Plumbing and heating distribution giant Ferguson posted double-digit increases in sales, profit and earnings in the first quarter of its new fiscal year.
The U.K.-based company said its three-month net sales of $7.9 billion were up 16.6% over the $6.8 billion reported in the same period last year. Ferguson saw 12.7% revenue growth from organic operations and a 2.7% contribution from acquisitions. The latest quarter had an additional selling day that added another 1.5%, helping offset a 0.3% impact from foreign currency exchange rates.
The company’s U.S. business posted 17.4% higher sales in the latest quarter, which officials attributed to a resilient residential construction market.
Ferguson’s gross margin, however, dropped from 31.3% in the previous fiscal first quarter to 30.5% in the latest period. Company executives suggested that the decline stemmed from a particularly strong report last year, which came amid supply chain disruptions and rapid price inflation. Inflation during the most recent quarter was 15%.
Operating profit increased 12.4% — from $739 million to $831 million — in the latest period; diluted earnings per share rose from $2.40 to $2.84, an increase of more than 18%.
Ferguson CEO Kevin Murphy hailed a strong performance by the company and said that it took steps to position the business to weather “macro economic headwinds.” The company’s full-year forecast — anticipating low single-digit net sales growth — remained unchanged following the latest quarter.
“We remain well positioned with balanced exposure to both residential and non-residential end markets and an agile business model,” Murphy said in a statement. “Our financial guidance continues to reflect market outperformance, both organically and from acquisitions, and we remain confident in the fundamental strength of our end markets over the longer term.”