Ferguson — the world's largest plumbing products distributor — on Tuesday reported its fiscal results for the first quarter of 2018, which ended Oct. 31. The results were led by strong year-over-year sales, powered by the Americas, while the company faces a tough United Kingdom market as it continues to undergo restructuring there.
Ferguson — which rebranded from Wolseley this past summer — posted Q1 sales of $5.19 billion, up 10.0 percent year-over-year (YoY), with organic sales up 7.6 percent. Total profit of $394 million increased 13.9 percent, while gross margin improved 0.2 percent.
"Our business continued to grow well in our first quarter, with strong organic growth in the U.S. of 8.3 percent in good U.S. markets," Ferguson CEO John Martin said. "The growth was widespread across all geographic regions and major business units and our gross margin performance was solid. Growth in Canada was also strong, though market conditions remain challenging in the UK, where we are continuing to implement our transformation program."
The company completed five acquisitions in the quarter — which have a combined value of $109 million — while the $1.21 billion sale of its Nordic building materials distribution business is on track to complete in early 2018.
By geography in Q1:
- U.S. sales of $4.1 billion increased 10.3 percent YoY at constant exchange rates, while profit increased 14.2 percent. Organic sales improved 8.3 percent, following growth of 8.7 percent and 8.8 percent the previous two quarters. "All businesses generated good organic growth in the quarter, with residential markets continuing to grow well, commercial markets growing reasonably and industrial markets continuing to improve," the company said.
- U.K. sales of $679 million increased 3.4 percent YoY at constant exchange rates, while profit of $21 million decreased 3.8 percent. Organic sales increased 3.2 percent, primarily due to price inflation. "Gross margins were lower in competitive markets as customers resisted supplier price rises. Repair, maintenance and improvement markets remained weak," the company said.
- Canada and Central Europe sales of $400 million increased 9.2 percent YoY at constant exchange rates, while profit of $24 million increased 19.3 percent. Organic sales increased 7.7 percent, following growth of 7.7 percent and 7.3 percent the previous two quarters.