FERG Q2 2026 - Preliminary Earnings Alert

Event: Quartr Q2 2026 event Retrieved: 2026-08-10T22:40:00Z Comparison mode: maximal Scorecard contract: v1 Source status: release=available (earnings release 3687669, quarterly report 3687670, slides 3995933) | financials=earnings release plus Quartr standardized Q1 2026 income statement | transcript=available and complete (call 2026-08-10 12:30Z)

Consensus scorecard

• Consensus scorecard, bulleted equivalent:
  • Revenue / consolidated net sales: Quartr actual $8,751m against API Ninjas consensus $8,676.667m - Beat +$74.333m, +0.9%.
  • EPS / adjusted diluted: Quartr actual $3.39 against API Ninjas consensus $3.30 - Beat +$0.09, +2.7%.

Reported results and guidance

• Q2 results, bulleted equivalent: net sales $8,751m, up 4.6%; gross margin 31.0%, down 20 basis points; reported operating profit $893m at a 10.2% operating margin, up 6.1% and up 10 basis points; adjusted operating profit $932m at a 10.7% adjusted operating margin, up 2.9% and down 10 basis points; reported diluted EPS $3.43, up 6.9%; adjusted diluted EPS $3.39, up 5.3%; quarterly dividend declared of $0.89; share repurchases of $202m in the quarter; net debt to adjusted EBITDA of 1.3x against 1.2x a year earlier.

• Revenue bridge, bulleted equivalent: organic revenue growth of +3.8% plus acquisition growth of +1.0% less 0.2% from a Canadian divestment gives total net sales growth of +4.6%. Price inflation was described as low single digits.

• Segment detail, bulleted equivalent: US net sales rose 5.0%, made up of 4.0% organic growth and 1.0% from acquisitions; Canada net sales fell 1.9% as 1.7% organic growth was more than offset by 3.6% from a non-core business divestment, and Canada adjusted operating profit of $22m was $1m below prior year; residential end markets, roughly half of revenue, grew 2% against weak new construction and soft repair, maintenance and improvement activity; non-residential revenue grew 8% with healthy large capital project activity, growth in open order volumes and strong bidding activity.

• Six-month results, bulleted equivalent (6M 2026 vs 6M 2025): net sales $16,223m vs $15,576m, up 4.2%; gross margin 31.0% flat; reported operating profit $1,505m vs $1,349m, up 11.6%, and adjusted operating profit $1,579m vs $1,503m, up 5.1%; reported operating margin 9.3% vs 8.7% and adjusted 9.7% vs 9.6%; reported diluted EPS $5.56 vs $4.94, up 12.6%, and adjusted diluted EPS $5.67 vs $5.30, up 7.0%; adjusted EBITDA $1,705m vs $1,614m, up 5.6%.

• Rolling twelve-month bridge, bulleted equivalent: net income $2,107m vs $1,857m; interest expense, net $192m vs $189m; restructuring activities $2m vs $84m; depreciation and amortization $387m vs $370m; adjusted EBITDA $3,334m vs $3,035m; net debt to adjusted EBITDA 1.3x vs 1.2x.

• Guidance, bulleted equivalent: calendar 2026 net sales guidance raised to mid-single digit growth from low to mid-single digit growth; adjusted operating margin guidance narrowed upward to 9.5%-9.8% from 9.4%-9.8%; interest expense unchanged at approximately $200 million; capital expenditure guidance raised to $375-$425 million from $350-$400 million; adjusted effective tax rate unchanged at approximately 26%. The company states the updated guidance does not include the expected impact of the FloWorks acquisition, which it expects to close during the third quarter.

Key bullish aspects

• Net sales of $8,751m beat the API Ninjas consensus of $8,676.667m by $74.333m, or 0.9%, and adjusted diluted EPS of $3.39 beat the $3.30 consensus by $0.09, or 2.7%.
• Full-year calendar 2026 guidance was raised on two of five metrics: net sales growth moved up to mid-single digit from low to mid-single digit, and the adjusted operating margin floor rose 10 basis points to 9.5%. Management attributed the increase to year-to-date performance.
• Most of the growth was organic: 3.8 points of the 4.6% net sales increase came from organic revenue, with 1.0 point from acquisitions and a 0.2 point drag from a Canadian divestment.
• Non-residential revenue grew 8% with management citing growth in open order volumes and strong bidding activity in large capital projects, so the strongest end market is the one with forward-order visibility.
• Residential revenue returned to growth at +2% despite management describing new residential construction as weak and repair, maintenance and improvement work as soft, which management frames as market outperformance.
• Reported operating margin expanded 10 basis points to 10.2% and reported operating profit rose 6.1%, faster than the 4.6% sales growth.
• The company completed five acquisitions in the quarter and signed a definitive agreement for FloWorks after quarter-end; the eight acquisitions announced year-to-date carry approximately $1.4 billion of aggregate annualized revenue, against calendar 2025 sales of $31.3 billion.
• Capital returns continued with $202m of share repurchases in the quarter and a declared dividend of $0.89, while leverage of 1.3x adjusted EBITDA remains inside the company's stated one-to-two-times target range.
• Rolling twelve-month adjusted EBITDA rose to $3,334m from $3,035m, up 9.9%.

Key bearish aspects

• Gross margin fell 20 basis points to 31.0%. Management attributes the decline to a prior-year period temporarily elevated by the timing and extent of supplier price increases, which means the comparison, not current pricing, is the stated cause.
• Adjusted operating margin fell 10 basis points to 10.7% and adjusted operating profit grew only 2.9%, below the 4.6% sales growth, so on the company's own preferred measure the quarter deleveraged.
• The gap between reported and adjusted results inverted: reported diluted EPS of $3.43 exceeded adjusted diluted EPS of $3.39, and reported operating margin improved while adjusted operating margin declined. The six-month figures show the same pattern, with reported EPS up 12.6% against adjusted EPS up 7.0%.
• Revenue growth of 4.6% included low-single-digit price inflation, so unit or volume growth is a smaller number than the headline and is not separately quantified.
• Residential end markets, about half of revenue, grew only 2% and management continues to describe both new construction and repair, maintenance and improvement demand as weak or soft.
• Canada net sales fell 1.9% and Canadian adjusted operating profit of $22m was $1m below prior year, with management describing markets as challenging, particularly residential.
• Capital expenditure guidance was raised at both ends to $375-$425 million from $350-$400 million, a $25 million increase at each end, so part of the improved outlook is offset by higher planned spend.
• Net debt rose year over year and leverage increased to 1.3x from 1.2x adjusted EBITDA, with the FloWorks acquisition still to be funded and its impact excluded from guidance.
• Management describes the economic environment as remaining uncertain in the same paragraph as the guidance increase.

Key uncertainties

• The FloWorks acquisition is expected to close in the third quarter but is excluded from the updated guidance, so the guided ranges are not comparable to the post-close business and the size of the effect is not stated in this release.
• Neither the purchase price nor the financing of FloWorks is disclosed in this release, so the effect on leverage against the stated one-to-two-times target cannot be assessed from this document.
• The release does not quantify the volume-versus-price split of organic growth beyond describing price inflation as low single digits.
• The raised net sales guidance of mid-single digit growth against 4.2% growth delivered in the first half implies acceleration in the second half, and the release does not identify what drives it beyond continued market outperformance.
• The eight acquisitions announced year-to-date carry approximately $1.4 billion of annualized revenue, but the release does not state how much of that is already in the reported run rate versus still to be consolidated.
• Whether the 20 basis point gross margin decline persists depends on the prior-year supplier-price-increase timing effect management cites, which is not sized in this release.
• Residential demand commentary is qualitative; the release provides no leading indicator for the roughly half of revenue exposed to it.
• The restructuring line fell to $2m over the rolling twelve months from $84m, so the year-over-year improvement in reported operating profit benefits from a comparison effect whose future run rate is not guided.

Market context

• API Ninjas price snapshot for FERG: $263.78 on NYSE, volume 2,113,060, snapshot timestamp 2026-08-10T20:57:57Z. That is shortly after the 20:00Z US close on the day of a pre-market release and a 12:30Z call, so it reflects a full regular session of trading after the news. It is a single snapshot, not a complete intraday reaction, and the volume figure is a session total rather than a reaction measure.
• The release was published at approximately 2026-08-10T10:51Z per the Quartr source PDF timestamp, ahead of the 12:30Z call and the US market open.

Source limitations

• Every displayed actual comes from Quartr earnings release document 3687669, except the Q1 2026 net sales figure used in the footing check below, which comes from Quartr standardized financials for event 588828. Quartr standardized financials for the Q2 2026 event were not yet populated at retrieval time.
• The text layer of release document 3687669 systematically drops the digit "6". This is visible throughout the document: the year 2026 renders as "202", net debt of $4,468m renders as "$4,4 8", the rolling-twelve-month tax provision renders as "24", and the leverage ratios render as "1.3x1.2x". Every figure in this report was therefore recovered and cross-checked rather than read directly where the raw text was affected.
• Quarterly net sales of $8,751m is not stated as a discrete figure anywhere in the release, which gives the quarter only as "$8.8 billion". It was placed by footing six-month net sales of $16,223m less Quartr standardized Q1 2026 net sales of $7,472m. Four independent checks confirm it: reported operating profit of $893m divided by $8,751m gives exactly the 10.2% operating margin the release states; adjusted operating profit of $932m gives 10.65%, matching the stated 10.7%; $8,751m rounds to the "$8.8 billion" the release states; and the stated 4.6% growth implies a prior-year quarter of $8,366m, which is consistent with the $15,576m prior-year six-month figure. The consensus comparison is a beat at any revenue between $8,676.7m and $8.8bn, so the direction of the revenue result does not depend on this reconstruction, though the 0.9% magnitude does.
• Growth percentages rendered with the dropped digit were recovered the same way and are consistent with the surrounding arithmetic: net sales +4.6%, reported operating profit +6.1%, reported diluted EPS +6.9%, six-month reported operating profit +11.6% and six-month reported diluted EPS +12.6%.
• EPS basis: adjusted diluted EPS was selected under the maximal-mode ladder because the provider's own historical actual EPS series tracks the company's adjusted basis. For Q1 2026 the provider's actual EPS of $2.28 equals Quartr's standardized diluted EPS excluding extraordinary items of $2.28, against a GAAP diluted EPS of $2.13 for the same quarter. On reported GAAP diluted EPS of $3.43 the same $3.30 estimate would be a larger beat of +3.9%, so the basis choice does not change the direction of the result.
• The API Ninjas row for FERG dated 2026-08-10 carries fiscal_year 2026 and fiscal_quarter 2, which agrees with the Quartr fiscal period of Q2 2026, so the fiscal-period match is by populated API fields rather than by the date-only path.
• The API Ninjas row also carries an actual revenue of $7,495,000,000 and an actual EPS of $0.04 for this event. Both conflict with the company release and are treated as provider diagnostics only; neither is displayed as a company result, per policy.
• The consolidated statement of earnings, balance sheet and cash flow statement pages of the release were not reproduced in this report because the digit-dropping defect makes line-item extraction unreliable at that level of detail. Only figures that could be independently cross-checked are shown.
• Prior-year quarterly gross margin, operating profit and EPS in absolute dollars are not stated separately in the release, which gives the quarter only as percentage changes; those are shown as changes rather than reconstructed levels.