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What changed in Ferguson Enterprises Inc. /DE/'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Ferguson Enterprises Inc. /DE/'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+331 added−353 removedSource: 10-K (2025-09-26) vs 10-K (2024-09-25)

Top changes in Ferguson Enterprises Inc. /DE/'s 2025 10-K

331 paragraphs added · 353 removed · 260 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur business is not highly seasonal although we generally experience the highest volume of sales in our fourth fiscal quarter which begins during the spring season in North America. Intellectual property We rely on a combination of intellectual property laws, confidentiality procedures and contractual provisions to protect our proprietary assets and our brands.
Biggest changeContractual relationships and seasonality We are not dependent on any material licenses, industrial, commercial or financial contracts (including contracts with customers and suppliers) or new manufacturing processes. Our business is not highly seasonal although we generally experience the highest volume of sales in our fourth fiscal quarter which begins during the spring season in North America.
We do not currently expect compliance with these laws and regulations to have a material effect on our capital expenditures, results of operations, or competitive position as compared to prior periods. 5 Human capital management Our associates are fundamental to the long-term success of the Company.
We do not currently expect compliance with these laws and regulations to have a material effect on our capital expenditures, results of operations, or competitive position as compared to prior periods. Human capital management Our associates are fundamental to the long-term success of the Company.
We have chosen to operate in each of these markets because we believe we can generate strong growth, solid gross and net margins and good returns on capital. The markets we serve are highly fragmented with very few large competitors and a high number of small, local distributors, as well as mid-size regional distributors.
We have chosen to operate in each of these markets because we believe we can generate strong growth, solid gross and operating margins and good returns on capital. The markets we serve are highly fragmented with very few large competitors and a high number of small, local distributors, as well as mid-size regional distributors.
We sell through a common network of distribution centers, branches, counter service and specialist sales associates, showroom consultants and e-commerce channels. The Company has a long history and maintained businesses throughout Europe, Canada and the United States in the 1900s. In the early 2000s, the Company’s focus shifted to attractive North American markets.
We sell through a common network of distribution centers, branches, counter service and expert sales associates, showroom consultants and e-commerce channels. The Company has a long history and maintained businesses throughout Europe, Canada and the United States in the 1900s. In the early 2000s, the Company’s focus shifted to attractive North American markets.
Specifically, we believe our network of suppliers, associates and the number of branches and distribution centers provides us with the scale and expertise to serve our customers better than our competitors do, as many of these competitors operate only locally. In addition, we also benefit from significant synergies to help lower operating costs and improve margins.
Specifically, we believe our network of suppliers, associates and the number of branches and distribution centers provide us with the scale and expertise to serve our customers better than our competitors do, as many of these competitors operate only locally. In addition, we also benefit from significant synergies to help lower operating costs and improve margins.
Our safety efforts are further supported by the allocation of additional resources for safety improvements and the employment of dedicated safety professionals. Through continuous investment in health and safety, we strive to mitigate the risk of and minimize the exposure to on-the-job injuries.
Our safety efforts are further supported by the allocation of additional resources for safety improvements and the employment of dedicated safety professionals. Through continuous investment in health and safety, we aim to mitigate the risk of and minimize exposure to on-the-job injuries.
For fiscal 2024, residential and non-residential markets each account for approximately half of our net sales, with net sales within these combined markets balanced between RMI (approximately two-thirds of our net sales) and new construction (approximately one-third of our net sales), based on management’s estimates.
For fiscal 2025, residential and non-residential markets each account for approximately half of our net sales, with net sales within these combined markets balanced between RMI (approximately two-thirds of our net sales) and new construction (approximately one-third of our net sales), based on management’s estimates.
The Canada segment operates primarily under the Wolseley brand and supplies plumbing, HVAC and refrigeration products to residential and commercial contractors. The Canada segment also supplies specialist water and wastewater treatment products to residential, commercial and infrastructure contractors, and supplies PVF solutions to industrial customers.
The Canada segment operates primarily under the Wolseley brand and supplies plumbing, HVAC and refrigeration products to residential and commercial contractors. The Canada segment also supplies specialized water and wastewater treatment products to residential, commercial and infrastructure contractors, and supplies PVF solutions to industrial customers.
Any references to the Company’s website contained herein do not constitute incorporation by reference of information contained on such website and such information should not be considered part of this Annual Report. 7
Any references to the Company’s website contained herein do not constitute incorporation by reference of information contained on such website and such information should not be considered part of this Annual Report. 8
Item 1. Business Overview Ferguson is the largest value-added distributor serving the specialized professional in our $340 billion residential and non-residential North American construction market.
Item 1. Business Overview Ferguson is the largest value-added distributor serving the water and air specialized professional in our $340 billion residential and non-residential North American construction market.
Below is a description of the Company’s reportable segments. United States segment The United States segment contributed 95% of net sales in each of fiscal years 2024, 2023 and 2022.
Below is a description of the Company’s reportable segments. United States segment The United States segment contributed 95% of net sales in each of fiscal years 2025, 2024 and 2023.
Fostering engagement and retention We strive to create an environment where our associates can bring their true, authentic selves to work every day. Our five Business Resource Groups (“BRGs”) play a role in our effort to enhance the overall well being of our associates, support professional development and create a positive workplace environment.
Fostering engagement and retention We strive to create an environment where our associates can bring their true, authentic selves to work every day. Our Business Resource Groups (“BRGs”) play a role in our effort to enhance the overall wellbeing of our associates, support professional development and create a positive workplace environment.
ESG Report Additional information regarding our activities related to ESG matters, including our people and human capital management, can be found in our most recent ESG Report, which is available on our website.
Sustainability Report Additional information regarding our activities related to sustainability and human capital management matters, including our people and communities, can be found in our most recent Sustainability Report, which is available on our website.
As of July 31, 2024, we had approximately 36,000 suppliers, with no supplier accounting for more than 5% of total inventory purchases, which provides us access to a diverse and broad range of quality products.
As of July 31, 2025, we had approximately 37,000 suppliers, with no supplier accounting for more than 5% of total inventory purchases, which provides us access to a diverse and broad range of quality products.
For further segment information, see Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2, Revenue and segment information of the Notes to the Ferguson plc Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Annual Report (the “Consolidated Financial Statements”).
For further segment information, see Part II, Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2, Segment and net sales information of the Notes to the Consolidated Financial Statements in Part II, Item 8: Financial Statements and Supplementary Data of this Annual Report (the “Consolidated Financial Statements”).
We believe these factors enable continued growth in net sales as well as growth in cash flow and, therefore, may better enable us to provide investment returns to shareholders. Our scale and expertise position us to be involved in all stages of our customers’ projects, including design, staging, and project management. Across all our customers, we take a consultative approach.
We believe these factors will enable continued growth in net sales as well as growth in cash flow and, therefore, may better enable us to provide investment returns to shareholders. Our scale and expertise position us to be involved in all stages of our customers’ projects, including design, staging, and project management.
The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The Company’s website is corporate.ferguson.com.
In accordance with these requirements, the Company files reports and other information with the SEC. The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The Company’s website is corporate.ferguson.com.
We offer a variety of health, welfare, and financial benefits to our full-time and part-time associates, including health care and insurance benefits, mental health and well-being resources, retirement plans, and an employee share purchase plan, among others. We believe acknowledging exceptional performance contributes to company success.
We offer a variety of health, welfare, and financial benefits to our full-time and part-time associates, including health care and insurance benefits, mental health and wellbeing resources, retirement plans, and an employee share purchase plan, among others. We believe acknowledging exceptional performance contributes to company success. We have prioritized and invested in associate recognition.
In general, increases in such prices increase our operating costs and negatively impact our operating profit to the extent that such increases cannot be passed on to customers. Conversely, if competitive pressures allow us to hold prices despite relevant raw material prices falling, profitability can increase.
To a lesser extent, fluctuations in the price of fuel could affect transportation costs. In general, increases in such prices increase our operating costs and negatively impact our operating profit to the extent that such increases cannot be passed on to customers. Conversely, if competitive pressures allow us to hold prices despite relevant raw material prices falling, profitability can increase.
The contents of this report are not incorporated by reference into this Annual Report or in any other report or document we file with or furnish to the SEC. Available information The Company is subject to the informational requirements of the Exchange Act. In accordance with these requirements, the Company files reports and other information with the SEC.
The contents of the Sustainability Report are not incorporated by reference into this Annual Report or in any other report or document we file with or furnish to the SEC. Available information The Company is subject to the informational requirements of the Securities Exchange Act of 1934 (as amended, the “Exchange Act”).
These programs are tailored to associates’ leadership level and potential. The Company also offers associates professional development courses, many of which are on-demand and targeted at improving technical skills, sales, communication, well-being, critical thinking and relationship management skills.
We offer a variety of leadership and development programs that develop skills and capabilities for our associates and leaders. These programs are tailored to associates’ roles, leadership level and potential. The Company also offers associates professional development courses, many of which are on-demand and targeted at improving technical skills, sales, communication, wellbeing, critical thinking and relationship management skills.
We have registered or applied for registration of trademarks, service marks, and internet domain names, both domestically and internationally. Regulatory landscape Our operations are affected by various statutes, regulations and standards in the countries and markets in which we operate, including the United States and Canada. The amount of such regulation and the penalties for any breaches can vary.
Regulatory landscape Our operations are affected by various statutes, regulations and standards in the countries and markets in which we operate, including the United States and Canada. The amount of such regulation and the penalties for any breaches can vary.
As of July 31, 2024, the Canada business operated 224 branches with one regional distribution center and approximately 3,000 associates. In addition, our Canada business operates one MDC in Brampton, Ontario (Toronto) for branch replenishment and final mile distribution. Business model We have a balanced approach to attractive end markets and serve customers principally in North America.
As of July 31, 2025, the Canada business operated 227 branches, one regional distribution center and one MDC with approximately 3,000 associates. 4 Business model We have a balanced approach to attractive end markets and serve customers principally in North America.
We believe that these programs, as well as our strategic focus on I&D, support our objective to retain the best talent. Culture and values We strive to maintain a culture of integrity and are committed to acting ethically in all our business activities.
We offer these development and engagement programs to aid in the growth, engagement and retention of our associates. We believe that these programs support our objective to retain the best talent. Culture and values We strive to maintain a culture of integrity and are committed to acting ethically in all our business activities.
We serve our customers through a network of 11 regional distribution centers, four MDCs, approximately 5,900 fleet vehicles, 1,773 branches and approximately 35,000 associates, in each case, as of July 31, 2024. Customers We help make our customers’ complex projects simple, successful and sustainable.
As of July 31, 2025, we serve our customers through a network of 11 regional distribution centers, six MDCs, approximately 5,900 fleet vehicles, 1,746 branches and approximately 35,000 associates. Customers We help make our customers’ complex projects simple, successful and sustainable. We offer expertise and a broad range of products delivered where and when our customers need them.
In the United States, approximately 14% of net sales are derived from basic products containing significant amounts of commodity-priced materials, predominantly plastic, copper and steel, and other components which can be subject to volatile price changes based upon fluctuations in the commodities market. To a lesser extent, fluctuations in the price of fuel could affect transportation costs.
In the United States, net sales include basic products that contain significant amounts of commodity-priced materials, predominantly plastic, copper and steel, and other components which can be subject to volatile price changes based upon fluctuations in the commodities market. These commodity based products can represent up to approximately 15% of annual net sales.
Health and safety We strive to drive continuous improvement in our health and safety performance by maintaining high standards for our health and safety compliance programs and training our associates on and enforcing expected safe behaviors and global safety rules.
We also award associates who consistently demonstrate four core behaviors of being: passionate, resilient, customer driven and solution-oriented. Health and safety We strive to drive continuous improvement in our health and safety performance by maintaining high standards for our health and safety compliance programs as well as training our associates on and enforcing expected safe behaviors and global safety rules.
Our Code of Business Conduct and Ethics (“Code of Conduct”) is a resource dedicated to helping our associates live by our values and understand Ferguson’s commitment to compliance with all applicable laws and regulations, our Code of Conduct and Company policies.
The Code of Conduct is a resource dedicated to helping our associates live by our values and understand Ferguson’s commitment to compliance with all applicable laws and regulations and Company policies. We require new associates to complete our Code of Conduct training upon hire and all current associates to complete our Code of Conduct training on an annual basis.
As a result, the operating businesses across Europe were disposed of through various transactions. As part of this transition and following a corporate restructuring, Ferguson plc became the ultimate holding company for the business in 2019.
As a result, the operating businesses across Europe were disposed of through various transactions. As part of this transition and following a corporate restructuring, Ferguson Enterprises Inc. became the ultimate parent company for the business in August 2024. Ferguson is listed on the New York Stock Exchange (NYSE: FERG) and the London Stock Exchange (LSE: FERG).
Over 95% of the products sold in the United States are sourced from U.S.-based suppliers, while approximately 90% of the products sold in Canada are sourced from Canada-based suppliers. Our branded and own brand products are generally available from several sources and are not typically subject to supply constraints in normal market conditions.
Our products include branded products and own brand products that the Company sells exclusively in the market. Approximately 95% of the products sold in the United States are sourced from U.S.-based suppliers, while approximately 90% of the products sold in Canada are sourced from Canada-based suppliers.
In addition, we are committed to supporting our associates as well as customers and people within our communities. Through a variety of outreach efforts, we provide our associates with the opportunity to directly engage in community service. We offer these development and engagement programs to aid in the growth, engagement and retention of our associates.
From the resulting data, we develop an action plan designed to make improvements in the areas our associates indicated that they value most. In addition, we are committed to supporting our associates as well as customers and people within our communities. Through a variety of outreach efforts, we provide our associates with the opportunity to engage directly in community service.
Its products are delivered through a common network of distribution centers, branches, counter service and specialist sales associates, showroom consultants and e-commerce channels. As of July 31, 2024, the United States business operated 1,549 branches and 10 regional distribution centers serving all 50 states with approximately 32,000 associates.
Our products are delivered through a common network of distribution centers, branches, counter service and expert sales associates, showroom consultants and e-commerce channels. As of July 31, 2025, the United States business operated 1,519 branches, 10 regional distribution centers, as well as five market distribution centers (“MDCs”) for branch replenishment and final mile distribution to customers.
Fulfillment options for our customers include delivery, customer pick-up from our branches, counters and locker locations, and direct shipments.
Fulfillment options for our customers include delivery, customer pick-up from our branches, counters and locker locations, and direct shipments. We also offer after-sales support that comprises warranty, credit, project-based billing, returns and maintenance, repair and operations (“MRO”) support.
We partner with our customers in an effort to guide complex projects to a successful conclusion, and to make the entire project better because Ferguson was involved. Contractual relationships and seasonality We are not dependent on any material licenses, industrial, commercial or financial contracts (including contracts with customers and suppliers) or new manufacturing processes.
Across all our customers, we take a consultative approach. We partner with our customers in an effort to guide complex projects to a successful conclusion, and to make the entire project better because Ferguson was involved.
These MDCs include automated picking and replenishment systems for the majority of items picked. This automation improves efficiency and reduces manual handling of certain products which supports associate health and safety. Competitive conditions We believe we are well-equipped to win new customers and generate attractive returns.
This automation improves efficiency and reduces manual handling of certain products which supports associate health and safety. 5 Competitive conditions We believe we are well-equipped to win new market share and generate attractive returns. We have leading positions in the residential and non-residential markets based on net sales as a percentage of overall market size.
Value-added products and solutions Our value-added solutions include a variety of sales channels available to our customers ranging from inside and outside sales teams, sales centers, digital commerce capabilities, system-to-system capabilities, counter sales and showrooms. We also offer customized solutions such as virtual design, fabrication, valve actuation, pre-assembly, kitting, installation and project management services.
No single customer accounted for more than 1% of our net sales in fiscal 2025. Value-added products and solutions Our value-added solutions include a variety of sales channels available to our customers ranging from inside and outside sales teams, sales centers, digital commerce capabilities, system-to-system capabilities, counter sales and showrooms.
We offer expertise and a broad range of products delivered where and when our customers need them. Customers rely on us to help them deliver critical infrastructure spanning almost every stage of projects within the residential and non-residential markets.
Customers rely on us to help them deliver critical infrastructure spanning almost every stage of a project’s life cycle within the residential and non-residential markets. We partner with our customers to keep millions of homes and businesses operating while helping them to run their business more efficiently.
We operate an extensive network across North America, including three import centers, 11 regional distribution centers and 1,773 branch locations as of July 31, 2024. Our network also includes four MDCs which provide greater access to key strategic markets and allows us to bring our products closer to our customers.
Global supply chain We have a global supply chain which provides access to approximately 37,000 suppliers and we sell more than 1 million unique products each year. We operate an extensive network across North America, including three import centers, 11 regional distribution centers and 1,746 branch locations as of July 31, 2025.
With our value-added solutions, we aim to increase productivity for our customers and for the industry. We source, distribute and sell products from domestic and international suppliers. Our products include branded products and own brand products that the Company sells exclusively in the market. We purchase from approximately 36,000 suppliers.
We also offer customized solutions such as virtual design, fabrication, valve actuation, pre-assembly, kitting, installation and project management services. With our value-added solutions, we aim to increase productivity for our customers and for the industry. We source, distribute and sell products from domestic and international suppliers.
Through internal mobility, many of our leaders shifted from frontline roles to managerial roles. Our learning and development initiatives are designed to foster both immediate and long-term growth, empowering our associates to advance their careers within Ferguson. We offer a variety of leadership and development programs that develop skills and capabilities for our associates and leaders.
The career paths of our senior leadership team demonstrate our commitment to identifying and developing the next generation of talent. Through internal mobility, many of our leaders shifted from frontline roles to managerial roles. Our learning and development initiatives are designed to foster both immediate skill-building and sustained professional advancement, helping associates thrive throughout their careers.
To support engagement and retention of our associates, we conduct an annual survey where associates can provide us with their feedback. From the resulting data, we develop an action plan designed to make improvements in the areas our associates indicated that they value most.
Membership for each BRG is open to all our associates and participation is voluntary. Our associates’ voices matter. To support engagement and retention of our associates, we conduct an annual survey where associates can provide us with their feedback.
These locations provide same-day and next-day product availability, which we believe to be a competitive advantage and an important requirement for customers.
Our network serves our customers in all 50 states with approximately 32,000 associates, providing same-day and next-day product availability, which we believe to be a competitive advantage and an important requirement for customers. Canada segment The Canada segment contributed 5% of net sales in each of fiscal years 2025, 2024 and 2023.
Our hiring process is intended to reach a diverse talent pool to assist us in fostering a culture of inclusion and acceptance through differences in thought, experience and perspective. Promoting growth We place great emphasis on helping our associates develop and expand their skills. The career paths of our tenured leadership team demonstrate our emphasis in the area.
Our hiring process is intended to reach a diverse talent pool to assist us in fostering a culture of strong relationships where differences in thought, experience and perspective contribute to our ability to help make our customers’ projects simple, successful and sustainable. Promoting growth Ferguson is committed to creating meaningful, long-term career opportunities for associates to grow and succeed.
As of July 31, 2024, Ferguson employed approximately 35,000 associates, of which approximately 32,000 were in the United States, 3,000 were in Canada and a small number of associates were in certain other jurisdictions, including Asia, Switzerland, and the U.K.
As of July 31, 2025, Ferguson employed approximately 35,000 associates worldwide, including those employed on a full-time, part-time, seasonal or temporary basis, which includes approximately 32,000 associates in the United States, 3,000 associates in Canada and small number of associates who reside outside of the United States and Canada. 6 Key areas of our human capital management program include the following: Attracting top talent We seek the best associates in our industry.
We have several established programs to recognize top performing sales associates and managers for their outstanding contributions. We also award associates who demonstrate the highest standards of integrity, teamwork, safety, service and impact.
Our Bravo! program is designed to foster a culture of mutual recognition by enabling associates to recognize, appreciate and celebrate each other, no matter their role. Additionally, we have several established formal programs to recognize top performing sales associates and managers for their outstanding contributions.
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The Company was incorporated and registered in Jersey as Alpha JCo Limited on March 8, 2019 under the Companies (Jersey) Law 1991, as amended (the “Jersey Companies Law”), as a private limited company with company number 128484.
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Our branded and private label (“Own Brand”) products are generally available from several sources and are not typically subject to supply constraints in normal market conditions.
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The Company converted its status to a public limited company and changed its name, first to Ferguson Newco plc on March 26, 2019, and then to Ferguson plc on May 10, 2019.
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Our network also includes six MDCs which provide greater access to key strategic markets and allows us to bring our products closer to our customers. These MDCs include automated picking and replenishment systems for the majority of items.
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At that time, our jurisdiction of organization was Jersey and we were centrally managed and controlled in the United Kingdom and therefore we were a tax resident of the United Kingdom. On May 30, 2024, the shareholders of Ferguson plc voted to approve a new corporate structure to domicile the Company’s ultimate parent company in the United States.
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Intellectual property We rely on a combination of intellectual property laws, confidentiality procedures and contractual provisions to protect our proprietary assets and our brands. We have registered or applied for registration of trademarks, service marks, and internet domain names, both domestically and internationally.
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Effective on August 1, 2024, the Company implemented this new corporate structure by completing the Merger that resulted in (i) Ferguson plc becoming a direct, wholly owned subsidiary of Ferguson Enterprises Inc., a Delaware corporation, and (ii) the shareholders of Ferguson plc at the designated record time for the Merger no longer holding ordinary shares of Ferguson plc but instead holding shares of common stock of Ferguson Enterprises Inc.
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This commitment is outlined in our Code of Business Conduct and Ethics (“Code of Conduct”), which sets forth the standards that we expect of our associates and those who may work on our behalf.
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As a result of the Merger, Ferguson Enterprises Inc. became the successor issuer to Ferguson plc, which was renamed “Ferguson (Jersey) Limited” and converted into a private company. Ferguson is listed on the New York Stock Exchange (NYSE: FERG) and the London Stock Exchange (LSE: FERG).
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Equal employment opportunity policy Ferguson recruits, hires, transfers, promotes, compensates, trains, terminates and is committed to making employment decisions about applicants and associates without regard to their race, color, religion, creed, national origin, ancestry, citizenship status, physical disability, mental disability, medical condition, genetic information, marital status, pregnancy, sex, gender, gender identity, gender expression, age, sexual orientation, military and/or veteran status or any other basis protected by law. 7 Compensation and rewards We are committed to offering competitive, comprehensive compensation and benefits that support the wellbeing of our associates.
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In addition, our United States business operates three market distribution centers (“MDCs”) in Denver, Colorado, Houston, Texas and Phoenix, Arizona for branch replenishment and final mile distribution to customers. 3 Canada segment The Canada segment contributed 5% of net sales in each of fiscal years 2024, 2023 and 2022.
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We partner with our customers to keep millions of homes and businesses operating while helping them to run their business more efficiently. No single customer accounted for more than 1% of our net sales in fiscal 2024.
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We also offer after-sales support that comprises warranty, credit, project-based billing, returns and maintenance, repair and operations (“MRO”) support. 4 Global supply chain We have a global supply chain which provides access to approximately 36,000 suppliers and we sell more than 1 million unique products each year.
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We have leading positions in the residential and non-residential markets based on net sales as a percentage of overall market size.
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Our human capital management program is guided by three core pillars, which are aligned with our inclusion and diversity (“I&D”) strategy: attracting top talent, promoting growth, and fostering engagement and retention. Attracting top talent We seek the best associates in our industry.
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Our BRGs include: BOLD (Black), EmpowHER (Women), Building Pride (LGBTQ+), VALOR (Veterans) and HOLA (Hispanic/Latin American). Membership is open to all our associates and participation is voluntary. Each BRG is led by an executive sponsor, a chair and a leadership team who are voted into their roles by their respective BRG members.
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Our core values provide guidance on ethical situations where there may be uncertainty over how to proceed and set out the standards that we expect of our associates and those who may work on our behalf.
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We require new associates to complete our Code of Conduct training upon hire and all current associates to complete our Code of Conduct training on an annual basis. 6 Compensation and rewards To help attract and retain talent, we offer our associates rewards that are designed to be market competitive.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

122 edited+32 added−48 removed95 unchanged
Biggest changeLoss of customer, supplier, associate, or other business information could disrupt operations, damage our reputation, and expose us to claims from customers, suppliers, financial institutions, regulators, payment card associations, associates, and others, any of which could have a material adverse effect on our business, financial condition and results of operations.
Biggest changeWhile we have instituted safeguards for the protection of our information systems and believe we use reputable third-party service providers, during the ordinary course of business, we and our service providers have experienced and expect to continue to experience cyber-attacks on our information systems, and we and our service providers may be unable to protect sensitive data and/or the integrity of our information systems. 15 Loss of customer, supplier, associate, or other business information or compromise of our information systems could disrupt operations and our key business processes, result in the impairment or loss of critical data, be costly and resource intensive to remedy, damage our reputation, our relationship with customers, suppliers and other stakeholders and expose us to claims from customers, suppliers, financial institutions, regulators, payment card associations, associates and others, any of which could have a material adverse effect on our business, financial condition and results of operations.
To a lesser extent, fluctuations in the price of fuel could affect transportation costs. In addition, shipping capacity constraints and related fluctuations in shipping rates and space availability further impact the product cost.
To a lesser extent, fluctuations in the price of fuel could affect transportation costs. In addition, shipping capacity constraints and related fluctuations in shipping rates and space availability further impact product cost.
We may face significant competition in the market for these resources and may not be successful in our hiring efforts. Failure to choose the right investments and implement them in the right manner and at the right pace could adversely affect our relationship with customers, our reputation, the demand for our products and solutions, and our market share.
We face significant competition in the market for these resources and may not be successful in our hiring efforts. Failure to choose the right investments and implement them in the right manner and at the right pace could adversely affect our relationship with customers, our reputation, the demand for our products and solutions, and our market share.
Although we maintain insurance we believe to be sufficient to cover estimated health and safety risks including product liability, health and safety in our operations, vehicle and driver related claims and other types of claims in various jurisdictions, there can be no assurance that such insurance will provide adequate coverage against potential claims.
Although we maintain insurance that we believe to be sufficient to cover estimated health and safety risks including product liability, health and safety in our operations, vehicle and driver related claims and other types of claims in various jurisdictions, there can be no assurance that such insurance will provide adequate coverage against potential claims.
Litigation is inherently unpredictable, and the outcome of some of these proceedings and other contingencies could require us to take or refrain from taking actions which could adversely impact the business or could result in excessive verdicts. Any such outcome could have an adverse effect on our business, financial condition, results of operations and cash flows.
Litigation is inherently unpredictable, and the outcome of some of these proceedings and other contingencies could require us to take or refrain from taking actions which could adversely impact our business or could result in excessive verdicts. Any such outcome could have an adverse effect on our business, financial condition, results of operations and cash flows.
Cyber-attacks from computer hackers and cyber criminals and other malicious internet-based activity continue to increase generally, and our services and systems, including the systems of our outsourced service providers, have been and may in the future continue to be the target of various forms of cybersecurity incidents such as Domain Name System attacks, wireless network attacks, viruses and worms, malicious software, ransomware, application centric attacks, peer-to-peer attacks, business email compromises and phishing attempts, backdoor trojans and distributed DoS attacks.
Cyber-attacks from computer hackers and cyber criminals and other malicious internet-based activity continue to increase, and our services and systems, including the systems of our outsourced service providers, have been and may in the future continue to be the target of various forms of cybersecurity incidents such as Domain Name System attacks, wireless network attacks, viruses and worms, malicious software, ransomware, application centric attacks, peer-to-peer attacks, business email compromises and phishing attempts, backdoor trojans and distributed DoS attacks.
However, these exclusive forum provisions may not apply to suits brought to enforce a duty or liability vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, such as those created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Item 1B. Unresolved Staff Comments None.
However, these exclusive forum provisions may not apply to suits brought to enforce a duty or liability vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, such as those created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Item 1B. Unresolved Staff Comments None. 24
In addition, any change in ratings could make it more difficult for us to raise capital on acceptable terms, impact the ability to obtain adequate financing and result in higher interest costs on future financings. 10 We may not be able to access the capital and credit markets on terms that are favorable to us.
In addition, any change in ratings could make it more difficult for us to raise capital on acceptable terms, impact the ability to obtain adequate financing and result in higher interest costs on future financings. We may not be able to access the capital and credit markets on terms that are favorable to us.
Any such security incidents, inventory loss or failure to maintain accurate records related to our inventory could have a material adverse effect on our business, financial condition, results of operations or reputation. 19 Regulatory and legal Changes in tax law or interpretations thereof could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Any such security incidents, inventory loss or failure to maintain accurate records related to our inventory could have a material adverse effect on our business, financial condition, results of operations or reputation. Regulatory and legal Changes in tax law or interpretations thereof could have a material adverse effect on our business, financial condition, results of operations and cash flows.
For further information on our cybersecurity risk management and governance, see Part I, Item 1C of this Annual Report. 15 We are required to maintain the privacy and security of personal information in compliance with U.S. and certain international privacy and data protection regulations.
For further information on our cybersecurity risk management and governance, see Part I, Item 1C of this Annual Report. We are required to maintain the privacy and security of personal information in compliance with U.S. and certain international privacy and data protection regulations.
The defense and disposition of litigation of this type could result in substantial costs and divert resources and the time and attention of our management, which could materially and adversely affect our business, financial condition or results of operations. The Amended and Restated Certificate of Incorporation of Ferguson Enterprises Inc.
The defense and disposition of litigation of this type could result in substantial costs and divert resources and the time and attention of our management, which could materially and adversely affect our business, financial condition or results of operations. 23 The Amended and Restated Certificate of Incorporation of Ferguson Enterprises Inc.
Further, the competitive landscape is dynamic and subject to change. For example, the arrival of new or expansion of existing competitors with lower-cost non-value added transactional business models or new technologies may aggregate demand away from incumbents.
Further, the competitive landscape is dynamic and subject to change. For example, the arrival of new, or the expansion of existing, competitors with new technologies or lower-cost non-value added business models may aggregate demand away from incumbents.
We may face global cybersecurity threats, which may range from uncoordinated individual attempts to sophisticated and targeted measures, known as advanced persistent threats, directed at us and our customers, suppliers, and service providers.
We face global cybersecurity threats, which range from uncoordinated individual attempts to sophisticated and targeted measures, known as advanced persistent threats, directed at us and our customers, suppliers, and service providers.
Failure to meet the requirements could harm our business and damage our reputation with customers, suppliers, and associates. We rely on IT systems, networks, products, and services, some of which are managed by service providers to protect our information. Increased information security threats and more sophisticated threat actors pose a risk to our information security program.
Failure to meet the requirements could harm our business and damage our reputation with customers, suppliers, and associates. We rely on information technology systems, networks, products, and services, some of which are managed by service providers to protect our information. Increased information security threats and more sophisticated threat actors pose a risk to our information security program.
Also, when we close a facility, we may remain obligated under the applicable lease. Most of our branches are located in leased premises. Many of our current leases are non-cancelable and typically have initial terms of around 5 to 10 years, with options to renew for specified periods of time.
Also, when we close a facility, we may remain obligated under the applicable lease. Most of our branches are located in leased premises. Many of our current leases are non-cancelable and typically have initial terms of around 3 to 10 years, with options to renew for specified periods of time.
These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers, employees, agents or stockholders and this limitation may have the effect of discouraging lawsuits or make our securities less attractive to investors.
These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers, employees, agents or stockholders and this limitation may have the effect of discouraging lawsuits or making our securities less attractive to investors.
Our failure to report accurately or achieve progress on our ESG-related goals, targets or metrics on a timely basis, or at all, could adversely affect our reputation, business, financial condition and results of operations. Statements regarding our ESG-related goals reflect our current plans and aspirations; our ESG-related policies, practices and goals are voluntary and subject to change at our discretion.
Our failure to report accurately or achieve progress on our sustainability-related goals, targets or metrics on a timely basis, or at all, could adversely affect our reputation, business, financial condition and results of operations. Statements regarding our sustainability-related goals reflect our current plans and aspirations; our sustainability-related policies, practices and goals are voluntary and subject to change at our discretion.
Additionally, involvement in these lawsuits and related inquiries and other proceedings may involve significant expense, divert management’s attention and resources from other matters, and negatively affect our reputation. Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters, could significantly affect our financial results or financial condition.
Additionally, involvement in these lawsuits and related inquiries and other proceedings may involve significant expense, divert management’s attention and resources from other matters, and negatively affect our reputation. Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial condition or results of operations.
Efforts to achieve our initiatives and goals, including collecting, measuring and reporting ESG information, involve operational, reputational, financial, legal and other risks and may result in additional costs or delays, and as a result may have a negative impact on us, including our brand, reputation and the market price of our common stock.
Efforts to achieve our initiatives and goals, including collecting, measuring and reporting sustainability information, involve operational, reputational, financial, legal and other risks and may result in additional costs or delays, and as a result may have a negative impact on us, including our brand, reputation and the market price of our common stock.
We are exposed to foreign currency exchange rate risk with respect to the USD relative to the local currencies of our international subsidiaries, predominantly CAD, arising from transactions in the normal course of business (such as sales and loans to wholly owned subsidiaries, sales to third-party customers, and purchases from suppliers).
We are exposed to foreign currency exchange rate risk with respect to the USD relative to the local currencies of our international subsidiaries, predominantly CAD, arising from transactions in the ordinary course of business (such as sales and loans to wholly owned subsidiaries, sales to third-party customers, and purchases from suppliers).
Our financial performance depends significantly on industry trends and general economic conditions, including the state of the residential and non-residential markets, as well as changes in gross domestic product in the geographic markets in which we operate, particularly in the U.S. where we generated 95% of our net sales in fiscal 2024.
Our financial performance depends significantly on industry trends and general economic conditions, including the state of the residential and non-residential markets, as well as changes in gross domestic product in the geographic markets in which we operate, particularly in the U.S. where we generated 95% of our net sales in fiscal 2025.
In fiscal 2024, residential markets and non-residential markets each accounted for approximately half of our net sales, with net sales within these combined markets balanced between RMI (approximately two-thirds of our net sales) and new construction (approximately one-third of our net sales). Our end markets are dependent, in part, upon certain macroeconomic trends.
In fiscal 2025, residential markets and non-residential markets each accounted for approximately half of our net sales, with net sales within these combined markets balanced between RMI (approximately two-thirds of our net sales) and new construction (approximately one-third of our net sales). Our end markets are dependent, in part, upon certain macroeconomic trends.
Our business operates in the U.S. and Canada and is subject to specific risks of conducting business in different jurisdictions across these countries and other parts of the world, including Barbados, China, South Korea, Switzerland, Taiwan, Thailand, Trinidad and Tobago, U.K. and Vietnam.
Our business operates in the U.S. and Canada and is subject to specific risks of conducting business in different jurisdictions across these countries and other parts of the world, including Barbados, China, India, Mexico, South Korea, Switzerland, Taiwan, Thailand, Trinidad and Tobago, the U.K. and Vietnam.
Moreover, we are also subject to audits and inquiries by government agencies in the normal course of business. These laws, regulations and standards are often complex, subject to change and subject to varying interpretations, and compliance therewith may be subject to varying degrees of scrutiny.
These laws, regulations and standards are often complex, subject to change and subject to varying interpretations, and compliance therewith may be subject to varying degrees of scrutiny. Moreover, we are also subject to audits and inquiries by government agencies in the ordinary course of business.
As we expand our own brand product offerings organically and through acquisitions, we may become subject to increased risks due to our greater role in the design, sourcing, marketing and sale of those products.
As we expand our private label, Own Brand, product offerings organically and through acquisitions, we may become subject to increased risks due to our greater role in the design, sourcing, marketing and sale of those products.
In addition, failure to effectively execute our strategies, including the development and acquisition of such new business models or technologies, or to successfully identify future market and competitive pressures, could have a material adverse effect on our business, financial condition and results of operations. 9 Fluctuating product prices may adversely affect our business, financial condition and results of operations.
In addition, failure to effectively execute our strategies, including the development and acquisition of such new business models or technologies, or to successfully identify future market and competitive pressures, could have a material adverse effect on our business, financial condition and results of operations. 10 Fluctuating product prices have in the past and may in the future adversely affect our business, financial condition and results of operations.
Our business is subject to a wide array of domestic and international laws, regulations and standards in jurisdictions where we operate, including advertising and marketing regulations, anti-bribery and corruption/money laundering laws, anti-competition regulations, data privacy and data protection (including payment card industry data security standards) and cybersecurity requirements (including protection of information and incident responses), occupational health and safety regulations, consumer product safety regulations, consumer protection laws, cash and electronic payment regulations and industry standards, environmental protection laws, foreign exchange controls and cash repatriation restrictions, government business regulations applicable to us as a government contractor selling to federal, state and local government entities, import and export requirements, intellectual property laws, labor laws, product compliance laws, fleet and driver related laws, supplier regulations regarding the sources of supplies or products, tax laws, zoning laws, unclaimed property laws and laws, regulations and standards applicable to other commercial matters.
Our business is subject to a wide array of domestic and international laws, regulations and standards in jurisdictions where we operate, including advertising and marketing regulations, anti-bribery and corruption/money laundering laws, anti-competition regulations, data privacy and data protection (including payment card industry data security standards) and cybersecurity requirements (including protection of information and incident responses), occupational health and safety regulations, consumer product safety regulations, consumer protection laws, cash and electronic payment regulations and industry standards, environmental protection laws and regulations (including those covering per- and polyfluoroalkyl substances (“PFAS”)), foreign exchange controls and cash repatriation restrictions, government business regulations applicable to us as a government contractor selling to federal, state and local government entities, import and export requirements, intellectual property laws, labor laws, product compliance laws, fleet and driver related laws, supplier regulations regarding the sources of supplies or products, tax laws, zoning laws, unclaimed property laws and laws, regulations and standards applicable to other commercial matters.
If our cash flow underperforms market expectations, then our capacity to pay a dividend or effect other returns of capital (including, without limitation, share repurchases) may be negatively impacted.
If our cash flow underperforms market expectations, then our ability to pay a dividend or effect other returns of capital (including, without limitation, share repurchases) may be negatively impacted.
Changes in accounting standards or their interpretation or changes in underlying assumptions and estimates or judgments could significantly change our reported or expected financial performance or financial condition. We are subject to various risks related to the local and international nature of our business, including domestic and foreign laws, regulations and standards.
Changes in accounting standards or their interpretation or changes in underlying assumptions and estimates or judgments could significantly change our reported or expected financial performance, financial condition or results of operations. 20 We are subject to various risks related to the local and international nature of our business, including domestic and foreign laws, regulations and standards.
Moreover, any failure to integrate, or delay in integrating, IT systems of acquired businesses could create an increased risk of cybersecurity incidents. Additionally, any impairment of goodwill or other assets acquired in a strategic transaction or charges to earnings associated with any strategic transaction, may materially reduce our profitability.
Moreover, any failure to integrate, or delay in integrating, information technology systems of acquired businesses could create an increased risk of cybersecurity incidents. Additionally, any impairment of goodwill or other assets acquired in a strategic transaction or charges to earnings associated with any strategic transaction, may materially reduce our profitability.
We may not realize any anticipated benefits from such transactions or partnerships, or any future ones, and we may be exposed to additional liabilities and risks from any acquired business or joint venture (including but not limited to risks associated with cybersecurity incidents, unknown claims and disputes by third parties against the companies we acquire, and business disruption related to inability to retain associates of the acquired entity).
We may not realize any anticipated benefits from such transactions or partnerships, and we have in the past and may in the future be exposed to additional liabilities and risks from any acquired business or joint venture (including but not limited to risks associated with cybersecurity incidents, unknown claims and disputes by third parties against the companies we acquire, and business disruption related to inability to retain associates of the acquired entity).
The market price of our common stock may fluctuate as a result of a variety of factors including, but not limited to, general global and regional economic and political conditions, period to period variations in operating results, changes in net sales or net income estimates by us, industry participants or financial analysts, our failure to meet our stated guidance, our failure to comply with the rules under the Sarbanes-Oxley Act related to accounting controls and procedures, changes in our capital allocation policy, the discovery of material weaknesses and other deficiencies in our internal control and accounting procedures, and the other factors discussed in this Item 1A .
The market price of our common stock may fluctuate as a result of a variety of factors including, but not limited to, general global and regional economic and political conditions, changes in, or announcements regarding proposed changes in, trade policy, period to period variations in our results of operations, changes in net sales or net income estimates by us, industry participants or financial analysts, our failure to meet our stated guidance, our failure to comply with the rules under the Sarbanes-Oxley Act related to accounting controls and procedures, changes in our capital allocation policy, the discovery of material weaknesses and other deficiencies in our internal control and accounting procedures, and the other factors discussed in this Item 1A .
If our fulfillment network does not operate properly or if a supplier fails to deliver on its commitments, we could experience delays in inventory availability at our distribution facilities and branches, increased delivery costs or lack of availability, any of which could lead to lower net sales and decreased customer confidence, and adversely affect our results of operations.
If our fulfillment network does not operate properly or if a supplier fails to deliver on its commitments, we could experience delays in inventory availability at our distribution facilities and branches, increased delivery costs or lack of availability, any of which could lead to lower net sales and decreased customer confidence, and materially adversely affect our business, financial condition or results of operations.
Additionally, as we add fulfillment capabilities or pursue strategies with different fulfillment requirements, our fulfillment network becomes increasingly complex and operating it becomes more challenging.
Further, as we add fulfillment capabilities or pursue strategies with different fulfillment requirements, our fulfillment network becomes increasingly complex and operating it becomes more challenging.
In addition, changing laws, regulations and standards relating to corporate governance, ESG matters, and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming.
In addition, changing laws, regulations and standards relating to corporate governance, sustainability and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming.
As of July 31, 2024, Ferguson had completed approximately $3.1 billion of its previously announced $4.0 billion share repurchase program with approximately $0.9 billion remaining under its share repurchase program. The timing and actual number of shares of common stock to be repurchased will depend on a variety of factors including cash availability and other market conditions.
As of July 31, 2025, Ferguson had completed approximately $4.0 billion of its previously announced $5.0 billion share repurchase program with approximately $1 billion remaining under its share repurchase program. The timing and actual number of shares of common stock to be repurchased will depend on a variety of factors including cash availability and other market conditions.
Some of our products contain significant amounts of commodity-priced materials, predominantly plastic, copper and steel, and other components that are subject to price changes based upon fluctuations in the commodities market, which can arise from changes in domestic and international supply and demand, general inflationary and deflationary pressures, labor costs, competition, tariffs and trade restrictions and geopolitical conflict, among other factors.
Some of our products are, or contain significant amounts of, commodity-priced materials, predominantly plastic, copper and steel, and other components that are subject to price changes based upon fluctuations in the commodities market, which can arise from changes in domestic and international supply and demand, general inflationary and deflationary pressures, labor costs, competition, trade restrictions, such as tariffs, sanctions and retaliatory countermeasures and geopolitical conflict, among other factors.
No security or audit program is 100% effective. There is a risk that our security programs will not prevent the occurrences of break-ins, theft, property damage, and workplace violence, including violent criminal acts such as interpersonal violence or an active shooter or mass casualty/damage event. Moreover, such programs may not be implemented as intended.
There is a risk that our security programs will not prevent the occurrences of break-ins, theft, property damage, and workplace violence, including violent criminal acts such as interpersonal violence or an active shooter or mass casualty/damage event. Moreover, such programs may not be implemented as intended.
Such closures could have a material adverse effect on our business, financial condition and results of operations. We could be adversely impacted by declines in the residential and non-residential markets.
Such closures could have a material adverse effect on our business, financial condition and results of operations. 9 We have in the past and may in the future be adversely impacted by declines in the residential and non-residential markets.
Our own brand products subject us to certain increased risks such as regulatory, product liability and reputational risks that could have an adverse effect on our business, results of operations and financial condition .
Our private label products subject us to certain increased risks such as regulatory, product liability and reputational risks that could have an adverse effect on our business, financial condition and results of operations .
Furthermore, more of our existing suppliers may decide to supply products directly to end users that are our existing or potential customers, which could have a detrimental effect on our ability to keep and procure customers, and maintain and win business, thereby having a material adverse effect on our business, financial condition and results of operations. 12 Execution of our operational strategies could prove unsuccessful, which could have a material adverse effect on our business, financial condition and results of operations.
Furthermore, more of our existing suppliers may decide to supply products directly to end users that are our existing or potential customers, which could have a detrimental effect on our ability to keep and procure customers, and maintain and win business, thereby having a material adverse effect on our business, financial condition and results of operations.
To effectively execute on our own brand product differentiation strategy, we must also be able to successfully protect our proprietary rights and successfully navigate and avoid claims related to the proprietary rights of third parties.
To effectively execute on our private label product differentiation strategy, we must also be able to successfully protect our proprietary rights and successfully navigate and avoid claims related to the proprietary rights of third parties.
We accept payments using a variety of methods, including cash, checks, credit and debit cards, PayPal and electronic payments, and we may offer new payment options over time.
We accept payments using a variety of methods, including, but not limited to, cash, checks, credit and debit cards, PayPal and electronic payments, and we may offer new payment options over time.
Cybersecurity incidents and network security breaches may include, but are not limited to, attempts to access or unauthorized access of information, exploitation of vulnerabilities (including those of third-party software or systems), computer viruses, ransomware, denial of service (“DoS”) and other electronic security breaches.
Cybersecurity incidents and network security breaches have included in the past, and may in the future include, but are not limited to, attempts to access or unauthorized access of information, exploitation of vulnerabilities (including those of third-party software or systems), computer viruses, ransomware, denial of service (“DoS”) and other electronic security breaches.
In addition, our future earnings and the value of our deferred tax assets and liabilities could be negatively impacted by further changes in tax legislation, including changes in tax rates, tax laws and changes in the rules for earnings repatriations in the U.S. or other countries.
In addition, our future earnings and the value of our deferred tax assets and liabilities could be negatively impacted by further changes in tax legislation, including changes in tax rates, tax laws and changes in the rules for earnings repatriations in the U.S. or other countries. Further, the application of tax law is subject to interpretation.
The risks and uncertainties we describe below are not the only ones we face. Additional risks and uncertainties of which we are not aware or that we currently believe are immaterial may also adversely affect the business, financial condition and results of operations of the Company.
The risks and uncertainties we describe below are not the only ones we face. Additional risks and uncertainties of which we are not aware or that we currently believe are immaterial may also adversely affect the Company.
Ownership of Shares of our Common Stock The obligations associated with being a public company require significant resources and management attention and result in significant legal and financial compliance costs, and changing laws, regulations and standards are creating uncertainty for public companies.
The obligations associated with being a public company require significant resources and management attention and result in significant legal and financial compliance costs, and changing laws, regulations and standards are creating uncertainty for public companies.
In addition, an increase in sales of our own brand products may adversely affect sales of our suppliers’ products, which in turn could adversely affect our relationships with certain of our suppliers.
In addition, an increase in sales of our private label products may adversely affect sales of our suppliers’ products, which in turn could adversely affect our relationships with certain of our suppliers.
Inventory levels in excess of customer demand due to the difficulty of calibrating demand for such products, the concentration of demand for a limited number of products, difficulties in product sourcing, or rapid changes in demand may result in inventory write-downs, and the sale of excess inventory at discounted prices could have an adverse effect on our operating results, financial condition and cash flows.
Inventory levels in excess of customer demand due to the difficulty of calibrating demand for such products, the concentration of demand for a limited number of products, difficulties in product sourcing or rapid changes in demand may result in extended cash conversion cycles, inventory write-downs and the sale of excess inventory at discounted prices, any of which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Further, our ESG and I&D-related initiatives and goals may not be favored by certain stakeholders, whose priorities and expectations may not align or may be opposed to one another, which could result in public scrutiny or reputational damage, and could impact the attraction and retention of investors, customers and employees.
Our sustainability and Inclusion-related initiatives and goals may not be favored by certain stakeholders, whose priorities and expectations may not align or may be opposed to one another, which could result in public scrutiny or reputational damage, and could impact the attraction and retention of investors, customers and associates.
Our business could be negatively impacted by a serious disruption in the movement of products through our supply chain or by an increase in the cost of such products, including due to any of the following or other factors beyond our control: financial instability among key suppliers; global or regional political unrest, disputes or war, or labor unrest, in source countries or elsewhere in our supply chain; changes in the total costs in our supply chain (including, but not limited to, changes in fuel and labor costs and currency exchange rates); port or rail labor disputes and security; the outbreak or resurgence of pandemics or epidemics; weather- or climate-related events; natural disasters; work stoppages or strikes; shipping capacity constraints or embargoes; changes in trade policy and any trade restrictions; tariffs or duties; fluctuations in currency exchange rates; or transport availability, capacity and costs.
Any of the following, or additional other factors beyond our control, may cause serious disruption in the movement of products through our supply chain, leading to a substantial decrease in the availability of products or an increase in the cost of such products: financial instability among key suppliers; global or regional political unrest, disputes or war, or labor unrest, in source countries or elsewhere in our supply chain; changes in the total costs in our supply chain (including, but not limited to, changes in fuel and labor costs and currency exchange rates); port or rail labor disputes and security; the outbreak or resurgence of pandemics or epidemics; adverse weather events or natural disasters; foreign competition; work stoppages or strikes; shipping capacity constraints or embargoes; changes in trade policy and any trade restrictions; tariffs or duties; fluctuations in currency exchange rates; or transport availability, capacity and costs.
I&D and climate change ESG topics have, in particular, received heightened attention from investors, shareholders, lawmakers and listing exchanges.
Inclusion and climate change topics have, in particular, received heightened attention from investors, shareholders, lawmakers and listing exchanges.
A failure to maintain an adequate number of associates with appropriate skill sets and talent could delay the execution of our operational strategies, result in loss of institutional knowledge and reduce our supply of future management skill. Competition in our industry for both existing and new talent is significant.
A failure to maintain an adequate number of associates with appropriate skill sets and talent could delay the execution of our operational strategies, result in loss of institutional knowledge and reduce our supply of future management skill.
We are and may continue to be involved in legal proceedings such as negligence, consumer and employment and other litigation that arises from time to time in the course of our business.
We are and may continue to be involved in legal proceedings such as product liability, asbestos, personal injury, consumer, employment and other litigation that arises from time to time in the ordinary course of our business.
If such entity were to cease, or failed, to maintain its place of central management and control in the location of its tax residency, our ability to rely on specific tax treaty benefits could be impacted, potentially causing withholding taxes on dividends and interest payments made by certain of our subsidiaries to increase while taxes on certain unrealized gains could possibly be imposed.
If it was determined that one or more of our subsidiaries ceased or failed to maintain its place of central management and control in the location of its tax residency, our ability to rely on specific tax treaty benefits could be impacted, potentially causing withholding taxes on dividends and interest payments made by certain of our subsidiaries to increase while taxes on certain unrealized gains could be imposed.
During fiscal 2024, 2023, and 2022, we completed a total of 10, 8, and 17 acquisitions, respectively.
During fiscal 2025, 2024, and 2023, we completed a total of 9, 10, and 8 acquisitions, respectively.
Our selection of disclosure frameworks and reporting standards and information voluntarily disclosed may change from time to time and may result in a lack of consistent or meaningful comparative data from period to period, as well as significant revisions to ESG goals, initiatives, commitments, or objectives or reported progress in achieving the same.
The disclosure frameworks and reporting standards under which we disclose information may change from time to time and may result in a lack of consistent or meaningful comparative data from period to period, as well as significant revisions to sustainability goals, initiatives, commitments, or objectives or reported progress in achieving the same.
Future tax controversy matters may result in previously unrecorded tax expenses, higher future tax expenses or the assessment of interest and penalties which could have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, the location of tax residence of Ferguson (Jersey) Limited (f/k/a Ferguson plc) could be challenged.
Tax controversy matters may result in previously unrecorded tax expenses, higher future tax expenses or the assessment of interest and penalties which could have a material adverse effect on our business, financial condition, results of operations and cash flows. 19 For example, the location of tax residence of certain subsidiaries could be challenged.
If we are not sufficiently agile in adapting our operating model, we may be unable to adapt to changing customer wants and/or to flex our cost base when required.
Development of our operating model is a key part of driving profitable growth. If we are not sufficiently agile in adapting our operating model, we may be unable to adapt to changing customer wants and/or to flex our cost base when required.
Market conditions, competition, financial Weakness in the economy, market trends, uncertainty and other conditions in the markets in which we operate, particularly in the U.S., may adversely affect the profitability and financial stability of our customers, and could negatively impact our sales growth and results of operations.
Market conditions, competition, financial Weakness in the economy, market trends, uncertainty and other conditions in the markets in which we operate, particularly in the U.S., have in the past and may in the future adversely affect the profitability and financial stability of some of our customers and vendors, and, in turn, negatively impact our business, financial condition and results of operations.
In the event of adverse market conditions, we may be unable to obtain capital or credit market financing on favorable terms, which could have a material adverse effect on our business, financial condition and results of operations.
In the event of adverse market conditions, we may be unable to obtain capital or credit market financing on favorable terms, which could have a material adverse effect on our business, financial condition and results of operations. 11 Potential regional or global barriers to trade or a global trade war could increase the cost of our products, which could have a material adverse impact on the competitiveness of our products and our business, financial condition and results of operations.
Any failure to comply with or violation of the various laws, regulations and standards to which we are subject could individually or in the aggregate have a material adverse effect on our business, financial condition, results of operations and cash flows.
Any failure to comply with or violation of the various laws, regulations and standards to which we are subject could individually or in the aggregate have a material adverse effect on our business, financial condition, results of operations and cash flows. Corporate responsibility, specifically related to sustainability matters, may impose additional costs and expose us to new risks.
Our ability to deliver the expected benefits from any strategic transactions that we do complete is subject to numerous uncertainties and risks, including our acquisition assumptions; our ability to integrate personnel, labor models, financials, customer relationships, supply chain and logistics, IT and other systems successfully; business culture incompatibility; disruption of our ongoing business and distraction of management; hiring additional management and other critical personnel; product quality compliance of new suppliers; and increasing the scope, geographic diversity and complexity of our operations.
Furthermore, we may have trouble identifying suitable acquisition targets in the future or the targets we identify and pursue may not result in the realization of the benefits we expect or any benefit at all. 14 Our ability to deliver the expected benefits from any strategic transactions that we do complete is subject to numerous uncertainties and risks, including our acquisition assumptions; our ability to integrate personnel, labor models, financials, customer relationships, supply chain and logistics, information technology and other systems successfully; business culture incompatibility; disruption of our ongoing business and distraction of management; hiring additional management and other critical personnel; product quality compliance of new suppliers; and increasing the scope, geographic diversity and complexity of our operations.
Changes in our credit ratings and outlook may reduce access to capital and increase borrowing costs. Our credit ratings are based on a number of factors, including our financial strength and factors outside of our control, such as conditions affecting our industry generally and the introduction of new rating practices and methodologies.
Our credit ratings are based on a number of factors, including our financial strength and factors outside of our control, such as conditions affecting our industry generally and the introduction of new rating practices and methodologies.
The nature of our operations may expose our associates, contractors, customers, suppliers and other individuals to health and safety risks and we may incur property, casualty or other losses not covered by our insurance policies and damage to our reputation.
Moreover, our ability to recover damages from foreign sources of supply may be more difficult and expensive. 18 The nature of our operations may expose our associates, contractors, customers, suppliers and other individuals to health and safety risks and we may incur property, casualty or other losses not covered by our insurance policies and damage to our reputation.
Any changes in, expanded enforcement of, or adoption of new federal, state or local laws and regulations could increase our costs of doing business or impact our operations, including, among other factors, as a result of required investments in technology and the development of new operational processes. 21 Failure to comply with any of these laws, regulations and standards could result in civil, criminal, monetary and non-monetary penalties as well as potential damage to our reputation.
Any changes in, expanded enforcement of, or adoption of new federal, state or local laws and regulations could increase our costs of doing business or impact our operations, including, among other factors, as a result of required investments in technology and the development of new operational processes.
If service levels were to significantly decrease, customers might purchase from our competitors instead, resulting in reduced net sales, lower operating margins, reduced profitability, loss of market share and/or diminished brand recognition. Development of our operating model is a key part of driving profitable growth.
Meeting customer needs through comprehensive and differentiated products and solutions that support our customers’ projects is a key part of our strategy to drive profitable growth. If service levels were to significantly decrease, customers might purchase from our competitors instead, resulting in reduced net sales, lower operating margins, reduced profitability, loss of market share and/or diminished brand recognition.
We may face reputational damage in the event our corporate responsibility initiatives or objectives, including with respect to I&D or climate matters, do not meet the standards set by our regulators, investors, shareholders, lawmakers, listing exchanges or other constituencies, or if we are unable to achieve an acceptable ESG or sustainability rating from third-party rating services.
We may face reputational damage, litigation or regulatory enforcement in the event our sustainability initiatives or objectives, including with respect to Inclusion or climate matters, do not meet the standards set by our regulators, investors, shareholders, lawmakers, listing exchanges or other constituencies, or if we are unable to achieve an acceptable sustainability rating from third-party rating services. 21 Further, sustainability reporting is expected from, and in certain cases required by, certain stakeholders, state regulators, investors, shareholders and other third parties.
Any failure to appropriately address some or all of these risks could damage our reputation and have an adverse effect on our business, results of operations and financial condition. 20 We are and may continue to be involved in legal proceedings in the course of our business, and while we cannot predict the outcomes of those proceedings and other contingencies with certainty, some of these outcomes may adversely impact our business, financial condition, results of operations and cash flows.
We are and may continue to be involved in legal proceedings in the ordinary course of our business, and while we cannot predict the outcomes of those proceedings and other contingencies with certainty, some of these outcomes may adversely impact our business, financial condition, results of operations and cash flows.
Any decision to declare and pay dividends or to effect other returns of capital will be made at the discretion of the Board and will depend on, among other things, Delaware corporate law, restrictions, if any, on the payment of dividends and/or capital returns in our financing arrangements, our financial position, retained earnings/net income, working capital requirements, interest expense, general economic conditions and other factors that the Board deems appropriate from time to time.
Any decision to declare and pay dividends or to effect other returns of capital will be made at the discretion of the Board of Directors of the Company (the “Board”) and will depend on, among other things, Delaware corporate law, restrictions, if any, on the payment of dividends and/or capital returns in our financing arrangements, our financial position, retained earnings/net income, working capital requirements, interest expense, general economic conditions and other factors that the Board deems appropriate from time to time. 22 We cannot guarantee that our share repurchase program will be fully consummated or that our share repurchase program will enhance long-term shareholder value, and share repurchases could increase the volatility of the price of our common stock and could diminish our liquidity.
Our strategy could be materially adversely affected by our indebtedness. We had total debt of $3.9 billion as of July 31, 2024. We may incur substantial additional indebtedness in the future, in particular in connection with future acquisitions which remain a core part of our strategy, some of which may be secured by some or all of our assets.
We may incur substantial additional indebtedness in the future, in particular in connection with future acquisitions, which remain a core part of our strategy, some of which may be secured by some or all of our assets.
Our ability to execute on this strategy depends, to a significant extent, on having an adequate number of qualified associates, including those in senior leadership, managerial, technical, sales, marketing and support positions.
We believe the quality of our associates provides us with the capabilities and expertise to serve our customers better than our competitors do. Our ability to execute on this strategy depends, to a significant extent, on having an adequate number of qualified associates, including those in senior leadership, managerial, technical, sales, marketing and support positions.
These laws and regulations, and related interpretations and enforcement activity, may change as a result of a variety of factors, including political, economic or social events. For example, in recent years, there has been a steady increase in antitrust enforcement activity.
These laws and regulations, and related interpretations and enforcement activity, may change as a result of a variety of factors, including political, economic or social events.
Moreover, in the past, we have experienced volatility in our stock price, and we may experience such volatility again in the future, which may make it more difficult and expensive to recruit and retain associates, particularly senior leadership, through equity-based compensation.
We experience pressure regarding increases to wages, more flexible work arrangements, including remote and hybrid work, and expanded benefit offerings. Moreover, we have in the past, and may in the future, experience volatility in our stock price, which may make it more difficult and expensive to recruit and retain associates, particularly senior leadership, through equity-based compensation.
Technology systems and data are fundamental to the operations, future growth and success of our business. In managing our business, we rely on the integrity and security of, and consistent access to, data from these systems such as sales, customer data, merchandise ordering, inventory replenishment and order fulfillment.
In managing our business, we rely on the integrity and security of, and consistent access to, data from these systems such as sales data, customer data, associate data, demand forecasting, merchandise ordering, inventory replenishment, supply chain management, payment processing and order fulfillment.
If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, when required, investor confidence in us may be adversely affected and, as a result, the value of our common stock may decline. 23 Furthermore, while the Company is expected to maintain a standard listing on the LSE in addition to its primary listing on the NYSE, there may be volatility in our share price as a result of the turnover in our shareholder base to the U.S. following the Merger.
If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, when required, investor confidence in us may be adversely affected and, as a result, the value of our common stock may decline.
If a court were to find the exclusive-forum provisions in the Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could harm our business. 24 The Certificate of Incorporation provides that any person purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Company shall be deemed to have notice of and to have consented to the exclusive forum provisions described above.
If a court were to find the exclusive-forum provisions in the Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could harm our business.
Aging technology may inhibit our efficiency and future growth as well as increase the likelihood of system interruption or failure. We are subject to payment-related risks that could increase our selling, general and administrative expenses, expose us to fraud or theft, subject us to potential liability, and potentially disrupt our business.
We are subject to payment-related risks that could increase our selling, general and administrative expenses, expose us to fraud or theft, subject us to potential liability, and potentially disrupt our business.
Other factors beyond our control, including but not limited to inflation, deflation, slow or stagnant economic growth or recession, government spending, unemployment, interest rate and mortgage rate fluctuations, mortgage delinquency and foreclosure rates, inventory loss due to theft, foreign currency fluctuations, labor and healthcare costs, the availability of financing, disruption in the financial and credit markets, including as a result of instability in the banking sector and the failure of financial institutions, changes in tax laws affecting the real estate industry, product availability constraints as a result of ineffectiveness of or disruption to our domestic or international supply chain or fulfillment networks, weather, cybersecurity incidents or network security breaches, natural disasters, acts of terrorism, acts of war, consumer activism, pandemics or epidemics, international trade tensions, civil unrest and geopolitical conditions, could have a material adverse effect on our business, financial condition and results of operations. 8 Any of these events could impair the ability of our customers to make full and timely payments for, or reduce the volume of, products these customers purchase from us and could cause increased pressure on our selling prices and terms of sale.
Accordingly, a number of factors beyond our control, including but not limited to inflation, deflation, stagflation or recession, trade restrictions such as tariffs, sanctions and retaliatory countermeasures, the political climate, government spending, unemployment, interest rate and mortgage rate fluctuations, mortgage delinquency and foreclosure rates, foreign currency fluctuations, labor shortages, including as a result of changes in immigration policy, labor and healthcare costs, the availability of financing, disruption in the financial and credit markets, including as a result of instability in the banking sector and the failure of financial institutions, changes in tax laws, product availability constraints as a result of the ineffectiveness of or disruption to our domestic or international supply chain or fulfillment networks, cybersecurity incidents or network security breaches, adverse weather events or natural disasters, acts of terrorism, acts of war, consumer activism, pandemics or epidemics, civil unrest and geopolitical conditions, could have a material adverse effect on our business, financial condition and results of operations.
We and our service providers seek to maintain our respective systems effectively and to successfully address the risk of compromise of the integrity, security and consistent operations of these systems, utilizing all reasonable and appropriate means available.
We and our service providers seek to maintain our respective systems effectively and to successfully address the risk of compromise to the integrity, security and consistent operations of these systems; however, such efforts are not always successful.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe CIRP also includes actions designed to enhance processes and responsiveness to address and prevent future incidents. Ferguson invests in associate training and education to prevent cyber attacks, including customized, role-based training provided to targeted internal audiences. In addition, we conduct periodic awareness campaigns and regular phishing email simulation tests to reinforce prior training and promote ongoing awareness of risks.
Biggest changeIn addition, we maintain a cybersecurity awareness hub on our company intranet, regularly distribute cyber newsletters and cyber tips, and conduct regular phishing email simulation tests, including customized role-based tests, to reinforce prior training and promote ongoing awareness of risks.
Using a risk-based approach, we perform diligence and security risk assessments for certain vendors and service providers, including appropriate obligations in our contractual arrangements where applicable. 25 As of the date of this Annual Report, cybersecurity incidents and risks, separately or in aggregate, have not materially affected our business strategy, results of operations, and financial condition.
Using a risk-based approach, we perform diligence and security risk assessments for certain vendors and service providers, including appropriate obligations in our contractual arrangements where applicable. As of the date of this Annual Report, cybersecurity incidents and risks, separately or in aggregate, have not materially affected our business strategy, results of operations, and financial condition.
Additionally, our CISO and members of the cybersecurity team hold a number of industry recognized certifications, such as Certified Information Systems Security Professional, Payment Card Industry Data Security Standard Internal Security Assessor, Certified Information Security Manager, Certified in Risk and Information Systems control, and Certified Ethical Hacker, among others. 26
Additionally, our CISO and members of the cybersecurity team hold a number of industry recognized certifications, such as Certified Information Systems Security Professional, Payment Card Industry Data Security Standard Internal Security Assessor, Certified Information Security Manager, Certified in Risk and Information Systems control, and Certified Ethical Hacker, among others.
Cybersecurity risk management is also integrated into our broader risk management framework through information technology general controls that are independently tested by our Internal Audit team and the findings reported to the Audit Committee.
Cybersecurity risk management is also integrated into our broader risk management framework through information technology general controls that are independently tested by our Internal Audit team, the findings of which are reported to the Audit Committee.
See “Risk Factors—If we are unable to protect our sensitive data and information systems against data corruption, cybersecurity incidents or network security breaches, or if we are unable to provide adequate security in the electronic transmission of sensitive data, it could adversely affect our business, financial condition and results of operations” and “—A failure of a key information technology system or process could adversely affect the operations of our business” in Item 1A of this Annual Report for more information on our cybersecurity-related risks.
See “Risk Factors—If we are unable to protect our sensitive data and information systems against data corruption, cybersecurity incidents or network security breaches, or if we are unable to provide adequate security in the electronic transmission of sensitive data, it could materially adversely affect our business, financial condition and results of operations” and “—A failure of a key information technology system or process could materially adversely affect the operations of our business” in Item 1A of this Annual Report for more information on our cybersecurity-related risks. 25 Governance Role of the Board Our Board is ultimately responsible for the risk oversight of the Company, including risks from cybersecurity threats.
The Board has delegated to the Audit Committee responsibility for monitoring the overall adequacy and effectiveness of the ERM Program, and the Audit Committee is specifically charged with discussing the Company’s cybersecurity risk exposures and the steps management has taken to monitor and control these exposures.
The Board has delegated to the Audit Committee responsibility for monitoring the overall adequacy and effectiveness of the ERM Program, and the Audit Committee is specifically charged with discussing the Company’s cybersecurity risk exposures and the steps management has taken to monitor and control these exposures. Our Chief Legal Officer provides reports on the ERM Program twice a year.
However, we face ongoing risks from cybersecurity threats and there can be no assurance that our security efforts and measures, and those of our third-party vendors, will prevent breakdowns or incidents to our or our third-party vendors’ systems that could adversely affect our business.
However, we face ongoing risks from cybersecurity threats and there can be no assurance that our security efforts and measures, and those of our third-party vendors, will prevent or minimize cybersecurity risks.
Item 1C. Cybersecurity Risk Management and Strategy We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats. We maintain a strategic plan to protect our information and to manage and mitigate emerging cybersecurity threats. Our cybersecurity team, led by our Chief Information Security Officer (“CISO”), oversees our cybersecurity efforts on a day-to-day basis.
Item 1C. Cybersecurity Risk Management and Strategy We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats. We maintain a strategic plan to protect our information and to manage and mitigate emerging cybersecurity threats.
The Board and/or the Audit Committee receives periodic reports, briefings and presentations on data protection and cybersecurity matters from senior information technology leaders, including our Chief Digital and Information Officer (“CDIO”) and CISO, as well as from our Internal Audit team. In addition, our Chief Legal Officer provides reports on the ERM Program.
The Board and/or the Audit Committee receives periodic reports, briefings or presentations on data protection and cybersecurity matters from senior information technology leaders, including our CDIO or CISO, as well as from our Internal Audit team.
Role of Management Pursuant to our ERM Program charter, our Executive Committee is responsible for assessing and managing the Company’s exposure to enterprise risks. The Executive Committee is composed of the CEO and his direct reports, including the CDIO. Our CISO and the cybersecurity teams are primarily responsible for identifying, assessing, monitoring and managing our cybersecurity threats.
Role of Management Pursuant to our ERM Program charter, our Executive Committee is responsible for assessing and managing the Company’s exposure to enterprise risks. The Executive Committee is composed of the CEO and members of senior management appointed by the CEO, including the CDIO.
Our cybersecurity team, in partnership with third parties, designs, implements and operates our data security and cybersecurity programs, risk assessments, monitoring procedures, and training programs for our associates.
Our cybersecurity team, led by our Chief Information Security Officer (“CISO”), who reports to our Chief Digital & Information Officer (“CDIO”), oversees our cybersecurity efforts on a day-to-day basis. Our cybersecurity team, in partnership with third parties, designs, implements and operates our data security and cybersecurity programs, risk assessments, monitoring procedures, and training programs for our associates.
Our CISO has 25 years of industry experience, including in developing and leading cybersecurity risk management programs for Fortune 100 companies.
For further details about our CDIO’s background, see the “Information About Our Executive Officers” section of Part I of this Annual Report. Our CISO has over 25 years of industry experience, including in developing and leading cybersecurity risk management programs for Fortune 100 companies.
They receive information regarding cybersecurity incidents and threats from the SOC and through internal escalation procedures detailed in the CIRP. The CISO then provides periodic reports to the Executive Committee, including reporting on significant cybersecurity incidents and resulting remedial actions, the cybersecurity team’s strategic plan, the results of associate trainings, and any other notable cybersecurity matters.
The CISO then provides periodic reports to the Executive Committee, including reporting on significant cybersecurity incidents and resulting remedial actions, the cybersecurity team’s strategic plan, the results of associate trainings, and any other notable cybersecurity matters. Our CDIO has over 25 years of executive experience leading information technology teams and providing strategic vision for multiple Fortune 500 companies.
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Governance Role of the Board Our Board is ultimately responsible for the risk oversight of the Company, including risks from cybersecurity threats.
Added
The CIRP also includes actions designed to enhance processes and responsiveness to address and prevent future incidents. Ferguson invests in associate training and education on cybersecurity and risk management thereof.
Removed
Periodically, our Board receives reports and/or presentations on cybersecurity matters prepared by third-party cybersecurity experts.
Added
Ferguson provides annual phishing training to all associates who are issued a Company device, and our annual Code of Conduct training often features information technology subjects, such as protection of company and personal information and identifying and reporting cybersecurity and phishing incidents.
Added
Our CDIO has delegated to our CISO and the cybersecurity teams primary responsibility for identifying, assessing, monitoring and managing our cybersecurity threats. They receive information regarding cybersecurity incidents and threats from the SOC and through internal escalation procedures detailed in the CIRP.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table presents our principal facilities as of July 31, 2024: Location / Segment Facility & Use Total locations Owned locations Leased locations Square feet United States Regional Distribution Centers (1) 10 90% 10% 6,541,697 United States Market Distribution Centers 3 67% 33% 1,603,988 United States Branches 1,549 17% 83% 46,530,951 Canada Regional Distribution Center 1 —% 100% 292,395 Canada Market Distribution Centers 1 —% 100% 160,616 Canada Branches 224 21% 79% 3,251,454 (1) Includes one owned building on leased land.
Biggest changeThe following table presents our principal facilities as of July 31, 2025: Location / Segment Facility & Use Total locations Owned locations Leased locations Square feet United States Regional Distribution Centers (1) 10 90% 10% 6,608,307 United States Market Distribution Centers 5 60% 40% 2,544,854 United States Branches 1,519 16% 84% 46,369,553 Canada Regional Distribution Center (2) 1 —% 100% 292,395 Canada Market Distribution Centers 1 —% 100% 186,174 Canada Branches 227 19% 81% 3,058,456 (1) Includes one owned building on leased land.
Added
Subsequent to fiscal 2025 year-end, one of the 10 Regional Distribution Centers in the United States was closed. (2) Canada’s Regional Distribution Center was closed subsequent to fiscal 2025 year-end. 26

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

12 edited+3 added−10 removed2 unchanged
Biggest changeHe provides leadership and direction to the Waterworks and Fire & Fabrication customer groups, the Own Brand Business, enterprise-wide Sales, Operations and Wolseley Canada. Mr. Thees began his career with Ferguson in 1990 as a trainee at the Orlando, Florida Waterworks location. Since then, he has held several key positions, including Branch Manager, General Manager and District Manager. Mr.
Biggest changeHe began his career with the Company in 1990 as a trainee at the Orlando, Florida Waterworks location. Since then, he has held several key positions, including Branch Manager, General Manager, and District Manager. Mr. Thees assumed leadership for the Waterworks Business in 2007 and was promoted to Vice President in 2009.
Brundage was appointed as a Director and Chief Financial Officer in November 2020. Mr. Brundage has served as the chief financial officer of FEL since 2017, and previously served at FEL as senior vice president of finance from 2016 to 2017 and vice president of finance since 2008. Mr.
Brundage was appointed as a Director and Chief Financial Officer in November 2020. Mr. Brundage has served as the chief financial officer of FEL since 2017, and previously served at FEL as senior vice president of finance from 2016 to 2017 and vice president of finance from 2008 to 2016. Mr.
Murphy joined Ferguson in 1999 as an operations manager following Ferguson’s acquisition of his family’s business, Midwest Pipe and Supply, and went on to hold a number of leadership positions before his eventual appointment as the Company’s Chief Executive Officer. Bill Brundage , age 48, Chief Financial Officer and Director. Mr.
Murphy joined Ferguson in 1999 as an operations manager following Ferguson’s acquisition of his family’s business, Midwest Pipe and Supply, and went on to hold a number of leadership positions before his eventual appointment as the Company’s President & Chief Executive Officer. Bill Brundage , age 49, Chief Financial Officer and Director. Mr.
Item 4. Mine Safety Disclosures Not applicable. Information about our Executive Officers Set forth below is a list of names and ages of the executive officers of the Company indicating all positions and offices with the Company held by each such person and each person’s principal occupations or employment during the past five years unless otherwise noted.
Item 4. Mine Safety Disclosures Not applicable. Information about our Executive Officers Set forth below is a list of the Company’s executive officers, including their names, ages, all positions and offices with the Company held by each such person and each person’s principal occupations or employment during the past five years, unless otherwise indicated.
Murphy has served as chief executive officer of Ferguson Enterprises, LLC (“FEL”), the Company’s U.S. operating subsidiary, since 2017. Prior to that, he was chief operating officer of FEL from 2007 to 2017. Mr.
Murphy’s title changed to President & Chief Executive Officer. Mr. Murphy has served as chief executive officer of Ferguson Enterprises, LLC (“FEL”), the Company’s U.S. operating subsidiary, since 2017. Prior to that, he was chief operating officer of FEL from 2007 to 2017. Mr.
Brundage joined Ferguson in 2003 as manager of finance and was promoted to corporate controller of FEL two years later. Previously, Mr. Brundage spent five years at PricewaterhouseCoopers in the U.S. as a senior associate. Mr. Brundage is a Certified Public Accountant. Ian Graham , age 56, Chief Legal Officer & Corporate Secretary . Mr.
Brundage joined Ferguson in 2003 as manager of finance and was promoted to corporate controller of FEL two years later. Previously, Mr. Brundage spent five years at PricewaterhouseCoopers in the U.S. Ian Graham , age 57, Chief Legal Officer & Corporate Secretary . Mr. Graham serves as the Chief Legal Officer & Corporate Secretary. Mr.
Allison Stirrup , age 48, Chief Human Resources Officer . Ms. Stirrup was promoted to Chief Human Resources Officer in August 2024. She joined the Company in 1998 as a trainee and has held several progressive leadership positions over her 26-year career at Ferguson. Ms.
Schlicher served as Senior Vice President – Strategic Development from February 2019 to February 2025. Allison Stirrup , age 49, Chief Human Resources Officer . Ms. Stirrup was promoted to Chief Human Resources Officer in August 2024. She joined the Company in 1998 as a trainee and has held several progressive leadership positions over her 26-year career at Ferguson. Ms.
Our executive officers do not have a specific term of office. Kevin Murphy , age 54, President & Chief Executive Officer and Director . Mr. Murphy was appointed as a Director in August 2017 and as Chief Executive Officer in November 2019. In connection with the Merger, Mr. Murphy’s title changed to President & Chief Executive Officer. Mr.
Our executive officers do not have a specific term of office. Kevin Murphy , age 55, President & Chief Executive Officer and Director . Mr. Murphy was appointed as a Director in August 2017 and as Chief Executive Officer in November 2019. In connection with a corporate restructure in August 2024, Mr.
Schlicher has held numerous positions including Director of the Residential Business Group, Vice President of Private Label, Vice President of the Strategic Products Group, and Vice President of the Commercial Business. In March 2016, he was named Senior Vice President of Ferguson Facilities Supply and, in November 2017, he was named Senior Vice President Strategic Brand Development.
Since then, he has held numerous positions including Director of the Residential Business Group, Vice President of Private Label, Vice President of the Strategic Products Group, Vice President of the Commercial Business, Senior Vice President of Ferguson Facilities Supply, and Senior Vice President of Strategic Brand Development. Most recently, Mr.
Graham serves as the Chief Legal Officer & Corporate Secretary. Mr. Graham joined the Company as Group General Counsel in May 2019. Prior to joining the Company, he was Senior Vice President, General Counsel and Secretary for BAE Systems, Inc. from 2010 to 2019.
Graham joined the Company as Group General Counsel in May 2019. Prior to joining the Company, he was Senior Vice President, General Counsel and Secretary for BAE Systems, Inc. from 2010 to 2019. Prior to that he held senior roles at EMCORE Corporation, UUNET Technologies, Jenner & Block LLP and McKenna & Cuneo LLP.
Stirrup served as Senior Director of HR – Blended. Most recently, she served as Vice President – HR Business Partners from March 2021 to August 2024. Bill Thees , age 57, Senior Vice President . Mr. Thees serves as Senior Vice President, having previously served as Senior Vice President of Business and Sales of Ferguson between 2018 and 2024.
Stirrup served as Senior Director of HR – Blended. Most recently, she served as Vice President – HR Business Partners from March 2021 to August 2024. 27 Bill Thees , age 58, Chief Operating Officer . Mr. Thees was named Chief Operating Officer in February 2025.
He is responsible for overseeing Digital Commerce, Digital Engineering, Digital Data, User Experience and Commerce Operations. Prior to joining Ferguson, Mr.
Andy Paisley , age 57, Chief Digital & Information Officer . Mr. Paisley became the Chief Digital & Information Officer for Ferguson in June 2023 after joining the Company in January 2023 as the Chief Information Officer. He is responsible for overseeing Digital Commerce, Digital Engineering, Digital Data, User Experience and Commerce Operations. Prior to joining Ferguson, Mr.
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Prior to that he held senior roles at EMCORE Corporation, UUNET Technologies, Jenner & Block LLP and McKenna & Cuneo LLP. 27 Michael Jacobs , age 63, Senior Vice President – Supply Chain . Mr. Jacobs was appointed Senior Vice President – Supply Chain in February 2017.
Added
Jake Schlicher , age 61, Chief Strategy Officer . Mr. Schlicher was named Chief Strategy Officer in February 2025. Mr. Schlicher joined the Company in 1999 through the acquisition of L&H Supply.
Removed
He is responsible for managing all aspects of the supply chain processes within Ferguson and developing a supply chain strategy that meets performance objectives and customer expectations. Prior to Ferguson, Mr. Jacobs held various roles at Keurig Green Mountain, including Chief Product Officer and Chief Logistics Officer, where he led the re-engineering of Keurig’s supply chain. Prior to Keurig, Mr.
Added
Between August 2018 and July 2024, he served as Senior Vice President of Business and Sales. Most recently, Mr. Thees served as Senior Vice President from August 2024 to February 2025. Bo Camposano , age 54, Senior Vice President . Mr. Camposano serves as Senior Vice President – Waterworks.
Removed
Jacobs served as Senior Vice President, Logistics for Toys “R” Us, where he led store, ecommerce and omni-channel fulfillment globally. Victoria Morrissey , age 57, Chief Marketing Officer . Ms. Morrissey was appointed as Chief Marketing Officer in May 2021. With more than 20 years of diversified experience, Ms.
Added
Before assuming his current role in August 2024, he served as Vice President of Waterworks from 2019 to 2024. Mr. Camposano began his career with the Company in 1996 as a trainee and has held several key positions, including Training and HR Development, Operations Manager, General Manager, District Manager and Regional Vice President. 28 Part II
Removed
Morrissey was most recently responsible for Global Marketing and Brand at Caterpillar Inc. from 2017 to 2021, where she led a global team with oversight of brand, digital marketing, analytics, customer insights and customer experience. Prior to this, she led brand and content marketing at Grainger. In addition to her industry experience, Ms.
Removed
Morrissey worked at several agencies, including WPP, one of the world’s largest advertising agencies. Andy Paisley , age 56, Chief Digital and Information Officer . Mr. Paisley became the Chief Digital and Information Officer for Ferguson in June 2023 after joining the Company in January 2023 as the Chief Information Officer.
Removed
Jake Schlicher , age 60, Senior Vice President – Strategic Development . Mr. Schlicher was named Senior Vice President – Strategic Development in February 2019. He focuses on developing strategies that help make our customers’ complex projects simple, successful and sustainable. Mr. Schlicher joined Ferguson in 1999 through the acquisition of L&H Supply. Since then, Mr.
Removed
Thees assumed leadership for the Waterworks Business Group in 2007 and was promoted to Vice President in 2009. Garland Williams , age 49, Senior Vice President – Blended. Mr.
Removed
Williams serves as Senior Vice President – Blended, having previously served as Senior Vice President between 2022 and 2024 and as Senior Vice President of Customer Experience and Canada between 2021 and 2022.
Removed
He provides strategic leadership across parts of the business and has profit and loss responsibilities for the Residential Trade Plumbing, Residential Building and Remodel, Residential Digital Commerce, Commercial/Mechanical, HVAC, Industrial and Facilities Supply businesses. Mr. Williams joined the organization as a trainee in July 1996 and has held several progressive roles over his 27-year career with Ferguson.
Removed
This has included inside and outside sales, Branch and Area Manager, General Manager, District Manager, Vice President of Residential Trade Plumbing, and Vice President of Customer Experience and Canada. 28 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn March 2022, September 2022, June 2023 and June 2024, the Company announced increases of $1.0 billion, $0.5 billion, $0.5 billion and $1.0 billion, respectively, bringing the total authorized repurchase program to $4.0 billion. As of July 31, 2024, the Company had completed $3.1 billion of the total authorized repurchase program.
Biggest changeSince the initial authorization, the Company has announced from time to time various increases, bringing the total authorized share repurchase program to $5.0 billion. As of July 31, 2025, the Company had completed approximately $4.0 billion of the total authorized repurchase program.
The graph assumes the investment of $100 in our shares at the closing price of our shares on the LSE prior to the Company’s listing on the NYSE on March 11, 2021, and on the NYSE on and following such date, and in each of the indices as of the market close on July 31, 2019 and also assumes the reinvestment of dividends.
The graph assumes the investment of $100 in our shares at the closing price of our shares on the LSE prior to the Company’s listing on the NYSE on March 11, 2021, and on the NYSE on and following such date, and in each of the indices as of the market close on July 31, 2020 and also assumes the reinvestment of dividends.
Performance data for the Company is provided as of the last trading day of each relevant fiscal year. The share price performance graph is not necessarily indicative of future share price performance. As of July 31, 2019 2020 2021 2022 2023 2024 Ferguson Enterprises Inc.
Performance data for the Company is provided as of the last trading day of each relevant fiscal year. The share price performance graph is not necessarily indicative of future share price performance. As of July 31, 2020 2021 2022 2023 2024 2025 Ferguson Enterprises Inc.
The performance graph below compares the cumulative total shareholder return of the Company’s shares since July 31, 2019, with the cumulative total return for the same period of the S&P 500 Stock Index and the S&P 500 Industrials Stock Index.
The performance graph below compares the cumulative total shareholder return of the Company’s shares since July 31, 2020, with the cumulative total return for the same period of the S&P 500 Stock Index and the S&P 500 Industrials Stock Index.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market information The principal United States trading market for Company shares is the NYSE, where the Company’s shares of common stock are traded under the symbol “FERG.” The Company’s principal foreign public trading market for Company shares is the LSE, where the Company’s shares of common stock are traded under the symbol “FERG.” Holders As of September 20, 2024, there were 3,758 holders of record of our shares of common stock.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market information The principal United States trading market for Company shares is the NYSE, where the Company’s shares of common stock are traded under the symbol “FERG.” The Company’s principal foreign public trading market for Company shares is the LSE, where the Company’s shares of common stock are traded under the symbol “FERG.” Holders As of September 19, 2025, there were 2,571 holders of record of our shares of common stock.
Purchases of equity securities by the issuer and affiliated purchasers (In millions, except share count and per share amount) (a) Total Number of Shares Purchased (b) Average Prices Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Program (1) (d) Maximum Value of Shares Yet To Be Purchased Under the Program (1) May 1 - May 31, 2024 398,243 $214.37 398,243 $1,025 June 1 - June 30, 2024 341,037 201.41 341,037 956 July 1 - July 31, 2024 259,016 202.78 259,016 904 998,296 998,296 (1) In September 2021, the Company announced a program to repurchase up to $1.0 billion of shares.
Purchases of equity securities by the issuer and affiliated purchasers (In millions, except share count and per share amount) (a) Total Number of Shares Purchased (b) Average Prices Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Program (1) (d) Maximum Value of Shares Yet To Be Purchased Under the Program (1) May 1 - May 31, 2025 349,736 $174.90 349,736 $1,092 June 1 - June 30, 2025 261,299 215.25 261,299 1,035 July 1 - July 31, 2025 297,199 222.50 297,199 969 908,234 908,234 (1) In September 2021, the Company announced a program to repurchase up to $1.0 billion of shares.
(1) $100 $121 $194 $178 $236 $330 S&P 500 Stock Index 100 112 153 146 165 201 S&P 500 Industrials Stock Index 100 94 138 130 152 179 (1) LSE data used from August 1, 2019 through March 10, 2021 with GBP values converted to USD using the daily foreign exchange rate.
(1) $100 $161 $147 $195 $274 $279 S&P 500 Stock Index 100 136 130 147 180 209 S&P 500 Industrials Stock Index 100 146 138 162 190 229 (1) LSE data used from August 1, 2020 through March 10, 2021 with GBP values converted to USD using the daily foreign exchange rate.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

56 edited+27 added−20 removed13 unchanged
Biggest changeContractual obligations The table below sets forth the Company’s anticipated contractual cash outflows on an undiscounted basis as of July 31, 2024: As of July 31, 2024 (In millions) Total Fiscal 2025 Fiscal 2026 & 2027 Fiscal 2028 & 2029 Fiscal 2029 & beyond Debt - principal (a) $3,950 $150 $1,600 $900 $1,300 Debt - interest only (b) 781 183 241 187 170 Operating leases 1,824 409 700 416 299 Leases not yet commenced 131 113 18 — — UK pension contributions (c) 107 57 50 — — Other purchase obligations (d) 2,810 2,810 — — — Total $9,603 $3,722 $2,609 $1,503 $1,769 (a) See Note 9, Debt to the Consolidated Financial Statements for further details.
Biggest changeAs of July 31, (In millions) 2025 2024 Current assets $284 $69 Non-current assets 25 59 Current liabilities 201 23 Non-current liabilities 740 500 Due from non-guarantor subsidiaries 9,283 5,474 For the years ended July 31, (In millions) 2025 Net sales $— Gross profit — Operating loss (46) Net loss (162) Other interest income, net from non-guarantor subsidiaries 653 Other income, net from non-guarantor subsidiaries (1) $4,383 (1) Includes income from intercompany transactions with non-guarantor subsidiaries, primarily from non-cash dividend transactions. 38 Contractual obligations The table below sets forth the Company’s anticipated contractual cash outflows on an undiscounted basis as of July 31, 2025: As of July 31, 2025 (In millions) Total Fiscal 2026 Fiscal 2027 & 2028 Fiscal 2029 & 2030 Thereafter Debt - principal (a) $4,175 $400 $975 $1,350 $1,450 Debt - interest only (b) 986 178 305 233 270 Operating leases 2,089 457 803 479 350 Leases not yet commenced 63 63 — — — Other purchase obligations (c) 2,708 2,708 — — — Total $10,021 $3,806 $2,083 $2,062 $2,070 (a) See Note 9, Debt to the Consolidated Financial Statements for further details.
Overview Ferguson is a value-added distributor serving the specialized professional in the residential and non-residential North American construction market. We help make our customers’ complex projects simple, successful and sustainable by providing expertise and a wide range of products and services from plumbing, HVAC, appliances, and lighting to PVF, water and wastewater solutions, and more.
Overview Ferguson is a value-added distributor serving the water and air specialized professional in the residential and non-residential North American construction market. We help make our customers’ complex projects simple, successful and sustainable by providing expertise and a wide range of products and services from plumbing, HVAC, appliances, and lighting to PVF, water and wastewater solutions, and more.
Management believes these measures are important indicators of operations because they exclude items that may not be indicative of our core operating results and provide a better baseline for analyzing trends in our underlying businesses, and they are consistent with how business performance is planned, reported and assessed internally by management and the Company’s Board of Directors.
Management believes these measures are important indicators of operations because they exclude items that may not be indicative of our core operating results and provide a better baseline for analyzing trends in our underlying businesses, and they are consistent with how business performance is planned, reported and assessed internally by management and the Company’s Board.
The reserve is estimated based on the Company’s current knowledge and judgment with respect to inventory levels, sales trends and historical experience. Pensions The Company considers that the most sensitive assumptions are the discount rate on the benefit obligation, the wage inflation growth rate and life expectancy in connection with the Company’s pension plan in the U.K.
The reserve is estimated based on the Company’s current knowledge and judgment with respect to inventory levels, sales trends and historical experience. 39 Pensions The Company considers that the most sensitive assumptions are the discount rate on the benefit obligation, the wage inflation growth rate and life expectancy in connection with the Company’s pension plan in the U.K.
The discussion in this Annual Report generally focuses on fiscal 2024 compared to fiscal 2023. A discussion of our results of operations and changes in financial condition for fiscal 2023 compared to fiscal 2022 has been excluded from this report, but can be found in Part II, Item 7.
The discussion in this Annual Report generally focuses on fiscal 2025 compared to fiscal 2024. A discussion of our results of operations and changes in financial condition for fiscal 2024 compared to fiscal 2023 has been excluded from this report, but can be found in Part II, Item 7.
For fiscal 2023, the tax impact on non-GAAP adjustments primarily related to the impairments and other charges and amortization of acquired intangibles. 35 Liquidity and Capital Resources The Company believes its current cash position coupled with cash flow anticipated to be generated from operations and access to capital should be sufficient to meet its operating cash requirements for the next 12 months and will also enable the Company to invest and fund acquisitions, capital expenditures, dividend payments, share repurchases, required debt payments and other contractual obligations through the next several fiscal years.
For fiscal 2024, the tax impact of non-GAAP adjustments primarily related to the amortization of acquired intangibles. 35 Liquidity and Capital Resources The Company believes its current cash position coupled with cash flow anticipated to be generated from operations and access to capital should be sufficient to meet its operating cash requirements for the next 12 months and will also enable the Company to invest and fund acquisitions, capital expenditures, dividend payments, share repurchases, required debt payments and other contractual obligations through the next several fiscal years.
These investments were primarily for strategic projects to support future growth, such as new market distribution centers, our branch network and new technology. In addition, the Company invested $260 million and $616 million in new acquisitions in fiscal 2024 and fiscal 2023, respectively.
These investments were primarily for strategic projects to support future growth, such as new market distribution centers, our branch network and new technology. In addition, the Company invested $301 million and $260 million in new acquisitions in fiscal 2025 and fiscal 2024, respectively.
The most sensitive assumption used for the Company’s U.K. pension plan were as follows: Rate assumption: 2024 2023 2022 Discount rate, benefit obligation 5.00% 5.05% 3.45% The sensitivity analyses below show the (increase)/decrease in the Company’s defined benefit plan net asset/liability of reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The most sensitive assumption used for the Company’s U.K. pension plan were as follows: Rate assumption: 2025 2024 2023 Discount rate, benefit obligation 5.80% 5.00% 5.05% The sensitivity analyses below show the (increase)/decrease in the Company’s defined benefit plan net asset/liability due to reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The Company also anticipates that it has the ability to obtain alternative sources of financing, if necessary. Cash flows As of July 31, 2024 and 2023, the Company had cash and cash equivalents of $571 million and $601 million, respectively.
The Company also anticipates that it has the ability to obtain alternative sources of financing, if necessary. Cash flows As of July 31, 2025 and 2024, the Company had cash and cash equivalents of $674 million and $571 million, respectively.
In addition to cash, the Company had $2.2 billion of available liquidity from undrawn debt facilities as of July 31, 2024. As of July 31, 2024, the Company’s total debt was $3.9 billion. The Company anticipates that it will be able to meet its debt obligations as they become due.
In addition to cash, the Company had $2.0 billion of available liquidity from undrawn debt facilities as of July 31, 2025. As of July 31, 2025, the Company’s total debt was $4.2 billion. The Company anticipates that it will be able to meet its debt obligations as they become due.
The following description is only a summary, does not purport to be complete and is qualified in its entirety by reference to the documents governing such indebtedness. As of July 31, (In millions) 2024 2023 Short-term debt $150 $55 Long-term debt 3,774 3,711 Total debt $3,924 $3,766 Private Placement Notes In June 2015 and November 2017, Wolseley Capital, Inc.
The following description is only a summary, does not purport to be complete and is qualified in its entirety by reference to the documents governing such indebtedness. As of July 31, (In millions) 2025 2024 Short-term debt $400 $150 Long-term debt 3,752 3,774 Total debt $4,152 $3,924 Private Placement Notes In June 2015 and November 2017, Wolseley Capital, Inc.
Segment results of operations for fiscal 2024 and fiscal 2023 The Company’s reportable segments are the United States and Canada based on how the Company manages its business and allocates resources, which is on a geographical basis.
Segment results of operations for fiscal 2025 and fiscal 2024 The Company’s reportable segments are the United States and Canada based on how the Company manages its business and allocates resources, which is on a geographical basis. The Company’s measure of segment profit is adjusted operating profit.
For further segment information, see Note 2, Revenue and segment information of the Notes to the Consolidated Financial Statements.
For further segment information, see Note 2, Segment and net sales information of the Notes to the Consolidated Financial Statements.
Adjusted operating profit for the Canada segment decreased compared with the prior year, primarily due to higher operating costs compared with the same period of prior year. 33 Non-GAAP Reconciliations and Supplementary Information The Company reports its financial results in accordance with U.S. GAAP.
Adjusted operating profit for the Canada segment increased compared with the prior year, primarily due to higher sales and gross profit, partially offset by higher operating costs compared with the same period of prior year. 33 Non-GAAP Reconciliations and Supplementary Information The Company reports its financial results in accordance with U.S. GAAP.
(In millions) Change U.K. Discount rate, benefit obligation +0.25 % ($42) (0.25) % 45 Wage inflation growth rate, benefit obligation +0.25 % 39 (0.25) % (33) Life expectancy +1 year 54 Accounting developments and changes Refer to Note 1, Summary of significant accounting policies to the Consolidated Financial Statements for a discussion of new accounting pronouncements. 39
(In millions) Change U.K. Discount rate, benefit obligation +0.25 % ($33) (0.25) % 35 Wage inflation growth rate, benefit obligation +0.25 % 29 (0.25) % (28) Life expectancy +1 year 41 Accounting developments and changes Refer to Note 1, Summary of significant accounting policies to the Consolidated Financial Statements for a discussion of new accounting pronouncements. 40
As of July 31, 2024 and 2023, these permanently reinvested earnings of foreign subsidiaries amounted to $795 million and $725 million, respectively.
As of July 31, 2025 and 2024, these permanently reinvested earnings of foreign subsidiaries amounted to $800 million and $795 million, respectively.
The following table presents highlights of our annual performance: For the years ended July 31, (In millions, except per share amounts) 2024 2023 Net sales $29,635 $29,734 Operating profit 2,652 2,659 Net income 1,735 1,889 Earnings per share - diluted 8.53 9.12 Net cash provided by operating activities 1,873 2,723 Supplemental non-GAAP financial measures: (1) Adjusted operating profit 2,824 2,917 Adjusted earnings per share - diluted 9.69 9.84 (1) The Company uses certain non-GAAP measures, which are not defined or specified under accounting principles generally accepted in the United States (“U.S.
The following table presents highlights of our annual performance: For the years ended July 31, (In millions, except per share amounts) 2025 2024 Net sales $30,762 $29,635 Operating profit 2,606 2,652 Net income 1,856 1,735 Earnings per share - diluted 9.32 8.53 Net cash provided by operating activities 1,908 1,873 Supplemental non-GAAP financial measures: (1) Adjusted operating profit 2,842 2,824 Adjusted earnings per share - diluted 9.94 9.69 (1) The Company uses certain non-GAAP measures, which are not defined or specified under accounting principles generally accepted in the United States (“U.S.
During fiscal 2024, the Company invested $260 million in acquisitions and $372 million in capital expenditures to meet the Company’s strategic objectives. Results of Operations The table below summarizes the Company’s consolidated statements of earnings for the periods indicated.
During fiscal 2025, the Company invested $301 million in acquisitions and $305 million in capital expenditures to meet the Company’s strategic objectives. 31 Results of Operations The table below summarizes the Company’s consolidated statements of earnings for the periods indicated.
(4) For fiscal 2024, discrete tax adjustments primarily related to one-time, non-cash deferred tax charges of $137 million, resulting from the elimination of certain pre-existing U.K. tax attributes as part of the Merger, partially offset by the release of uncertain tax positions, as well as the tax treatment of certain compensation items that were not individually significant.
For fiscal 2024, discrete tax adjustments primarily related to non-recurring, non-cash deferred tax charges of $137 million, resulting from the elimination of certain pre-existing U.K. tax attributes as part of the establishment of our parent company’s domicile in the United States, partially offset by the release of uncertain tax positions, as well as the tax treatment of certain compensation items that were not individually significant.
Share repurchases under the Company’s announced share repurchase program were $634 million and $908 million in fiscal 2024 and 2023, respectively. Net proceeds from debt were $145 million compared to net repayments of debt of $155 million in fiscal 2024 and 2023, respectively.
Share repurchases under the Company’s announced share repurchase program were $948 million and $634 million in fiscal 2025 and 2024, respectively. 36 Net proceeds from debt were $221 million compared to net proceeds from debt of $145 million in fiscal 2025 and 2024, respectively.
Cash flows from financing activities As of July 31, (In millions) 2024 2023 Net cash used in financing activities ($1,313) ($1,807) Net cash used in financing activities was $1.3 billion and $1.8 billion in fiscal 2024 and 2023, respectively. Dividends paid to shareholders were $784 million and $711 million in fiscal 2024 and 2023, respectively.
Cash flows from financing activities As of July 31, (In millions) 2025 2024 Net cash used in financing activities ($1,286) ($1,313) Net cash used in financing activities decreased 2.1% to $1.3 billion in fiscal 2025. Dividends paid to shareholders were $489 million and $784 million in fiscal 2025 and 2024, respectively.
Selling, general and administrative expenses (“SG&A”) SG&A expenses in fiscal 2024 increased $146 million, or 2.5%, compared with fiscal 2023. SG&A as a percentage of sales was 20.5% and 19.9% in fiscal 2024 and fiscal 2023, respectively.
Selling, general and administrative expenses (“SG&A”) SG&A expenses in fiscal 2025 increased $338 million, or 5.6%, compared with fiscal 2024. SG&A as a percentage of sales was 20.7% and 20.4% in fiscal 2025 and fiscal 2024, respectively.
United States For the years ended July 31, (In millions) 2024 2023 Net sales $28,195 $28,291 Adjusted operating profit 2,820 2,892 Net sales for the United States segment were $28.2 billion in fiscal 2024, a decrease of $0.1 billion, or 0.3%, compared with the prior year.
United States For the years ended July 31, (In millions) 2025 2024 Net sales $29,269 $28,195 Adjusted operating profit 2,840 2,820 Net sales for the United States segment were $29.3 billion in fiscal 2025, an increase of $1.1 billion, or 3.8%, compared with the prior year.
For fiscal 2023, discrete tax adjustments primarily related to the release of uncertain tax positions following the lapse of statute of limitations, as well as adjustments in connection with amended returns. (5) For fiscal 2024, the tax impact of non-GAAP adjustments primarily related to the amortization of acquired intangibles.
(4) For fiscal 2025, discrete tax adjustments primarily related to the release of uncertain tax positions following the lapse of statute of limitations, as well as adjustments in connection with amended returns.
Canada For the years ended July 31, (In millions) 2024 2023 Net sales $1,440 $1,443 Adjusted operating profit 60 76 Net sales for the Canada segment were $1,440 million in fiscal 2024, a decrease of $3 million, or 0.2%, compared with the prior year.
Canada For the years ended July 31, (In millions) 2025 2024 Net sales $1,493 $1,440 Adjusted operating profit 66 60 Net sales for the Canada segment were $1,493 million in fiscal 2025, an increase of $53 million, or 3.7%, compared with the prior year.
GAAP) to adjusted net income and adjusted EPS - diluted (non-GAAP): For the years ended July 31, (In millions, except per share amounts) 2024 2023 per share (1) per share (1) Net income $1,735 $8.53 $1,889 $9.12 Corporate restructurings (2) 28 0.14 — — Impairments and other charges (3) — — 125 0.60 Amortization of acquired intangibles 144 0.71 133 0.64 Discrete tax adjustments (4) 101 0.49 (36) (0.17) Tax impact on non-GAAP adjustments (5) (36) (0.18) (73) (0.35) Adjusted net income $1,972 $9.69 $2,038 $9.84 Diluted weighted average shares outstanding 203.5 207.2 (1) Per share on a dilutive basis.
GAAP) to adjusted net income and adjusted EPS - diluted (non-GAAP): For the years ended July 31, (In millions, except per share amounts) 2025 2024 per share (1) per share (1) Net income $1,856 $9.32 $1,735 $8.53 Corporate restructurings (2) 7 0.03 28 0.14 Business restructurings (3) 73 0.37 — — Amortization of acquired intangibles 156 0.78 144 0.71 Discrete tax adjustments (4) (52) (0.26) 101 0.49 Tax impact on non-GAAP adjustments (5) (59) (0.30) (36) (0.18) Adjusted net income $1,981 $9.94 $1,972 $9.69 Diluted weighted average shares outstanding 199.2 203.5 (1) Per share on a dilutive basis.
Cash flows from operating activities As of July 31, (In millions) 2024 2023 Net cash provided by operating activities $1,873 $2,723 Net cash provided by operating activities was $1.9 billion in fiscal 2024 and $2.7 billion in fiscal 2023.
Cash flows from operating activities As of July 31, (In millions) 2025 2024 Net cash provided by operating activities $1,908 $1,873 Net cash provided by operating activities increased by 1.9% to $1.9 billion in fiscal 2025.
As of July 31, 2024, no borrowings were outstanding under the Revolving Facility. Receivables Securitization Facility The Company maintains a Receivables Securitization Facility (as amended from time to time, the “Receivables Facility”) with an aggregate total available amount of $1.1 billion, including a swingline for up to $100 million in same day funding.
As of July 31, 2025, no borrowings were outstanding under the Revolving Facility. 37 Receivables Securitization Facility The Company maintains a Receivables Securitization Facility with an aggregate total available amount of $915 million (as amended from time to time, the “Receivables Facility”).
Net income Net income for fiscal 2024 was $1.7 billion, a decrease of $154 million, or 8.2%, compared with fiscal 2023 due to the elements described in the sections above.
Net income Net income for fiscal 2025 was $1.9 billion, an increase of $121 million, or 7.0%, compared with fiscal 2024 due to the elements described in the sections above.
This decrease in net sales was primarily due to lower sales volumes, as well as a 1.3% unfavorable impact from foreign currency exchange rates. These impacts were partially offset by incremental sales from acquisitions of 2.7% , price inflation of approximately 1% and the benefit of one additional sales day of 0.5%.
This increase in net sales was primarily due to incremental sales from acquisitions of 4.7% and price inflation of approximately 2%, partially offset by the impacts of foreign currency exchange rates of 2.3%, one fewer sales day in the fiscal year of 0.5% and slightly lower sales volume.
In fiscal 2024, the Company had net borrowings of $200 million under the Receivables Facility (as defined below), partially offset by the repayment of $55 million in connection with the maturity of certain Private Placement Notes (as defined below).
In fiscal 2024, the Company had net borrowings of $200 million under the Receivables Facility, partially offset by the repayment of $55 million in connection with the maturity of certain Private Placement Notes. Reinvestment of unremitted earnings We consider foreign earnings of specific subsidiaries to be indefinitely reinvested.
(“Wolseley Capital”), a wholly-owned subsidiary of the Company, privately placed fixed rate notes in an aggregate principal amount of $800 million and $355 million, respectively (collectively, the “Private Placement Notes”). In September 2022 and November 2023, the Company repaid $250 million and $55 million, respectively, due to the maturing of certain Private Placement Notes.
(“Wolseley Capital”), a wholly-owned subsidiary of the Company, privately placed fixed rate notes in an aggregate principal amount of $800 million and $355 million, respectively (collectively, the “Private Placement Notes”). As of July 31, 2025, $700 million in Private Placement Notes were outstanding.
Some of these accounting policies may require management to make difficult, subjective or complex judgments about the Company’s estimates.
These policies and related estimates are described in Note 1, Summary of significant accounting policies to the Consolidated Financial Statements. Some of these accounting policies may require management to make difficult, subjective or complex judgments about the Company’s estimates.
Cash flows from investing activities As of July 31, (In millions) 2024 2023 Net cash used in investing activities ($601) ($1,054) Net cash used in investing activities was $0.6 billion in fiscal 2024 compared with $1.1 billion in fiscal 2023. Capital expenditure totaled $372 million and $441 million in fiscal 2024 and fiscal 2023, respectively.
Cash flows from investing activities As of July 31, (In millions) 2025 2024 Net cash used in investing activities ($543) ($601) Net cash used in investing activities decreased 9.7% to $0.5 billion in fiscal 2025. Capital expenditure totaled $305 million and $372 million in fiscal 2025 and fiscal 2024, respectively.
The timing of payment, if any, associated with our long-term unrecognized tax benefit liabilities is unknown. See Note 4, Income Tax to the Consolidated Financial Statements for further discussion of our unrecognized tax benefits. Critical Accounting Estimates In applying the Company’s accounting policies, various transactions and balances are valued using estimates or assumptions.
See Note 4, Income Tax to the Consolidated Financial Statements for further discussion of our unrecognized tax benefits. Critical Accounting Estimates In applying the Company’s accounting policies, various transactions and balances are valued using estimates or assumptions. Should these estimates or assumptions prove incorrect, there may be an impact on the following year’s financial statements.
Management’s Discussion and Analysis of Financial Conditions and Results of Operations of the Annual Report on Form 10-K filed by Ferguson plc with the SEC on September 26, 2023 for fiscal 2023. The following discussion contains trend information and forward-looking statements.
Management’s Discussion and Analysis of Financial Conditions and Results of Operations of our fiscal 2024 Annual Report. The following discussion contains trend information and forward-looking statements.
The Company has the ability to increase the aggregate total available amount under the Receivables Facility up to a total of $1.5 billion from time to time, subject to lender participation. The benchmark rate is Term SOFR (as defined in the Receivables Facility) plus a credit spread adjustment of 10 basis points.
The Company has the ability to increase the aggregate total available amount under the Receivables Facility up to a total of $1.5 billion from time to time, subject to lender participation. As of July 31, 2025, $375 million in borrowings were outstanding under the Receivables Facility.
(d) Other purchase obligations primarily include commitments to purchase inventory and other goods and services and uncompleted additions to property, buildings and equipment that are expected to be satisfied within the next 12 months. Purchase obligations are made in the normal course of business to meet operating needs.
(b) Interest on debt is calculated using the prevailing spot interest rate as of the balance sheet date. (c) Other purchase obligations primarily include commitments to purchase inventory and other goods and services and uncompleted additions to property, buildings and equipment that are expected to be satisfied within the next 12 months.
For the years ended July 31, (In millions) 2024 2023 Net sales $29,635 $29,734 Cost of sales (20,582) (20,709) Gross profit 9,053 9,025 Selling, general and administrative expenses (6,066) (5,920) Impairments and other charges — (125) Depreciation and amortization (335) (321) Operating profit 2,652 2,659 Interest expense, net (179) (184) Other expense, net (9) (11) Income before income taxes 2,464 2,464 Provision for income taxes (729) (575) Income from continuing operations $1,735 $1,889 Income from discontinued operations (net of tax) — — Net income $1,735 $1,889 Net sales Net sales were $29.6 billion in fiscal 2024, a decrease of $0.1 billion, or 0.3%, compared with the same period in 2023.
For the years ended July 31, (In millions) 2025 2024 Net sales $30,762 $29,635 Cost of sales (21,327) (20,582) Gross profit 9,435 9,053 Selling, general and administrative expenses (6,376) (6,038) Restructuring and impairment expenses (80) (28) Depreciation and amortization (373) (335) Operating profit 2,606 2,652 Interest expense, net (190) (179) Other income (expense), net 7 (9) Income before income taxes 2,423 2,464 Provision for income taxes (567) (729) Net income $1,856 $1,735 Net sales Net sales were $30.8 billion in fiscal 2025, an increase of $1.1 billion, or 3.8%, compared with 2024.
Adjusted operating profit in the United States was $2.8 billion, a decrease of $0.1 billion, or 2.5%, compared with the prior year, primarily reflecting the impact of wage and infrastructure cost inflation.
Adjusted operating profit in the United States was $2.8 billion, an increase of 0.7% compared with the prior year, primarily reflecting higher gross profit, partially offset by higher operating costs in light of sales volume growth and cost inflation.
GAAP) to adjusted operating profit (non-GAAP): For the years ended July 31, (In millions) 2024 2023 Net income $1,735 $1,889 Income, discontinued operations (net of tax) — — Income from continuing operations 1,735 1,889 Provision for income taxes 729 575 Interest expense, net 179 184 Other expense, net 9 11 Operating profit 2,652 2,659 Corporate restructurings (1) 28 — Impairments and other charges (2) — 125 Amortization of acquired intangibles 144 133 Adjusted operating profit $2,824 $2,917 (1) For fiscal 2024, corporate restructuring costs related to incremental costs in connection with the Merger.
GAAP) to adjusted operating profit (non-GAAP): For the years ended July 31, (In millions) 2025 2024 Net income $1,856 $1,735 Provision for income taxes 567 729 Interest expense, net 190 179 Other expense, net (7) 9 Operating profit 2,606 2,652 Corporate restructuring expenses (1) 7 28 Business restructuring expenses (2) 73 — Amortization of acquired intangibles 156 144 Adjusted operating profit $2,842 $2,824 (1) For fiscal 2025, corporate restructuring expenses primarily related to incremental costs in connection with transition activities following the establishment of our ultimate parent company’s domicile in the United States.
There have been no significant changes during the fiscal year to the Company’s policies on accounting for, valuing and managing the risk of financial instruments.
Other The Company was in compliance with all debt covenants for all facilities as of July 31, 2025. See Note 9, Debt to the Consolidated Financial Statements for further details regarding the Company’s debt. There have been no significant changes during the fiscal year to the Company’s policies on accounting for, valuing and managing the risk of financial instruments.
While purchase orders for both inventory purchases and non-inventory purchases are generally cancellable without penalty, certain vendor agreements provide for cancellation fees or penalties depending on the terms of the contract. 38 Tax obligations At July 31, 2024, the Company had aggregate liabilities for unrecognized tax benefits totaling $151 million, none of which are expected to be paid in the next 12 months.
Purchase obligations are made in the ordinary course of business to meet operating needs. While purchase orders for both inventory purchases and non-inventory purchases are generally cancellable without penalty, certain vendor agreements provide for cancellation fees or penalties depending on the terms of the contract.
Should these estimates or assumptions prove incorrect, there may be an impact on the following year’s financial statements. Management believes that the estimates and assumptions that have been applied would not give rise to a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year.
Management believes that the estimates and assumptions that have been applied would not give rise to a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year. The Company’s significant accounting policies that require estimates include the allowance for doubtful accounts, inventories, considerations around goodwill impairment, leases and revenue recognition.
The decrease in net sales was primarily driven by price deflation of approximately 2%, mainly within certain commodity categories, and to a lesser extent, lower sales volume. These decreases were partially offset by incremental sales from acquisitions of 1.7% and the benefit of one additional sales day of 0.4% in the year-over-year comparison.
The increase in net sales was primarily driven by higher sales volume, along with incremental sales from acquisitions of 1.0%. These increases were partially offset by price deflation of approximately 1%, mainly within certain commodity categories in the first half of the fiscal year that was partially offset by improvements in finished goods pricing.
The increase in income tax expense and the increase in the effective tax rate were primarily driven by one-time, non-cash deferred tax charges of $137 million due to the elimination of certain pre-existing U.K. tax attributes of the Company as part of the Merger.
The decrease in income tax expense and the decrease in the effective tax rate were primarily driven by non-recurring, non-cash deferred tax charges of $137 million incurred in the prior fiscal year due to the elimination of certain pre-existing U.K. tax attributes of the Company in connection with establishing a new corporate structure to domicile our ultimate parent company in the United States, as well as the release of uncertain tax positions following the lapse of statute of limitations in fiscal 2025.
The decrease in net interest expense was primarily due to lower average borrowings in fiscal 2024. 32 Income tax expense Income tax expense was $729 million for fiscal 2024, an increase of $154 million compared with fiscal 2023. The Company’s effective tax rate was 29.6% for fiscal 2024 compared with 23.3% for fiscal 2023.
Income tax expense Income tax expense was $567 million for fiscal 2025, a decrease of $162 million compared with fiscal 2024. The Company’s effective tax rate was 23.4% for fiscal 2025 compared with 29.6% for fiscal 2024.
Gross profit Gross profit was $9.1 billion in fiscal 2024 and approximately flat compared with fiscal 2023. Gross profit as a percent of sales was 30.5% in fiscal 2024 compared with 30.4% in the prior year with the increase reflecting favorable product mix, partially offset by price deflation in net sales within certain commodity categories.
Gross profit Gross profit was $9.4 billion in fiscal 2025, an increase of $382 million, or 4.2%, compared with fiscal 2024. Gross profit as a percent of sales was 30.7% in fiscal 2025 compared with 30.5% in the prior year.
In November 2024, an additional $150 million of such notes will mature. Unsecured Senior Notes Ferguson Finance plc (“Ferguson Finance”) has issued $2.35 billion in various issuances of unsecured senior notes (collectively, the “Unsecured Senior Notes”).
Unsecured Senior Notes As of July 31, 2025, the Company has issued a total of $3.1 billion in unsecured notes, collectively referred to as the “Unsecured Senior Notes”. • Ferguson Finance plc (“Ferguson Finance”) has issued $2.35 billion of Unsecured Senior Notes. • In October 2024, Ferguson Enterprises Inc.
The increase in SG&A as a percent of sales primarily reflects the impact of wage and infrastructure cost inflation, corporate restructuring costs and the impact of acquisitions. Net interest expense Net interest expense was $179 million in fiscal 2024 compared with $184 million in fiscal 2023.
The increase in SG&A as a percent of sales primarily reflects higher performance based incentive compensation and the impact of cost inflation on labor, infrastructure and fleet. Restructuring expenses Corporate restructuring expenses Corporate restructuring expenses were $7 million and $28 million in fiscal 2025 and 2024, respectively.
Adjusted diluted earnings per share decreased 1.5%, primarily due to the lower adjusted operating profit, partially offset by the impact of the Company’s share repurchases. 31 Net cash provided by operating activities decreased to $1.9 billion for fiscal 2024 compared with $2.7 billion for fiscal 2023, primarily reflecting lower net income after adjusting for non-cash items, as well as higher working capital with inventory levels stabilizing in line with customer demand.
Adjusted diluted earnings per share increased 2.6%, primarily due the impact of the Company’s share repurchases, and to a lesser extent, higher adjusted operating profit. Net cash provided by operating activities increased 1.9% to $1.9 billion in fiscal 2025.
GAAP”). See the section titled “ Non-GAAP Reconciliations and Supplementary Information .” For fiscal 2024, net sales decreased by 0.3%, primarily driven by price deflation of approximately 2%, mainly within certain commodity categories, and to a lesser extent, lower sales volume.
GAAP”). See the section titled “ Non-GAAP Reconciliations and Supplementary Information .” For fiscal 2025, net sales increased by 3.8%, primarily due to higher sales volume and incremental sales from acquisitions, partially offset by the impact of one less sales day in fiscal 2025 than in fiscal 2024.
These decreases were partially offset by incremental sales from acquisitions of 1.8% and the benefit of an additional sales day of 0.4% in the year-over-year comparison. The Company’s decrease in sales was primarily driven by lower year-over-year sales in the United States residential markets.
The increase in net sales was primarily driven by higher sales volume and incremental sales from acquisitions of 1.0%, partially offset by the 0.4% impact of one less sales day in fiscal 2025.
These decreases were partially offset by incremental sales from acquisitions and the benefit of one additional sales day in fiscal 2024 compared with fiscal 2023. For fiscal 2024, operating profit decreased 0.3% (adjusted operating profit decreased 3.2%) compared to fiscal 2023.
This decrease was primarily due to $80 million in non-recurring restructuring expenses, along with the profit impact of one less sales day in fiscal 2025. These decreases were partially offset by higher gross profit compared with fiscal 2024. Adjusted operating profit increased due to higher gross profit compared with fiscal 2024.
For fiscal 2024, diluted earnings per share was $8.53 (adjusted diluted earnings per share: $9.69), decreasing 6.5% compared with the prior year due to lower net income and the impact of one-time, non-cash deferred tax charges of $137 million in fiscal 2024 in connection with the Merger, partially offset by not having the software impairment and other charges recorded in fiscal 2023, as well as the impact of share repurchases.
For fiscal 2025, diluted earnings per share was $9.32 (adjusted diluted earnings per share: $9.94), increasing 9.3% compared with the prior year due to higher net income and the impact of share repurchases.
Net sales in the residential markets decreased by 2.4%, driven by lower sales in new construction reflecting housing starts and permit activity that were below prior year levels, as well as lower sales in RMI. Net sales growth in the non-residential markets, was 1.9%, with growth in the civil/infrastructure and commercial markets.
In addition, net sales growth was partially offset by the impact of one fewer sales day of 0.4% in the year-over-year comparison. Net sales growth in the non-residential markets was 6.8% due to growth in each of Commercial, Civil/Infrastructure and Industrial. Net sales in the residential markets increased by 0.9%, with growth across both new construction and RMI.
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Ferguson is headquartered and managed in Newport News, Virginia with its operations and associates solely focused on North America.
Added
Pricing was slightly down year-over-year, primarily during the first half of fiscal 2025, due to deflation in certain commodity categories, which was partially offset by improvements in finished goods pricing. For fiscal 2025, operating profit decreased 1.7% (adjusted operating profit increased 0.6%) compared to fiscal 2024.
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The year-over-year decline was primarily due to higher operating costs driven by inflation, partially offset by not having the software impairment and other charges recorded in fiscal 2023.
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The higher year-over-year net income was primarily driven by non-recurring, non-cash deferred tax charges of $137 million incurred in fiscal 2024 in connection with establishing a new corporate structure to domicile our ultimate parent company in the United States.
Removed
The decrease in net sales was primarily driven by price deflation of approximately 2%, mainly within certain commodity categories, and to a lesser extent, lower sales volume, as well as the impact of foreign currency exchange rates of 0.1%.
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Pricing was slightly down year-over-year, primarily during the first half of fiscal 2025, due to deflation in certain commodity categories, which was partially offset by improvements in finished goods pricing. The Company’s increase in net sales was primarily driven by growth in non-residential markets, and to a lesser extent, in residential markets in its United States segment.
Removed
The Company’s measure of segment profit is adjusted operating profit which is defined as profit before tax, excluding central and other costs, restructuring costs, amortization of acquired intangible assets, net interest expenses, as well as other items typically recorded in net other (expense) income such as (loss)/gain on disposal of businesses, pension plan changes/closure costs and amounts recorded in connection with the Company’s interests in investees.
Added
The increase reflected specific management actions to better capture the value provided to customers and the timing and extent of supplier price increases, partially offset by the impact of deflation in certain commodity categories, primarily during the first half of the year.
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(2) For fiscal 2023, impairments and other charges related to the $107 million in software impairment charges and $18 million in charges associated with the closure of certain smaller, underperforming branches in the United States. 34 Reconciliation of net income to adjusted net income and adjusted EPS - diluted The following table reconciles net income (U.S.
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During fiscal 2024, these expenses primarily related to establishing a new corporate structure to domicile our ultimate parent company in the United States. During fiscal 2025, these expenses were primarily related to transition activities following the establishment of our ultimate parent company’s domicile in the United States.
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(2) For fiscal 2024, corporate restructuring costs related to incremental costs in connection with the Merger. (3) For fiscal 2023, impairments and other charges related to the $107 million in software impairment charges and $18 million in charges associated with the closure of certain smaller, underperforming branches in the United States.
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Business restructuring expenses During the second half of fiscal 2025, the Company implemented targeted actions to streamline operations, enhancing speed and efficiency to better serve customers and drive further profitable growth. As a result of these actions, the Company recorded non-recurring business restructuring expenses of $73 million.
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This decrease was primarily driven by changes in inventory, along with the timing of receivables collections and lower net income in fiscal 2024 after adjusting for non-cash charges. In fiscal 2024, inventory levels have stabilized in line with customer demand compared to fiscal 2023 where inventory was decreasing to normalized levels following periods of supply chain disruption.
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No such amounts were recorded in fiscal 2024. 32 Net interest expense Net interest expense was $190 million in fiscal 2025 compared with $179 million in fiscal 2024. The increase in interest expense was due to higher average borrowings in fiscal 2025 compared with the prior year.
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These decreases in cash flow were partially offset by a net increase in payables, due to the timing of vendor payments.
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For fiscal 2024, corporate restructuring expenses related to incremental costs in connection with establishing the new corporate structure to domicile our ultimate parent company in the United States.
Removed
In fiscal 2023, the Company made $405 million in net repayments on the Receivables Facility and repaid $250 million due to the maturity of certain Private Placement Notes, partially offset by borrowings of $500 million in term loans. 36 Reinvestment of unremitted earnings We consider foreign earnings of specific subsidiaries to be indefinitely reinvested.
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(2) For fiscal 2025, business restructuring expenses related to the Company’s implementation of targeted actions to streamline operations, enhancing speed and efficiency to better serve customers and drive further profitable growth. 34 Reconciliation of net income to adjusted net income and adjusted EPS - diluted The following table reconciles net income (U.S.
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The Unsecured Senior Notes are fully and unconditionally guaranteed on a direct, unsubordinated and unsecured senior basis by the Company and generally carry the same terms and conditions with interest paid semi-annually.
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(2) For fiscal 2025, corporate restructuring expenses primarily related to incremental costs in connection with transition activities following the establishment of our ultimate parent company’s domicile in the United States. For fiscal 2024, corporate restructuring expenses related to incremental costs in connection with establishing the new corporate structure to domicile our ultimate parent company in the United States.
Removed
The Unsecured Senior Notes may be redeemed, in whole or in part, (i) at 100% of the principal amount on the notes being redeemed plus a “make-whole” prepayment premium at any time prior to three months before the maturity date (the “Notes Par Call Date”) or (ii) after the Notes Par Call Date at 100% of the principal amount of the notes being redeemed plus accrued and unpaid interest on the principal being redeemed.
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(3) For fiscal 2025, business restructuring expenses related to the Company’s implementation of targeted actions to streamline operations, enhancing speed and efficiency to better serve customers and drive further profitable growth.
Removed
The Unsecured Senior Notes include covenants, subject to certain exceptions, which include limitations on the granting of liens and on mergers and acquisitions. Term Loan In October 2022, the Company and Ferguson UK Holdings Limited (“Ferguson UK”) entered into, and Ferguson UK borrowed in full, the $500 million of term loans available under the Term Loan Agreement (as defined below).
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(5) For fiscal 2025, the tax impact on non-GAAP adjustments related to the restructuring expenses and the amortization of acquired intangibles.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur foreign currency related hedging arrangements outstanding at the end of fiscal 2024 and 2023 were not material. A hypothetical 10% change in the relative value of the U.S. dollar would not materially impact the Company’s net earnings for 2024. Interest rate risks The Company is exposed to interest rate risk on its debt.
Biggest changeOur foreign currency related hedging arrangements outstanding at the end of fiscal 2025 and 2024 were not material. A hypothetical 10% change in the relative value of the U.S. dollar would not materially impact the Company’s net income for fiscal 2025. Interest rate risks The Company is exposed to interest rate risk on its debt.
In connection with certain of its Private Placement Notes, the Company entered into interest rate swaps, designated as fair value hedges, to manage its exposure to interest rate movements on its debt. If short-term interest rates varied by 10%, the impact on the Company’s variable-rate debt obligations would not have a material impact on the Company’s net earnings.
In connection with certain of its Private Placement Notes, the Company entered into interest rate swaps, designated as fair value hedges, to manage its exposure to interest rate movements on its debt. If short-term interest rates varied by 10%, the impact on the Company’s variable-rate debt obligations would not have a material impact on the Company’s net income.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk The Company is exposed to market risks arising from changes in foreign currency exchange rates, interest rates and commodity prices. The Company has well-defined risk management policies, which have been consistently applied during fiscal years 2024, 2023 and 2022.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk The Company is exposed to market risks arising from changes in foreign currency exchange rates, interest rates and commodity prices. The Company has well-defined risk management policies, which have been consistently applied during fiscal years 2025, 2024 and 2023.
Actual results may differ materially from these forward-looking statements due to the inherent limitations associated with predicting the timing and amount of changes in interest rates, foreign currency exchange rates, prices of raw materials and the Company’s actual exposures and positions. 40
Actual results may differ materially from these forward-looking statements due to the inherent limitations associated with predicting the timing and amount of changes in interest rates, foreign currency exchange rates, prices of raw materials and the Company’s actual exposures and positions. 41