Ferguson Enterprises reported its second-quarter results, showing continued volume growth in a challenging market environment. Sales reached $6.9 billion, a 3.0% increase driven by market outperformance. The company's sales volume grew by 5%, offset by a 2% decline due to deflationary pressures. Gross margin was 29.7%, down 70 basis points from the prior year. Operating margin stood at 6.0% (6.5% on an adjusted basis). Diluted earnings per share were $1.38 ($1.52 on an adjusted basis).

Despite market headwinds, Ferguson reaffirmed its full-year revenue guidance, expecting low single-digit growth. However, the company revised its expected full-year adjusted operating margin down to a range of 8.3% to 8.8%. Capital expenditure guidance was also reduced to $325-$375 million from the previous $400-$450 million.

The company continues to manage costs carefully while making strategic investments to improve efficiency. Ferguson completed one acquisition during the quarter and signed an agreement to acquire a leading commercial/mechanical distributor in the Northeast. The share repurchase program was expanded by an additional $1 billion, with $252 million in repurchases completed during the quarter. The quarterly dividend was increased by 5% to $0.83 per share.

In the U.S., net sales rose 3.0%, with residential markets remaining steady and non-residential markets showing stronger resilience, particularly in large capital projects and infrastructure. Adjusted operating profit in the U.S. was $455 million, down 13.3% year-over-year. In Canada, net sales grew 3.2%, with adjusted operating profit increasing to $11 million.

Ferguson maintains a strong financial position, with net debt to adjusted EBITDA at 1.2x. The company remains confident in medium-term market conditions and continues to focus on balancing strategic investments with cost management.