Ferguson Enterprises (NYSE: FERG) raised its fiscal 2026 full-year outlook following a strong second-quarter performance driven by robust non-residential growth and accelerating data center construction. The industrial distributor reported adjusted earnings per share of $3.39, surpassing the consensus estimate of $3.29 by 3.04 percent. Quarterly sales reached $8.75 billion, exceeding the $8.67 billion forecast, while CEO Kevin Murphy highlighted that large capital projects in the data center sector remain the strongest part of the market.

The company’s financial discipline was evident despite modest pressure on margins. Gross margin declined 20 basis points to 31.0 percent, and adjusted operating margin fell 10 basis points to 10.7 percent. However, the top-line growth of 4.6 percent year-over-year — up from the previously reported 27.33 percent figure which appears to be a discrepancy in source reporting or refers to a different metric not explicitly defined as YoY sales growth in the new text — was supported by organic gains in the U.S. market. Ferguson also returned capital to shareholders through a quarterly dividend of 89 cents per share and repurchased $202 million of shares during the quarter.

Segment Performance and Acquisitions

Ferguson’s U.S. operations delivered solid results, with net sales rising 5.0 percent, comprising 4.0 percent organic growth and a 1.0 percent contribution from acquisitions. Non-residential revenue climbed 8 percent, outpacing residential revenue growth of 2 percent. Adjusted operating profit in the U.S. increased 2.9 percent to $925 million, fueled by market share gains and healthy large-project activity.

In contrast, Canada faced headwinds, with sales falling 1.9 percent due to a 3.6 percent impact from a non-core divestiture, which offset 1.7 percent organic growth. Adjusted operating profit in Canada declined by $1 million to $22 million amid challenging residential market conditions.

The company completed five acquisitions during the quarter across HVAC, Commercial/Mechanical, Waterworks, and Industrial businesses. Additionally, Ferguson agreed to acquire FloWorks, a technical industrial distributor, with the transaction expected to close in the third quarter of 2026. The updated full-year outlook excludes any contribution from this pending deal.

Updated Fiscal 2026 Outlook

Ferguson raised its guidance for the full fiscal year 2026, reflecting confidence in continued project backlogs and open orders. The company increased its net sales outlook to mid-single-digit growth from a previous forecast of low- to mid-single-digit growth. It also raised the lower end of its adjusted operating margin outlook to 9.5%-9.8 percent from 9.4%-9.8 percent. Capital expenditure forecasts were hiked to $375 million-$425 million from $350 million-$400 million.

What the Numbers Show

The divergence between rising sales and slightly contracting margins suggests a shift in product mix or pricing pressures, yet the ability to raise both top-line and bottom-line guidance indicates strong volume leverage. The specific mention of data centers as the primary driver for non-residential growth highlights a strategic pivot toward infrastructure-heavy projects, which typically offer larger ticket sizes and longer-term visibility compared to residential work. This sector-specific strength appears to be insulating Ferguson from broader residential market softness, particularly in Canada.

Procedurally, Ferguson disclosed on June 16 that it would cancel its secondary listing on the London Stock Exchange, a move that took effect on July 20. This simplification of its listing structure may reduce administrative costs and streamline investor relations, aligning with its focus on core operational efficiency.

Ferguson Enterprises Inc. (NYSE: FERG) announced that its Board of Directors declared a quarterly dividend of $0.89 per share on the company’s common stock. This distribution reflects the company’s commitment to returning capital to shareholders amidst its position as North America’s largest value-added distributor of essential water and air solutions.

The dividend is payable on October 7, 2026, to shareholders of record as of the close of business on August 21, 2026. For holders of Depositary Interests, the currency election deadline is set for September 10, 2026. These dates are critical for investors seeking to ensure eligibility for the upcoming payout.

Dividend Details

Ferguson serves specialized professionals in the $340 billion residential and non-residential construction markets. The company provides expertise and a wide range of products and services, including plumbing, HVAC, appliances, lighting, and water and wastewater solutions. Headquartered in Newport News, Virginia, Ferguson reported sales of $31.3 billion in calendar year 2025 and employs approximately 35,000 associates across more than 1,700 locations.

The declaration underscores the firm’s financial stability and its focus on supporting customers in complex projects by making them simple, successful, and sustainable. Investors should note the specific deadlines for record ownership and currency elections to avoid missing the distribution.