Ferguson Enterprises Inc (NYSE:FERG) stock fell 5.91% (As on December 9, 11:43:50 AM UTC-4, Source: Google Finance) though the company raised its calendar year 2025 guidance after reporting better-than-expected quarterly results, driven by strong execution and double-digit non-residential revenue growth. Organic revenue growth contributed 4.2%, with acquisitions adding another 1.0%. Gross margin improved to 30.7%, up 60 basis points from the prior year, while operating margin increased to 9.4%, an 80 basis point improvement. The company’s U.S. business, which accounts for the majority of revenue, saw 5.3% sales growth with organic revenue growth of 4.4% and a further 0.9% contribution from acquisitions. Non-residential end markets performed significantly better than residential, with non-residential revenue up 12% during the quarter while residential revenue declined 1%. Ferguson also completed one acquisition during the quarter, Moore Supply Company, an HVAC equipment and supplies business operating in the Chicago metro area.

Meanwhile, Residential end markets, representing approximately half of US revenue, remained challenged. New residential housing starts and permit activity have been weak and repair, maintenance and improvement (“RMI”) work has also remained soft. Non-residential end markets, representing approximately half of US revenue, performed better than residential. Growth was supported by both waterworks and commercial / mechanical, including large capital project activity. The company continued to see solid bidding activity on large capital projects. In addition, Canada net sales increased by 2.2%, with organic revenue growth of 0.7% and a 4.6% contribution from acquisitions, partially offset by a 1.6% adverse impact from foreign exchange rates as well as 1.5% from a non-core business divestment. Markets have remained subdued in Canada, particularly in residential. Adjusted operating profit of $16 million was $7 million below last year.

FERG in the first quarter of FY26 has reported the adjusted earnings per share of $2.84, beating the analysts’ estimates for the adjusted earnings per share of $2.63. The company had reported the adjusted revenue growth of 5.1 percent to $8.17 billion in the first quarter of FY26, missing the analysts’ estimates for revenue of $8.18 billion. Ferguson Enterprises Inc Q1 reported adjusted EBITDA of USD 867 million versus Ibes estimate USD 844.6 million.

Additionally, the company maintained its financial flexibility, reporting net debt to adjusted EBITDA of 1.1x. During the quarter, Ferguson completed $208 million in share repurchases and declared a quarterly dividend of $0.89 per share, a 7% increase over the prior year.

Ferguson updated its calendar year 2025 guidance, now expecting approximately 5% net sales growth and adjusted operating margin between 9.4% and 9.6%, an improvement from its previous forecast.