Ferguson Enterprises Q3 2026: Guidance Raised as Non-Residential Sales Surge 15%

Ferguson Enterprises posted adjusted diluted earnings of $3.43 per share for the quarter ended September 30, 2026, beating expectations. Net sales of $9.03 billion also came in above expectations, helped by organic sales gains in the US business.

Non-residential demand led the quarter, with sales up 15% as large capital project activity remained healthy and open order volumes expanded. Residential sales also held up, rising 6% despite weak new construction and soft renovation and repair activity. US adjusted operating profit grew to $952 million, though gross margin slipped against a prior-year period that had been temporarily elevated by supplier price timing.

The FloWorks acquisition, a valve and flow control business with over 60 locations across the US and Canada that closed on August 31, contributed to the revenue beat and lifted net debt to 1.7 times adjusted EBITDA. Ferguson completed eleven acquisitions in 2026 with aggregate annualized revenue of approximately $1.5 billion. That acquisition pace is the reason share repurchases remain on hold while management works leverage back toward the lower end of its 1 to 2 times target range.

With year-to-date performance in hand and FloWorks folded in, management raised full-year 2026 guidance to approximately 7% net sales growth, up from a prior expectation of mid-single digit growth. The adjusted operating margin outlook was tightened to 9.6% to 9.8%, while forecast interest expense rose, reflecting the cost of financing the acquisition spree. Capital expenditure guidance was set at approximately $425 million for the year.

CEO Kevin Murphy pointed to water infrastructure, large capital projects, climate and comfort, and aging and underbuilt housing as the long-term drivers the company expects to keep powering outperformance even as markets remain mixed. Canada was a notable soft spot, with that segment's revenue down 4.5%, weighed down by challenging residential conditions and foreign exchange headwinds. The quarterly dividend of $0.89 per share is payable January 8, 2027 to shareholders of record November 20, 2026.