Ferguson Plc (NYSE:FERG) shares are trading slightly lower in the morning session on Tuesday.
The company reported third-quarter net sales of $7.308 billion, which was 2.4% higher year over year, driven by volume improvement despite continued deflation of approximately 2%.
Ferguson said weakness in certain commodity-related categories persisted, driving modest overall price deflation in the quarter under review.
Net sales in the U.S. business increased by 2.2%, while that in Canada grew by 6.7%.
Adjusted gross margin expanded by 50 basis points to 30.5% in the third quarter. Ferguson associates’ ‘strong pricing execution’ improved the metric.
Adjusted operating margin remained flat on a year-over-year basis at 9.2%. Adjusted EBITDA rose 2.4% to $722 million.
“We remain well positioned to leverage multi-year tailwinds in both residential and non-residential end markets as we support the complex project needs of our specialist pro customers,” said CEO Kevin Murphy.
The company’s adjusted earnings per share of $2.32 increased 5.5% due to the increase in adjusted operating profit and impact of share repurchases. The metric was in line with the street view.
Dividend: The company declared a quarterly dividend of 79 cents per share. The dividend will be paid on July 31 to shareholders on the register as of June 14.
Outlook: Ferguson continues to expect FY24 net sales to be broadly flat on a year-over-year basis. The company projects an adjusted operating margin of 9.2% – 9.6% (prior view: 9.2% – 9.8%).
Price Action: FERG shares are trading lower by 0.31% to $202.26 at last check Tuesday.
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