Ferguson PLC (NYSE:FERG) stock rose 3.69% (As on September 26, 11:29:40 AM UTC-4, Source: Google Finance) after the company beats the earnings expectations for the fourth quarter of FY 23.  Organic revenue declined 5.3%, partially offset by acquisition growth of 2.2% and 1.4% positive net impact from one additional sales day and the impact of foreign exchange rates. The Company’s decrease in net sales was mainly driven by declines in residential, partially offset by growth in non-residential sales compared to the prior year period. As expected, price inflation stepped down from approximately 5% in the third quarter to approximately 1% in the fourth quarter. Gross margin of 30.6% was 10 basis points ahead of last year. Operating expenses continued to be diligently managed and we remain focused on productivity and efficiencies while investing in core capabilities for future growth. Adjusted operating profit of $814 million (10.4% adjusted operating margin) was 4.1% lower than last year.

FERG in the fourth quarter of FY 23 has reported the adjusted earnings per share of $2.77, beating the analysts’ estimates for the adjusted earnings per share of $2.46, according to figures compiled by Thomson Reuters. The company had reported 1.7 percent fall in the adjusted revenue to $7.84 billion in the fourth quarter of FY 23. Net debt to adjusted EBITDA at July 31, 2023 was 1.0x and during the year.

Moreover, Net sales in the US business declined 1.5%, with an organic revenue decline of 5.5% partially offset by 2.4% from acquisitions and a 1.6% positive impact from one additional sales day. Residential end markets, which comprise just over half of US revenue, slowed further during the quarter as expected. New residential housing start and permit activity has remained relatively stable on a sequential basis but remains below prior year levels, while repair, maintenance and improvement (“RMI”) work remained more resilient. Overall, residential revenue declined by approximately 4% in the fourth quarter. Non-residential end markets, representing just under half of US revenue, continued to moderate with non-residential revenue growing by approximately 2% in the fourth quarter.

For its fiscal year 2024 (FY24) forecast, the company anticipates its net sales to remain relatively stable at $29.73 billion, slightly surpassing the estimated $29.41 billion. The projected adjusted operating margin is expected to fall within the range of 9.2% to 9.8%.