Ferguson Enterprises Inc.

Strong Q2 fundamentals + profit/share growth (good) - Revenue: $8.8B, +4.6% YoY ( +3.8% organic, +1% acquisitions, -0.2% divestment). - Gross margin: 31%, -20 bps YoY (tough comp from prior supplier price increases; margin still described as strong). - Operating profit: $932M, +2.9%, with operating margin 10.7% ( -10 bps YoY). - EPS: $3.39, +5.3% YoY (driven by operating profit growth + share repurchases impact).

Demand picture: large capital projects/backlog building, with some residential headwinds (mixed) - US non-res performance: +8% growth, up from +13% prior-year comp, with large capital projects supporting strength; backlog/open orders continuing to build and remain above what Q2 growth implies. - Commercial mechanical: +15% (on +20% prior-year comp) led by data centers, pharma/biotech, general manufacturing. - Industrial: +18% (on +6% prior-year comp), supported by life sciences/pharma, chemical, power generation infrastructure. - Residential: +2% in the quarter, but CFO noted persistent residential weakness; overall mix described as providing resilience.

Inflation/pricing and gross margin seasonality: expected to remain manageable, but commodities can move (surprising/uncertain) - Inflation deceleration to low-single-digit YoY is attributed to rolling over earlier price increases on finished goods. - Commodities: ~flat basket in the quarter; PVC still down double digits (deflation), so commodity direction is a key swing factor. - Gross margin was flatter QoQ than the prior quarter’s expectation of summer step-down; management says execution + pricing tools + own-brand growth kept gross margin resilient. - Target view: gross margin expected to support the operating margin outlook, though Q3 comps are tough (they cited 31.3% gross margin in Q3 last year).