# Ferguson Enterprises

**Ferguson Enterprises Inc.** is a Delaware-incorporated distributor of plumbing, HVAC (heating, ventilation, and air conditioning), and waterworks products to professional contractors, describing itself as North America's largest value-added distributor of essential water and air solutions serving the specialized professional in a $400 billion residential and non-residential construction market.<sup>[1](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)</sup><sup> • </sup><sup>[2](https://www.fergusonpressroom.com/factsheets--reports)</sup> It trades under the ticker FERG on both the New York and London stock exchanges and is headquartered in [Newport News, Virginia](https://www.edgepedia.org/newport-news-virginia).<sup>[1](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)</sup>

| Key fact | Detail |
|---|---|
| Scale | $31.3 billion in calendar 2025 sales; 1,729 branches and about 35,000 associates as of December 31, 2025; roughly 1 million customers<sup>[1](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)</sup><sup> • </sup><sup>[2](https://www.fergusonpressroom.com/factsheets--reports)</sup> |
| Geography | The United States segment contributed 95% of net sales in each of fiscal 2023, 2024, and 2025; Canada contributed 5% with 212 branches<sup>[1](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)</sup> |
| Margins | Calendar 2025 gross margin 31.0%; adjusted operating margin 9.6% (FY2025: 9.2%)<sup>[3](https://www.corporate.ferguson.com/pressroom/news-releases/news-details/2026/Ferguson-Reports-Strong-Calendar-2025-Results-and-Issues-2026-Guidance/default.aspx)</sup><sup> • </sup><sup>[4](https://www.nasdaq.com/press-release/ferguson-reports-fourth-quarter-and-year-end-results-2025-09-16)</sup> |
| Fragmentation | About 37,000 suppliers (none over 5% of purchases) and no customer over 1% of net sales; markets described as highly fragmented<sup>[1](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)</sup> |
| End markets | Residential and non-residential each about half of net sales; repair, maintenance, and improvement about two-thirds, new construction about one-third<sup>[1](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)</sup> |
| Structure | On August 1, 2024, Ferguson Enterprises Inc. became the new Delaware parent of the Jersey-incorporated Ferguson plc group<sup>[5](https://www.corporate.ferguson.com/pressroom/news-releases/news-details/2024/Ferguson-Enterprises-Inc.-Establishment-of-new-corporate-structure-cancellation-of-Ferguson-plc-listing-and-admission-of-Ferguson-Enterprises-Inc.-common-stock/default.aspx)</sup> |
| M&A pace | More than 50 acquisitions in the five years through fiscal 2024; nine acquisitions for $301 million in fiscal 2025<sup>[6](https://www.mdm.com/company_article/how-ferguson-worked-wonders-with-channel-drifting-expansion/)</sup><sup> • </sup><sup>[4](https://www.nasdaq.com/press-release/ferguson-reports-fourth-quarter-and-year-end-results-2025-09-16)</sup> |

## What Ferguson is and what it distributes

Ferguson describes itself as a distributor of essential water and air solutions, sold to professional contractors rather than consumers.<sup>[1](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)</sup> As of December 31, 2025 it served customers through 9 regional distribution centers, six MDCs (mixed distribution centers), approximately 6,200 fleet vehicles, 1,729 branches, and approximately 35,000 associates; the US business alone operated 1,517 branches serving all 50 states with about 32,000 associates.<sup>[1](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)</sup> The company's own factsheet places its network within 60 miles of 95% of its customers and counts roughly 1 million customers served.<sup>[2](https://www.fergusonpressroom.com/factsheets--reports)</sup>

The physical footprint is large. In MDM's analysis of fiscal 2023 figures, Ferguson's branches and distribution centers occupied nearly 57 million square feet holding $3.9 billion of inventory, generating sales of roughly $524 per square foot and close to $850,000 per employee, on fiscal 2023 sales just shy of $30 billion.<sup>[6](https://www.mdm.com/company_article/how-ferguson-worked-wonders-with-channel-drifting-expansion/)</sup> The first Ferguson showroom opened in 1970 in Newport News, Virginia; the company now operates more than 260 showrooms.<sup>[2](https://www.fergusonpressroom.com/factsheets--reports)</sup>

## How the two-step distribution model makes money

In a two-step distribution model, manufacturers sell to a wholesaler such as Ferguson, which typically warehouses goods, breaks bulk, extends credit, and sells in small lots to contractors. Ferguson's economics rest on buying at wholesale and capturing a gross margin on resale: calendar 2025 gross margin was 31.0%, and adjusted operating profit was $3.0 billion at a 9.6% adjusted operating margin.<sup>[3](https://www.corporate.ferguson.com/pressroom/news-releases/news-details/2026/Ferguson-Reports-Strong-Calendar-2025-Results-and-Issues-2026-Guidance/default.aspx)</sup>

The model works because both sides of Ferguson's market are fragmented. The company had approximately 37,000 suppliers, with no supplier accounting for more than 5% of total inventory purchases, and no single customer accounted for more than 1% of net sales during the transition period and fiscal 2025.<sup>[1](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)</sup>

**Why large wholesalers win.** The scholarly context supports the consolidation logic. Research by Sharat Ganapati found that wholesalers intermediated half of all transactions in the $6 trillion US market for manufactured goods in 2012, up from 32 percent in 1992, with 70% of that increase attributable to "superstar" firms, the largest 1 percent of wholesalers.<sup>[7](https://www.aeaweb.org/articles?id=10.1257%2Fmic.20210015)</sup> His NBER working paper shows wholesalers' market share rose from 43.1% to 54.9% across 56 sampled US manufactured-goods markets between 1997 and 2007, driven by a linkage between foreign sourcing and expansion of domestic distribution networks, both of which require scale.<sup>[8](https://www.nber.org/system/files/working_papers/w32036/w32036.pdf)</sup> The same work explains the customer base: over 80% of downstream buyers with small purchases (under 100,000 euros) sourced goods indirectly through wholesalers, while larger purchasers bought directly from manufacturers; shipments worth $1,000 or less accounted for 14.9% of total wholesaler shipments but only 3.9% of manufacturer shipments.<sup>[8](https://www.nber.org/system/files/working_papers/w32036/w32036.pdf)</sup>

**Channel mix.** The trade counter, where a contractor picks up parts at a branch counter, remains the core channel: in 2022, 68% of Ferguson group revenue came from branches, 21% via eCommerce, and 11% in showrooms, and only 16% of orders were sent as direct shipments from suppliers.<sup>[6](https://www.mdm.com/company_article/how-ferguson-worked-wonders-with-channel-drifting-expansion/)</sup>

## From Ferguson plc to Ferguson Enterprises Inc.

On August 1, 2024, Ferguson Enterprises Inc., a Delaware corporation, became the new parent company of the Ferguson plc group. The listing of all 201,343,253 existing Ferguson plc ordinary shares was canceled on the [London Stock Exchange](https://www.edgepedia.org/london-stock-exchange), and the same number of new Ferguson Enterprises common shares was admitted, trading as FERG on both the NYSE and the LSE.<sup>[5](https://www.corporate.ferguson.com/pressroom/news-releases/news-details/2024/Ferguson-Enterprises-Inc.-Establishment-of-new-corporate-structure-cancellation-of-Ferguson-plc-listing-and-admission-of-Ferguson-Enterprises-Inc.-common-stock/default.aspx)</sup> The old parent was re-registered as a private Jersey company and renamed Ferguson (Jersey) Limited.<sup>[5](https://www.corporate.ferguson.com/pressroom/news-releases/news-details/2024/Ferguson-Enterprises-Inc.-Establishment-of-new-corporate-structure-cancellation-of-Ferguson-plc-listing-and-admission-of-Ferguson-Enterprises-Inc.-common-stock/default.aspx)</sup> At the time of the change, Ferguson had sales of $29.7 billion (fiscal 2023) and approximately 35,000 associates in 1,700 locations.<sup>[5](https://www.corporate.ferguson.com/pressroom/news-releases/news-details/2024/Ferguson-Enterprises-Inc.-Establishment-of-new-corporate-structure-cancellation-of-Ferguson-plc-listing-and-admission-of-Ferguson-Enterprises-Inc.-common-stock/default.aspx)</sup> The redomiciliation completed a long shift of the business toward North America; the company is now headquartered at 751 Lakefront Commons, Newport News, Virginia.<sup>[1](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)</sup>

## By the numbers

Ferguson's recent results, across two fiscal calendars:

- **Fiscal 2025 (ended July 31, 2025):** net sales of $30.8 billion, up 3.8%; gross margin 30.7% (up 20 basis points); reported operating margin 8.5% (down 40 basis points); adjusted operating margin 9.2% (down 30 basis points); diluted EPS $9.32 (up 9.3%); adjusted diluted EPS $9.94 (up 2.6%).<sup>[4](https://www.nasdaq.com/press-release/ferguson-reports-fourth-quarter-and-year-end-results-2025-09-16)</sup> Operating cash flow was $1.9 billion, capital expenditure $305 million, and free cash flow $1.654 billion, up $132 million year over year.<sup>[9](https://www.fool.com/earnings/call-transcripts/2026/04/02/ferguson-ferg-q4-2025-earnings-call-transcript/)</sup>
- **Calendar 2025 (transition period ended December 31, 2025):** net sales of $31.3 billion, up 5.0%, with 4.5% organic growth and 1.0% acquisition growth; net profit of $2.01 billion, up 21.5%; adjusted EBITDA of $3.24 billion, up 11.6%.<sup>[3](https://www.corporate.ferguson.com/pressroom/news-releases/news-details/2026/Ferguson-Reports-Strong-Calendar-2025-Results-and-Issues-2026-Guidance/default.aspx)</sup><sup> • </sup><sup>[10](https://www.mdm.com/news/top-distributor-sectors/contractor/fergusons-2025-led-by-31b-in-sales-8-acquisitions-as-nonres-powers-growth/)</sup>
- **Returns on capital:** return on capital employed was 29.4% in fiscal 2025, down from 40.4% in 2022; net sales grew from $19.9 billion in 2020 to $30.8 billion in fiscal 2025.<sup>[11](https://www.sec.gov/Archives/edgar/data/2011641/000201164125000049/ferg2025ar.pdf)</sup>

**Market position.** In MDM's 2024 Top Distributors Lists (fiscal 2023 revenues), Ferguson ranked No. 1 in Plumbing, No. 2 in HVACR, No. 2 in Industrial PVF, No. 3 in Industrial Supplies, No. 3 in Building Materials/Construction, No. 9 in JanSan, and No. 11 in MRO.<sup>[6](https://www.mdm.com/company_article/how-ferguson-worked-wonders-with-channel-drifting-expansion/)</sup> The company describes its markets as highly fragmented, with very few large competitors and a high number of small local and mid-size regional distributors; it publishes no precise market-share figure.<sup>[1](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)</sup> Within its addressable market, Ferguson estimates that $30 billion of the $100 billion addressable residential trade plumbing and HVAC market is served by dual-trade plumbing and HVAC professionals, the customer group its counter strategy targets.<sup>[6](https://www.mdm.com/company_article/how-ferguson-worked-wonders-with-channel-drifting-expansion/)</sup>

## Cycles, M&A, and the growth playbook

**Housing exposure.** Residential and non-residential markets each account for approximately half of net sales, with repair, maintenance, and improvement (RMI) about two-thirds and new construction about one-third.<sup>[1](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)</sup> The 2024 to 2025 slowdown showed how the mix cushions housing weakness: in fiscal 2025, Waterworks and HVAC customer groups grew 10% and 8% respectively, non-residential sales were approximately 7% higher, and residential revenues were approximately 1% above the prior year.<sup>[11](https://www.sec.gov/Archives/edgar/data/2011641/000201164125000049/ferg2025ar.pdf)</sup> By the fourth quarter of calendar 2025, US residential revenue was down 2% while non-residential revenue was up 10%, driven by waterworks and commercial/mechanical activity including large capital projects.<sup>[3](https://www.corporate.ferguson.com/pressroom/news-releases/news-details/2026/Ferguson-Reports-Strong-Calendar-2025-Results-and-Issues-2026-Guidance/default.aspx)</sup> In that quarter, US Waterworks was 24% of US sales (up 9% year over year), Residential Trade Plumbing 15% (down 4%), and HVAC 11% (down 7%).<sup>[10](https://www.mdm.com/news/top-distributor-sectors/contractor/fergusons-2025-led-by-31b-in-sales-8-acquisitions-as-nonres-powers-growth/)</sup>

**Serial acquisitions.** Ferguson has made more than 50 acquisitions in the five years through fiscal 2024, including 10 in fiscal 2024, many targeting dual-trade plumbing and HVAC contractors.<sup>[6](https://www.mdm.com/company_article/how-ferguson-worked-wonders-with-channel-drifting-expansion/)</sup> In fiscal 2025 it invested $301 million in nine acquisitions generating approximately $300 million of annualized revenue.<sup>[4](https://www.nasdaq.com/press-release/ferguson-reports-fourth-quarter-and-year-end-results-2025-09-16)</sup> For calendar 2025 the company reported eight acquisitions with combined annualized revenue of more than $300 million; the two counts cover different reporting periods and are not directly comparable.<sup>[10](https://www.mdm.com/news/top-distributor-sectors/contractor/fergusons-2025-led-by-31b-in-sales-8-acquisitions-as-nonres-powers-growth/)</sup> Acquisitions remain a core growth strategy alongside organic share gains.<sup>[1](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)</sup>

**Dual-trade counters and capital returns.** Ferguson has completed over 600 counter conversions toward a goal of 650 dual-trade counters in 2026 under its "HVAC everywhere" strategy; the dual-trade counters serve approximately 65,000 contractors who work across both plumbing and HVAC trades.<sup>[11](https://www.sec.gov/Archives/edgar/data/2011641/000201164125000049/ferg2025ar.pdf)</sup><sup> • </sup><sup>[9](https://www.fool.com/earnings/call-transcripts/2026/04/02/ferguson-ferg-q4-2025-earnings-call-transcript/)</sup> In fiscal 2025 it paid $0.5 billion in dividends (the annual dividend up 5% to $3.32 per share), repurchased $948 million of shares, and ended the year with net debt to adjusted EBITDA of 1.1x.<sup>[11](https://www.sec.gov/Archives/edgar/data/2011641/000201164125000049/ferg2025ar.pdf)</sup><sup> • </sup><sup>[4](https://www.nasdaq.com/press-release/ferguson-reports-fourth-quarter-and-year-end-results-2025-09-16)</sup> The company also estimates a roughly $50 billion total addressable market in large capital projects through 2030, spanning data centers, manufacturing, and healthcare.<sup>[11](https://www.sec.gov/Archives/edgar/data/2011641/000201164125000049/ferg2025ar.pdf)</sup>

## References

1. [Ferguson Enterprises Inc. Form 10-KT for the period ended December 31, 2025, SEC EDGAR](https://www.sec.gov/Archives/edgar/data/2011641/000201164126000006/ferg-20251231.htm)
2. [Ferguson Pressroom: Facts & Corporate Information (February 24, 2026)](https://www.fergusonpressroom.com/factsheets--reports)
3. [Ferguson Reports Strong Calendar 2025 Results and Issues 2026 Guidance, Ferguson corporate press release](https://www.corporate.ferguson.com/pressroom/news-releases/news-details/2026/Ferguson-Reports-Strong-Calendar-2025-Results-and-Issues-2026-Guidance/default.aspx)
4. [Ferguson Reports Fourth Quarter and Year End Results (September 16, 2025), Nasdaq](https://www.nasdaq.com/press-release/ferguson-reports-fourth-quarter-and-year-end-results-2025-09-16)
5. [Ferguson Enterprises Inc.: Establishment of new corporate structure, cancellation of Ferguson plc listing (August 1, 2024), Ferguson corporate press release](https://www.corporate.ferguson.com/pressroom/news-releases/news-details/2024/Ferguson-Enterprises-Inc.-Establishment-of-new-corporate-structure-cancellation-of-Ferguson-plc-listing-and-admission-of-Ferguson-Enterprises-Inc.-common-stock/default.aspx)
6. [How Ferguson Worked Wonders with 'Channel Drifting' Expansion, Modern Distribution Management](https://www.mdm.com/company_article/how-ferguson-worked-wonders-with-channel-drifting-expansion/)
7. [Sharat Ganapati (2025). The Modern Wholesaler: Global Sourcing, Domestic Distribution, and Scale Economies. AEJ: Microeconomics.](https://www.aeaweb.org/articles?id=10.1257%2Fmic.20210015)
8. [Sharat Ganapati (January 2024). The Modern Wholesaler. NBER Working Paper w32036.](https://www.nber.org/system/files/working_papers/w32036/w32036.pdf)
9. [Ferguson (FERG) Q4 2025 Earnings Call Transcript, The Motley Fool](https://www.fool.com/earnings/call-transcripts/2026/04/02/ferguson-ferg-q4-2025-earnings-call-transcript/)
10. [Ferguson's 2025 Led by $31B in Sales, 8 Acquisitions as NonRes Powers Growth, Modern Distribution Management](https://www.mdm.com/news/top-distributor-sectors/contractor/fergusons-2025-led-by-31b-in-sales-8-acquisitions-as-nonres-powers-growth/)
11. [Ferguson Enterprises Inc. FY2025 Annual Report (Form 10-K), SEC EDGAR](https://www.sec.gov/Archives/edgar/data/2011641/000201164125000049/ferg2025ar.pdf)

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*Topic: Encyclopedia › Society and history › Economics and business › Business and work › Companies and commercial industries › Business and professional services companies*

*Initially written Oct 10, 2026 · Edited: Oct 11, 2026; Oct 15, 2026*

*Copyright 2026 EdgeChat AI, a subsidiary of Biostate AI.*

License: Edgepedia Community License 1.0, https://www.edgepedia.org/edgepedia/license