Ferguson Enterprises (NYSE: FERG), the building-products distributor that supplies plumbing, HVAC and waterworks materials to homebuilders and contractors nationwide, raised its full-year guidance after posting second-quarter net sales of $8.8 billion, up 4.6% from a year earlier, the company reported Aug. 10, 2026.
According to the earnings release filed with the Securities and Exchange Commission, diluted earnings per share rose 6.9% to $3.43, while adjusted diluted EPS climbed 5.3% to $3.39. Operating margin ticked up 10 basis points to 10.2%, even as gross margin slipped 20 basis points to 31.0%.
The results split sharply by end market. Ferguson’s U.S. non-residential business β materials for commercial and industrial construction projects β grew net sales 8%, which the company attributed to strong capital project activity. Residential revenue, roughly half of total U.S. sales, returned to growth with a 2% increase “despite the challenging market backdrop,” in the words of Chief Executive Kevin Murphy, a reference to the broader housing slowdown that has weighed on new construction and remodeling demand for much of 2026. Total U.S. net sales rose 5.0% to $8.343 billion, while Canadian net sales fell 1.9% to $408 million, hurt in part by a divestment.
“Our associates continued to execute for our customers, driving market outperformance in the second quarter,” Murphy said in the release. “We delivered another strong quarter of non-residential growth and we returned to growth in residential despite the challenging market backdrop.” He added that the company’s “scale-advantaged business model and consistent cash generation enable us to invest in organic growth, consolidate our markets through acquisitions and return capital to shareholders, all while maintaining a strong balance sheet.”
Ferguson raised its full-year 2026 outlook, now projecting mid-single-digit net sales growth, up from a prior low-to-mid-single-digit range, and adjusted operating margin of 9.5% to 9.8%, up from 9.4% to 9.8% previously. The company said the updated guidance excludes any contribution from its pending acquisition of FloWorks, a distributor of technical valves and flow-control equipment, which is expected to close in the third quarter. “While the economic environment remains uncertain, our performance year-to-date enables the upward revision of our full year guidance,” Murphy said.
The company was active on the acquisition front during the quarter, spending $573 million to complete five deals: Carrier Great Lakes and Dealers Supply Company in HVAC distribution, New England Applied Products in commercial and mechanical products, Hamlett Environmental Technologies in water and wastewater treatment, and PRD Technologies Group in specialty valves and flow control. Combined with the pending FloWorks deal, Ferguson said its eight acquisitions so far in 2026 represent roughly $1.4 billion in annualized revenue.
The board declared a quarterly dividend of $0.89 per share, payable Oct. 7, 2026, and the company repurchased $202 million of stock during the quarter. Net debt stood at 1.3 times adjusted EBITDA. Separately, Ferguson confirmed the cancellation of its secondary London Stock Exchange listing effective July 20, 2026, consolidating its primary listing on the New York Stock Exchange.
What it means: Ferguson’s results offer a useful read on construction demand broadly, since the company sells the pipes, fixtures and mechanical equipment that go into both new homes and commercial buildings. The divergence between 8% non-residential growth and a modest 2% residential rebound tracks with builder commentary this earnings season, including LGI Homes’ guidance raise, and with broader construction-cost data such as the Turner Building Cost Index, which has shown data centers and other non-residential projects driving construction demand even as single-family building activity remains comparatively soft.
