Ferguson Raises Annual Sales Growth Forecast to About 7% and Adjusted Operating Margin to 9.8%
Key Facts
Ferguson raised its forecast for net sales growth in calendar 2026 to about 7%, from mid-single-digit growth, and raised the low end of its adjusted operating margin forecast to 9.6% from 9.5%, according to results for the quarter ended September 30. The revision reflects an improvement in the company's estimates for sales and adjusted profitability over the year. Ferguson attributed the higher forecast to its year-to-date performance and the addition of FloWorks to the group. The announcement came in its third-quarter results report published on November 9. The annual guidance now incorporates a greater acquisition impact, alongside the performance of the existing business.
The previous guidance for net sales growth in 2026 was mid-single-digit, while the new forecast is close to 7%. The company raised its adjusted operating margin range to 9.6%-9.8%, compared with a previous range of 9.5% to 9.8%. The change lifts the lower end of the expected margin while keeping the upper end at its previous level. Ferguson had raised its sales guidance in the second quarter from low- to mid-single-digit growth to mid-single-digit growth. That quarter's guidance did not include the expected impact of the FloWorks deal, which later closed on August 31.
Performance varied across the company's businesses: U.S. non-residential sales rose 15% in the quarter ended September 30, while residential sales increased 6%. Ferguson said residential business grew despite weakness in new construction and continued softness in repair, maintenance and improvement activity. Residential markets account for about half of the company's sales, making the trajectory of this business an important part of the demand picture. The company said its markets were mixed, but it had seen healthy activity in large capital projects. It added that open order volumes increased and bidding remained strong.
Ferguson's U.S. business sales grew 10.2% in the quarter, including organic growth of 7.4% and a 2.8% contribution from acquisitions. These figures distinguish growth in the existing business from the impact acquisitions added to sales. The company had completed 11 acquisitions in the year through the announcement of its third-quarter results. It estimated the combined annual revenue of these deals at about $1.5 billion. Acquisitions completed during the quarter included FloWorks, which Ferguson said supported the increase in its annual sales guidance.
Reported and adjusted earnings moved in different directions in the quarter. Adjusted operating profit rose 8.9% to $962 million, with a margin of 10.7%, while reported diluted earnings per share fell 4.9% to $3.08. Adjusted diluted earnings per share, by contrast, rose 7.9% to $3.43. The company attributed the decline in reported earnings per share mainly to the timing and amount of tax benefits in the year-earlier period. Gross profit margin was 30.9%, down 40 basis points from the corresponding period, and the company said the comparison was temporarily affected by the timing and extent of supplier price increases.
The forecast increase follows an earlier revision in the second quarter, when the company said year-to-date performance had enabled it to raise its full-year guidance despite continued economic uncertainty. It said then that large capital projects, water infrastructure and housing were long-term growth drivers. In its third-quarter results, the company linked the improved outlook to year-to-date performance and the addition of FloWorks, while market conditions continued to vary across businesses. Ferguson shares closed at $233.7 on November 6, 2026, according to EL7 daily data. The company is scheduled to report results for the period ended December 31, 2026, on February 16, 2027, with the call set to begin at 8:30 a.m. Eastern time.