Ferguson PLC on Tuesday reported a dip in second quarter income as revenue growth slowed quarter-on-quarter and its gross margin worsened.
In the three months ended January 31, the plumbing and heating products distributor posted net income of $374 million, down 14% from $436 million the year prior.
Net sales in the quarter totalled $6.83 billion. This represented a 4.9% increase from $6.51 billion the previous year and a ‘sequential step down in growth rates’ from the first quarter, as expected, according to Ferguson.
Gross margin stood at 30.2%, 40 basis points lower than last year, driven primarily by a very strong prior year comparison.
In the six months ended January 31, net income fell more modestly, dropping 2.7% to $969 million from $996 million. Net sales, meanwhile, increased 11% to $14.76 billion from $13.31 billion.
Chief Executive Kevin Murphy said: ‘The year is unfolding as we expected, and our associates continue to deliver solid results by leveraging our scale and core strengths to help our customers deliver their complex projects. We continue to appropriately manage costs to position the business for challenging end markets.’
Looking ahead, Ferguson said it expects low-single-digit sales net sales growth in financial 2023, with an adjusted operating margin between 9.3% and 9.9%.
The Wokingham, England-based firm declared a quarterly dividend of $0.75, up 9% against the previous year.
Shares in Ferguson were down 4.5% at 11,500.00 pence on Tuesday afternoon in London.
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