ferg-20250131

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-42200

Ferguson Enterprises Inc.
(Exact name of registrant as specified in its charter)


Delaware						38-4304133
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

751 Lakefront Commons

Newport News, Virginia 23606

+1-757-874-7795


(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class:	Trading Symbol:	Name of Each Exchange on Which Registered:
Common Stock, par value $0.0001 per share	FERG	The New York Stock Exchange
		London Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of March 4, 2025, the number of outstanding shares of common stock was 198,700,177.

TABLE OF CONTENTS


			PAGE


CERTAIN TERMS			1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			1
PART I – FINANCIAL INFORMATION			3
Item 1. Financial Statements			3
Condensed Consolidated Statements of Earnings			3
C ondensed C onsolidated Statements of Comprehensive Income			4
C ondensed C onsolidated Balance Sheets			5
Condensed Consolidated Statements of Stockholders’ Equity			6
C ondensed C onsolidated Statements of Cash Flows			7
Notes to the Condensed Consolidated Financial Statements			8
Note 1: Summary of significant accounting policies			8
Note 2: Revenue and segment information			10
Note 3: Weighted average shares			11
Note 4: Income tax			11
Note 5: Debt			12
Note 6: Assets and liabilities at fair value			13
Note 7: Commitments and contingencies			13
Note 8: Accumulated other comprehensive loss			14
Note 9: Retirement benefit obligations			14
Note 10: Stockholders’ equity			15
Note 11: Share-based compensation			16
Note 12: Acquisitions			17


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			19
Item 3. Quantitative and Qualitative Disclosures About Market Risk			29
Item 4. Controls and Procedures			29
PART II - OTHER INFORMATION			30
Item 1. Legal Proceedings			30
Item 1A. Risk Factors			30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			30
Item 6. Exhibits			31
SIGNATURES			32

CERTAIN TERMS

Unless otherwise specified or the context otherwise requires, the terms “Company,” “Ferguson,” “we,” “us,” and “our” and other similar terms used in this Quarterly Report on Form 10-Q (this “Quarterly Report”) refer to Ferguson Enterprises Inc. and its consolidated subsidiaries. Except as otherwise specified or the context otherwise requires, references to years indicate our fiscal year ended July 31 of the respective year. For example, references to “fiscal 2025” or similar references refer to the fiscal year ended July 31, 2025. References to the “Merger” refer to the merger transaction that resulted in (i) Ferguson plc becoming a direct, wholly owned subsidiary of Ferguson Enterprises Inc., (ii) the shareholders of Ferguson plc at the designated record time for the Merger no longer holding ordinary shares of Ferguson plc but instead holding shares of common stock of Ferguson Enterprises Inc., and (iii) Ferguson Enterprises Inc. becoming the successor issuer to Ferguson plc, which was renamed “Ferguson (Jersey) Limited” and converted into a private company.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information included in this Quarterly Report is forward-looking, including within the meaning of the Private Securities Litigation Reform Act of 1995, and involves risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied by forward-looking statements. Forward-looking statements cover all matters which are not historical facts and include, without limitation, statements or guidance regarding or relating to our future financial position, results of operations and growth, plans and objectives for the future including our capabilities and priorities, risks associated with changes in global and regional economic, market and political conditions, ability to manage supply chain challenges, ability to manage the impact of product price fluctuations, our financial condition and liquidity, legal or regulatory changes, and other statements concerning the success of our business and strategies.

Forward-looking statements can be identified by the use of forward-looking terminology, including terms such as “believes,” “estimates,” “anticipates,” “expects,” “forecasts,” “intends,” “continues,” “plans,” “projects,” “goal,” “target,” “aim,” “may,” “will,” “would,” “could” or “should” or, in each case, their negative or other variations or comparable terminology and other similar references to future periods. Forward-looking statements speak only as of the date on which they are made. They are not assurances of future performance and are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Therefore, you should not place undue reliance on any of these forward-looking statements. Although we believe that the forward-looking statements contained in this Quarterly Report are based on reasonable assumptions, you should be aware that many factors could cause actual results to differ materially from those contained in such forward-looking statements, including but not limited to:

•weakness in the economy, market trends, uncertainty and other conditions in the markets in which we operate, and other factors beyond our control, including disruption in the financial markets and any macroeconomic or other consequences of political unrest, disputes or war;

•failure to rapidly identify or effectively respond to direct and/or end customers’ wants, expectations or trends, including costs and potential problems associated with new or upgraded information technology systems or our ability to timely deploy new omni-channel capabilities;

•decreased demand for our products as a result of operating in highly competitive industries and the impact of declines in the residential and non‐residential markets;

•changes in competition, including as a result of market consolidation or competitors responding more quickly to emerging technologies (such as generative artificial intelligence);

•failure of a key information technology system or process as well as exposure to fraud or theft resulting from payment‐related risks;

•privacy and protection of sensitive data failures, including failures due to data corruption, cybersecurity incidents or network security breaches;

•ineffectiveness of or disruption in our domestic or international supply chain or our fulfillment network, including delays in inventory availability at our distribution facilities and branches, increased delivery costs or lack of availability;

•failure to effectively manage and protect our facilities and inventory or to prevent personal injury to customers, suppliers or associates, including as a result of workplace violence;

•unsuccessful execution of our operational strategies;

•failure to attract, retain and motivate key associates;

•exposure of associates, contractors, customers, suppliers and other individuals to health and safety risks;

•risks associated with acquisitions, partnerships, joint ventures and other business combinations, dispositions or strategic transactions;

•regulatory, product liability and reputational risks and the failure to achieve and maintain a high level of product and service quality or comply with responsible sourcing standards;

•inability to renew leases on favorable terms or at all, as well as any remaining obligations under a lease when we close a facility;

•changes in, interpretations of, or compliance with tax laws;

•our indebtedness and changes in our credit ratings and outlook;

•fluctuations in product prices (e.g., commodity-priced materials, inflation/deflation) and foreign currency;

•funding risks related to our defined benefit pension plans;

•legal proceedings in the course of our business as well as failure to comply with domestic and foreign laws, regulations and standards, as those laws, regulations and standards or interpretations and enforcement thereof may change, or the occurrence of unforeseen developments such as litigation, investigations, governmental proceedings or enforcement actions;

•our failure to comply with the obligations associated with being a public company listed on the New York Stock Exchange and London Stock Exchange and the costs associated therewith;

•the costs and risk exposure relating to environmental, social and governance matters, including sustainability issues, regulatory or legal requirements, and disparate stakeholder expectations;

•adverse impacts caused by a public health crisis; and

•other risks and uncertainties set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended July 31, 2024 filed with the Securities and Exchange Commission (“SEC”) on September 25, 2024 (the “Annual Report”) and in other filings we make with the SEC in the future.

Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other than in accordance with our legal or regulatory obligations, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Part I - FINANCIAL INFORMATION

Item 1.Financial Statements

Ferguson Enterprises Inc.

Condensed Consolidated Statements of Earnings

(unaudited)


	Three months ended		Six months ended
	January 31,		January 31,
(In millions, except per share amounts)	2025	2024	2025	2024
Net sales	$6,872	$6,673	$14,644	$14,381
Cost of sales	(4,830)	(4,644)	(10,262)	(10,021)
Gross profit	2,042	2,029	4,382	4,360
Selling, general and administrative expenses	(1,540)	(1,469)	(3,125)	(2,981)

Depreciation and amortization	(92)	(83)	(182)	(163)
Operating profit	410	477	1,075	1,216
Interest expense, net	(48)	(44)	(94)	(89)
Other income (expense), net	8	—	13	(3)
Income before income taxes	370	433	994	1,124
Provision for income taxes	(94)	(111)	(248)	(283)
Net income	$276	$322	$746	$841

Earnings per share - Basic	$1.38	$1.58	$3.73	$4.13

Earnings per share - Diluted	$1.38	$1.58	$3.72	$4.12

Weighted average number of shares outstanding:
Basic	199.6	203.4	200.2	203.6
Diluted	199.8	203.9	200.5	204.2

See accompanying Notes to the Condensed Consolidated Financial Statements.

Ferguson Enterprises Inc.

Condensed Consolidated Statements of Comprehensive Income

(unaudited)


	Three months ended		Six months ended
	January 31,		January 31,
(In millions)	2025	2024	2025	2024
Net income	$276	$322	$746	$841
Other comprehensive income (loss):
Foreign currency translation adjustments	(32)	21	(39)	(14)
Pension adjustments, net of tax impacts of $0, ($2), ($2) and ($2), respectively.	1	4	6	5
Total other comprehensive (loss) income, net of tax	(31)	25	(33)	(9)
Comprehensive income	$245	$347	$713	$832

See accompanying Notes to the Condensed Consolidated Financial Statements.

Ferguson Enterprises Inc.

Condensed Consolidated Balance Sheets

(unaudited)


	As of
(In millions, except share amounts)	January 31, 2025	July 31, 2024
Assets
Cash and cash equivalents	$764	$571
Accounts receivable, less allowances of $31 and $21, respectively	3,200	3,602
Inventories	4,273	4,188
Prepaid and other current assets	962	1,020
Assets held for sale	26	29
Total current assets	9,225	9,410
Property, plant and equipment, net	1,808	1,752
Operating lease right-of-use assets	1,637	1,565
Deferred income taxes, net	188	181
Goodwill	2,361	2,357
Other intangible assets, net	699	753
Other non-current assets	612	554
Total assets	$16,530	$16,572

Liabilities and stockholders’ equity
Accounts payable	$3,027	$3,410
Short-term debt	400	150
Current portion of operating lease liabilities	416	395
Other current liabilities	1,214	1,261
Total current liabilities	5,057	5,216
Long-term debt	3,949	3,774
Long-term portion of operating lease liabilities	1,256	1,198
Other long-term liabilities	779	768
Total liabilities	11,041	10,956

Stockholders’ equity:
Ordinary shares, par value 10 pence; 500,000,000 shares authorized; 0 and 232,171,182 shares issued, respectively	—	30
Common stock, par value $0.0001; 500,000,000 shares authorized; 201,343,253 and 0 shares issued, respectively	—	—
Paid-in capital	912	864
Retained earnings	5,998	9,589
Treasury shares, 2,312,552 and 30,827,929 shares, respectively at cost	(457)	(3,936)

Accumulated other comprehensive loss	(964)	(931)
Total stockholders' equity	5,489	5,616
Total liabilities and stockholders' equity	$16,530	$16,572

See accompanying Notes to the Condensed Consolidated Financial Statements.

Ferguson Enterprises Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)



	Three months ended		Six Months ended
(In millions, except per share data)	January 31, 2025	January 31, 2024	January 31, 2025	January 31, 2024
Ordinary shares:
Balance at beginning of period	$—	$30	$30	$30
Treasury shares canceled	—	—	(4)	—
Ordinary shares canceled	—	—	(26)	—
Balance at end of period	—	30	—	30

Common stock:
Balance at beginning of period	$—	$—	$—	$—
Common stock issued	—	—	—	—
Balance at end of period	—	—	—	—

Paid-in capital:
Balance at beginning of period	$910	$828	$864	$809
Share-based compensation expense	2	12	22	31
Ordinary shares canceled	—	—	26	—
Other	—	2	—	2
Balance at end of period	912	842	912	842

Retained earnings:
Balance at beginning of period	$5,889	$8,858	$9,589	$8,557
Treasury shares canceled	—	—	(3,932)	—
Net earnings	276	322	746	841
Cash dividends declared of $0.83, $0.79, $1.62, and $1.54, respectively	(166)	(160)	(324)	(312)
Shares issued under employee stock plans	(1)	(2)	(81)	(68)
Balance at end of period	5,998	9,018	5,998	9,018

Treasury shares:
Balance at beginning of period	($211)	($3,433)	($3,936)	($3,425)
Treasury shares canceled	—	—	3,936	—
Share repurchases	(247)	(143)	(508)	(176)
Shares issued under employee share plans, net	1	1	51	26
Balance at end of period	(457)	(3,575)	(457)	(3,575)

Employee Benefit Trust:
Balance at beginning of period	$—	($1)	$—	($46)
Shares issued	—	—	—	45
Other	—	1	—	1
Balance at end of period	—	—	—	—

Accumulated other comprehensive loss:
Balance at beginning of period	(933)	(922)	(931)	(888)
Total other comprehensive (loss) income	(31)	25	(33)	(9)
Balance at end of period	(964)	(897)	(964)	(897)
Total stockholder's equity	$5,489	$5,418	$5,489	$5,418

See accompanying Notes to the Condensed Consolidated Financial Statements.

Ferguson Enterprises Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)


(In millions)	Six months ended
	January 31,
	2025	2024
Cash flows from operating activities:
Net income	$746	$841


Depreciation and amortization	182	163
Share-based compensation	13	24

Changes in deferred income taxes	(3)	(6)
Changes in inventories	(94)	(52)
Changes in receivables and other assets	494	565
Changes in accounts payable and other liabilities	(600)	(626)
Changes in income taxes payable	(39)	(40)
Other operating activities	(14)	(6)


Net cash provided by operating activities	685	863

Cash flows from investing activities:
Purchase of businesses acquired, net of cash acquired	(46)	(67)
Capital expenditures	(158)	(192)
Other investing activities	12	28


Net cash used in investing activities	(192)	(231)

Cash flows from financing activities:
Purchase of treasury shares	(508)	(250)
Repayments of debt	(2,100)	(1,155)
Proceeds from debt	2,521	1,125
Change in bank overdrafts	(1)	6
Cash dividends	(158)	(305)
Other financing activities	(43)	(18)
Net cash used in financing activities	(289)	(597)
Change in cash, cash equivalents and restricted cash	204	35
Effects of exchange rate changes	(14)	—
Cash, cash equivalents and restricted cash, beginning of period	625	669
Cash, cash equivalents and restricted cash, end of period	$815	$704

Supplemental Disclosures:
Cash paid for income taxes, net	$291	$330
Cash paid for interest	94	97
Accrued capital expenditures	7	6
Accrued dividends	166	161

See accompanying Notes to the Condensed Consolidated Financial Statements.

Ferguson Enterprises Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Note 1: Summary of significant accounting policies

Background

Ferguson Enterprises Inc. (including subsidiaries, the “Company”) (NYSE: FERG; LSE: FERG) is a Delaware corporation. Ferguson is a value-added distributor serving the specialized professional in the residential and non-residential North American construction market. We help make our customers’ complex projects simple, successful and sustainable by providing expertise and a wide range of products and services from plumbing, HVAC, appliances, and lighting to PVF, water and wastewater solutions, and more. We sell through a common network of distribution centers, branches, counter service and specialist sales associates, showroom consultants and e-commerce channels. The corporate headquarters of the Company is located at 751 Lakefront Commons, Newport News, Virginia 23606.

Effective on August 1, 2024 (the “Effective Date”), the Company established a new corporate structure to domicile our ultimate parent company in the United States by completing a merger between entities under common control (the “Merger”). The Merger resulted in (i) Ferguson plc (the “predecessor”) becoming a direct, wholly owned subsidiary of Ferguson Enterprises Inc. (the “successor issuer”) and (ii) the shareholders of Ferguson plc at the designated record time for the Merger no longer holding ordinary shares of Ferguson plc but instead holding shares of common stock of Ferguson Enterprises Inc.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements and notes to the condensed consolidated financial statements are presented in accordance with the rules and regulations of the SEC and accounting principles generally accepted in the United States of America (“U.S. GAAP”), but do not include all disclosures normally required in annual consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented.

In light of the Merger, the July 31, 2024 condensed consolidated balance sheet was derived from the audited financial statements of the predecessor. For the six months ended January 31, 2024, the unaudited condensed consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows represent the activities of the predecessor. The successor issuer had no operating activities prior to the Effective Date.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report. The financial results for the interim periods may not be indicative of the financial results for the entire fiscal year.

Use of estimates

The preparation of the Company's interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions affecting certain reported amounts in the interim condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates.

Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits with banks with original maturities of three months or less and overdrafts to the extent there is a legal right of offset and practice of net settlement with cash balances. Cash equivalents also include amounts due from third-party credit card processors as they are both short-term and highly liquid in nature and are typically converted to cash within a few days of the sales transaction.

Restricted cash primarily consists of deferred consideration for business combinations, subject to various settlement agreements. These amounts are recorded in prepaid and other current assets and other non-current assets in the Company’s condensed consolidated balance sheets.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows.


	As of
(In millions)	January 31, 2025	July 31, 2024
Cash and cash equivalents	$764	$571
Restricted cash	51	54
Total cash, cash equivalents and restricted cash	$815	$625

Supplier finance program

In October 2023, the Company began a supplier financing program with a third party wherein certain shipping and logistics providers in the United States can opt to receive early payment at a nominal discount. The Company’s obligations to suppliers are unchanged and payment terms are consistent with the Company’s normal payment terms. All outstanding payables related to the supplier finance program are classified within accounts payable within our condensed consolidated balance sheets and were $42 million and $46 million as of January 31, 2025 and July 31, 2024, respectively.

Recently issued accounting standard updates (“ASU”)

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU requires new financial statement disclosures disaggregating prescribed expense categories within relevant income statement expense captions, including information about purchases of inventory, employee compensation, depreciation, and intangible asset amortization for each relevant expense caption on the face of the income statement. Per ASU No. 2025-01, the amendments under ASU No. 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The ASU No. 2024-03 can be adopted either prospectively or retrospectively. The Company is currently evaluating the ASU to determine the impact on its disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU provides qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid. The amendments in this ASU are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied prospectively; however, retrospective application is also permitted. The Company is currently evaluating the ASU to determine the impact on its disclosures.

In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU expands public entities’ required segment disclosures, including disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets that are currently not required. This ASU is effective for fiscal years beginning after December 15, 2023, and interim reporting periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The impact to the Company’s consolidated financial statements and related disclosures is not expected to be material.

Recent accounting pronouncements pending adoption that are not discussed above are either not applicable, or will not have, or are not expected to have, a material impact on our consolidated financial condition, results of operations or cash flows.

Note 2: Revenue and segment information

The Company reports its financial results of operations on a geographical basis in the following two reportable segments: United States and Canada. Each segment generally derives its revenues in the same manner. The Company uses adjusted operating profit as its measure of segment profit. A reporting segment’s adjusted operating profit is defined as profit before tax, excluding central and other costs, restructuring costs, amortization of acquired intangible assets, net interest expenses, as well as other items typically recorded in net other (expense) income such as (loss)/gain on disposal of businesses, pension plan changes/closure costs and amounts recorded in connection with the Company’s interests in investees. Certain income and expenses are not allocated to the Company’s segments and, thus, the information that management uses to make operating decisions and assess performance does not reflect such amounts.

Segment results were as follows:


	Three months ended		Six months ended
	January 31,		January 31,
(In millions)	2025	2024	2025	2024
Net sales:
United States	$6,553	$6,364	$13,922	$13,693
Canada	319	309	722	688
Total net sales	$6,872	$6,673	$14,644	$14,381
Adjusted operating profit:
United States	$455	$525	$1,152	$1,291
Canada	11	9	34	32

Central and other costs	(17)	(14)	(31)	(30)
Corporate restructurings(1)	—	(8)	(3)	(8)

Amortization of acquired intangible assets	(39)	(35)	(77)	(69)
Interest expense, net	(48)	(44)	(94)	(89)
Other income (expense), net	8	—	13	(3)
Income before income taxes	$370	$433	$994	$1,124

(1)For the six months ended January 31, 2025, corporate restructurings primarily related to incremental costs in connection with transition activities following the establishment of our parent company’s domicile in the United States. For the three and six months ended January 31, 2024, corporate restructuring costs related to incremental costs in connection with establishing a new corporate structure to domicile our ultimate parent company in the United States.

Our products are delivered through a common network of distribution centers, branches, counter service and specialist sales associates, showroom consultants and e-commerce channels. The Company recognizes revenue when a sales arrangement with a customer exists (e.g., contract, purchase orders, others), the transaction price is fixed or determinable, collection of consideration is probable and the Company has satisfied its performance obligation per the sales arrangement. The majority of the Company’s revenue originates from sales arrangements with a single performance obligation to deliver products, whereby the performance obligations are satisfied when control of the product is transferred to the customer which is the point the product is delivered to, or collected by, the customer.

The Company determined that disaggregating net sales by end market at the segment level achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows may be impacted by economic factors. The disaggregated net sales by end market are as follows:


	Three months ended		Six months ended
	January 31,		January 31,
(In millions)	2025	2024	2025	2024
United States:
Residential	$3,371	$3,299	$7,118	$7,039
Non-residential:
Commercial	2,188	2,122	4,653	4,592
Civil/Infrastructure	555	508	1,205	1,141
Industrial	439	435	946	921
Total Non-residential	3,182	3,065	6,804	6,654
Total United States	6,553	6,364	13,922	13,693
Canada	319	309	722	688
Total net sales	$6,872	$6,673	$14,644	$14,381

No sales to an individual customer accounted for more than 10% of net sales during any of the periods presented.

The Company is a value-added distributor in North America, providing a wide range of products from plumbing, HVAC, appliances, and lighting to PVF, water and wastewater solutions, and more. We offer a broad line of products, and items are regularly added to and removed from the Company's inventory. Accordingly, it would be impractical to provide sales information by product category due to the way the business is managed, and the dynamic nature of the inventory offered.

Note 3: Weighted average shares

The following table shows the calculation of diluted shares:


	Three months ended		Six months ended
	January 31,		January 31,
(In millions)	2025	2024	2025	2024
Weighted average number of shares outstanding:
Basic weighted average shares	199.6	203.4	200.2	203.6
Effect of dilutive shares(1)	0.2	0.5	0.3	0.6
Diluted weighted average shares	199.8	203.9	200.5	204.2

Excluded anti-dilutive shares	0.2	—

SEC Form 10-Q filed by Ferguson Enterprises Inc.