Ferguson Earnings: Residential End Markets Remain Soft; 2024 Guidance Unchanged

Ferguson’s fiscal second-quarter results (ended Jan. 31) fell short of FactSet consensus expectations amid muted end market demand. Revenue of $6.7 billion declined 2% year over year and was roughly 1% below consensus expectations, and adjusted EPS of $1.74 was 9% lower than last year and 4% below the consensus estimate. These results aren’t particularly surprising, though, given that repair and remodel spending began to soften in the United States during the spring of 2023 and has yet to rebound. Furthermore, US single-family housing starts declined 6% in 2023. Ferguson’s nonresidential end markets remain more resilient but are slowing, as well. During the fiscal second quarter, Ferguson’s US nonresidential revenue declined 1% compared with a 4% decline in residential revenue.