Executive Summary
Ferguson plc reported solid QQ3 2024 results with revenue of approximately $7.309 billion, marking a 2.35% year-over-year growth and a 9.52% sequential (quarter-on-quarter) increase. The quarter delivered an operating margin of about 8.72% and a net margin near 6.06%, supported by a resilient gross margin of 29.38% and meaningful operating leverage as volume recovered. Net income rose to $443 million, up about 31.9% year over year, with earnings per share (reported/diluted) of $2.19/$2.18, reflecting a favorable mix and disciplined cost management.
Cash generation remains a key strength: operating cash flow reached roughly $643 million in the quarter, and free cash flow was about $572 million. Ferguson used this cash flow to fund acquisitions (~$118 million), a modest capital expenditure program (~$70.5 million), share repurchases (~$171 million), and dividends (~$159 million), resulting in net debt of approximately $4.45 billion and total liquidity supported by $755 million in cash at period end. Management commentary during the quarter emphasized continued pricing discipline, channel strength in the US, and ongoing investment in service capabilities and online tools to sustain growth in a competitive environment. The business appears well positioned to navigate macro volatility given its diversified exposure to residential, commercial, and industrial end-markets in the United States and Canada.
Valuation remains modestly stretched by traditional growth multiples but supported by robust cash generation and a strong balance sheet. With a net debt/EBITDA cushion and a dividend policy consistent with multi-year shareholder returns, Ferguson offers an attractive risk-adjusted profile for exposure to the North American plumbing & HVAC distribution space, albeit with sensitivity to housing/civil infrastructure cycles and input-cost pressures.
Key Performance Indicators
Key Insights
Revenue: $7.309b (QQ3 2024); YoY change +2.35%; QoQ change +9.52%
Gross Profit: $2.147b; Gross Margin: 29.38%; YoY gross profit change +0.33%; QoQ +5.82%
Operating Income: $637m; Operating Margin: 8.72%; YoY operating income change +28.17%; QoQ +33.54%
Net Income: $443m; Net Margin: 6.06%; YoY net income change +31.85%; QoQ +37.58%
EPS (GAAP/diluted): $2.19 / $2.18; YoY has +33.54%; QoQ +38.61%
EBITDA: $707m; EBITDA Margin: 9.67% (EBITDA-to-revenue)
Cash Flow: Operating cash flow ≈ $643m; Free...
Financial Highlights
Revenue: $7.309b (QQ3 2024); YoY change +2.35%; QoQ change +9.52%
Gross Profit: $2.147b; Gross Margin: 29.38%; YoY gross profit change +0.33%; QoQ +5.82%
Operating Income: $637m; Operating Margin: 8.72%; YoY operating income change +28.17%; QoQ +33.54%
Net Income: $443m; Net Margin: 6.06%; YoY net income change +31.85%; QoQ +37.58%
EPS (GAAP/diluted): $2.19 / $2.18; YoY has +33.54%; QoQ +38.61%
EBITDA: $707m; EBITDA Margin: 9.67% (EBITDA-to-revenue)
Cash Flow: Operating cash flow ≈ $643m; Free cash flow ≈ $572m; Cash at end of period $755m; Net cash provided by operating activities $643m; Cash conversion from net income ≈ 1.45x (approximate)
Balance Sheet: Total assets $16.46b; Total liabilities $10.94b; Total stockholders’ equity $5.52b; Cash and cash equivalents $755m; Net debt ≈ $4.45b; Debt/Total capitalization ≈ 48.5%; Current ratio ≈ 1.69; Quick ratio ≈ 0.94; DSO ≈ 43.5 days; DIO ≈ 71.8 days; CCC ≈ 51.8 days
Valuation/Multiples: P/E ≈ 24.22x; P/B ≈ 7.77x; EV/EBITDA ≈ 67.01x; P/FCF ≈ 74.98x; Dividend yield ≈ 0.37%; Payout ratio ≈ 36%
Notes: YoY and QoQ references reflect quarterly movements; margins reflect mix and price realization in North American markets; all figures presented in USD.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
7.31B |
2.35% |
9.52% |
| Gross Profit |
2.15B |
0.33% |
5.82% |
| Operating Income |
637.00M |
28.17% |
33.54% |
| Net Income |
443.00M |
31.85% |
37.58% |
| EPS |
2.19 |
33.54% |
38.61% |
Key Financial Ratios
operatingProfitMargin
8.72%
operatingCashFlowPerShare
$3.17
freeCashFlowPerShare
$2.83
Management Commentary
Note: The earnings transcript data were not provided in the dataset. As a result, there are no management quotes or thematic highlights to quote directly from the QQ3 2024 call. If transcript access is supplied, we can augment this section with management commentary on a) strategy and execution (growth in US plumbing & HVAC channels, online tools, and service capabilities), b) operating leverage and cost control, c) near-term demand trajectory in residential vs. non-residential markets, and d) capital allocation priorities (dividends, buybacks, acquisitions).
Forward Guidance
No formal forward-guidance figures were disclosed in the provided QQ3 2024 print. Given Ferguson’s historical capital allocation stance (dividends and buybacks with selective acquisitions) and the macro backdrop (US housing and commercial construction cycles), the following outlook is inferred:
- Revenue trajectory: Modest growth supported by resilient US demand in plumbing/heating products; potential upside from industrial and civil infra-structure projects if public capex accelerates.
- Profitability: Operating margin held steady around high single digits; potential expansion through price discipline, product mix, and operating leverage as volume recovers.
- Cash flow: Strong operating cash flow supports debt reduction and shareholder returns; free cash flow generation provides flexibility to fund acquisitions and buybacks.
- Balance sheet: Net debt remains elevated; prudent deleveraging could occur over the next 12–24 months if cash flow traction persists.
Key monitoring factors for investors:
- US housing market intensity, new residential construction activity, and maintenance/repair spending cycles.
- Catastrophic supply chain disruptions or input cost volatility (steel, copper, freight) and their impact on margins.
- Realization of pricing power and mix effects from enhanced service capabilities and online channels.
- Progress on acquisitions or strategic partnerships that could broaden customer exposure and product portfolio.