Ferguson reported third-quarter sales of $9.03 billion, up 9.5% year over year, as stronger organic growth and acquisitions fueled an acceleration from its second-quarter performance.

The Newport News, VA-based distributor of plumbing, HVACR, industrial and infrastructure supplies posted 7.0% organic growth for the quarter ended Sept. 30, compared with 3.8% in 2Q. Acquisitions added 2.7 percentage points to growth, partially offset by a 0.2-point reduction from a Canadian divestiture.

Reported operating profit increased 4.9% to $885 million, while adjusted operating profit rose 8.9% to $962 million. Gross margin declined 40 basis points to 30.9%, but adjusted operating margin held steady at 10.7%. Reported operating margin fell 40 basis points to 9.8%.

U.S. Growth Broadens

U.S. sales increased 10.2% to $8.62 billion. Nonresidential revenue grew 15%, accelerating from 8% growth in 2Q, while residential sales increased 6%, compared with 2% in the preceding quarter.

Industrial led customer groups with 55% growth, including approximately 23 percentage points from acquired businesses. Commercial/Mechanical increased 17%, HVAC grew 15% and Facilities Supply rose 6%. Waterworks increased 5%, while Ferguson Home and Residential Trade Plumbing each grew 3%. Fire & Fabrication declined 8%.

Canadian sales decreased 4.5% to $405 million.

Through September, companywide sales increased 6.0% to $25.25 billion, with adjusted operating profit up 6.5% to $2.54 billion.

ADI’s NYSE Debut, Ferguson’s S&P 500 Entry Give Distribution a Week to Celebrate – August

FloWorks Adds Industrial Depth

Ferguson completed three acquisitions during 3Q, deploying approximately $1.7 billion. The largest was its $1.6 billion purchase of industrial flow control distributor FloWorks, which closed Aug. 31.

FloWorks generated approximately $1 billion in 2025 revenue and brought more than 60 locations, 25 service and repair centers and specialized capabilities in valves, automation, rotating equipment and fluid handling.

Including a subsequent deal, Ferguson has completed 11 acquisitions this year, investing approximately $2.3 billion and adding roughly $1.5 billion in annualized revenue. Net debt to adjusted EBITDA stood at 1.7 times at September’s close.

Ferguson raised its calendar 2026 sales growth forecast to approximately 7% from mid-single-digit growth and narrowed its adjusted operating margin outlook to 9.6-9.8% from 9.5-9.8%. The updated guidance incorporates FloWorks and recent performance.

2026 Guidance	Prior Guidance	Updated Guidance
Net sales	Mid-single-digit growth	Approximately 7% growth
Adjusted operating margin	9.5%-9.8%	9.6%-9.8%
Capital expenditures	$375M-$425M	Approximately $425M

The quarter also included Ferguson’s Aug. 5 entry into the S&P 500.

MDM Analysis

The clearest takeaway from Ferguson’s 3Q26 results is the acceleration in organic growth, alongside broader gains across residential and nonresidential customers. FloWorks adds substantial industrial exposure, but acquisitions account for only part of Ferguson’s momentum. Holding adjusted operating margin flat despite lower gross margin also signals effective expense control. With Industrial, Commercial/Mechanical and HVAC leading growth, Ferguson’s results underscore the value of serving multiple end markets while expanding technical capabilities that deepen customer relationships.