Plumbing supply and industrial products giant Ferguson said Tuesday that recent acquisitions fueled an increase in sales in its latest fiscal quarter.
The U.K.-based company posted net sales of more than $7.3 billion in its third quarter, up 2.4% compared to the same period last year. The company said its organic revenue slipped by 0.9% year-over-year, but that the impact of acquisitions — along with an additional day of sales in the latest quarter — raised its overall number. The drop in organic revenue, officials said, reflected “modest” deflation amid persistent weakness in some commodity-related categories.
Ferguson’s quarterly operating profit of $625 million was up 26% compared to the third quarter of the last fiscal year, although it rose just 2.6% on an adjusted basis. Ferguson reported an operating profit margin of 8.6% and a gross margin of 30.5%, up 50 basis points year-over-year following “strong pricing execution” from the company’s associates.
Earnings came in at $2.18 per diluted share, an increase of 33.7%.
Ferguson’s U.S. business saw a 2.2% increase in sales, while its sales in Canada rose by 6.7%. Both segments benefited from acquisitions, particularly the Canadian division. In the U.S., non-residential end markets outpaced the residential sector, which remained “muted” in the latest quarter. Ferguson’s industrial operations in North America came in at no. 16 on ID’s latest Big 50.
“Our associates have remained focused on execution as we returned to revenue growth in the quarter,” Kevin Murphy, the company’s CEO, said in a statement. “The year is progressing largely as expected and our volume growth supports our view of continued improvement through the remainder of the fiscal year."
Ferguson maintained its projections for broadly flat sales over the full fiscal year, but officials reduced the top end of its adjusted operating margin forecast. The company now expects an adjusted operating margin of between 9.2% and 9.6%.
