Ferguson’s QQ2 2025 results reflect continued top-line momentum in a deflationary environment, with net sales of $6.872 billion, up 3% year over year. The quarter featured meaningful growth in HVAC (+17% in the U.S.) and Waterworks (+10%), underscored by the company’s multi-pronged growth strategy: accelerate dual-trade counter conversions, expand HVAC geography, and pursue selective acquisitions. While volume-driven revenue growth persisted for a fourth consecutive quarter, gross margin contracted to 29.7% primarily due to persistent commodity deflation and mix effects from HVAC and Waterworks growth. Adjusted operating profit declined by $71 million to $449 million, yielding an adjusted operating margin of 6.5%. The company continues to outgrow its markets, with capital deployment totaling about $500 million in the quarter and an increased share-repurchase authorization. Management projects a low single-digit sales increase for fiscal 2025 and targets an adjusted operating margin of 8.3%–8.8% for the year, supported by ongoing cost-management actions and efficiency initiatives. The guidance remains cautious on margin progression given deflation persistence, tariff-related pricing dynamics, and timing of acquisitions, but Ferguson expects improvement in the second half as price realization and mix stabilizes, with fundamental demand drivers in residential and non-residential end-markets still intact.