It was a disappointing start to the 2024 fiscal year for a major plumbing distributor. And if Ferguson Plc has learned two lessons, they are:
- Ecommerce cannot always save the day.
- Do not count on putting your eggs in one basket.
Ferguson sales Q1
Ferguson is based in the United Kingdom but does more than 95% of its B2B and B2C business in the United States. It reported sales of $7.708 billion in the first quarter of the 2024 fiscal year ended Oct. 31, 2023. That is a decrease of about 3% from Q1 fiscal 2023 sales of $7.931 billion.
In the U.S., sales declined 2.7% to $7.329 billion from $7.532 billion in Q1 fiscal 2023. For all of Ferguson, operating profit was $773 million compared with $864 million in the prior year.
“Residential trends have remained broadly consistent with the prior quarter, with markets impacted by the slowdown in new residential construction, an area serving the project-minded consumer,” CEO Kevin Murphy told analysts on a recent earnings call, based on a transcript from SeekingAlpha.com. “Repair, maintenance and improvement has seen greater resilience, particularly with our core trade professionals and in high-end remodel.”
Ferguson, which operates 1,549 branches and 10 distribution centers in the U.S., does not break out specific ecommerce figures. But online business for its residential channel was down significantly.
“Residential digital commerce declined by 14% as weaker consumer demand has persisted,” Murphy told analysts.
Ferguson does business evenly across its B2B and B2C sales channels. Residential is about 52% of sales compared with about 48% for commercial, the company says.
It is that sales diversity that Ferguson will count on as it looks to sustain business in the year ahead, Murphy said.
“As we look forward, despite the current challenging macroeconomic environment, we are well positioned with a balanced business mix between residential and non-residential, new construction and repair maintenance and improvement,” he told analysts.
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