Ferguson Enterprises Inc (NYSE:FERG) stock fell 1.03% (As on March 12, 12:31:05 AM UTC-4, Source: Google Finance) after the company posted mixed result for the second quarter of FY25. Gross margin was of 29.7% was 70 basis points lower than last year due to subdued end market demand, persistent deflation and sales mix. Adjusted operating profit was of $449 million (6.5% adjusted operating margin) was 13.7% below last year in the seasonally lightest quarter.

Moreover, net sales in the US business increased by 3.0%, with organic revenue growth of 2.0% and a further 1.0% contribution from acquisitions. Overall, the residential revenue grew approximately 2% in the second quarter. The company continued to take share with non-residential revenue growth of approximately 4% in the second quarter. The sales grew modestly in both commercial and industrial end markets with particular strength in civil/infrastructure end markets. Further, the company has completed one acquisition during the quarter, Templeton and its affiliate, TEMSCO, which serve the water and wastewater industries in the southeast. Additionally, subsequent to the quarter end the company signed a definitive purchase agreement to acquire Independent Pipe & Supply Corporation, a leading commercial/mechanical distributor in the Northeast. Canada net sales grew by 3.2%, with organic revenue growth of 3.1% and a 5.4% contribution from acquisitions, partially offset by a 5.3% adverse impact from foreign exchange rates.

FERG in the second quarter of FY25 has reported the adjusted earnings per share of $1.52, missing the analysts’ estimates for the adjusted earnings per share by 8 cents. The company had reported the adjusted revenue growth of 3 percent to $6.9 billion in the second quarter of FY25, beating the analysts’ estimates for revenue by $100 million. This is driven by organic revenue growth of 2.1% and acquisition growth of 1.2%, offset by 0.3% from the adverse impact of foreign exchange rates. On a volumetric basis, total volume increased by approximately 5% with organic volume up approximately 4%.

Additionally, Net debt to adjusted EBITDA at January 31, 2025 was 1.2x and during the quarter the company completed share repurchases of $252 million. The company has extended the share repurchase program by an additional $1.0 billion, resulting in a remaining outstanding balance of approximately $1.4 billion. The company has declared a quarterly dividend of $0.83 representing a 5% growth over prior year. The dividend will be paid on May 6, 2025 to stockholders of record as of March 21, 2025.