Executive Summary
Ferguson plc reported QQ1 2025 results with USD 7.772 billion in revenue, marking a modest year-over-year gain of about 0.8% and a sequential decline of 2.2% driven by seasonality and working-capital dynamics. Gross profit reached USD 2.34 billion for a gross margin of 30.1%, essentially flat versus a year ago but down on a quarter-to-quarter basis due to mix and cost dynamics. Operating income was USD 665 million (8.56% margin) and EBITDA USD 760 million (9.78% margin), translating to a net income of USD 470 million and a 6.05% net margin. EPS stood at USD 2.34 (diluted USD 2.33), reflecting a yoy and qoq mix of margin pressures and offsetting efficiency gains.
Cash flow remains robust, with net cash provided by operating activities of USD 345 million and free cash flow of USD 268 million. Ferguson ended the quarter with USD 654 million in cash and equivalents and a net debt position of USD 4.081 billion, underpinned by a total debt load of USD 5.638 billion. Capital allocation included USD 256 million in share repurchases and USD 158 million in dividends paid during the period, contributing to a negative financing cash flow of USD 214 million. The company’s leverage remains material, but interest coverage (~14.5x) and liquidity metrics (current ratio 1.68, quick ratio 0.91) support ongoing operational flexibility. Valuation sits at roughly 21x P/E and 7x P/B, implying a premium to broad industrial peers, justified by Ferguson’s expansive U.S. branch network and persistent exposure to housing-related demand, albeit with cyclicality risk.
Looking ahead, management did not publish explicit full-year guidance in the provided data. The near-term outlook for Ferguson hinges on U.S. construction activity, housing markets, and infrastructure spend, alongside ongoing supply-chain normalization and working-capital management. The investment case rests on continued cash-flow generation, debt reduction flexibility, and disciplined capital allocation, including potential accretive acquisitions or targeted share repurchases that preserve balance-sheet strength.
Key Performance Indicators
QoQ: -18.00% | YoY:-10.01%
Key Insights
Revenue: USD 7.772 billion; YoY +0.8%; QoQ -2.2%
Gross Profit: USD 2.340 billion; Gross Margin 30.1%; YoY +0.39%; QoQ -4.92%
Operating Income: USD 665 million; Operating Margin 8.56%; YoY -10.01%; QoQ -18.00%
EBITDA: USD 760 million; EBITDA Margin 9.78%
Net Income: USD 470 million; Net Margin 6.05%; YoY -9.44%; QoQ +4.21%
EPS (USD): 2.34; Diluted: 2.33; YoY -8.24%; QoQ +5.41%
Cash Flow and Capital Allocation: CFO USD 345 million; Capex USD 77 million; Free Cash Flow USD 268 million; Net change i...
Financial Highlights
Revenue: USD 7.772 billion; YoY +0.8%; QoQ -2.2%
Gross Profit: USD 2.340 billion; Gross Margin 30.1%; YoY +0.39%; QoQ -4.92%
Operating Income: USD 665 million; Operating Margin 8.56%; YoY -10.01%; QoQ -18.00%
EBITDA: USD 760 million; EBITDA Margin 9.78%
Net Income: USD 470 million; Net Margin 6.05%; YoY -9.44%; QoQ +4.21%
EPS (USD): 2.34; Diluted: 2.33; YoY -8.24%; QoQ +5.41%
Cash Flow and Capital Allocation: CFO USD 345 million; Capex USD 77 million; Free Cash Flow USD 268 million; Net change in cash USD +29 million; Cash at end of period USD 654 million; Net debt USD 4.081 billion; Total debt USD 5.638 billion
Balance Sheet Health: Cash and equivalents USD 601 million; total current assets USD 9.625 billion; total assets USD 16.858 billion; total liabilities USD 11.203 billion; equity USD 5.655 billion; Goodwill USD 2.363 billion; Intangible assets USD 0.720 billion; Current ratio 1.677; Quick ratio 0.912; Debt to capitalization 0.453; Interest coverage 14.46x
Liquidity and Working Capital: DSO 42.17 days; DIO 72.79 days; DPO 56.83 days; CCC 114.96 days; Inventory USD 4.393 billion; Receivables Turnover 2.13x; Payables Turnover 1.584x
Valuation and Leverage: P/E ~21.1x; P/B ~7.0x; P/S ~5.11x; Dividend Yield ~0.40%; Enterprise Value to EBITDA ~57.6x; Free Cash Flow Yield ~3.45%
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
7.77B |
0.83% |
-2.19% |
| Gross Profit |
2.34B |
0.39% |
-4.92% |
| Operating Income |
665.00M |
-10.01% |
-18.00% |
| Net Income |
470.00M |
-9.44% |
4.21% |
| EPS |
2.34 |
-8.24% |
5.41% |
Key Financial Ratios
operatingProfitMargin
8.56%
operatingCashFlowPerShare
$1.72
freeCashFlowPerShare
$1.34
dividendPayoutRatio
33.6%
Management Commentary
Note: The earnings transcript was not provided in the data set. Consequently, there are no management commentary highlights to extract or group by themes within this report.
Forward Guidance
Management guidance for FY2025 is not disclosed in the provided data. Investors should monitor: (1) US housing market and repair/renovation activity as a core demand driver for Ferguson’s plumbing and HVAC products; (2) commercial/institutional construction and infrastructure spending; (3) working-capital management and supply-chain normalization to sustain margins; (4) capital allocation strategy, including debt reduction vs. buybacks vs. selective acquisitions; (5) currency and commodity pressures that could influence cost of revenue and SG&A. Achievability of any formal targets would hinge on stabilization of demand in Ferguson’s principal markets and continued efficiency in distribution and procurement.