,” Ferguson CEO Kevin Murphy said. “We remain well positioned to leverage multi-year tailwinds in both residential and non-residential end markets as we support the complex project needs of our specialist pro customers.”

Premium – Behind the Deal: Ferguson’s Bolt-On Acquisition Strategy Amplifies Growth (Feb. 26)

Redomiciliation of Parent Company

Ferguson noted that on May 30, it held a special meeting of shareholders for a vote on whether to proceed with a new corporate structure that would domicile the company’s ultimate parent company in the U.S., changing from Wokingham, England. Ferguson said that over 99% of votes were in favor of the transaction and that the company expects the change to be effective on or about Aug. 1.

2 New Board Directors

On June 3, Ferguson announced the appointment of two new non-employee board directors: Rekha Agrawal and Richard Beckwitt.