Ferguson PLC (NYSE:FERG) stock rose 3.38% (As on December 5, 11:17:25 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the first quarter of FY 24. In the United States, net sales declined by 2.7%, with organic revenue decreasing by 5.0%. The residential market remained subdued, while non-residential markets showed stability with a 2% growth. In Canada, net sales decreased by 5.0%, with organic revenue declining by 3.3%. Adjusted operating profit in the US was down by 9.3%, and in Canada, it decreased by 30.3%. The company has reported a strong operating cash flow of $557 million, an increase from the previous year, demonstrating the company’s robust cash-generative business model. The balance sheet remains solid with a net debt to adjusted EBITDA ratio of 1.0x. The company also continued its shareholder-friendly activities with share repurchases totaling $108 million during the quarter. The company’s strategic acquisitions and commitment to shareholder returns, coupled with a stable dividend increase, position it well for future growth opportunities.

FERG in the first quarter of FY 24 has reported the adjusted earnings per share of $2.65, beating the analysts’ estimates for the adjusted earnings per share of $2.62. The company had reported 2.8 percent decline in the adjusted revenue growth to $7.71 billion in the first quarter of FY 24, beating the analysts’ estimates for revenue of $7.62 billion. This is primarily due to a decline in residential sales, which was partially offset by growth in non-residential sales. The gross margin contracted slightly by 30 basis points to 30.2%, affected by commodity categories. Operating expenses were carefully managed, and the reported operating profit was $739 million, an 11.1% decrease from the previous year. Adjusted operating profit stood at $773 million, a 10.5% decrease. The company’s operating margin remained robust at 9.6%, with an adjusted margin of 10.0%.

Ferguson said it lifted its dividend by 5% to $0.79 per share, payable on Feb. 6 to shareholders of record as of Dec. 15. Additionally, FERG completed one acquisition during the quarter, further expanding its market presence.

The company has reaffirmed its full-year guidance, expecting net sales to be broadly flat and an adjusted operating margin to be  between 9.2% and 9.8%. The company remains confident in its market position and its ability to leverage structural tailwinds over the medium and long term.