Ferguson Enterprises Inc (NYSE:FERG) stock fell 2.20% (As on September 18, 11:30:08 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the fourth quarter of FY 24. The company’s operating margin improved to 10.2%, up 20 basis points from the previous year driven by the value FERG provide to its customers as well as a decrease to the inventory reserve. The company anticipate an ongoing challenging near term market environment, and will continue to invest in scale and capabilities to take advantage of multi-year structural tailwinds such as underbuilt and aging U.S. housing, non-residential large capital projects and the opportunity with the dual-trade plumbing and HVAC contractor. Adjusted operating profit of $857 million (10.8% adjusted operating margin) was 5.3% ahead of last year. During the year the company acquired ten businesses which in aggregate generate annualized revenue of approximately $400 million.

Moreover, Net sales in the US business grew 1.3%, with an organic revenue decline of 0.2% offset by 1.5% from acquisitions. Residential end markets, representing approximately half of US revenue, remained muted. New residential housing start and permit activity weakened during the second half of our fiscal year. Repair, maintenance and improvement (“RMI”) work has also remained soft. Overall, residential revenue was flat in the fourth quarter. Non-residential end markets, representing approximately half of US revenue, showed continued resilience with non-residential revenue growing by approximately 3% in the fourth quarter. Net sales in Canada business grew by 2.0%, with an organic revenue decline of 1.2% and a 2.4% adverse impact from foreign exchange rates offset by a 5.6% impact from acquisitions.

FERG in the fourth quarter of FY 24 has reported the adjusted earnings per share of $2.23, missing the analysts’ estimates for the adjusted earnings per share of $2.71. The company had reported the adjusted revenue growth of 1.4 percent to $7.9 billion in the fourth quarter of FY 24, missing the analysts’ estimates for revenue of $8.01 billion. Organic revenue declined 0.2% and the adverse impact of foreign exchange rates was 0.1%, offset by acquisition growth of 1.7%. Weakness in certain commodity related categories drove modest overall price deflation of approximately 2%. Consequently, volumes on an organic basis were up approximately 2%.

For fiscal 2025, the company expects net sales to grow in the low single digits, with an adjusted operating margin between 9.0% and 9.5%. Capital expenditures are projected to be between $400 million and $450 million.