FinanceLooker

Excrept from filing document 2025-07-31

The aggregate market value of the voting shares held by non affiliates of the registrant computed by reference to the closing price as reported on the New York Stock Exchange as of January 31 2025 the last business day of the registrant s most recently completed second fiscal quarter was 36 048 440 565 As of September 19 2025 the number of outstanding shares of common stock was 196 151 443
The information required by Part III of this Annual Report on Form 10 K the Annual Report to the extent not set forth herein is incorporated herein by reference from the registrant s definitive proxy statement relating to the annual meeting of stockholders to be held in 2025 which definitive proxy statement shall be filed with the Securities and Exchange Commission the SEC within 120 days after the end of the fiscal year to which this Annual Report relates the 2025 Proxy Statement
Unless otherwise specified or the context otherwise requires the terms Company Ferguson we us and our and other similar terms used in this Annual Report i for periods prior to August 1 2024 refer to Ferguson plc and its consolidated subsidiaries and ii for periods on and following August 1 2024 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 As previously announced Ferguson is changing its fiscal year end from July 31
The information in this Annual Report that has been sourced from third parties has been accurately reproduced and as far as we are aware and able to ascertain from the information published by that third party no facts have been omitted that would render the reproduced information inaccurate or misleading Industry publications generally state that their information is obtained from sources they believe reliable but that the accuracy and completeness of such information is not guaranteed and that the projections they contain are based on a number of significant assumptions We are not aware of any exhaustive industry or market reports that cover or address our specific markets
All trademarks trade names and service marks appearing in this Annual Report are the property of their respective owners Solely for convenience the trademarks and trade names in this Annual Report are referred to without the symbols and but such references should not be construed as any indication that their respective owners will not assert to the fullest extent under applicable law their rights thereto We do not intend to use or display other companies trademarks or trade names to imply a relationship with or endorsement or sponsorship of us by any other companies
Certain information included in this Annual 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 Annual 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 the macroeconomic impact of factors beyond our control including among others inflation deflation recession labor and wage pressures trade restrictions such as tariffs sanctions and retaliatory countermeasures interest rates and geopolitical conditions
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 and our ability to effectively manage inventory as a result
changes in competition including as a result of market consolidation new entrants vertical integration or competitors responding more quickly to emerging technologies such as generative artificial intelligence AI
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 due to loss of key suppliers
fluctuations in product prices costs e g including as a result of the use of commodity priced materials inflation deflation trade restrictions and or failure to qualify for or maintain supplier rebates and foreign currency
legal proceedings in the ordinary course of our business as well as any failure to comply with domestic and foreign laws regulations and standards as those laws regulations and standards or interpretations and enforcement thereof may change
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
Ferguson is the largest value added distributor serving the water and air specialized professional in our 340 billion 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 heating ventilation and air conditioning HVAC appliances and lighting to pipes valves and fittings PVF water and wastewater solutions and more We sell through a common network of distribution centers branches counter service and expert sales associates showroom consultants and e commerce channels
The Company has a long history and maintained businesses throughout Europe Canada and the United States in the 1900s In the early 2000s the Company s focus shifted to attractive North American markets As a result the operating businesses across Europe were disposed of through various transactions As part of this transition and following a corporate restructuring Ferguson Enterprises Inc became the ultimate parent company for the business in August 2024
The Company s reportable segments are established based on how the Company manages its business and allocates resources which is on a geographical basis The Company s reportable segments are the United States and Canada For further segment information see Part II Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations and Note 2
of the Notes to the Consolidated Financial Statements in Part II Item 8 Financial Statements and Supplementary Data of this Annual Report the Consolidated Financial Statements Below is a description of the Company s reportable segments
The United States segment operates primarily under the Ferguson brand providing expertise and a wide range of products and services from plumbing HVAC appliances and lighting to PVF water and wastewater solutions and more to residential and non residential customers Our products are delivered through a common network of distribution centers branches counter service and expert sales associates showroom consultants and e commerce channels As of July 31 2025 the United States business operated 1 519 branches 10 regional distribution centers as well as five
market distribution centers MDCs for branch replenishment and final mile distribution to customers Our network serves our customers in all 50 states with approximately 32 000 associates providing same day and next day product availability which we believe to be a competitive advantage and an important requirement for customers
The Canada segment operates primarily under the Wolseley brand and supplies plumbing HVAC and refrigeration products to residential and commercial contractors The Canada segment also supplies specialized water and wastewater treatment products to residential commercial and infrastructure contractors and supplies PVF solutions to industrial customers As of July 31 2025 the Canada business operated 227 branches one regional distribution center and one MDC with approximately 3 000 associates
We have a balanced approach to attractive end markets and serve customers principally in North America Residential and non residential markets each account for approximately half of our net sales with net sales within these combined markets balanced between repair maintenance and improvement RMI approximately two thirds of our net sales and new construction approximately one third of our net sales based on management s estimates
Ferguson operates in highly fragmented markets with no one market dominated by any single distributor We are positioned as one of the top distributors in most end markets we serve including residential commercial civil infrastructure and industrial
Our business bridges the gap between a large and fragmented supplier base with an even larger and more fragmented customer base As of July 31 2025 we had approximately 37 000 suppliers with no supplier accounting for more than 5 of total inventory purchases which provides us access to a diverse and broad range of quality products As of July 31 2025 we serve our customers through a network of 11 regional distribution centers six MDCs approximately 5 900 fleet vehicles 1 746 branches and approximately 35 000 associates
We help make our customers complex projects simple successful and sustainable We offer expertise and a broad range of products delivered where and when our customers need them Customers rely on us to help them deliver critical infrastructure spanning almost every stage of a project s life cycle within the residential and non residential markets We partner with our customers to keep millions of homes and businesses operating while helping them to run their business more efficiently No single customer accounted for more than 1 of our net sales in fiscal 2025
Our value added solutions include a variety of sales channels available to our customers ranging from inside and outside sales teams sales centers digital commerce capabilities system to system capabilities counter sales and showrooms We also offer customized solutions such as virtual design fabrication valve actuation pre assembly kitting installation and project management services With our value added solutions we aim to increase productivity for our customers and for the industry
We source distribute and sell products from domestic and international suppliers Our products include branded products and own brand products that the Company sells exclusively in the market Approximately 95 of the products sold in the United States are sourced from U S based suppliers while approximately 90
Our branded and private label Own Brand products are generally available from several sources and are not typically subject to supply constraints in normal market conditions In the United States net sales include basic products that contain significant amounts of commodity priced materials predominantly plastic copper and steel and other components which can be subject to volatile price changes based upon fluctuations in the commodities market These commodity based products can represent up to approximately 15 of annual net sales To a lesser extent fluctuations in the price of fuel could affect transportation costs In general increases in such prices increase our operating costs and negatively impact our operating profit to the extent that such increases cannot be passed on to customers Conversely if competitive pressures allow us to hold prices despite relevant raw material prices falling profitability can increase
We have a global supply chain which provides access to approximately 37 000 suppliers and we sell more than 1 million unique products each year We operate an extensive network across North America including three
import centers 11 regional distribution centers and 1 746 branch locations as of July 31 2025 Our network also includes six MDCs which provide greater access to key strategic markets and allows us to bring our products closer to our customers These MDCs include automated picking and replenishment systems for the majority of items This automation improves efficiency and reduces manual handling of certain products which supports associate health and safety
We believe we are well equipped to win new market share and generate attractive returns We have leading positions in the residential and non residential markets based on net sales as a percentage of overall market size For fiscal 2025 residential and non residential markets each account for approximately half of our net sales with net sales within these combined markets balanced between RMI approximately two thirds of our net sales and new construction approximately one third of our net sales based on management s estimates We have chosen to operate in each of these markets because we believe we can generate strong growth solid gross and operating margins and good returns on capital
The markets we serve are highly fragmented with very few large competitors and a high number of small local distributors as well as mid size regional distributors While our market positions can be expanded through growth of our existing business acquisitions also remain a core part of our growth strategy and we expect to focus on acquisitions that bolt on to our existing branch network as well as acquisitions that provide further capabilities to serve our customers We believe there is a significant opportunity for strong growth and continued consolidation within our markets
Many customer projects require a range of products and solutions and we leverage our scale and expertise across the organization for the benefit of our customers Specifically we believe our network of suppliers associates and the number of branches and distribution centers provide us with the scale and expertise to serve our customers better than our competitors do as many of these competitors operate only locally In addition we also benefit from significant synergies to help lower operating costs and improve margins We believe these factors will enable continued growth in net sales as well as growth in cash flow and therefore may better enable us to provide investment returns to shareholders
Our scale and expertise position us to be involved in all stages of our customers projects including design staging and project management Across all our customers we take a consultative approach We partner with our customers in an effort to guide complex projects to a successful conclusion and to make the entire project better because Ferguson was involved
We are not dependent on any material licenses industrial commercial or financial contracts including contracts with customers and suppliers or new manufacturing processes Our business is not highly seasonal although we generally experience the highest volume of sales in our fourth fiscal quarter which begins during the spring season in North America
We rely on a combination of intellectual property laws confidentiality procedures and contractual provisions to protect our proprietary assets and our brands We have registered or applied for registration of trademarks service marks and internet domain names both domestically and internationally
Our operations are affected by various statutes regulations and standards in the countries and markets in which we operate including the United States and Canada The amount of such regulation and the penalties for any breaches can vary While we are not engaged in a highly regulated industry we are subject to the laws governing businesses generally including laws relating to competition product safety data protection labor and employment practices accounting and tax standards international trade fraud bribery and corruption land usage the environment health and safety transportation payment terms and other matters We do not currently expect compliance with these laws and regulations to have a material effect on our capital expenditures results of operations or competitive position as compared to prior periods
Our associates are fundamental to the long term success of the Company We continue to invest in the development of our associates and are committed to attracting developing engaging and retaining the best talent Our associate base includes a mix of tenured associates and external hires blended with new talent through acquisitions
As of July 31 2025 Ferguson employed approximately 35 000 associates worldwide including those employed on a full time part time seasonal or temporary basis which includes approximately 32 000 associates in the United States 3 000 associates in Canada and small number of associates who reside outside of the United States and Canada
We seek the best associates in our industry Our hiring process is intended to reach a diverse talent pool to assist us in fostering a culture of strong relationships where differences in thought experience and perspective contribute to our ability to help make our customers projects simple successful and sustainable
Ferguson is committed to creating meaningful long term career opportunities for associates to grow and succeed The career paths of our senior leadership team demonstrate our commitment to identifying and developing the next generation of talent Through internal mobility many of our leaders shifted from frontline roles to managerial roles Our learning and development initiatives are designed to foster both immediate skill building and sustained professional advancement helping associates thrive throughout their careers We offer a variety of leadership and development programs that develop skills and capabilities for our associates and leaders These programs are tailored to associates roles leadership level and potential The Company also offers associates professional development courses many of which are on demand and targeted at improving technical skills sales communication wellbeing critical thinking and relationship management skills
Our Business Resource Groups BRGs play a role in our effort to enhance the overall wellbeing of our associates support professional development and create a positive workplace environment Membership for each BRG is open to all our associates and participation is voluntary
Our associates voices matter To support engagement and retention of our associates we conduct an annual survey where associates can provide us with their feedback From the resulting data we develop an action plan designed to make improvements in the areas our associates indicated that they value most In addition we are committed to supporting our associates as well as customers and people within our communities Through a variety of outreach efforts we provide our associates with the opportunity to engage directly in community service
We strive to maintain a culture of integrity and are committed to acting ethically in all our business activities This commitment is outlined in our Code of Business Conduct and Ethics Code of Conduct which sets forth the standards that we expect of our associates and those who may work on our behalf The Code of Conduct is a resource dedicated to helping our associates live by our values and understand Ferguson s commitment to compliance with all applicable laws and regulations and Company policies We require new associates to complete our Code of Conduct training upon hire and all current associates to complete our Code of Conduct training on an annual basis
Ferguson recruits hires transfers promotes compensates trains terminates and is committed to making employment decisions about applicants and associates without regard to their race color religion creed national origin ancestry citizenship status physical disability mental disability medical condition genetic information marital status pregnancy sex gender gender identity gender expression age sexual orientation military and or veteran status or any other basis protected by law
We are committed to offering competitive comprehensive compensation and benefits that support the wellbeing of our associates We regularly assess our total rewards programs including compensation and recognition programs in an effort to provide equitable and competitive programs that align with our overall compensation philosophy We are committed to rewarding our associates based on achievement of organizational goals and individual performance We offer a variety of health welfare and financial benefits to our full time and part time associates including health care and insurance benefits mental health and wellbeing resources retirement plans and an employee share purchase plan among others
We believe acknowledging exceptional performance contributes to company success We have prioritized and invested in associate recognition Our Bravo program is designed to foster a culture of mutual recognition by enabling associates to recognize appreciate and celebrate each other no matter their role Additionally we have several established formal programs to recognize top performing sales associates and managers for their outstanding contributions We also award associates who consistently demonstrate four core behaviors of being passionate resilient customer driven and solution oriented
We strive to drive continuous improvement in our health and safety performance by maintaining high standards for our health and safety compliance programs as well as training our associates on and enforcing expected safe behaviors and global safety rules We promote a culture of first in safety which is supported by a commitment from our executive leadership and through engagement with our associates We endeavor to ensure that at each location our associates and our contractors are well informed about health and safety measures and are provided with the appropriate equipment and tools to protect themselves and those around them Our safety efforts are further supported by the allocation of additional resources for safety improvements and the employment of dedicated safety professionals Through continuous investment in health and safety we aim to mitigate the risk of and minimize exposure to on the job injuries
Additional information regarding our activities related to sustainability and human capital management matters including our people and communities can be found in our most recent Sustainability Report which is available on our website The contents of the Sustainability Report are not incorporated by reference into this Annual Report or in any other report or document we file with or furnish to the SEC
The Company is subject to the informational requirements of the Securities Exchange Act of 1934 as amended the Exchange Act In accordance with these requirements the Company files reports and other information with the SEC The SEC maintains an internet site at http www sec gov that contains reports proxy and information statements and other information regarding registrants that file electronically with the SEC The Company s website is corporate ferguson com The Company s reports filed or furnished pursuant to Section 13 a or 15 d of the Exchange Act including Annual Reports on Form 10 K Quarterly Reports on Form 10 Q Current Reports on Form 8 K and any amendments thereto are available free of charge through the Company s website as soon as reasonably practicable after the material is electronically filed with or furnished to the SEC
Any references to the Company s website contained herein do not constitute incorporation by reference of information contained on such website and such information should not be considered part of this Annual Report
In addition to the other information contained in this Annual Report you should carefully consider the following risk factors before investing in our common stock The risks and uncertainties we describe below are not the only ones we face Additional risks and uncertainties of which we are not aware or that we currently believe are immaterial may also adversely affect the Company If any of the possible events described below were to occur the business financial condition and results of operations of the Company could be materially and adversely affected If that happens the market price of our common stock could decline and holders of shares of our common stock could lose all or part of their investment
This Annual Report also contains forward looking statements that involve risks and uncertainties Our actual results may differ materially from those anticipated in these forward looking statements as a result of various factors including the risks described below and elsewhere in this Annual Report
Weakness in the economy market trends uncertainty and other conditions in the markets in which we operate particularly in the U S have in the past and may in the future adversely affect the profitability and financial stability of some of our customers and vendors and in turn negatively impact our business financial condition and results of operations
Our financial performance depends significantly on industry trends and general economic conditions including the state of the residential and non residential markets as well as changes in gross domestic product in the geographic markets in which we operate particularly in the U S where we generated 95 of our net sales in fiscal 2025 Accordingly a number of factors beyond our control including but not limited to inflation deflation stagflation or recession trade restrictions such as tariffs sanctions and retaliatory countermeasures the political climate government spending unemployment interest rate and mortgage rate fluctuations mortgage delinquency and foreclosure rates foreign currency fluctuations labor shortages including as a result of changes in immigration policy labor and healthcare costs the availability of financing disruption in the financial and credit markets including as a result of instability in the banking sector and the failure of financial institutions changes in tax laws product availability constraints as a result of the ineffectiveness of or disruption to our domestic or international supply chain or fulfillment networks cybersecurity incidents or network security breaches adverse weather events or natural disasters acts of terrorism acts of war consumer activism pandemics or epidemics civil unrest and geopolitical conditions could have a material adverse effect on our business financial condition and results of operations
Any of these events could impair the ability of our customers to make full and timely payments for or reduce the volume of products our customers purchase from us and could cause increased pressure on our selling prices In particular our customers may be affected by the shortage of skilled trade professionals in the U S If the shortage continues it could lead to customers delaying or failing to place orders due to a lack of sufficient skilled trade professionals needed to take on additional projects
Furthermore any of these conditions could affect key suppliers which could impair their ability to deliver products and result in delays for our customers or added costs Accordingly any prolonged uncertainty about current or future micro or macro economic conditions and potential volatility in our relevant end markets has in the past and may in the future negatively impact our business financial condition and results of operations
In addition we have closed and may in the future choose to close underperforming branches and or showrooms from time to time as warranted by general economic conditions and or weakness in the end markets in which we operate Such closures could have a material adverse effect on our business financial condition and results of operations
In fiscal 2025 residential markets and non residential markets each accounted for approximately half of our net sales with net sales within these combined markets balanced between RMI approximately two thirds of our net sales and new construction approximately one third of our net sales Our end markets are dependent in part upon certain macroeconomic trends For example in the past we have seen a slowdown in our end markets caused by softer demand inflation higher interest or mortgage rates and other issues in the market It is uncertain if the Federal Reserve will raise or lower interest rates and if so to what level and for how long Further it is possible that mortgage rates could remain elevated despite any action taken by the Federal Reserve Rate increases or the lack of anticipated rate decreases could result in weak or no growth in our end markets Any slowdown or stagnation may cause unanticipated shifts in our end market preferences and purchasing practices and in the business models and strategies of our customers Such shifts may alter the nature and prices of products demanded by the end consumer and in turn our customers and could have a material adverse effect on our business financial condition and results of operations For example rapid changes in demand may heighten the risks described in the risk factor titled We may not rapidly identify or effectively respond to direct and or end customers wants expectations or trends which could adversely affect our relationship with customers our reputation the demand for our products and our market share
The industries in which we operate are highly competitive and changes in competition could result in decreased demand for our products and related service offerings and could have a material adverse effect on our sales and profitability
The markets in which we operate are fragmented and highly competitive We face competition in all markets we serve including but not limited to from other companies of varying size that offer the same or similar products and services wholesale distributors supply houses retail enterprises online businesses and manufacturers including some of our own suppliers that sell directly to certain segments of the market
Further the competitive landscape is dynamic and subject to change For example the arrival of new or the expansion of existing competitors with new technologies or lower cost non value added business models may aggregate demand away from incumbents In addition certain competitors may devote more resources to systems development and automation or respond more quickly to emerging technologies such as generative AI and changes in customer preferences than we do Furthermore the industries in which we operate may be disrupted by non traditional competitors through acquisitions of traditional competitors to expand their capabilities and or targeted customer base These non traditional competitors in some cases have larger customer bases greater brand recognition and greater resources than we do Furthermore this competitor consolidation could cause the industries in which we operate to become more competitive as greater economies of scale are achieved
Additionally we have experienced and may continue to experience competitive pressure from certain of our suppliers vertically integrating and selling their products directly to customers Our suppliers can often sell their products at lower prices and maintain higher gross margins on their product sales than we can
Moreover competition could further intensify in the future as new entrants have increasing interest in our industry Increased competition may result in reduced net sales lower operating margins reduced profitability loss of market share and diminished brand recognition
In response to these competitive pressures among other initiatives we are leveraging technology to enhance customer service streamline product delivery and develop tools to save customers time and money However such initiatives may take longer than expected we may not realize the anticipated benefits from such initiatives and the initiatives may not be successful In addition failure to effectively execute our strategies including the development and acquisition of such new business models or technologies or to successfully identify future market and competitive pressures could have a material adverse effect on our business financial condition and results of operations
Some of our products are or contain significant amounts of commodity priced materials predominantly plastic copper and steel and other components that are subject to price changes based upon fluctuations in the commodities market which can arise from changes in domestic and international supply and demand general inflationary and deflationary pressures labor costs competition trade restrictions such as tariffs sanctions and retaliatory countermeasures and geopolitical conflict among other factors To a lesser extent fluctuations in the price of fuel could affect transportation costs In addition shipping capacity constraints and related fluctuations in shipping rates and space availability further impact product cost Our ability to adjust prices in a timely manner to account for price fluctuations will often depend on market conditions our fixed costs inflation and deflation and other factors In the event that circumstances require us to adjust our product prices and operational strategies to reflect fluctuating prices inflation deflation there can be no assurance that such adjustments will be effective For example our inability to pass on all or a portion of product price inflation to our customers in a timely manner could reduce our profit margins Similarly downward pressure on product prices due to deflation have in the past and may in the future cause profit margins to decline particularly in the case of sustained price deflation coupled with increasing costs of operations Our efforts to monitor for signs of moderation or deflation which would present risks that we may not be able to totally mitigate may be ineffective Any failure to appropriately address some or all of these risks could have a material adverse effect on our business financial condition and results of operations
We operate a variety of pension plans including defined benefit plans in Canada and the U K The amount we are required to contribute to these plans is determined by the laws and regulations governing each plan and is generally related to the funded status of the plans A deterioration in the value of the plans investments or a decrease in the discount rate used to calculate plan liabilities generally would negatively impact the funding status of the plans which may result in an increase in our obligation to make contributions to the plans
The U K defined benefit pension plan the U K Plan our largest defined benefit plan is closed to future service costs The trustee of the U K Plan has purchased a bulk annuity insurance policy that provides an income stream equivalent to the obligations to pensioners covered by the arrangement As a result the Company is no longer expected to make ongoing deficit reduction contributions to the U K Plan but will make ongoing contributions to cover the plan s expenses and other payments that may be required
In spite of the efforts taken to match our plan liabilities with a portfolio of assets designed to hedge the underlying interest inflation and longevity risk certain actions by pensions regulators or the trustees of our pension plans any material revisions to existing pension legislation or any failure by the insurer to fulfill its obligations could result in us being required to incur significant additional costs immediately or in short time frames Such costs could reduce the cash available for working capital and other corporate uses and may have an adverse impact on the Company s financial condition
Our credit ratings are based on a number of factors including our financial strength and factors outside of our control such as conditions affecting our industry generally and the introduction of new rating practices and methodologies We cannot provide assurances that our current credit ratings will remain in effect or that the ratings will not be lowered suspended or withdrawn entirely by the rating agencies If rating agencies lower suspend or withdraw the ratings the market price or marketability of our securities may be adversely affected Pressure on the ratings could also arise from higher shareholder payouts or larger acquisitions than we have currently planned that result in increased leverage or in a deterioration in the metrics used by the rating agencies to assess creditworthiness In addition any change in ratings could make it more difficult for us to raise capital on acceptable terms impact the ability to obtain adequate financing and result in higher interest costs on future financings
We may seek access to the capital and credit markets to supplement our existing funds and cash generated from operations for working capital capital expenditure and debt service requirements and other business initiatives Capital and credit markets may experience volatility and disruption from time to time which can lead to uncertainty and liquidity issues for both borrowers and investors In the event of adverse market conditions we may be unable to obtain capital or credit market financing on favorable terms which could have a material adverse effect on our business financial condition and results of operations
Potential regional or global barriers to trade or a global trade war could increase the cost of our products which could have a material adverse impact on the competitiveness of our products and our business financial condition and results of operations
Changes in laws or policies governing the terms of foreign trade and in particular increased trade restrictions tariffs sanctions or taxes on imports from countries where we import products or raw materials either directly or through our suppliers could have a material adverse impact on our competitive position business financial condition and results of operations Recently the U S has announced tariffs and reciprocal tariffs on a wide range of products manufactured or produced worldwide Several countries have similarly announced reciprocal or other tariffs impacting products manufactured or produced in the U S The U S has and may in the future pause reimpose or increase tariffs and countries subject to such tariffs have and in the future may impose reciprocal tariffs or other retaliatory countermeasures in response to the imposition of tariffs by the U S If these tariffs are fully implemented and we are unable to pass on the costs of these tariffs to our customers our gross profits will be reduced In addition if our customers costs are increased we could suffer from decreased demand as our customers may choose to delay or cancel projects and other purchases that include the products that we sell to them
Conversely if tariffs duties or quotas are lifted or if the level of imported products otherwise increases we could be adversely affected to the extent that we would then have higher cost products in our inventory or experience lower prices and margins due to increased supplies of these products that could drive down prices and margins If prices of these products were to decrease significantly we might not be able to profitably sell these products and the value of our inventory would decline In addition significant price decreases could result in a significantly longer holding period for some of our inventory
We had total debt of 4 2 billion as of July 31 2025 We may incur substantial additional indebtedness in the future in particular in connection with future acquisitions which remain a core part of our strategy some of which may be secured by some or all of our assets Our overall level of indebtedness from time to time may have an adverse effect on our strategy including requiring us to dedicate portions of our cash flow to payments on our debt thereby reducing funds available for reinvestment in the business restricting us from securing financing if necessary to pursue acquisition opportunities limiting our flexibility in planning for or reacting to changes in our business and industry limiting our ability to purchase redeem or retire our common stock and placing us at a competitive disadvantage compared to our competitors that have lower levels of indebtedness In addition our indebtedness exposes us to the risk of increased interest rates because a portion of our borrowings are at variable rates of interest
We may need to refinance some or all of our debt upon maturity either on terms which could potentially be less favorable than the existing terms or under unfavorable market conditions which may also have an adverse effect on our strategy Our ability to refinance all or a portion of our indebtedness or obtain additional financing depends on many factors beyond our control
We are exposed to foreign currency exchange rate risk with respect to the USD relative to the local currencies of our international subsidiaries predominantly CAD arising from transactions in the ordinary course of business such as sales and loans to wholly owned subsidiaries sales to third party customers and purchases from suppliers Fluctuations in foreign currency exchange rates could affect our results of operations and impact reported net sales and net income
If our domestic or international supply chain or our fulfillment network for our products is ineffective or disrupted for any reason including the loss of key suppliers our business financial condition and results of operations could be materially adversely affected
Our ability to offer a wide variety of products to our customers is dependent upon our ability to obtain adequate product supply from our suppliers The loss of or an ongoing substantial decrease in the availability of products from our suppliers or the loss of key supplier arrangements could materially adversely impact our financial condition operating results and cash flows Any of the following or additional other factors beyond our control may cause serious disruption in the movement of products through our supply chain leading to a substantial decrease in the availability of products or an increase in the cost of such products financial instability among key suppliers global or regional political unrest disputes or war or labor unrest in source countries or elsewhere in our supply chain changes in the total costs in our supply chain including but not limited to changes in fuel and labor costs and currency exchange rates port or rail labor disputes and security the outbreak or resurgence of pandemics or epidemics adverse weather events or natural disasters foreign competition work stoppages or strikes shipping capacity constraints or embargoes changes in trade policy and any trade restrictions tariffs or duties fluctuations in currency exchange rates or transport availability capacity and costs These risks may be amplified if we are unable to maintain a diverse supply chain
Additionally the loss of key supplier arrangements could have a material adverse impact on us Although in many instances we have agreements with our suppliers these agreements are generally terminable by either party on limited notice Failure by our suppliers to continue to supply us with products on commercially reasonable terms or at all could put pressure on operating margins result in reduced customer purchases or lead to termination of certain customer relationships any of which could have a material adverse effect on our business financial condition and results of operations These risks may be amplified in cases where we are unable to identify and secure alternative sources of supply Furthermore more of our existing suppliers may decide to supply products directly to end users that are our existing or potential customers which could have a detrimental effect on our ability to keep and procure customers and maintain and win business thereby having a material adverse effect on our business financial condition and results of operations
Further as we add fulfillment capabilities or pursue strategies with different fulfillment requirements our fulfillment network becomes increasingly complex and operating it becomes more challenging If our fulfillment network does not operate properly or if a supplier fails to deliver on its commitments we could experience delays in inventory availability at our distribution facilities and branches increased delivery costs or lack of availability any of which could lead to lower net sales and decreased customer confidence and materially adversely affect our business financial condition or results of operations
To achieve our key priorities we must drive profitable growth across our operational businesses by fulfilling customer needs capitalizing on attractive markets and growth opportunities and achieving planned execution Meeting customer needs through comprehensive and differentiated products and solutions that support our customers projects is a key part of our strategy to drive profitable growth If service levels were to significantly decrease customers might purchase from our competitors instead resulting in reduced net sales lower operating margins reduced profitability loss of market share and or diminished brand recognition
Development of our operating model is a key part of driving profitable growth If we are not sufficiently agile in adapting our operating model we may be unable to adapt to changing customer wants and or to flex our cost base when required Moreover we may not successfully execute our strategic initiatives on expected timelines or at all including through failure to have the right talent in place or to achieve internal alignment or coordination Any failure to appropriately address some or all of these risks could damage our reputation and have a material adverse effect on our business financial condition and results of operations
We may not rapidly identify or effectively respond to direct and or end customers wants expectations or trends which could adversely affect our relationship with customers our reputation the demand for our products and our market share
The success of our business depends in part on our ability to identify and respond promptly to evolving trends in demographics as well as customer wants preferences and expectations while also managing appropriate inventory levels and maintaining sufficient staffing to deliver an excellent customer experience It is difficult to successfully predict the products and solutions that customers will require In addition the customers in the markets we serve have different needs and expectations many of which evolve as the demographics in a particular market change Inventory levels in excess of customer demand due to the difficulty of calibrating demand for such products the concentration of demand for a limited number of products difficulties in product sourcing or rapid changes in demand may result in extended cash conversion cycles inventory write downs and the sale of excess inventory at discounted prices any of which could have a material adverse effect on our business financial condition results of operations and cash flows Conversely if we underestimate customer demand for our products or if our manufacturers fail to supply products we require at the time we need them we may experience inventory shortages Inventory shortages might delay shipments to customers and negatively impact customer relationships Moreover as we manage our cost base and resource allocation our total number of associates may decrease due to natural attrition decisions not to backfill open positions or targeted headcount reductions A failure to serve our customers on their required timeframes including due to lack of available associates could have a material adverse effect on our business financial condition and results of operations
We offer more localized assortments of our products to appeal to needs within each end market If we do not successfully evolve and differentiate to meet the individual needs and expectations of or within a particular end market we may lose market share
We are continuing to invest in our e commerce and omni channel capabilities and other technology solutions including investments in incremental upgrades to our enterprise wide resource planning systems to simplify our customer propositions and to optimize the supply chain and branch network to be more efficient and to deliver a more efficient business for our customers
The cost and potential problems and interruptions associated with these initiatives could disrupt or reduce the efficiency of our online and in store operations in the near term lead to product availability issues and negatively affect our relationship with our customers Furthermore accomplishing these initiatives will require a substantial investment in additional information technology associates and other specialized associates We face significant competition in the market for these resources and may not be successful in our hiring efforts Failure to choose the right investments and implement them in the right manner and at the right pace could adversely affect our relationship with customers our reputation the demand for our products and solutions and our market share In addition our branch and omni channel initiatives enhanced supply chain and new or upgraded information technology systems might not provide the anticipated benefits and could impose substantial capital expenditures It might take longer than expected to realize the anticipated benefits cost more than budgeted or all or part of the initiatives might fail altogether each of which could adversely impact our competitive position and our business financial condition results of operations or cash flows
Acquisitions partnerships joint ventures and other business combinations or strategic transactions involve a number of risks any of which could result in the benefits anticipated not being realized and could have an adverse effect on our business financial condition and results of operations
Acquisitions are an important part of our growth model and we regularly consider and enter into strategic transactions including mergers acquisitions investments and other growth market and geographic expansion strategies with the expectation that these transactions will result in increases in sales profits cost savings synergies and various other benefits
During fiscal 2025 2024 and 2023 we completed a total of 9 10 and 8 acquisitions respectively We may not realize any anticipated benefits from such transactions or partnerships and we have in the past and may in the future be exposed to additional liabilities and risks from any acquired business or joint venture including but not limited to risks associated with cybersecurity incidents unknown claims and disputes by third parties against the companies we acquire and business disruption related to inability to retain associates of the acquired entity In addition we may be exposed to litigation in connection with our acquisition and partnership transactions Our due diligence investigations may fail to identify all of the problems liabilities or other challenges associated with an acquired business which could result in an increased risk of unanticipated or unknown issues or liabilities including with respect to environmental competition and other regulatory matters and our mitigation strategies for such risks that are identified may not be effective Furthermore we may have trouble identifying suitable acquisition targets in the future or the targets we identify and pursue may not result in the realization of the benefits we expect or any benefit at all
Our ability to deliver the expected benefits from any strategic transactions that we do complete is subject to numerous uncertainties and risks including our acquisition assumptions our ability to integrate personnel labor models financials customer relationships supply chain and logistics information technology and other systems successfully business culture incompatibility disruption of our ongoing business and distraction of management hiring additional management and other critical personnel product quality compliance of new suppliers and increasing the scope geographic diversity and complexity of our operations
Effective internal controls are necessary to provide reliable and accurate financial reports and the integration of businesses may create complexity in our financial systems and internal controls and make them more difficult to manage Integration of businesses into our internal control system could cause us to fail to meet our financial reporting obligations Moreover any failure to integrate or delay in integrating information technology systems of acquired businesses could create an increased risk of cybersecurity incidents Additionally any impairment of goodwill or other assets acquired in a strategic transaction or charges to earnings associated with any strategic transaction may materially reduce our profitability Following integration an acquired business may not produce the expected margins or cash flows Our shareholders vendors or customers may react unfavorably to substantial strategic transactions Furthermore we may finance these strategic transactions by incurring additional debt or issuing equity which could increase leverage or impact our ability to access capital in the future
Many of our products are purchased pursuant to rebate arrangements that entitle us to receive a rebate based on specified purchases Some arrangements require us to purchase minimum quantities and result in higher rebates with increased quantities of purchases These rebates effectively reduce the costs of our products and we manage our business to take advantage of these programs Rebate arrangements are subject to renegotiation with our suppliers from time to time In addition consolidation of suppliers may result in the reduction or elimination of rebate programs in which we participate If we fail to qualify for these rebates or are unable to renew rebate programs on desirable terms or a supplier materially reduces or stops offering rebates our costs could materially increase and our gross margins and net income could be materially adversely affected
If we are unable to protect our sensitive data and information systems against data corruption cybersecurity incidents or network security breaches or if we are unable to provide adequate security in the electronic transmission of sensitive data it could materially adversely affect our business financial condition and results of operations
We face global cybersecurity threats which range from uncoordinated individual attempts to sophisticated and targeted measures known as advanced persistent threats directed at us and our customers suppliers and service providers Cybersecurity incidents and network security breaches have included in the past and may in the future include but are not limited to attempts to access or unauthorized access of information exploitation of vulnerabilities including those of third party software or systems computer viruses ransomware denial of service DoS and other electronic security breaches Cyber attacks from computer hackers and cyber criminals and other malicious internet based activity continue to increase and our services and systems including the systems of our outsourced service providers have been and may in the future continue to be the target of various forms of cybersecurity incidents such as Domain Name System attacks wireless network attacks viruses and worms malicious software ransomware application centric attacks peer to peer attacks business email compromises and phishing attempts backdoor trojans and distributed DoS attacks Furthermore given that new technologies continue to emerge the methods used by computer hackers and cyber criminals to obtain unauthorized access to data or to sabotage computer systems change frequently and continue to grow in sophistication Accordingly we may be unable to anticipate or detect such attacks or promptly and effectively respond to them
For example the rapid evolution of AI and machine learning technologies and the implementation of pilot programs integrating generative AI into both our internal and external facing systems may intensify our cybersecurity privacy and data security risks such as the risk of increased vulnerability to cybersecurity threats and exposure or theft of proprietary confidential personal or otherwise sensitive information which could result in such information being made available to our competitors and other members of the public the generation of factually incorrect or biased outputs and reliance on outdated or unverified data
While we have instituted safeguards for the protection of our information systems and believe we use reputable third party service providers during the ordinary course of business we and our service providers have experienced and expect to continue to experience cyber attacks on our information systems and we and our service providers may be unable to protect sensitive data and or the integrity of our information systems
Loss of customer supplier associate or other business information or compromise of our information systems could disrupt operations and our key business processes result in the impairment or loss of critical data be costly and resource intensive to remedy damage our reputation our relationship with customers suppliers and other stakeholders and expose us to claims from customers suppliers financial institutions regulators payment card associations associates and others any of which could have a material adverse effect on our business financial condition and results of operations For further information on our cybersecurity risk management and governance see Part I Item 1C of this Annual Report
We are required to maintain the privacy and security of personal information in compliance with U S and certain international privacy and data protection regulations Failure to meet the requirements could harm our business and damage our reputation with customers suppliers and associates
We rely on information technology systems networks products and services some of which are managed by service providers to protect our information Increased information security threats and more sophisticated threat actors pose a risk to our information security program Additionally we collect store and process personal information relating to our customers suppliers and associates This information is increasingly subject to a variety of international and U S federal and or state laws and regulations that are constantly changing and becoming more complex
Data privacy and data protection laws and regulations are typically intended to protect the privacy of personal information that is collected processed transmitted and stored in or from the governing jurisdiction In many cases these laws apply not only to third party transactions but also to transfers of information between a company and its subsidiaries including associate information While we have invested and continue to invest significant resources to comply with data privacy regulations many of these regulations are new complex and subject to interpretation To maintain compliance with these laws we have incurred increased costs to continually evaluate and modify our policies and processes to adapt to new legal and regulatory requirements Non compliance with these laws could result in negative publicity damage to our reputation penalties or significant legal liability Our business and operations could also be adversely affected if legislation or regulations are expanded to require changes in our business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business
Technology systems and data are fundamental to the operations future growth and success of our business In managing our business we rely on the integrity and security of and consistent access to data from these systems such as sales data customer data associate data demand forecasting merchandise ordering inventory replenishment supply chain management payment processing and order fulfillment A major disruption of the information technology systems and their backup mechanisms may cause us to incur significant costs to repair the systems experience a critical loss of data and or result in business interruptions
For these information technology systems and processes to operate effectively we rely on our service providers to continue to support and maintain them Furthermore we must retain and recruit information technology associates and other specialized associates that can operate maintain and update these systems In addition our systems and the third party systems on which we rely are subject to damage or interruption from a number of causes including power outages infrastructure or network failures aging of technology assets computer and telecommunications failures cybersecurity incidents including the use of ransomware catastrophic events such as fires floods earthquakes tornadoes hurricanes or other natural disasters a pandemic or epidemic outbreak or resurgence acts of war or terrorism and design or usage errors by our associates contractors or service providers We and our service providers seek to maintain our respective systems effectively and to successfully address the risk of compromise to the integrity security and consistent operations of these systems however such efforts are not always successful As a result we or our service providers have experienced and are likely to experience in the future errors interruptions delays or cessations of service impacting the integrity or availability of our information technology infrastructure While such incidents have not been material to date any future incident could significantly disrupt our operations and key business processes result in the impairment or loss of critical data be costly and resource intensive to remedy harm our reputation and relationship with customers suppliers and other stakeholders any of which could have a material adverse effect on our business financial condition and results of operations
In addition our information technology systems infrastructure and personnel require substantial investments such as replacing existing systems some of which are older legacy systems that are less flexible and efficient with successor systems maintaining or enhancing legacy systems that are not currently being replaced or designing or cost effectively acquiring and implementing new systems with new functionality These efforts can result in significant potential risks including failure of the systems to operate as designed potential loss or corruption of data cost overruns or implementation delays or errors and may result in operational challenges security control failures reputational harm and increased costs that could have a material adverse effect on our business financial condition and results of operations Furthermore we may be unable to complete such efforts on a timely basis or at all due to a lack of specialized associates or insufficient resources Aging technology may inhibit our efficiency and future growth as well as increase the likelihood of system interruption or failure
We are subject to payment related risks that could increase our selling general and administrative expenses expose us to fraud or theft subject us to potential liability and potentially disrupt our business
We accept payments using a variety of methods including but not limited to cash checks credit and debit cards PayPal and electronic payments and we may offer new payment options over time Acceptance of these payment options subjects us to rules regulations contractual obligations and compliance requirements including payment network rules and operating guidelines data security standards and certification requirements and rules governing electronic funds transfers These requirements may change over time or be reinterpreted making compliance more difficult or costly For certain payment methods including credit and debit cards we pay interchange and other fees which may increase over time and raise our selling general and administrative expenses In some cases we have determined to pass along a portion of such fees to customers In certain cases disputes over such fees may result in a decision not to accept select forms of payment Such actions could cause us to lose customers or negatively impact our brand or reputation
We rely on third parties to provide payment processing services including the processing of credit cards debit cards and other forms of electronic payment If these companies become unable to provide these services to us or if their systems are compromised it could potentially disrupt our business
The payment methods that we offer also subject us to potential fraud and theft by criminals who are becoming increasingly more sophisticated seeking to obtain unauthorized access to or exploit weaknesses that may exist in the payment systems If we fail to comply with applicable rules or requirements for the payment methods we accept or if payment related data is compromised due to a breach or misuse of data we may be liable for costs incurred by payment card issuing banks and other third parties or be subject to fines and higher transaction fees or our ability to accept or facilitate certain types of payments may be impaired In addition our customers could lose confidence in certain payment types which may result in a shift to other payment types potential changes to our payment systems that may result in higher costs or loss of business As a result our business financial condition and results of operations could be adversely affected
Also certain of our customers suppliers or other third parties may seek to obtain products fraudulently from or submit fraudulent invoices to us We have sought to put in place a number of processes and controls to minimize opportunities for fraud However if we are unsuccessful in detecting fraudulent activities we could suffer loss directly and or lose the confidence of our customers and or suppliers which could have a material adverse effect on our business financial condition and results of operations
In addition our operations are working capital intensive and our inventories accounts receivable and accounts payable are significant components of our net asset base We manage our inventories and accounts payable through our purchasing policies and our accounts receivable through our customer credit policies We perform periodic credit evaluations of our customers financial condition and collateral is generally not required We evaluate the collectability of accounts receivable based on numerous factors including past transaction history with customers and their creditworthiness based on reports we receive from independent external credit bureaus and we provide a reserve for accounts that we believe to be uncollectible A significant deterioration in the economy could have an adverse effect on our ability to collect our accounts receivable including longer payment cycles increased collection costs and defaults In addition if customers fail to pay within terms of our customer credit policies we may enforce lien and bond rights which could lead to customer dissatisfaction and loss If we fail to adequately manage our product purchasing or customer credit policies our working capital and financial condition may be adversely affected
We believe the quality of our associates provides us with the capabilities and expertise to serve our customers better than our competitors do Our ability to execute on this strategy depends to a significant extent on having an adequate number of qualified associates including those in senior leadership managerial technical sales marketing and support positions A failure to maintain an adequate number of associates with appropriate skill sets and talent could delay the execution of our operational strategies result in loss of institutional knowledge and reduce our supply of future management skill In addition if we are unable to enforce certain non compete covenants and confidentiality provisions when key associates leave for a competitor we may lose a competitive advantage arising from confidential and proprietary company information known to such former associates
Competition in our industry for both existing and new talent is significant We experience pressure regarding increases to wages more flexible work arrangements including remote and hybrid work and expanded benefit offerings Moreover we have in the past and may in the future experience volatility in our stock price which may make it more difficult and expensive to recruit and retain associates particularly senior leadership through equity based compensation While our retention rates have not changed materially we have experienced and may continue to experience extended lead times in backfilling roles due in part to changing workforce dynamics and the lack of a sufficient number of people qualified for skilled roles Although we believe we generally offer competitive employment packages we can provide no assurance that our efforts to attract and retain associates will be successful Our failure to do so could have an adverse effect on our business financial condition and results of operations
Attracting and retaining experienced skilled associates must be balanced with managing overall labor costs In addition to measures we take to remain attractive in a competitive labor market other external factors such as changing workforce demographics labor market related employment laws and regulations and increased health and insurance costs adversely affect our labor costs We may also on occasion be subject to labor union organization efforts which may impact cost and operational flexibility Substantial increases in our operating costs to maintain our workforce may have an adverse effect on our business financial condition and results of operations
Failure to achieve and maintain a high level of product and service quality and comply with responsible sourcing standards could damage our reputation and negatively impact our business financial condition and results of operations
To continue to be successful we must continue to preserve grow and leverage the value of our brand and our product brands in the marketplace Reputational value is based in large part on perceptions of subjective qualities Even an isolated incident such as a high profile product recall or the aggregate effect of individually insignificant incidents can erode trust and confidence particularly if such incident or incidents result in adverse publicity governmental investigations or litigation and as a result could tarnish our brand and lead to adverse effects on our business
In particular product quality and service issues including as a result of our suppliers or manufacturers acts or omissions could negatively impact customer confidence in our product brands and our product portfolio As we do not have direct control over the quality of the products manufactured or supplied by third party suppliers we are exposed to risks relating to the quality of the products we distribute If our product or service offerings do not meet applicable safety standards or customers expectations regarding safety or quality or are alleged to have quality issues or to have caused personal injury or other damage or our supplier does not meet our expectations on responsible sourcing outlined in our supplier code of conduct we could experience lower net sales and increased costs and be exposed to legal financial and reputational risks as well as governmental enforcement actions In addition actual potential or perceived product safety concerns could result in costly product recalls
We seek to enter into contracts with suppliers which provide for indemnification from any costs associated with the provision of defective products however there can be no assurance that such contractual rights will be obtained or would be adequate or that related indemnification claims will be successfully asserted by us Moreover our ability to recover damages from foreign sources of supply may be more difficult and expensive
The nature of our operations may expose our associates contractors customers suppliers and other individuals to health and safety risks and we may incur property casualty or other losses not covered by our insurance policies and damage to our reputation
The nature of our operations can expose our associates contractors customers suppliers and other individuals to health and safety risks which can lead to loss of life or severe injuries or illness Additionally we operate a large fleet of trucks and other vehicles and therefore face the risk of traffic accidents and other fleet incidents involving the motoring public Any injuries illness or loss of life could harm our reputation and reduce customer demand and expose us to the potential for litigation from third parties The outcome of any personal injury wrongful death or other litigation is difficult to assess or quantify and the cost to defend litigation could be significant
Although we maintain insurance that we believe to be sufficient to cover estimated health and safety risks including product liability health and safety in our operations vehicle and driver related claims and other types of claims in various jurisdictions there can be no assurance that such insurance will provide adequate coverage against potential claims If we do not have adequate contractual indemnification or insurance available such claims could have a material adverse effect on our business financial condition and results of operations
We occupy most of our facilities under non cancelable leases with terms of 10 years or less We may be unable to renew leases on favorable terms or at all Also when we close a facility we may remain obligated under the applicable lease
Most of our branches are located in leased premises Many of our current leases are non cancelable and typically have initial terms of around 3 to 10 years with options to renew for specified periods of time There can be no assurance that we will be able to renew our current or future leases on favorable terms or at all which could have an adverse effect on our ability to operate our business and on our results of operations In addition we make decisions to close certain facilities from time to time When we close or cease to use a facility we generally remain committed to perform our obligations under the applicable lease which include among other things payment of the base rent for the balance of the lease term
We have office showroom counter warehouse and distribution facilities located in all regions in which we operate which may be at risk for criminal acts that could impact our operations financial performance or reputation There is a risk that our security programs will not prevent the occurrences of break ins theft property damage and workplace violence including violent criminal acts such as interpersonal violence or an active shooter or mass casualty damage event Moreover such programs may not be implemented as intended In the current climate of global and regional political uncertainty and social unrest a security breach could result in significant facility damage or loss loss of inventory or personal injury to customers suppliers or associates There is a risk that inventory controls and facility security will fail resulting in inventory shrinkage or loss due to inadequate inventory tracking or misconduct of associates customers vendors or other third parties Moreover our inventory is located across our distribution facilities and branches and the disaggregated nature of our inventory could result in a failure to accurately record the existence and condition of our inventory Any such security incidents inventory loss or failure to maintain accurate records related to our inventory could have a material adverse effect on our business financial condition results of operations or reputation
We are subject to income taxes in the U S and various other countries globally Changes in tax laws regulations and treaties and conflicts in related interpretations or guidance may result in payments greater or less than amounts accrued which could have a negative impact on our provision for income taxes In addition our future earnings and the value of our deferred tax assets and liabilities could be negatively impacted by further changes in tax legislation including changes in tax rates tax laws and changes in the rules for earnings repatriations in the U S or other countries
Further the application of tax law is subject to interpretation Additionally administrative guidance can be incomplete or vary from legislative intent and therefore the application of the tax law is uncertain While we believe the positions reported by the Company comply with relevant tax laws and regulations we have in the past and may in the future be subject to tax audits and taxing authorities could interpret our application of certain laws and regulations differently Tax controversy matters may result in previously unrecorded tax expenses higher future tax expenses or the assessment of interest and penalties which could have a material adverse effect on our business financial condition results of operations and cash flows
For example the location of tax residence of certain subsidiaries could be challenged If it was determined that one or more of our subsidiaries ceased or failed to maintain its place of central management and control in the location of its tax residency our ability to rely on specific tax treaty benefits could be impacted potentially causing withholding taxes on dividends and interest payments made by certain of our subsidiaries to increase while taxes on certain unrealized gains could be imposed
Our tax expenses and liabilities are also affected by factors other than changes in law such as changes in our business operations acquisitions investments entry into new businesses and geographies intercompany transactions the relative amount of our foreign earnings losses incurred in jurisdictions for which we are not able to realize related tax benefits the applicability of special or extraterritorial tax regimes changes in foreign exchange rates changes in our stock price changes to our forecasts of income and loss and the mix of jurisdictions to which they relate and changes in our tax assets and liabilities and their valuation In the ordinary course of our business there are many transactions and calculations for which the ultimate tax determination is uncertain Significant judgment is required in evaluating and estimating our tax expenses assets and liabilities
Our private label products subject us to certain increased risks such as regulatory product liability and reputational risks that could have an adverse effect on our business financial condition and results of operations
As we expand our private label Own Brand product offerings organically and through acquisitions we may become subject to increased risks due to our greater role in the design sourcing marketing and sale of those products The risks include greater responsibility to administer and comply with applicable regulatory requirements increased potential product liability and product recall exposure and increased potential legal and reputational risks related to the responsible sourcing of those products To effectively execute on our private label product differentiation strategy we must also be able to successfully protect our proprietary rights and successfully navigate and avoid claims related to the proprietary rights of third parties In addition an increase in sales of our private label products may adversely affect sales of our suppliers products which in turn could adversely affect our relationships with certain of our suppliers Further the development of our private label products may require us to make investments in specialized personnel and operating systems increase marketing efforts and reallocate resources away from other uses Any failure to appropriately address some or all of these risks could damage our reputation and have an adverse effect on our business financial condition and results of operations
We are and may continue to be involved in legal proceedings in the ordinary course of our business and while we cannot predict the outcomes of those proceedings and other contingencies with certainty some of these outcomes may adversely impact our business financial condition results of operations and cash flows
We are and may continue to be involved in legal proceedings such as product liability asbestos personal injury consumer employment and other litigation that arises from time to time in the ordinary course of our business In future periods we could be subject to cash costs or non cash charges to earnings if any of these litigation matters are resolved on unfavorable terms or if our estimates regarding legal provisions accounting or our insurance coverage are incorrect Shareholders are also able to pursue derivative actions on behalf of the Company for among other things alleged breaches of fiduciary duties by our directors and officers If we face such litigation it could result in substantial costs and a diversion of management s resources and attention which could harm our business and the value of our common stock
Litigation is inherently unpredictable and the outcome of some of these proceedings and other contingencies could require us to take or refrain from taking actions which could adversely impact our business or could result in excessive verdicts Any such outcome could have an adverse effect on our business financial condition results of operations and cash flows Additionally involvement in these lawsuits and related inquiries and other proceedings may involve significant expense divert management s attention and resources from other matters and negatively affect our reputation
Changes in accounting standards and subjective assumptions estimates and judgments by management related to complex accounting matters could significantly affect our financial condition or results of operations
Accounting standards and related accounting pronouncements implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business such as revenue recognition and net sales asset impairment impairment of goodwill and other intangible assets inventories lease obligations self insurance tax matters pensions and litigation are complex and involve many subjective assumptions estimates and judgments Changes in accounting standards or their interpretation or changes in underlying assumptions and estimates or judgments could significantly change our reported or expected financial performance financial condition or results of operations
We are subject to various risks related to the local and international nature of our business including domestic and foreign laws regulations and standards Failure to comply with such laws and regulations or the occurrence of unforeseen developments such as litigation investigations governmental proceedings or enforcement actions could adversely affect our business
Our business operates in the U S and Canada and is subject to specific risks of conducting business in different jurisdictions across these countries and other parts of the world including Barbados China India Mexico South Korea Switzerland Taiwan Thailand Trinidad and Tobago the U K and Vietnam Our business is subject to a wide array of domestic and international laws regulations and standards in jurisdictions where we operate including advertising and marketing regulations anti bribery and corruption money laundering laws anti competition regulations data privacy and data protection including payment card industry data security standards and cybersecurity requirements including protection of information and incident responses occupational health and safety regulations consumer product safety regulations consumer protection laws cash and electronic payment regulations and industry standards environmental protection laws and regulations including those covering per and polyfluoroalkyl substances PFAS foreign exchange controls and cash repatriation restrictions government business regulations applicable to us as a government contractor selling to federal state and local government entities import and export requirements intellectual property laws labor laws product compliance laws fleet and driver related laws supplier regulations regarding the sources of supplies or products tax laws zoning laws unclaimed property laws and laws regulations and standards applicable to other commercial matters These laws regulations and standards are often complex subject to change and subject to varying interpretations and compliance therewith may be subject to varying degrees of scrutiny Moreover we are also subject to audits and inquiries by government agencies in the ordinary course of business
In recent years a number of new laws and regulations have been adopted new executive orders have been announced and there has been expanded enforcement of certain existing laws and regulations by federal state and local agencies These laws and regulations and related interpretations and enforcement activity may change as a result of a variety of factors including political economic or social events For example since taking office the current administration has sought to adopt new regulations and policies and to suspend revise or rescind prior policies that are identified as conflicting with the administration s position which has resulted in increased regulatory uncertainty Any changes in expanded enforcement of or adoption of new federal state or local laws and regulations could increase our costs of doing business or impact our operations including among other factors as a result of required investments in technology and the development of new operational processes
Failure to comply with any of these laws regulations and standards has in the past and may in the future result in civil criminal monetary and non monetary penalties as well as potential damage to our reputation Furthermore while we have implemented policies and procedures designed to facilitate compliance with these laws regulations and standards there can be no assurance that associates contractors or agents will not violate such laws regulations and standards or our policies Any failure to comply with or violation of the various laws regulations and standards to which we are subject could individually or in the aggregate have a material adverse effect on our business financial condition results of operations and cash flows
Ongoing focus on sustainability matters by investors customers regulators and other parties may impose additional costs or expose us to new risks Moreover stakeholder expectations and standards on sustainability matters continue to evolve and may diverge If we do not adapt to or comply with such investor customer regulator or other stakeholder expectations or if we are perceived to have not responded appropriately or quickly enough to concerns related to sustainability issues regardless of whether there is a regulatory or legal requirement to do so we may suffer from reputational damage be subject to litigation or regulatory enforcement or be precluded from doing business with certain customers any of which could materially adversely affect our business financial condition results of operations and or the market price of our common stock
Certain organizations that provide corporate governance and other corporate risk information to investors and shareholders have developed scores and ratings to evaluate companies and investment funds based upon sustainability metrics Select investment funds and investors may consider a company s policies or scores as a reputational or other factor in making an investment decision Inclusion and climate change topics have in particular received heightened attention from investors shareholders lawmakers and listing exchanges We may face reputational damage litigation or regulatory enforcement in the event our sustainability initiatives or objectives including with respect to Inclusion or climate matters do not meet the standards set by our regulators investors shareholders lawmakers listing exchanges or other constituencies or if we are unable to achieve an acceptable sustainability rating from third party rating services
Further sustainability reporting is expected from and in certain cases required by certain stakeholders state regulators investors shareholders and other third parties These sustainability reporting disclosure frameworks and reporting standards continue to evolve The disclosure frameworks and reporting standards under which we disclose information may change from time to time and may result in a lack of consistent or meaningful comparative data from period to period as well as significant revisions to sustainability goals initiatives commitments or objectives or reported progress in achieving the same Our failure to report accurately or achieve progress on our sustainability related goals targets or metrics on a timely basis or at all could adversely affect our reputation business financial condition and results of operations Statements regarding our sustainability related goals reflect our current plans and aspirations our sustainability related policies practices and goals are voluntary and subject to change at our discretion
Our sustainability and Inclusion related initiatives and goals may not be favored by certain stakeholders whose priorities and expectations may not align or may be opposed to one another which could result in public scrutiny or reputational damage and could impact the attraction and retention of investors customers and associates Efforts to achieve our initiatives and goals including collecting measuring and reporting sustainability information involve operational reputational financial legal and other risks and may result in additional costs or delays and as a result may have a negative impact on us including our brand reputation and the market price of our common stock
The obligations associated with being a public company require significant resources and management attention and result in significant legal and financial compliance costs and changing laws regulations and standards are creating uncertainty for public companies
As a public company we are subject to the reporting requirements of the Exchange Act and the Sarbanes Oxley Act of 2002 the Sarbanes Oxley Act the listing requirements of the NYSE and LSE the Market Abuse Regulation Disclosure Guidance and Transparency Rules and other applicable securities rules and regulations The Exchange Act requires that we file annual and other reports with respect to our business financial condition and results of operations The Sarbanes Oxley Act requires among other things that we establish and maintain effective internal controls and procedures for financial reporting Any failure to maintain effective controls or any difficulties encountered implementing required new or improved controls could cause us to fail to meet our reporting obligations which could have a material adverse effect on our business and the trading price of our common stock
In addition changing laws regulations and standards relating to corporate governance sustainability and public disclosure are creating uncertainty for public companies increasing legal and financial compliance costs and making some activities more time consuming These laws regulations and standards are subject to varying interpretations in many cases due to their lack of specificity as well as certain legal challenges and as a result their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies or as pending or future litigation is resolved This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices We have invested and expect to continue to invest resources to comply with evolving laws regulations and standards and this investment may result in increased operating expenses and a diversion of management s time and attention from sales generating activities to compliance activities If our efforts to comply with new laws regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice or differ from new legal interpretations resulting from related litigation regulatory authorities or others may initiate legal proceedings against us and our business financial condition results of operations and cash flow could be adversely affected
There can be no guarantee that our historical performance will be repeated in the future particularly given the competitive nature of the industry in which we operate and our net sales net income and cash flow may significantly underperform market expectations If our cash flow underperforms market expectations then our ability to pay a dividend or effect other returns of capital including without limitation share repurchases may be negatively impacted Any decision to declare and pay dividends or to effect other returns of capital will be made at the discretion of the Board of Directors of the Company the Board and will depend on among other things Delaware corporate law restrictions if any on the payment of dividends and or capital returns in our financing arrangements our financial position retained earnings net income working capital requirements interest expense general economic conditions and other factors that the Board deems appropriate from time to time
We cannot guarantee that our share repurchase program will be fully consummated or that our share repurchase program will enhance long term shareholder value and share repurchases could increase the volatility of the price of our common stock and could diminish our liquidity
As of July 31 2025 Ferguson had completed approximately 4 0 billion of its previously announced 5 0 billion share repurchase program with approximately 1 billion remaining under its share repurchase program The timing and actual number of shares of common stock to be repurchased will depend on a variety of factors including cash availability and other market conditions The share repurchase program could affect the price of our shares and increase volatility and we may suspend or terminate the share repurchase program at any time which may result in a decrease in the trading price of our shares The existence of a share repurchase program could also cause the price of our shares of common stock to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our shares of common stock Additionally repurchases under our share repurchase program could diminish our liquidity
The Company is a holding company with no independent operations and is dependent on its operating subsidiaries to generate cash including in order to pay dividends to its shareholders The Company s ability to pay dividends to its shareholders therefore depends on the ability of its subsidiaries to service intercompany loans distribute profits and or pay dividends general economic conditions and other factors that the Board deems significant from time to time The Company s distributable reserves can be affected by reductions in profitability impairment of assets and severe market turbulence
The market price of our shares has been and may in the future be volatile and subject to wide fluctuations The market price of our common stock may fluctuate as a result of a variety of factors including but not limited to general global and regional economic and political conditions changes in or announcements regarding proposed changes in trade policy period to period variations in our results of operations changes in net sales or net income estimates by us industry participants or financial analysts our failure to meet our stated guidance our failure to comply with the rules under the Sarbanes Oxley Act related to accounting controls and procedures changes in our capital allocation policy the discovery of material weaknesses and other deficiencies in our internal control and accounting procedures and the other factors discussed in this Item 1A
If we are unable to assert that our internal control over financial reporting is effective or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting when required investor confidence in us may be adversely affected and as a result the value of our common stock may decline
In addition the market price of our common stock could also be adversely affected by developments unrelated to our operating performance such as the operating and share price performance of other companies that investors may consider comparable to us speculation about us in the press or the investment community unfavorable press strategic actions by competitors including acquisitions and restructurings changes in market conditions regulatory changes broader market volatility and movements and delay in our inclusion in North American indices Any or all of these factors could result in material fluctuations in the market price of our common stock which could lead to investors getting back less than they invested or a total loss of their investment In addition where the market price of a company s shares have been volatile the shareholders of such company may file securities class action litigation against that company based on various claims such as securities fraud and other violations of securities laws While we have not been a target of this type of litigation we may be in the future The defense and disposition of litigation of this type could result in substantial costs and divert resources and the time and attention of our management which could materially and adversely affect our business financial condition or results of operations
The Amended and Restated Certificate of Incorporation of Ferguson Enterprises Inc the Certificate of Incorporation provides that the Court of Chancery of the State of Delaware the Court of Chancery will be the exclusive forum for substantially all disputes between the Company and its stockholders which could limit its stockholders ability to obtain a favorable judicial forum for disputes with the Company or its directors officers employees agents or stockholders
The Certificate of Incorporation provides that subject to certain exceptions the Court of Chancery will to the fullest extent permitted by law be the sole and exclusive forum for i any derivative action or proceeding brought on behalf of the Company ii any action asserting a claim of breach of a duty including any fiduciary duty by or other wrongdoing by any current or former director officer employee agent or stockholder of the Company to the Company or its stockholders iii any action asserting a claim against the Company or any current or former director officer employee agent or stockholder of the Company arising out of or relating to any provision of Delaware General Corporation Law DGCL the Certificate of Incorporation or the Amended and Restated Bylaws of Ferguson Enterprises Inc the Bylaws iv any action to interpret apply enforce or determine the validity of the Certificate of Incorporation or the Bylaws v any action asserting a claim against the Company or any current or former director officer employee agent or stockholder of the Company governed by the internal affairs doctrine vi any action asserting an internal corporate claim as that term is defined in Section 115 of the DGCL or vii any action as to which the DGCL confers jurisdiction on the Court of Chancery In addition to prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts among other considerations the Certificate of Incorporation provides that unless the Company consents in writing to the selection of an alternative forum to the fullest extent permitted by law the federal district courts of the U S will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933 as amended the Securities Act against the Company or any director officer employee or agent of the Company
These exclusive forum provisions may limit a stockholder s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors officers employees agents or stockholders and this limitation may have the effect of discouraging lawsuits or making our securities less attractive to investors For example stockholders who bring a claim in the Court of Chancery could face additional litigation costs in pursuing any such claim particularly if they do not reside in or near the State of Delaware The Court of Chancery may also reach different judgments or results than would other courts including courts where a stockholder considering an action may be located or would otherwise choose to bring the action and such judgments or results may be more favorable to the Company than to its stockholders
It should also be noted that Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder Accordingly both state and federal courts have jurisdiction to entertain such claims Due to such concurrent jurisdiction there is uncertainty as to whether a court would enforce the exclusive forum provision in the Certificate of Incorporation in respect of causes of action arising under the Securities Act against the Company or any director officer employee or agent of the Company While the Delaware courts have determined that such choice of forum provisions are facially valid a stockholder may nevertheless seek to bring such a claim arising under the Securities Act against the Company its directors officers employees agents or stockholders in a venue other than in the federal district courts of the U S In such instance the Company would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of the Certificate of Incorporation This may require significant additional costs associated with resolving such action in other jurisdictions and we cannot assure you that the provisions will be enforced by a court in those other jurisdictions If a court were to find the exclusive forum provisions in the Certificate of Incorporation to be inapplicable or unenforceable in an action we may incur further significant additional costs associated with resolving the dispute in other jurisdictions all of which could harm our business
The Certificate of Incorporation provides that any person purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Company shall be deemed to have notice of and to have consented to the exclusive forum provisions described above However these exclusive forum provisions may not apply to suits brought to enforce a duty or liability vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery such as those created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction
We recognize the importance of assessing identifying and managing material risks associated with cybersecurity threats We maintain a strategic plan to protect our information and to manage and mitigate emerging cybersecurity threats Our cybersecurity team led by our Chief Information Security Officer CISO who reports to our Chief Digital Information Officer CDIO oversees our cybersecurity efforts on a day to day basis Our cybersecurity team in partnership with third parties designs implements and operates our data security and cybersecurity programs risk assessments monitoring procedures and training programs for our associates
Cybersecurity risk management is integrated into our overall enterprise risk management program ERM Program and our cybersecurity legal infrastructure privacy and other cross functional teams work together to evaluate and address cybersecurity risks in alignment with our business objectives and operational needs Cybersecurity risk management is also integrated into our broader risk management framework through information technology general controls that are independently tested by our Internal Audit team the findings of which are reported to the Audit Committee
As part of our cybersecurity risk management and strategy the Company invests in processes resources and incremental technical defenses to help prevent identify escalate investigate resolve and recover from identified vulnerabilities and security incidents in a timely manner We have enterprise level compliance processes policies and insurance coverage in place including related to data protection and cybersecurity We utilize the ISO 27001 2022 information security standard to drive our risk assessment and to identify and prioritize technology and process investments Additionally Ferguson maintains a Security Operations Center SOC with enterprise event visibility
The Company maintains a Cybersecurity Incident Response Plan CIRP that establishes a foundation for capture containment escalation and response to cybersecurity events across the Company The CIRP details how the Company including the SOC and cybersecurity team prioritize and respond to cybersecurity events and incidents including when and how incidents are escalated to key members of management who in turn determine whether further escalation to the Audit Committee or Board is appropriate The CIRP also includes actions designed to enhance processes and responsiveness to address and prevent future incidents
Ferguson invests in associate training and education on cybersecurity and risk management thereof Ferguson provides annual phishing training to all associates who are issued a Company device and our annual Code of Conduct training often features information technology subjects such as protection of company and personal information and identifying and reporting cybersecurity and phishing incidents In addition we maintain a cybersecurity awareness hub on our company intranet regularly distribute cyber newsletters and cyber tips and conduct regular phishing email simulation tests including customized role based tests to reinforce prior training and promote ongoing awareness of risks We also periodically conduct tabletop exercises with management and other associates to practice cyber incident response and to improve our processes and strategies
In addition Ferguson regularly engages with independent third party partners including cybersecurity assessors consultants and auditors to assess and consult on our cybersecurity capabilities prioritize areas of risk and assist with execution of our risk management systems and strategic plans Our collaboration with these third parties includes regular audits threat assessments and consultation on security enhancements To mitigate data or security incidents that may originate from third party suppliers we have a third party risk management program that works to classify service provider or business partner risk based on several factors including but not limited to data type accessed and or retained Using a risk based approach we perform diligence and security risk assessments for certain vendors and service providers including appropriate obligations in our contractual arrangements where applicable
As of the date of this Annual Report cybersecurity incidents and risks separately or in aggregate have not materially affected our business strategy results of operations and financial condition However we face ongoing risks from cybersecurity threats and there can be no assurance that our security efforts and measures and those of our third party vendors will prevent or minimize cybersecurity risks See Risk Factors If we are unable to protect our sensitive data and information systems against data corruption cybersecurity incidents or network security breaches or if we are unable to provide adequate security in the electronic transmission of sensitive data it could materially adversely affect our business financial condition and results of operations and A failure of a key information technology system or process could materially adversely affect the operations of our business in Item 1A of this Annual Report for more information on our cybersecurity related risks
The Board has delegated to the Audit Committee responsibility for monitoring the overall adequacy and effectiveness of the ERM Program and the Audit Committee is specifically charged with discussing the Company s cybersecurity risk exposures and the steps management has taken to monitor and control these exposures Our Chief Legal Officer provides reports on the ERM Program twice a year The Board and or
the Audit Committee receives periodic reports briefings or presentations on data protection and cybersecurity matters from senior information technology leaders including our CDIO or CISO as well as from our Internal Audit team In addition to these Board and Audit Committee updates our CIRP provides that significant developments or incidents even if immaterial to the Company will be reviewed regularly by a cross functional team to determine whether further escalation to the Audit Committee or Board is appropriate enabling Audit Committee and Board oversight that is timely and responsive
Pursuant to our ERM Program charter our Executive Committee is responsible for assessing and managing the Company s exposure to enterprise risks The Executive Committee is composed of the CEO and members of senior management appointed by the CEO including the CDIO Our CDIO has delegated to our CISO and the cybersecurity teams primary responsibility for identifying assessing monitoring and managing our cybersecurity threats They receive information regarding cybersecurity incidents and threats from the SOC and through internal escalation procedures detailed in the CIRP The CISO then provides periodic reports to the Executive Committee including reporting on significant cybersecurity incidents and resulting remedial actions the cybersecurity team s strategic plan the results of associate trainings and any other notable cybersecurity matters
Our CDIO has over 25 years of executive experience leading information technology teams and providing strategic vision for multiple Fortune 500 companies For further details about our CDIO s background see the Information About Our Executive Officers section of Part I of this Annual Report Our CISO has over 25 years of industry experience including in developing and leading cybersecurity risk management programs for Fortune 100 companies Additionally our CISO and members of the cybersecurity team hold a number of industry recognized certifications such as Certified Information Systems Security Professional Payment Card Industry Data Security Standard Internal Security Assessor Certified Information Security Manager Certified in Risk and Information Systems control and Certified Ethical Hacker among others
The Company s corporate headquarters and management office are located at 751 Lakefront Commons Newport News Virginia 23606 We believe our facilities are maintained in good operating condition and sufficient to meet our present operating needs
The Company is from time to time a party to various lawsuits claims and other legal proceedings that arise in the ordinary course of business With respect to such lawsuits claims and proceedings the Company records reserves when it is probable a liability has been incurred and the amount of loss can be reasonably estimated The Company does not expect any of its pending legal proceedings to have a material adverse effect on its results of operations financial position or cash flows In accordance with Item 103 of Regulation S K we have adopted a 1 million disclosure threshold for certain proceedings under environmental laws to which a governmental authority is a party as we believe matters under this threshold are not material to the Company The Company maintains liability insurance for certain risks that are subject to certain self insurance limits
Set forth below is a list of the Company s executive officers including their names ages all positions and offices with the Company held by each such person and each person s principal occupations or employment during the past five years unless otherwise indicated Our executive officers do not have a specific term of office
Mr Murphy was appointed as a Director in August 2017 and as Chief Executive Officer in November 2019 In connection with a corporate restructure in August 2024 Mr Murphy s title changed to President Chief Executive Officer Mr Murphy has served as chief executive officer of Ferguson Enterprises LLC FEL the Company s U S operating subsidiary since 2017 Prior to that he was chief operating officer of FEL from 2007 to 2017 Mr Murphy joined Ferguson in 1999 as an operations manager following Ferguson s acquisition of his family s business Midwest Pipe and Supply and went on to hold a number of leadership positions before his eventual appointment as the Company s President Chief Executive Officer
Mr Brundage was appointed as a Director and Chief Financial Officer in November 2020 Mr Brundage has served as the chief financial officer of FEL since 2017 and previously served at FEL as senior vice president of finance from 2016 to 2017 and vice president of finance from 2008 to 2016 Mr Brundage joined Ferguson in 2003 as manager of finance and was promoted to corporate controller of FEL two years later Previously Mr Brundage spent five years at PricewaterhouseCoopers in the U S
Mr Graham serves as the Chief Legal Officer Corporate Secretary Mr Graham joined the Company as Group General Counsel in May 2019 Prior to joining the Company he was Senior Vice President General Counsel and Secretary for BAE Systems Inc from 2010 to 2019 Prior to that he held senior roles at EMCORE Corporation UUNET Technologies Jenner Block LLP and McKenna Cuneo LLP
Mr Paisley became the Chief Digital Information Officer for Ferguson in June 2023 after joining the Company in January 2023 as the Chief Information Officer He is responsible for overseeing Digital Commerce Digital Engineering Digital Data User Experience and Commerce Operations Prior to joining Ferguson Mr Paisley served as the chief information officer of Dollar Tree Inc from December 2020 until 2022 Old Dominion Freight Line Inc from 2017 to 2020 and Advance Auto Parts Inc from 2014 to 2017 where he aligned the technology strategy with business strategy and improved the digital experience for associates and customers
Mr Schlicher was named Chief Strategy Officer in February 2025 Mr Schlicher joined the Company in 1999 through the acquisition of L H Supply Since then he has held numerous positions including Director of the Residential Business Group Vice President of Private Label Vice President of the Strategic Products Group Vice President of the Commercial Business Senior Vice President of Ferguson Facilities Supply and Senior Vice President of Strategic Brand Development Most recently Mr Schlicher served as Senior Vice President Strategic Development from February 2019 to February 2025
Ms Stirrup was promoted to Chief Human Resources Officer in August 2024 She joined the Company in 1998 as a trainee and has held several progressive leadership positions over her 26 year career at Ferguson Ms Stirrup began her career with Ferguson as a Showroom Consultant and later Showroom Manager prior to transitioning into human resources in 2003 as a Corporate Recruiter Ms Stirrup held a number of leadership positions including Manager of College Recruiting Manager of Recruiting Director of Talent Management and Senior Director of Talent Development From April 2018 to March 2021 Ms Stirrup served as Senior Director of HR Blended Most recently she served as Vice President HR Business Partners from March 2021 to August 2024
Mr Thees was named Chief Operating Officer in February 2025 He began his career with the Company in 1990 as a trainee at the Orlando Florida Waterworks location Since then he has held several key positions including Branch Manager General Manager and District Manager Mr Thees assumed leadership for the Waterworks Business in 2007 and was promoted to Vice President in 2009 Between August 2018 and July 2024 he served as Senior Vice President of Business and Sales Most recently Mr Thees served as Senior Vice President from August 2024 to February 2025
Mr Camposano serves as Senior Vice President Waterworks Before assuming his current role in August 2024 he served as Vice President of Waterworks from 2019 to 2024 Mr Camposano began his career with the Company in 1996 as a trainee and has held several key positions including Training and HR Development Operations Manager General Manager District Manager and Regional Vice President
This graph is not soliciting material is not deemed filed with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language in any such filing
The performance graph below compares the cumulative total shareholder return of the Company s shares since July 31 2020 with the cumulative total return for the same period of the S P 500 Stock Index and the S P 500 Industrials Stock Index The graph assumes the investment of 100 in our shares at the closing price of our shares on the LSE prior to the Company s listing on the NYSE on March 11 2021 and on the NYSE on and following such date and in each of the indices as of the market close on July 31 2020 and also assumes the reinvestment of dividends Performance data for the Company is provided as of the last trading day of each relevant fiscal year The share price performance graph is not necessarily indicative of future share price performance
In September 2021 the Company announced a program to repurchase up to 1 0 billion of shares Since the initial authorization the Company has announced from time to time various increases bringing the total authorized share repurchase program to 5 0 billion As of July 31 2025 the Company had completed approximately 4 0 billion of the total authorized repurchase program
is intended to convey management s perspective regarding the Company s operational and financial performance and should be read in conjunction with the Consolidated Financial Statements and related notes contained in this Annual Report The discussion in this Annual Report generally focuses on fiscal 2025 compared to fiscal 2024 A discussion of our results of operations and changes in financial condition for fiscal 2024 compared to fiscal 2023 has been excluded from this report but can be found in
from our historical performance due to various factors including but not limited to those discussed in the Risk Factors and Forward Looking Statements and Risk Factor Summary sections and elsewhere in this Annual Report
Ferguson is a value added distributor serving the water and air 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 Ferguson is headquartered in Newport News Virginia
For fiscal 2025 net sales increased by 3 8 primarily due to higher sales volume and incremental sales from acquisitions partially offset by the impact of one less sales day in fiscal 2025 than in fiscal 2024 Pricing was slightly down year over year primarily during the first half of fiscal 2025 due to deflation in certain commodity categories which was partially offset by improvements in finished goods pricing
For fiscal 2025 operating profit decreased 1 7 adjusted operating profit increased 0 6 compared to fiscal 2024 This decrease was primarily due to 80 million in non recurring restructuring expenses along with the profit impact of one less sales day in fiscal 2025 These decreases were partially offset by higher gross profit compared with fiscal 2024 Adjusted operating profit increased due to higher gross profit compared with fiscal 2024
For fiscal 2025 diluted earnings per share was 9 32 adjusted diluted earnings per share 9 94 increasing 9 3 compared with the prior year due to higher net income and the impact of share repurchases The higher year over year net income was primarily driven by non recurring non cash deferred tax charges of 137 million incurred in fiscal 2024 in connection with establishing a new corporate structure to domicile our ultimate parent company in the United States Adjusted diluted earnings per share increased 2 6 primarily due the impact of the Company s share repurchases and to a lesser extent higher adjusted operating profit
Net sales were 30 8 billion in fiscal 2025 an increase of 1 1 billion or 3 8 compared with 2024 The increase in net sales was primarily driven by higher sales volume and incremental sales from acquisitions of 1 0 partially offset by the 0 4 impact of one less sales day in fiscal 2025 Pricing was slightly down year over year primarily during the first half of fiscal 2025 due to deflation in certain commodity categories which was partially offset by improvements in finished goods pricing The Company s increase in net sales was primarily driven by growth in non residential markets and to a lesser extent in residential markets in its United States segment
compared with fiscal 2024 Gross profit as a percent of sales was 30 7 in fiscal 2025 compared with 30 5 in the prior year The increase reflected specific management actions to better capture the value provided to customers and the timing and extent of supplier price increases partially offset by the impact of deflation in certain commodity categories primarily during the first half of the year
SG A expenses in fiscal 2025 increased 338 million or 5 6 compared with fiscal 2024 SG A as a percentage of sales was 20 7 and 20 4 in fiscal 2025 and fiscal 2024 respectively The increase in SG A as a percent of sales primarily reflects higher performance based incentive compensation and the impact of cost inflation on labor infrastructure and fleet
Corporate restructuring expenses were 7 million and 28 million in fiscal 2025 and 2024 respectively During fiscal 2024 these expenses primarily related to establishing a new corporate structure to domicile our ultimate parent company in the United States During fiscal 2025 these expenses were primarily related to transition activities following the establishment of our ultimate parent company s domicile in the United States
During the second half of fiscal 2025 the Company implemented targeted actions to streamline operations enhancing speed and efficiency to better serve customers and drive further profitable growth As a result of these actions the Company recorded non recurring business restructuring expenses of 73 million No such amounts were recorded in fiscal 2024
Net interest expense was 190 million in fiscal 2025 compared with 179 million in fiscal 2024 The increase in interest expense was due to higher average borrowings in fiscal 2025 compared with the prior year
Income tax expense was 567 million for fiscal 2025 a decrease of 162 million compared with fiscal 2024 The Company s effective tax rate was 23 4 for fiscal 2025 compared with 29 6 for fiscal 2024 The decrease in income tax expense and the decrease in the effective tax rate were primarily driven by non recurring non cash deferred tax charges of 137 million incurred in the prior fiscal year due to the elimination of certain pre existing U K tax attributes of the Company in connection with establishing a new corporate structure to domicile our ultimate parent company in the United States as well as the release of uncertain tax positions following the lapse of statute of limitations in fiscal 2025
The Company s reportable segments are the United States and Canada based on how the Company manages its business and allocates resources which is on a geographical basis The Company s measure of segment profit is adjusted operating profit For further segment information see Note 2
Net sales for the United States segment were 29 3 billion in fiscal 2025 an increase of 1 1 billion or 3 8 compared with the prior year The increase in net sales was primarily driven by higher sales volume along with incremental sales from acquisitions of 1 0 These increases were partially offset by price deflation of approximately 1 mainly within certain commodity categories in the first half of the fiscal year that was partially offset by improvements in finished goods pricing In addition net sales growth was partially offset by the impact of one fewer sales day of 0 4 in the year over year comparison Net sales growth in the non residential markets was 6 8 due to growth in each of Commercial Civil Infrastructure and Industrial Net sales in the residential markets increased by 0 9 with growth across both new construction and RMI
Adjusted operating profit in the United States was 2 8 billion an increase of 0 7 compared with the prior year primarily reflecting higher gross profit partially offset by higher operating costs in light of sales volume growth and cost inflation
Net sales for the Canada segment were 1 493 million in fiscal 2025 an increase of 53 million or 3 7 compared with the prior year This increase in net sales was primarily due to incremental sales from acquisitions of 4 7 and price inflation of approximately 2 partially offset by the impacts of foreign currency exchange rates of 2 3 one fewer sales day in the fiscal year of 0 5 and slightly lower sales volume
Adjusted operating profit for the Canada segment increased compared with the prior year primarily due to higher sales and gross profit partially offset by higher operating costs compared with the same period of prior year
The Company reports its financial results in accordance with U S GAAP However the Company believes certain non GAAP financial measures provide users of the Company s financial information with additional meaningful information to assist in understanding financial results and assessing the Company s performance from period to period These non GAAP financial measures include adjusted operating profit adjusted net income and adjusted earnings per share adjusted EPS diluted Management believes these measures are important indicators of operations because they exclude items that may not be indicative of our core operating results and provide a better baseline for analyzing trends in our underlying businesses and they are consistent with how business performance is planned reported and assessed internally by management and the Company s Board Such non GAAP adjustments include amortization of acquired intangible assets discrete tax items and any other items that are non recurring Non recurring items may include various restructuring charges gains or losses on the disposals of businesses which by their nature do not reflect primary operations as well as certain other items deemed non recurring in nature and or that are not a result of the Company s primary operations Because non GAAP financial measures are not standardized it may not be possible to compare these financial measures with other companies non GAAP financial measures having the same or similar names These non GAAP financial measures should not be considered in isolation or as a substitute for results reported under U S GAAP These non GAAP financial measures reflect an additional way of viewing aspects of operations that when viewed with U S GAAP results provide a more complete understanding of the business The Company strongly encourages investors and shareholders to review the Company s financial statements and publicly filed reports in their entirety and not to rely on any single financial measure
For fiscal 2025 corporate restructuring expenses primarily related to incremental costs in connection with transition activities following the establishment of our ultimate parent company s domicile in the United States For fiscal 2024 corporate restructuring expenses related to incremental costs in connection with establishing the new corporate structure to domicile our ultimate parent company in the United States
For fiscal 2025 business restructuring expenses related to the Company s implementation of targeted actions to streamline operations enhancing speed and efficiency to better serve customers and drive further profitable growth
For fiscal 2025 corporate restructuring expenses primarily related to incremental costs in connection with transition activities following the establishment of our ultimate parent company s domicile in the United States
For fiscal 2025 business restructuring expenses related to the Company s implementation of targeted actions to streamline operations enhancing speed and efficiency to better serve customers and drive further profitable growth
For fiscal 2024 discrete tax adjustments primarily related to non recurring non cash deferred tax charges of 137 million resulting from the elimination of certain pre existing U K tax attributes as part of the establishment of our parent company s domicile in the United States partially offset by the release of uncertain tax positions as well as the tax treatment of certain compensation items that were not individually significant
For fiscal 2025 the tax impact on non GAAP adjustments related to the restructuring expenses and the amortization of acquired intangibles For fiscal 2024 the tax impact of non GAAP adjustments primarily related to the amortization of acquired intangibles
The Company believes its current cash position coupled with cash flow anticipated to be generated from operations and access to capital should be sufficient to meet its operating cash requirements for the next 12 months and will also enable the Company to invest and fund acquisitions capital expenditures dividend payments share repurchases required debt payments and other contractual obligations through the next several fiscal years The Company also anticipates that it has the ability to obtain alternative sources of financing if necessary
to 1 9 billion in fiscal 2025 This increase was primarily driven by the timing of vendor and tax payments compared with the prior year partially offset by an increase in receivables in light of sales growth and an increase in inventory in connection with sales volume growth and consideration of customer demand as well as lower net income adjusted for non cash items
Capital expenditure totaled 305 million and 372 million in fiscal 2025 and fiscal 2024 respectively These investments were primarily for strategic projects to support future growth such as new market distribution centers our branch network and new technology In addition the Company invested 301 million and 260 million in new acquisitions in fiscal 2025 and fiscal 2024 respectively
Dividends paid to shareholders were 489 million and 784 million in fiscal 2025 and 2024 respectively The decrease was due to the timing of dividend payments in fiscal 2025 and 2024 The Company generally pays dividends in the fiscal quarter following the fiscal quarter in which the dividend was declared However the dividends declared in the fourth quarter of fiscal 2024 were also paid in the fourth quarter of fiscal 2024 in connection with establishing a new corporate structure to domicile our ultimate parent company in the United States As such no dividends were paid in the first quarter of fiscal 2025
Net proceeds from debt were 221 million compared to net proceeds from debt of 145 million in fiscal 2025 and 2024 respectively In fiscal 2025 the Company received net proceeds of 746 million and 125 million from the issuance of certain Unsecured Senior Notes and net borrowings under the Receivables Facility each as defined below respectively These proceeds were partially offset by debt repayments of 500 million and 150 million in connection with the Company s Term Loan as defined in Note 9
to the Consolidated Financial Statements and the maturity of certain Private Placement Notes as defined below respectively In fiscal 2024 the Company had net borrowings of 200 million under the Receivables Facility partially offset by the repayment of 55 million in connection with the maturity of certain Private Placement Notes
We consider foreign earnings of specific subsidiaries to be indefinitely reinvested As of July 31 2025 and 2024 these permanently reinvested earnings of foreign subsidiaries amounted to 800 million and 795 million respectively If at some future date the Company ceases to be permanently reinvested in these specific foreign subsidiaries the Company may be subject to foreign withholding and other taxes on these undistributed earnings and may need to record a deferred tax liability for any outside basis difference on these specific foreign subsidiaries In addition interest payments made between the U S and U K are anticipated to be exempt from withholding taxes however if Ferguson should fail to meet treaty requirements withholding taxes may apply to these payments
The following section summarizes certain material provisions of our long term debt facilities and current obligations The following description is only a summary does not purport to be complete and is qualified in its entirety by reference to the documents governing such indebtedness
In June 2015 and November 2017 Wolseley Capital Inc Wolseley Capital a wholly owned subsidiary of the Company privately placed fixed rate notes in an aggregate principal amount of 800 million and 355 million respectively collectively the Private Placement Notes As of July 31 2025 700 million
In September 2025 FEI issued an additional 750 million aggregate principal amount of Unsecured Senior Notes maturing in March 2031 the 2031 Senior Notes The 2031 Senior Notes bear interest at a rate of 4 35 payable semi annually
In April 2025 the Company entered into a revolving credit agreement the Revolving Credit Agreement replacing its existing 1 35 billion Multicurrency Revolving Facility The Revolving Credit Agreement provides an unsecured revolving credit facility in an aggregate committed amount of 1 5 billion the Revolving Facility The Revolving Credit Agreement provides the Company with the ability to increase from time to time the aggregate capacity of the facility by 500 million under certain conditions subject to lender participation
The Company maintains a Receivables Securitization Facility with an aggregate total available amount of 915 million as amended from time to time the Receivables Facility The Company has the ability to increase the aggregate total available amount under the Receivables Facility up to a total of 1 5 billion from time to time subject to lender participation
In October 2024 FEI issued and sold 750 million aggregate principal amount of certain Unsecured Senior Notes The obligations under such Unsecured Senior Notes are unsecured and are fully and unconditionally guaranteed on an unsecured basis by FUKHL the Guarantor and together with FEI the Obligor Group
FEI is a holding company that primarily repurchases shares and pays dividends issues and services third party debt obligations and engages in certain corporate and headquarters activities as well as holds an investment in its direct subsidiary that primarily holds investments in and borrows from the Guarantor The Guarantor is a holding company that primarily issues and services third party debt obligations and holds investments in borrows from and lends to non guarantor subsidiary operating companies These activities are generally funded by non guarantor subsidiaries The Guarantor is a private limited company incorporated under the laws of England and Wales and an indirect subsidiary of FEI
The following tables present the summarized financial information specified in Rule 1 02 bb 1 of Regulation S X for the Obligor Group on a combined basis after elimination of intercompany transactions and balances between the Obligor Group and excluding the investments in and equity in the earnings of any non guarantor subsidiaries The summarized financial information has been prepared in accordance with Rule 13 01 of Regulation S X and should be read in conjunction with the Consolidated Financial Statements and notes thereto that included in Item 8 of this Annual Report
Other purchase obligations primarily include commitments to purchase inventory and other goods and services and uncompleted additions to property buildings and equipment that are expected to be satisfied within the next 12 months Purchase obligations are made in the ordinary course of business to meet operating needs While purchase orders for both inventory purchases and non inventory purchases are generally cancellable without penalty certain vendor agreements provide for cancellation fees or penalties depending on the terms of the contract
At July 31 2025 the Company had aggregate liabilities for unrecognized tax benefits totaling 126 million none of which are expected to be paid in the next 12 months The timing of payment if any associated with our long term unrecognized tax benefit liabilities is unknown See Note 4
In applying the Company s accounting policies various transactions and balances are valued using estimates or assumptions Should these estimates or assumptions prove incorrect there may be an impact on the following year s financial statements Management believes that the estimates and assumptions that have been applied would not give rise to a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year
The Company s significant accounting policies that require estimates include the allowance for doubtful accounts inventories considerations around goodwill impairment leases and revenue recognition These policies and related estimates are described in Note 1
The Company considers an accounting policy to be a critical estimate if 1 it involves assumptions that are uncertain when judgment was applied and 2 changes in the estimate assumptions or selection of a different estimate methodology could have a significant impact on the Company s consolidated financial position and results The Company has determined that its estimates around inventories and pension obligations represent its most critical accounting estimates
Inventory reserves are recorded against slow moving obsolete and damaged inventories for which the net realizable value is estimated to be less than the cost The reserve is estimated based on the Company s current knowledge and judgment with respect to inventory levels sales trends and historical experience
The Company considers that the most sensitive assumptions are the discount rate on the benefit obligation the wage inflation growth rate and life expectancy in connection with the Company s pension plan in the U K Changes in the assumption related to the pension plan in Canada do not result in significant changes
The Company measures discount rates by reference to corporate bond yields which can also vary significantly between reporting periods particularly in light of macroeconomic factors that can impact corporate bond yields The most sensitive assumption used for the Company s U K pension plan were as follows
The sensitivity analyses below show the increase decrease in the Company s defined benefit plan net asset liability due to reasonably possible changes of the respective assumptions occurring at the end of the reporting period while holding all other assumptions constant
The Company is exposed to market risks arising from changes in foreign currency exchange rates interest rates and commodity prices The Company has well defined risk management policies which have been consistently applied during fiscal years 2025 2024 and 2023 We use derivative and non derivative instruments to hedge a portion of our risks none of which are for trading or speculative purposes There have been no changes since the previous year in the major financial risks faced by the Company
We are exposed to risks from foreign currency exchange rate fluctuations on the translation of our foreign operations into U S dollars and on the purchase of goods and services by these foreign operations that are not denominated in their local currencies Our foreign currency related hedging arrangements outstanding at the end of fiscal 2025 and 2024 were not material A hypothetical 10 change in the relative value of the U S dollar would not materially impact the Company s net income for fiscal 2025
The Company is exposed to interest rate risk on its debt In connection with certain of its Private Placement Notes the Company entered into interest rate swaps designated as fair value hedges to manage its exposure to interest rate movements on its debt If short term interest rates varied by 10 the impact on the Company s variable rate debt obligations would not have a material impact on the Company s net income
Some of the Company s products contain significant amounts of commodity priced materials predominantly plastic copper and steel and other components which are subject to price changes based upon fluctuations in the commodities market The Company is also exposed to fluctuations in the price of fuel which could affect transportation costs This price volatility could potentially have a material impact on our financial condition and or our results of operations The Company regularly monitors commodity trends and has alternative sourcing plans in place to mitigate the risk of supplier concentration passing commodity related inflation to customers or suppliers and continuing to scale its distribution networks including its transportation infrastructure
Quantitative and qualitative disclosures about market risk include forward looking statements with respect to management s opinion about risks associated with the Company s operations debt and derivative positions Actual results may differ materially from these forward looking statements due to the inherent limitations associated with predicting the timing and amount of changes in interest rates foreign currency exchange rates prices of raw materials and the Company s actual exposures and positions
We have audited the accompanying consolidated balance sheets of Ferguson Enterprises Inc and subsidiaries the Company as of July 31 2025 and 2024 the related consolidated statements of earnings comprehensive income stockholders equity and cash flows for each of the three years in the period ended July 31 2025 and the related notes collectively referred to as the financial statements In our opinion the financial statements present fairly in all material respects the financial position of the Company as of July 31 2025 and 2024 and the results of its operations and its cash flows for each of the three years in the period ended July 31 2025 in conformity with accounting principles generally accepted in the United States of America
We have also audited in accordance with the standards of the Public Company Accounting Oversight Board United States PCAOB the Company s internal control over financial reporting as of July 31 2025 based on criteria established in
issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated September 26 2025 expressed an unqualified opinion on the Company s internal control over financial reporting
These financial statements are the responsibility of the Company s management Our responsibility is to express an opinion on the Company s financial statements based on our audits We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audits in accordance with the standards of the PCAOB Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud Our audits included performing procedures to assess the risks of material misstatement of the financial statements whether due to error or fraud and performing procedures that respond to those risks Such procedures included examining on a test basis evidence regarding the amounts and disclosures in the financial statements Our audits also included evaluating the accounting principles used and significant estimates made by management as well as evaluating the overall presentation of the financial statements We believe that our audits provide a reasonable basis for our opinion
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that 1 relates to accounts or disclosures that are material to the financial statements and 2 involved our especially challenging subjective or complex judgments The communication of critical audit matters does not alter in any way our opinion on the financial statements taken as a whole and we are not by communicating the critical audit matter below providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates
Inventory reserves are recorded against slow moving obsolete and damaged inventories for which the net realizable value is estimated to be less than the cost The reserve is estimated based on the Company s current knowledge and judgment with respect to inventory levels sales trends and historical experience
We identified certain components of the inventory reserve as a critical audit matter due to the inherent uncertainty and higher degree of auditor judgment and effort needed to evaluate sales trends and experience that were used in determining the inventory reserve
Obtained an understanding of the Company s accounting policies related to the reserve calculation Based on that understanding we evaluated the appropriateness of the policy and independently recalculated the inventory reserve amount based on the Company s policy
Ferguson Enterprises Inc including subsidiaries the Company NYSE FERG LSE FERG is a Delaware corporation Ferguson is a value added distributor serving the water and air 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 expert 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
The accompanying consolidated financial statements have been prepared in accordance with U S GAAP as set forth in the Financial Accounting Standards Board s FASB Accounting Standards Codification and in conjunction with the rules and regulations of the SEC These consolidated financial statements include the results of the Company and its wholly owned subsidiaries as of July 31 2025 All intercompany transactions have been eliminated from the consolidated financial statements
Except as otherwise specified 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
The preparation of the Company s consolidated financial statements in conformity with U S GAAP requires management to make estimates and assumptions affecting reported amounts in the consolidated financial statements and accompanying notes Actual results may differ from those estimates
Accounts receivables are stated at their estimated net realizable value An allowance for credit losses is estimated based on historical write offs the age of past due receivables as well as consideration for forward looking expectations where appropriate Accounts receivables are written off when recoverability is assessed as being remote The charges associated with the allowance for credit losses are recognized in selling general and administrative expenses SG A Subsequent recoveries of amounts previously written off are credited to SG A
Advertising costs including digital television radio and print are expensed when the advertisement first appears Certain marketing or co op contributions are received to fund marketing activities of specific incremental and identifiable costs incurred to promote suppliers products or activities which are recorded in SG A as reductions of the related marketing costs
The assets and liabilities of acquired businesses are recorded at their fair values at the date of acquisition The excess of the purchase price over the fair value of the identifiable assets acquired and liabilities assumed is recorded as goodwill During the measurement period which is up to one year from the acquisition date the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill Upon conclusion of the measurement period any subsequent adjustments are recorded to earnings
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 consolidated balance sheets
The following table provides a reconciliation of cash cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows
The Company monitors credit risk associated with those financial institutions with which it conducts significant business Credit risk including but not limited to counterparty non performance under derivative instruments and our credit facilities is not considered significant as we primarily conduct business with large well established financial institutions This risk is managed by setting credit and settlement limits for approved counterparties In addition the Company has established guidelines that it follows regarding counterparty credit ratings which are monitored regularly seeking to limit its exposure to any individual counterparty The concentration of credit risk was deemed not significant as of July 31 2025 and 2024
Cost of sales includes the cost of goods purchased for resale net of earned rebates and the cost of bringing inventory to a sellable location and condition As the Company does not produce or manufacture products its inventories are finished goods and therefore depreciation related to warehouse facilities and equipment is presented separately within operating expenses
Derivative financial instruments in particular interest rate swaps and foreign exchange swaps are used to manage the financial risks arising from the Company s business activities and the financing of those activities Derivatives are not used for speculative purposes or trading activities and have generally not been significant Derivatives are measured at their fair values and included in other assets and other liabilities in the consolidated balance sheets The Company s derivatives are not material
The applicable accounting guidance for fair value measurements established a fair value hierarchy The fair value hierarchy established under this guidance prioritizes the inputs used to measure fair value The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities Level 1 measurement and the lowest priority to unobservable inputs Level 3 measurement The three levels of the fair value hierarchy are as follows
Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis
Level 2 Pricing inputs are other than quoted prices in active markets included in Level 1 which are either directly or indirectly observable as of the reporting date Level 2 includes those financial instruments that are valued using models or other valuation methodologies These models are primarily industry standard models that consider various assumptions including quoted prices time value volatility factors and current market and contractual prices for the underlying instruments as well as other relevant economic measures Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace
Level 3 Pricing inputs include significant inputs that are generally less observable from objective sources These inputs may be used with internally developed methodologies that result in management s best estimate of fair value from the perspective of a market participant
Results of operations of foreign subsidiaries are translated into U S dollars using average exchange rates during the year The assets and liabilities of those subsidiaries are translated into U S dollars using exchange rates at the current rate of exchange on the last day of the reporting period These foreign currency translation adjustments are included in accumulated other comprehensive loss Foreign currency transaction gains and losses are not material
In the event that the Company disposes of a subsidiary that uses a non U S dollar functional currency the gain or loss on disposal recognized in the consolidated statements of earnings includes the cumulative currency translation adjustments attributable to the subsidiary
Goodwill represents the excess of the cost of an acquisition over the fair value of the Company s share of the net identifiable assets of the acquired business at the date of acquisition Goodwill is not amortized but is carried at cost less accumulated impairment losses The Company performs an annual impairment assessment in the fourth quarter of each fiscal year or more frequently if changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount
The annual impairment assessment begins with an option to assess qualitative factors to determine whether a quantitative evaluation is appropriate for determining potential goodwill impairment The quantitative impairment assessment compares the fair value of the reporting unit to its carrying value The reporting units represent the lowest level within the Company at which the associated goodwill is monitored for management purposes and are based on the markets where the business operates
The fair value of a reporting unit is determined using the income approach which requires significant assumptions regarding future operations and the ability to generate cash flows These assumptions include a forecast of future operating cash flows capital requirements and a discount rate Where the carrying value of a reporting unit exceeds the fair value an impairment loss is recorded in the consolidated statements of earnings
Definite lived intangible assets are primarily comprised of customer relationships trade names and other intangible assets acquired as part of business combinations and are capitalized separately from goodwill and carried at cost less accumulated amortization and accumulated impairment losses
Computer software that is not integral to an item of property plant and equipment is recognized separately as an intangible asset and is carried at cost less accumulated amortization and accumulated impairment losses Costs may include software licenses and external and internal costs directly attributable to the development design and implementation of the computer software Training and data conversion costs are expensed as incurred
Customer relationship amortization is calculated using a systematic accelerated approach based on the timing of future expected cash flows The straight line method is used for all other intangible assets
The recoverability of long lived assets including property plant and equipment right of use assets and definite lived intangible assets is evaluated when events or changes in circumstances indicate that the carrying amounts of an asset group may not be recoverable Long lived depreciable and amortizable assets are tested for impairment in asset groups which are defined as the lowest level of assets that generate identifiable cash flows that are largely independent of the cash flows of other asset groups A potential impairment has occurred for an asset group if projected future undiscounted cash flows expected to result from the use and eventual disposition of the assets are less than the carrying amounts of the assets
Inventories which comprise goods purchased for resale are stated at the lower of cost or net realizable value Cost is primarily determined using the average cost method The cost of goods purchased for resale includes import and custom duties transport and handling costs freight and packing costs and other attributable costs less trade discounts and rebates Net realizable value is the estimated selling price in the ordinary course of business less applicable variable selling expenses
Inventory reserves are recorded against slow moving obsolete and damaged inventories for which the net realizable value is estimated to be less than the cost The reserve is estimated based on the Company s current knowledge and judgment with respect to inventory levels sales trends and historical experience
The Company enters into contractual arrangements for the utilization of certain non owned assets These principally relate to property for the Company s branches distribution centers and offices which have varying terms including extension and termination options and periodic rent reviews
The Company determines if an arrangement is a lease at inception Leases are evaluated at commencement to determine proper classification as an operating lease or a finance lease The Company s leases primarily consist of operating leases The Company recognizes a right of use ROU asset and lease liability at lease commencement based on the present value of lease payments over the lease term
The Company generally uses its incremental borrowing rate as the discount rate as most of the Company s lease arrangements do not provide an implicit borrowing rate The incremental borrowing rate is estimated using a combination of U S Treasury note rates corresponding to lease terms as well as a blended credit risk spread
For operating leases fixed lease payments are recognized on a straight line basis over the lease term The Company has elected to not separate lease and non lease components Certain lease agreements include variable lease payments that depend on an index as well as payments for non lease components such as common area maintenance and certain pass through operating expenses such as real estate taxes and insurance In instances where these payments are fixed they are included in the measurement of our lease liabilities and when variable are excluded and recognized in the period in which the obligations for those payments are incurred The Company s leases do not contain any material residual value guarantees or payments under purchase and termination options which are reasonably certain to be exercised
Lease terms are initially determined as the non cancelable period of a lease adjusted for options to extend or terminate a lease that are reasonably certain to be exercised Generally the Company s real estate leases have initial terms of three to 10 years and up to four extension periods that range from two to five years each Renewal options are typically not included in the lease term as it is not reasonably certain at commencement date that the Company would exercise the extension options Lease liabilities are subsequently measured at amortized cost using the effective interest method
Right of use assets are carried at cost less accumulated amortization impairment losses and any subsequent remeasurement of the lease liability Initial cost comprises the lease liability adjusted for lease payments at or before the commencement date lease incentives received initial direct costs and an estimate of restoration costs The Company recognizes minimum rent expense on a straight line basis over the lease term
Leases that have an original term of 12 months or less are not recognized on the Company s consolidated balance sheet and the lease expense related to those short term leases is recognized over the lease term
PPE is recorded at cost less accumulated depreciation Cost includes expenditures necessary to acquire and prepare PPE for its intended use In addition subsequent costs that increase the productive capacity or extend the useful life of PPE are capitalized The cost of repairs and maintenance are expensed as incurred
The Company has agreements with a number of its suppliers whereby volume based rebates and other discounts are received in connection with the purchase of goods for resale from those suppliers supplier rebates
The majority of volume based supplier rebates are determined by reference to guaranteed rates of rebate These calculations require minimal judgment A small proportion of volume based supplier rebates are subject to tiered targets where the rebate percentage increases as volumes purchased reach agreed targets within a set period of time The Company estimates supplier rebates based on forecasts which are informed by historical trading patterns current performance and trends
Rebates relating to the purchase of goods for resale are accrued as earned and are recorded initially as a deduction to the cost of inventory with a subsequent reduction in cost of sales when the related goods are sold When the Company has the legal right of offset and net settles with the supplier the supplier rebate receivables are offset with amounts owed to the supplier at the balance sheet date and are included within accounts payable When the Company does not have the legal right of offset the supplier rebate receivables are recorded in prepaid and other current assets in the consolidated balance sheets As of July 31 2025 and 2024 rebates owed to the Company were 471 million and 491 million respectively
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 performance obligations are satisfied when control of the product is transferred to the customer which is the point they are delivered to or collected by the customer Therefore shipping and handling activities are not deemed to be a separate performance obligation Payment terms between the Company and its customers vary by the type of customer country of sale and the products sold The Company does not have significant financing components in its contracts and the payment due date is typically shortly after sale
In some limited cases the Company s contracts contain services and products that are deemed one performance obligation as the services are highly interdependent and interrelated with the products or are significantly integrated with the products Contracts in which services provided are a separately identifiable performance obligation are not material
In some instances goods are delivered directly to the customer by the supplier The Company has concluded that it is the principal in these transactions as it is primarily responsible to the customer for fulfilling the obligation and has the responsibility for identifying and directing the supplier to deliver the goods to the customer
The Company offers a right of return to its customers for most goods sold Revenue is reduced by the amount of expected returns in the period in which the related revenue is recorded with a corresponding liability recorded in other current liabilities The Company also recognizes a returned asset in prepaid and other current assets with a corresponding adjustment to cost of sales for the right to recover the returned goods measured at the former carrying value less any expected recovery costs
Share based incentives are provided to associates under the Company s long term incentive and all employee share purchase plans The Company recognizes a compensation cost in respect of these plans based on the fair value of the awards as determined at the date of grant and is not subsequently remeasured unless the conditions on which the award was granted are modified Compensation cost is generally recognized on a straight line basis over the vesting period utilizing cumulative catch up for changes in estimates of non market performance conditions Estimates of expected forfeitures are made at the date of grant based on historical experience to appropriately reduce expense for those grants expected not to satisfy service conditions or based on expected performance for non market performance conditions The estimated forfeitures are adjusted when facts and circumstances indicate the prior estimate is no longer appropriate
The Company accounts for income taxes under the asset and liability method which requires the recognition of deferred tax assets DTAs and deferred tax liabilities DTLs for the expected future tax consequences of events that have been included in the financial statements Under this method the Company determines DTAs and DTLs based on the differences between the financial reporting and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse The effect of a change in tax rates on DTAs and DTLs is recognized in income in the period that includes the enactment date For a tax paying component of an entity and within a particular tax jurisdiction all deferred tax liabilities and assets as well as any related valuation allowance shall be offset and presented as a single non current amount
The Company recognizes DTAs to the extent that it believes these assets are more likely than not to be realized In making such a determination the Company considers all available positive and negative evidence including future reversals of existing taxable temporary differences projected future taxable income tax planning strategies carryback potential if permitted under the tax law and results of recent operations If the Company determines that it would be able to realize our DTAs in the future in excess of their net recorded amount the DTA valuation allowance would be appropriately adjusted which would reduce the provision for income taxes
The Company records uncertain tax positions in accordance with Accounting Standard Codification ASC 740 on the basis of a two step process in which 1 it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and 2 for those tax positions that meet the more likely than not recognition threshold the Company recognizes the largest amount of tax benefit that is more than 50 likely to be realized upon ultimate settlement with the related tax authority
The Company maintains a supplier financing program with a third party financial institution wherein certain of the Company s shipping and logistics providers in the United States can opt to receive early payment from the third party financial institution at a nominal discount Such payment terms are independently negotiated between the third party financial institution and the shipping and logistics providers 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 consolidated balance sheets
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
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
The Company reports its financial results of operations on a geographical basis in the following two reportable segments which are also operating segments United States and Canada Each segment generally derives its revenues in the same manner as described in Note 1
The Company uses adjusted operating profit as its measure of segment profit 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
This segment structure reflects the financial information and reports used by the Company s management specifically its chief operating decision makers CODM to make decisions regarding the Company s business including resource allocations and performance assessments as well as the current operating focus in compliance with ASC 280
The significant expenses reviewed by the CODM include operating costs and costs of sales The operating costs evaluated by the CODM are primarily SG A including depreciation expense on long lived assets and software amortization expense
The CODM use segment adjusted operating profit to evaluate performance and allocate resources including employees property and financial or capital resources in conjunction with the annual budget process as well as during periodic business reviews
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
In fiscal 2025 the Company became a tax resident in the United States As such the categories in connection with certain disclosure requirements have changed and are therefore reflected separately from prior years
For fiscal years 2024 and 2023 the Company was a tax resident in the U K Therefore the Company utilized the U K statutory rate Since the change in statutory rate transitioned between fiscal years the Company utilized a prorated statutory rate during fiscal 2023
As a result of the steps taken in the fourth quarter of fiscal 2024 to complete the Merger the Company recognized one time non cash deferred tax charges of 137 million composed of a reduction in deferred tax assets of 90 million related to tax losses that were no longer expected to be realizable and an increase in valuation allowance of 47 million related to U K deferred tax assets no longer expected to be realizable as well the tax impact of non deductible expenses related to the Merger
We recognize a valuation allowance if based on the weight of available evidence it is more likely than not that some portion or all of a deferred tax asset will not be realized Our valuation allowance at July 31 2025 related to foreign net capital loss carryforwards in the U K and Canada as well as deferred tax assets in the U K which are not expected to be realizable Our valuation allowance at July 31 2024 relates to foreign net capital loss carryforwards in the U K and Canada which are not expected to be realizable For the year ended July 31 2025 there was a 1 million change in the valuation allowance 2024 47 million and 2023 4 million
As of July 31 2025 the Company had U S federal and state operating loss carryforwards for income tax purposes of 8 million and 24 million respectively Some of the loss carryforwards may expire at various dates through 2039 At July 31 2025 the Company had 369 million of loss carryforwards related to international operations The Company s foreign losses and
As of July 31 2025 the unrecognized tax benefits that if recognized would impact the effective tax rate were 126 million 2024 151 million and 2023 144 million The Company recognizes interest and penalties in the income tax provision in its consolidated statements of earnings As of July 31 2025 the Company had accrued interest of 32 million 2024 28 million and 2023 23 million For the year ended July 31 2025 the interest expense included in income tax expense was 4 million 2024 5 million and 2023 6 million Penalties related to these positions were not material for all periods presented
The total amount of unrecognized tax benefits relating to the Company s tax positions is subject to change based on future events including but not limited to the settlement of ongoing tax audits and assessments and the expiration of applicable statutes of limitations The Company anticipates that the balance of gross unrecognized tax benefits excluding interest and penalties will be reduced by 61 million during the next 12 months primarily due to statute of limitation expirations However the outcomes and timing of such events are highly uncertain and changes in the occurrence expected outcomes and timing of such events could cause the Company s current estimate to change materially in the future
We consider foreign earnings of specific subsidiaries to be indefinitely reinvested These permanently reinvested earnings of foreign subsidiaries at July 31 2025 amounted to 800 million 2024 795 million The Company is not recording a deferred tax liability if any on such amounts If at some future date the Company ceases to be permanently reinvested in these specific foreign subsidiaries the Company may be subject to foreign withholding and other taxes on these undistributed earnings and may need to record a deferred tax liability for any outside basis difference on these specific foreign subsidiaries In addition interest payments made between the U S and U K are anticipated to be exempt from withholding taxes however if Ferguson should fail to meet treaty requirements withholding taxes may apply to these payments
The Company files income tax returns in the U S U K and in various other foreign state and local jurisdictions We are subject to tax audits in the various jurisdictions until the respective statutes of limitation expire The Company is no longer subject to U S income tax examinations for fiscal years before 2022 with the exception of fiscal year 2020 With respect to the U K the company is no longer subject to examinations by tax authorities for fiscal years before 2020 There are ongoing U S state and local audits and other foreign audits covering fiscal 2013 2023 We do not expect the results from any ongoing income tax audit to have a material impact on our consolidated financial condition results of operations or cash flows
Variable lease costs represent costs incurred in connection with non lease components such as common area maintenance and certain pass through operating expenses such as real estate taxes and insurance
The future minimum rental payments for the next five fiscal years under operating lease obligations having initial or remaining non cancelable lease terms in excess of one year are summarized as follows
As of July 31 2025 the Company had 63 million of non cancelable operating leases with terms similar to the Company s current operating leases that have not yet commenced These leases are expected to commence in fiscal year 2026
The Company completed its annual impairment analysis for goodwill during the fourth quarter of fiscal 2025 Based on the results of the Company s analysis the Company concluded that the fair value of each reporting unit was substantially in excess of its respective carrying value There were no impairment charges related to goodwill in fiscal 2025 2024 or 2023
In June 2015 and November 2017 Wolseley Capital Inc Wolseley Capital a wholly owned subsidiary of the Company privately placed fixed rate notes in an aggregate principal amount of 800 million and 355 million respectively collectively the Private Placement Notes Interest on the Private Placement Notes is payable semi annually
As of July 31 2025 and 2024 the Company had interest rate swaps with a notional value of 150 million and 300 million respectively in connection with the Private Placement Notes entered into in November 2017 See Note 10
Wolseley Capital s obligations under the note and guarantee agreements are unconditionally guaranteed by the Ferguson Enterprises Inc FEI and Ferguson UK Holdings Limited an indirect subsidiary of the Company FUKHL Wolseley Capital may repay the outstanding Private Placement Notes in whole or in part at any time at a price equal to 100 of the principal amount being prepaid plus a make whole prepayment premium
The note and guarantee agreements relating to the Private Placement Notes contain certain customary affirmative covenants as well as certain customary negative covenants that among other things restrict subject to certain exceptions the Company s non guarantor subsidiaries ability to incur indebtedness and the Company s ability to enter into affiliate transactions grant liens on its assets sell assets or engage in acquisitions mergers or consolidations In addition subject to certain exceptions the note and guarantee agreements require us to maintain a leverage ratio
The outstanding Private Placement Notes also contain customary events of default Upon an event of default and an acceleration of the Private Placement Notes the Company must repay the outstanding Private Placement Notes plus a make whole premium and accrued and unpaid interest
Subsequent to fiscal 2025 in September 2025 FEI issued an additional 750 million aggregate principal amount of Unsecured Senior Notes maturing in March 2031 the 2031 Senior Notes The 2031 Senior Notes bear interest at a rate of 4 35 payable semi annually
The Unsecured Senior Notes issued by Ferguson Finance are fully and unconditionally guaranteed by FUKHL and FEI and the Unsecured Senior Notes issued by FEI are fully and unconditionally guaranteed by FUKHL each on a direct unsubordinated and unsecured senior basis and generally carry the same terms and conditions with interest paid semi annually The Unsecured Senior Notes may be redeemed in whole or in part i at 100 of the principal amount on the notes being redeemed plus a make whole prepayment premium at any time prior to certain specified periods up to three months before the maturity date the Notes Par Call Date or ii after the Notes Par Call Date at 100 of the principal amount of the notes being redeemed plus accrued and unpaid interest on the principal being redeemed
In April 2025 the Company entered into a revolving credit agreement with JPMorgan Chase Bank N A as administrative agent FUKHL as guarantor and certain other lenders the Revolving Credit Agreement providing an unsecured revolving credit facility in an aggregate committed amount of 1 5 billion that matures April 2 2030 the Revolving Facility The Revolving Credit Agreement provides the Company with the ability to increase from time to time the aggregate capacity of the facility by 500 million under certain conditions including the receipt of additional or increased lender commitments Capitalized terms used in this summary have the meaning set forth the Revolving Credit Agreement
U S Dollar denominated loans bear interest at either Term SOFR Rate plus a margin or alternatively at Base Rate plus a margin Canadian Dollar denominated loans bear interest at Adjusted Term CORRA Rate plus a margin In addition the Company will pay a commitment fee on any unused commitments
Upon entering into the Revolving Credit Agreement the Company terminated its existing committed 1 35 billion Multicurrency Revolving Facility Agreement originally dated March 10 2020 as amended and restated by that certain Amendment and Restatement Agreement dated October 7 2022 Multicurrency Revolving Facility
The Company maintains a Receivables Securitization Facility the Receivables Facility which is primarily governed by the Receivables Purchase Agreement dated July 31 2013 as amended from time to time among the following parties the Parties the Company Ferguson Receivables LLC FRL and certain other subsidiaries of the Company the conduit purchasers committed purchasers and letter of credit banks from time to time party thereto and Royal Bank of Canada as administrative agent the Receivables Purchase Agreement
The Receivables Facility consists of funding for up to 915 million terminating on October 29 2027 The Company has the ability to increase the aggregate total available amount under the Receivables Facility up to a total of 1 5 billion from time to time subject to lender participation Under the Receivables Facility creditors of FRL have no recourse to the Company s general credit and FRL s assets can be used only to settle FRL s obligations Interest is payable under the Receivables Facility at a rate of Term SOFR as defined in the Receivables Facility plus a credit spread adjustment of 10 basis points plus a margin or in the case of the lending banks that fund through a conduit by the issuance of commercial paper at a rate equal to the per annum rate payable of the related commercial paper issued by such conduit plus a margin The interest rate under the Receivables Facility was approximately 5 25 as of July 31 2025 The Company does not factor its accounts receivable
The Receivables Facility contains affirmative and negative covenants that among other things restrict subject to certain exceptions the ability of the Company and its subsidiaries party thereto from granting additional liens on the accounts receivable selling certain assets or engaging in acquisitions mergers or consolidations or in the case of the borrower incurring other indebtedness
The Receivables Facility also contains events of default and cross default provisions including requirements that our performance in relation to accounts receivable remains at set levels specifically among other things relating to timely payments being received from debtors on the accounts receivable and to the amount of accounts receivable written off as bad debt and that a required level of accounts receivable be generated and available to support the borrowings under the arrangements
The Company and FUKHL previously maintained a Credit Agreement dated October 7 2022 as amended from time to time the Term Loan Agreement providing for term loans the Term Loan in an aggregate principal amount of 500 million In October 2024 the Term Loan was voluntarily repaid in full and the Term Loan Agreement was terminated in accordance with its terms
Debt maturities excluding of unamortized original issue discounts unamortized debt issuance costs fair value hedge adjustments and finance lease obligations for the next five fiscal years and thereafter are as follows
The Company s derivatives relate principally to interest rate swaps designated as fair value hedges to manage its exposure to interest rate movements on its debt They are measured at fair value on a recurring basis through profit and loss using forward interest curves which are Level 2 inputs The Company s derivatives are not material The notional amount of the Company s outstanding fair value hedges as of July 31 2025 was 150 million 2024 300 million
The fair value of the Company s equity investments is measured on a recurring basis using market derived valuation methods upon occurrence of orderly transactions for identical or similar assets which is deemed a Level 3 input The fair value of equity investments was 39 million as of July 31 2025 2024 28 million and the activity during fiscal 2025 was not material
Due to their short maturities or their insignificance the carrying amounts of cash and cash equivalents accounts receivable accounts payable accrued liabilities and short term debt approximated their fair values at July 31 2025 and 2024
The difference in fair values results from changes since issuance in the corporate debt markets and investor preferences The fair value of the Unsecured Senior Notes and Private Placement Notes are classified as Level 2 fair value measurements and were estimated using observable market prices as provided in secondary markets that consider the Company s credit risk and market related conditions
The Company is from time to time involved in various legal proceedings considered to be ordinary course of business in relation to among other things the products that we supply contractual and commercial disputes and disputes with employees Provision is made if on the basis of current information and professional advice liabilities are considered probable In the case of unfavorable outcomes the Company may benefit from applicable insurance protection The Company does not expect any of its pending legal proceedings to have a material adverse effect on its results of operations financial position or cash flows
The Company provides various retirement benefits to eligible employees including pension benefits associated with defined benefit plans contributions to defined contribution plans post retirement benefits and other benefits Eligibility requirements and benefit levels vary depending on associate location
The Company provides defined benefit plans to its employees in Canada The majority of the Canadian defined benefit plans are funded Post retirement benefit obligations are not material and have been included in all amounts presented herein
The legacy U K defined benefit plan the U K Plan is the Wolseley Group Retirement Benefits Plan which provides benefits based on final pensionable salaries The assets are held in separate trustee administered funds The plan was closed to new entrants in 2009 closed to future service accrual in December 2013 and closed to future non inflationary salary accrual on the disposal of the U K business in 2021 In 2021 prior to the disposal of the U K business Wolseley UK Limited the U K Plan liabilities were transferred to FUKHL
In 2017 the Company secured a buy in insurance policy with Pension Insurance Corporation for the U K Plan This policy covers all benefit payments to a certain portion of participants in the plan The insured liabilities are exactly equal to the fair value of the related insurance assets
On September 9 2025 subsequent to the fiscal year end the trustee of the U K Plan purchased a bulk annuity policy the September Buy In Policy to insure the remaining uninsured U K Plan liabilities Under the September Buy In Policy the U K Plan s assets along with a Company contribution of 41 million have been transferred to an insurance provider in return for a qualifying insurance policy that will provide an income stream equivalent to the remaining obligations to the covered U K Plan s members As a result the Company is no longer required to make deficit reduction contributions but expects to make ongoing contributions to cover the U K Plan s expenses and other payments that may be required
As required by United Kingdom pensions regulation the U K Plan completed its triennial actuarial valuation exercise which is measured on a technical provisions basis based on the U K Plan s financial position as of April 30 2022 The triennial valuation originally resulted in required contributions by the Company of 133 million to be spread over the period to January 31 2026 of which the Company has paid 72 million as of July 31 2025 In connection with the September Buy In Policy the Company has satisfied all obligations to date under the triennial valuation occurring in April 2022
The Company determines the discount rate primarily by reference to rates on high quality long term corporate and government bonds that mature in a pattern similar to the expected payments to be made under the various plans
The Company has established strategic asset allocation percentage targets for significant asset classes with the aim of achieving an appropriate balance between risk and return The Company periodically revises asset allocations where appropriate in an effort to improve return and or manage risk The expected return on plan assets is determined based on the expected long term rate of return on plan assets and the market related value of plan assets The market related value of plan assets is based on long term expectations given current investment objectives and historical results
The Company s investment strategy for its funded post employment plans is decided locally and if relevant by the trustees of the plan and takes account of the relevant statutory requirements The Company s objective for the investment strategy is to achieve a target rate of return in excess of the increase in the liabilities while taking an acceptable amount of investment risk relative to the liabilities This objective is implemented by using specific allocations to a variety of asset classes that are expected over the long term to deliver the target rate of return
The principal plans operated for employees in the United States are defined contribution plans which are established in accordance with 401 k rules in the United States The Company s Canadian employees are covered by defined contribution plans including a Post Retirement Benefit Plan and Supplemental Executive Retirement Plan Under the Canadian plans the Company s employees are able to make personal contributions
In addition Ferguson Enterprises LLC a subsidiary of the Company sponsors a non qualified deferred compensation plan for the benefit of U S based executives and certain other senior associates For the year ended July 31 2025 the Company s obligations related to the plan total 408 million 2024 378 million including a current portion of the liability of 35 million 2024 28 million The Company has investments in Company owned life insurance policies that are intended to fund these obligations however these assets are subject to the general claims of the Company s creditors The assets are recorded at cash surrender value with changes recognized in earnings The non current assets total 409 million 2024 373 million
Two Employee Benefit Trusts had been previously established in connection with the Company s discretionary share award plans and long term incentive plans During fiscal 2024 each of these trusts were terminated with all shares disbursed or sold
In March 2025 the Company extended the share repurchase program by an additional 1 0 billion As such the Company is purchasing shares under an authorization that allows up to 5 0 billion in share repurchases As of July 31 2025 the Company has completed 4 0 billion in share repurchases under the authorized program
As of August 1 2024 the Company canceled all ordinary shares held in treasury in connection with its completion of the Merger As a result in the first quarter of fiscal 2025 30 827 929 ordinary shares held in treasury were canceled 201 343 253 of outstanding ordinary shares not held in treasury were canceled and 201 343 253 shares of common stock were issued as consideration therefor
The Ferguson Enterprises Inc 2023 Omnibus Equity Incentive Plan the Omnibus Plan provides authorization for the granting of share based compensation awards to the Company s key employees and non employee directors The Omnibus Plan provides for the issuance of up to 6 750 000 shares of the Company s common stock subject to share recycling and adjustment provisions All share based compensation awards granted subsequent to shareholder approval of the Omnibus Plan at the annual general meeting on November 28 2023 have been granted under the Omnibus Plan
Since November 2023 no new awards have been granted under the Ferguson Enterprises Inc Ordinary Share Plan 2019 the Ferguson Enterprises Inc Performance Ordinary Share Plan 2019 and the Ferguson Enterprises Inc Long Term Incentive Plan 2019
Time vested restricted stock units RSU vest over time RSU awards granted prior to fiscal 2025 cliff vest typically at the end of three years RSU awards granted in fiscal 2025 will vest in equal annual installments over three years The fair value of these awards is based on the closing share price on the date of grant
Single metric performance stock units PSU typically vest following three year performance cycles The number of shares issued will vary based upon the Company s performance against an adjusted operating profit measure The fair value of the award is based on the closing share price on the date of grant
Multiple metric performance stock units granted to certain members of management PSU EX typically vest following three year performance cycles The number of shares issued will vary based upon the Company s performance against pre determined goals for adjusted EPS growth diluted return on capital employed ROCE and relative total shareholder return rTSR The fair value of awards vesting based upon EPS growth diluted and ROCE are equal to the closing share price on the date of grant and the fair value of rTSR awards are determined using a Monte Carlo simulation
In October 2024 the Company granted 65 760 stock options with an exercise price equal to the closing share price of the Company s common stock on the last trading day prior to the date of grant These options vest and become exercisable over three years in equal annual installments beginning one year from the date of grant and expire 10 years from the date of grant The fair value of the Company s stock options was estimated on the date of grant using the Black Scholes option pricing model Since the grant date 6 803 options have been forfeited The share based compensation expense of these stock options is not material
Ferguson Enterprises Inc Employee Share Purchase Plan 2021 the ESPP provides for a limit of 20 million shares of common stock that can be awarded under the plan subject to certain guidelines set forth in the plan
As of July 31 2025 19 5 million shares of common stock remain available for allotment under the ESPP The exercise price per share of common stock is prescribed by the Board for each offering period and may not be less than 85 of the lesser of the fair market value of common stock on the date of grant and the fair market value of common stock on the date of exercise During fiscal 2025 there were no shares purchased under the ESPP The expense associated with the ESPP is not material
businesses during fiscal 2025 and 2024 respectively Each of the acquired businesses is generally engaged in the distribution of plumbing HVAC or infrastructure related products and was acquired to support growth In each of the Company s acquisitions the Company has purchased substantially all of the acquiree s business and therefore all transactions have been accounted for as a business combination pursuant to FASB Accounting Standards Codification ASC 805
The following table summarizes the preliminary purchase price allocation for the assets acquired and liabilities assumed in regards to the Company s respective acquisitions having occurred as of July 31 in fiscal 2025 and 2024
The fair values of the assets acquired in fiscal 2025 are considered preliminary and are based on management s best estimates Further adjustments may be necessary in connection with acquisitions completed in fiscal 2025 when additional information becomes available during the measurement period about events that existed at the date of acquisition There were no material adjustments in the current fiscal year that related to the closing of the measurement period of acquisitions made in the prior fiscal year As of the date of this Annual Report the Company has made all material adjustments related to acquisitions in fiscal 2025
The goodwill on these acquisitions is attributable to the anticipated profitability of the new markets and product ranges to which the Company has gained access and additional profitability operating efficiencies and other synergies available in connection with existing markets Goodwill acquired during fiscal 2025 that was attributed to the United States and Canada segments were 99 million 2024 91 million and 17 million 2024 33 million respectively Goodwill acquired in fiscal 2025 that is expected to be deductible for tax purposes is 102 million 2024 90 million
Deferred consideration represents the expected payout due to the sellers of certain acquired businesses that is subject to either 1 a contractual settle up period or 2 a contingency related to contractually defined performance metrics If the deferred consideration is contingent on achieving performance metrics the liability is estimated using assumptions regarding the expectations of an acquiree s ability to achieve the contractually defined performance metrics over a period of time that typically spans one to three years When ultimately paid deferred consideration is reported as a cash outflow from financing activities
The businesses acquired in fiscal 2025 contributed 112 million to net sales and 5 million in profit to the Company s income before income tax including acquired intangible asset amortization transaction and integration costs for the period between the applicable date of acquisition and July 31 2025 Acquisition costs in fiscal 2025 was 3 million 2024 5 million Acquisition costs are expensed as incurred and included in SG A in the Company s consolidated statements of earnings
The unaudited pro forma results presented herein do not necessarily represent financial results that would have been achieved had the acquisition actually occurred at the beginning of the prior fiscal year
In fiscal 2024 and 2023 the Company purchased 8 million and 27 million respectively of delivery installation and related administrative services from companies that were significantly influenced by a Ferguson Non Employee Director at the time such services were acquired The services were purchased on an arm s length basis In December 2023 this related party relationship ended As such subsequent services provided by these companies did not constitute related party transactions No material amounts are due to such companies No such related parties transactions occurred in fiscal 2025 that require disclosure under ASC 850
During fiscal 2025 the Company recorded corporate restructuring expenses that were primarily related to transition activities following the establishment of our parent company s domicile in the United States
During fiscal 2025 the Company implemented targeted actions to streamline operations enhancing speed and efficiency to better serve customers and drive further profitable growth As a result of these actions non recurring business restructuring expenses of 73 million were incurred primarily in the United States The charges primarily related to severance costs of 45 million as well as 15 million of non cash branch and facility costs mainly related to lease impairments The Company does not expect charges in connection with these actions including any future charges to be material
During fiscal 2023 the Company recorded charges of 18 million related to the closure of certain smaller underperforming branches in the United States primarily related to impairment of lease assets and related fixed assets This item was included in the restructuring and impairments expenses line of the Company s consolidated statements of earnings
In fiscal 2023 the Company recorded a non cash charge of 107 million in connection with previously capitalized software costs in the United States This item was included in the restructuring and impairments expenses line of the Company s consolidated statements of earnings No such impairments were recorded in fiscal years 2025 and 2024
As of the end of the period covered by this Annual Report our management with the participation of our Chief Executive Officer and Chief Financial Officer has carried out an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a 15 e or 15d 15 e promulgated under the Exchange Act as of July 31 2025 The term disclosure controls and procedures means controls and other procedures that are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded processed summarized and reported within the time periods specified in the rules and forms of the SEC Disclosure controls and procedures include without limitation controls and procedures designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to management including our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding our required disclosure In designing and evaluating our disclosure controls and procedures management recognizes that any controls and procedures no matter how well conceived and operated can only provide reasonable assurance that the objectives of the disclosure controls and procedures are met
Based on their evaluation as of the end of the period covered by this Annual Report our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rule 13a 15 f promulgated under the Exchange Act Under the supervision and with the participation of our management including our Chief Executive Officer and Chief Financial Officer we conducted an evaluation of the effectiveness of our internal control over financial reporting as of July 31 2025 based on the framework in Internal Control Integrated Framework 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission Based on our evaluation our management concluded that our internal control over financial reporting was effective as of July 31 2025 in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U S GAAP
The effectiveness of our internal control over financial reporting as of July 31 2025 has been audited by Deloitte Touche LLP an independent registered public accounting firm as stated in their report which is included herein
There were no changes in our internal control over financial reporting during the fiscal quarter ended July 31 2025 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting
issued by the Committee of Sponsoring Organizations of the Treadway Commission COSO In our opinion the Company maintained in all material respects effective internal control over financial reporting as of July 31 2025 based on criteria established in
We have also audited in accordance with the standards of the Public Company Accounting Oversight Board United States PCAOB the consolidated financial statements as of and for the year ended July 31 2025 of the Company and our report dated September 26 2025 expressed an unqualified opinion on those financial statements
The Company s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management s Report on Internal Controls over Financial Reporting Our responsibility is to express an opinion on the Company s internal control over financial reporting based on our audit We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audit in accordance with the standards of the PCAOB Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects Our audit included obtaining an understanding of internal control over financial reporting assessing the risk that a material weakness exists testing and evaluating the design and operating effectiveness of internal control based on the assessed risk and performing such other procedures as we considered necessary in the circumstances We believe that our audit provides a reasonable basis for our opinion
A company s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles A company s internal control over financial reporting includes those policies and procedures that 1 pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company 2 provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and 3 provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company s assets that could have a material effect on the financial statements
Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Also projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate
The Compensation Committee of the Board approved on September 25 2025 the following overall changes to the pay structure for the Company s Chief Operating Officer COO and Chief Legal Officer Corporate Secretary CLO for the transition period
For the transition period the short term incentive STI scorecard metric is adjusted operating profit 100 and the range of achievement levels are threshold at 85 target at 100 and maximum at 110 reflecting a decrease for threshold from 90 to 85 from the fiscal 2025 STI achievement levels
The long term incentive LTI program components and their weighting remain unchanged rTSR adjusted EPS growth diluted and ROCE 33 3 each The LTI design for the transition period also remained the same comprised of an award mix of 50 PSUs 30 RSUs and 20 stock options
Information required by this item will be contained in the 2025 Proxy Statement under the headings Proposal 1 Election of Directors Board Committees and Oversight and Executive Compensation Compensation Discussion and Analysis Management of Compensation Related Risks Oversight Policies Insider Trading Policy Anti Hedging and Anti Pledging which information is incorporated herein by reference
Our Code of Conduct is applicable to all directors officers and associates A copy of our Code of Conduct is available on our website at corporate ferguson com under the Governance Documents page of the Investors Corporate Governance tab We intend to satisfy the disclosure requirement regarding amendment to or waiver from a provision of our Code of Conduct by posting such information at the website location specified above
Information required by this item will be contained in the 2025 Proxy Statement under the headings Board Committees and Oversight Committees of the Board Compensation Committee Interlocks and Insider Participation Compensation Committee Report and Executive Compensation which information is incorporated herein by reference
Except as set forth below under the heading Equity Compensation Plan Information information required by this item will be contained in the 2025 Proxy Statement under the heading Security Ownership of Certain Beneficial Owners and Management which information is incorporated herein by reference
145 762 of these shares were subject to share options outstanding under the ESPP 1 482 of these shares were subject to share options outstanding under the Ferguson Enterprises Inc International Sharesave Plan 2019 ISP 68 974 of these shares were subject to share awards outstanding under the Ferguson Enterprises Inc Long Term Incentive Plan 2019 LTIP and 403 382 of these shares were subject to share awards outstanding under the Omnibus Plan
166 189 of these shares were subject to share awards outstanding under the Ferguson Enterprises Inc Ordinary Share Plan 2019 OSP 415 665 of these shares were subject to share awards outstanding under the Ferguson Enterprises Inc Performance Ordinary Share Plan 2019 POSP
19 498 954 shares of common stock remain available to be awarded under the ESPP The ESPP provides for a limit of 20 000 000 shares of common stock that can be awarded under the plan subject to certain guidelines set forth in the plan that are consistent with the limits set forth as described in footnote 4
12 000 shares of common stock remain available for allotment under the rules of the ISP which provides for a limit of 12 000 shares of common stock that can be awarded under the plan following June 1 2023 No new awards have been or will be granted under the LTIP after November 28 2023
6 353 884 shares of common stock remain available for allotment under the Omnibus Plan which provides for a limit of 6 750 000 shares of common stock that may be awarded under the plan subject to adjustment due to recapitalization or reorganization or as otherwise provided under such plan Any shares subject to an award pursuant to the Omnibus Plan that are canceled forfeited or terminated without issuance of the full number of shares to which the award relates will again be available under the aggregate limit under the plan
Information required by this item will be contained in the 2025 Proxy Statement under the headings Corporate Governance Director Independence and Board Committees and Oversight Related Party Transactions which information is incorporated herein by reference
Information required by this item will be contained in the 2025 Proxy Statement under the heading Independent Registered Public Accounting Firm s Fees and Services which information is incorporated herein by reference
Merger Agreement dated as of February 29 2024 by and among Ferguson Delaware Inc f k a Ferguson plc Ferguson Jersey 2 Limited and Ferguson Enterprises Inc incorporated by reference to Exhibit 2 1 of Registration Statement on Form S 4 filed by Ferguson Enterprises Inc with the SEC on March 1 2024
Amended and Restated Certificate of Incorporation of Ferguson Enterprises Inc incorporated by reference to Exhibit 3 1 of the Current Report on Form 8 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on August 1 2024
Second Amended and Restated Bylaws of Ferguson Enterprises Inc incorporated by reference to Exhibit 3 1 of the Current Report on Form 8 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on September 16 2025
Revolving Credit Agreement dated April 2 2025 by and among Ferguson Enterprises Inc as borrower Ferguson UK Holdings Limited as guarantor the lenders party thereto JPMorgan Chase Bank N A as administrative agent the swingline lender and an issuing bank and the other lenders and issuing banks party thereto incorporated by reference to Exhibit 10 1 of the Current Report on Form 8 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on April 3 2025
Receivables Purchase Agreement dated as of July 31 2013 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the lenders as conduit purchasers and committed purchasers letters of credit banks and facility agents party each thereto Royal Bank of Canada as administrative agent SunTrust Bank as co administrative agent and Wolseley plc as parent as further amended supplemented and restated the Receivables Purchase Agreement incorporated by reference to Exhibit 4 3 of the 20FR12B File No 001 39301 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on February 12 2021
Purchase and Contribution Agreement dated as of July 31 2013 among Ferguson Receivables LLC as purchaser Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer and its various subsidiaries party thereto as originators as further amended supplemented or restated the Purchase and Contribution Agreement incorporated by reference to Exhibit 4 4 of the 20FR12B File No 001 39301 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on February 12 2021
First Amendment to Receivables Purchase Agreement dated as of December 6 2013 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the facility agents party each thereto Royal Bank of Canada as administrative agent SunTrust Bank as co administrative agent and Wolseley plc as parent amending the Receivables Purchase Agreement incorporated by reference to Exhibit 10 6 of the Registrant s Annual Report on Form 10 K File No 001 40066 filed with the SEC on September 27 2022
Omnibus Amendment to Receivables Purchase Agreement and Purchase and Contribution Agreement dated as of September 23 2014 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the lenders as conduit purchasers and committed purchasers letters of credit banks and facility agents party each thereto Royal Bank of Canada as administrative agent SunTrust Bank as co administrative agent and Wolseley plc as parent amending the Receivables Purchase Agreement and the Purchase and Contribution Agreement incorporated by reference to Exhibit 10 7 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 27 2022
Third Amendment to Receivables Purchase Agreement dated as of December 22 2014 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the facility agents party each thereto Royal Bank of Canada as administrative agent SunTrust Bank as co administrative agent and Wolseley plc as parent amending the Receivables Purchase Agreement incorporated by reference to Exhibit 10 8 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 27 2022
Omnibus Amendment to Receivables Purchase Agreement and Purchase and Contribution Agreement dated as of September 11 2015 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the lenders as conduit purchasers and committed purchasers letters of credit banks and facility agents party each thereto Royal Bank of Canada as administrative agent SunTrust Bank as co administrative agent and Wolseley plc as parent amending the Receivables Purchase Agreement and the Purchase and Contribution Agreement incorporated by reference to Exhibit 10 9 of the Annual Report on Form 10 K File No 001 40066 filed with the SEC on September 27 2022
Second Omnibus Amendment to Receivables Purchase Agreement and Purchase and Contribution Agreement dated as of December 31 2015 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the lenders as conduit purchasers and committed purchasers letters of credit banks and facility agents party each thereto Royal Bank of Canada as administrative agent SunTrust Bank as co administrative agent and Wolseley plc as parent amending the Receivables Purchase Agreement and the Purchase and Contribution Agreement incorporated by reference to Exhibit 10 10 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 27 2022
Fifth Amendment to Receivables Purchase Agreement dated as of December 16 2016 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the facility agents party each thereto Royal Bank of Canada as administrative agent SunTrust Bank as co administrative agent and Wolseley plc as parent amending the Receivables Purchase Agreement incorporated by reference to Exhibit 10 11 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 27 2022
Sixth Amendment to Receivables Purchase Agreement dated as of December 8 2017 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the facility agents party each thereto Royal Bank of Canada as administrative agent SunTrust Bank as co administrative agent and Ferguson plc f k a Wolseley plc as parent amending the Receivables Purchase Agreement incorporated by reference to Exhibit 10 12 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 27 2022
Seventh Amendment to Receivables Purchase Agreement dated as of December 20 2018 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the facility agents party each thereto Royal Bank of Canada as administrative agent SunTrust Bank as co administrative agent and Ferguson plc f k a Wolseley plc as parent amending the Receivables Purchase Agreement incorporated by reference to Exhibit 10 13 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 27 2022
Eighth Amendment to Receivables Purchase Agreement and Consent to Assignment by Parent dated as of May 10 2019 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the facility agents party each thereto Royal Bank of Canada as administrative agent SunTrust Bank as co administrative agent and Ferguson Holdings Limited as assignor parent and Ferguson plc as assignee parent amending the Receivables Purchase Agreement incorporated by reference to Exhibit 10 14 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 27 2022
Ninth Amendment to Receivables Purchase Agreement dated as of April 17 2020 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the facility agents party each thereto Royal Bank of Canada as administrative agent Truist Bank f k a SunTrust Bank as co administrative agent and Ferguson plc f k a Wolseley plc as parent amending the Receivables Purchase Agreement incorporated by reference to Exhibit 10 15 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 27 2022
Tenth Amendment to Receivables Purchase Agreement dated as of July 22 2020 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the facility agents party each thereto Royal Bank of Canada as administrative agent Truist Bank f k a SunTrust Bank as co administrative agent and Ferguson plc f k a Wolseley plc as parent amending the Receivables Purchase Agreement incorporated by reference to Exhibit 10 16 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 27 2022
Omnibus Amendment and Consent dated as of May 19 2021 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the lenders as conduit purchasers and committed purchasers letters of credit banks and facility agents party each thereto Royal Bank of Canada as administrative agent Truist Bank f k a SunTrust Bank as co administrative agent and Ferguson plc f k a Wolseley plc as parent amending the Receivables Purchase Agreement and the Purchase and Contribution Agreement incorporated by reference to Exhibit 10 17 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 27 2022
Omnibus Amendment to Receivables Purchase Agreement and Purchase and Contribution Agreement dated as of December 8 2021 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the lenders as conduit purchasers and committed purchasers letters of credit banks and facility agents party each thereto Royal Bank of Canada as administrative agent and Ferguson plc f k a Wolseley plc as parent amending the Receivables Purchase Agreement and the Purchase and Contribution Agreement incorporated by reference to Exhibit 10 18 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 27 2022
Thirteenth Amendment to Receivables Purchase Agreement dated October 7 2022 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the lenders as conduit purchasers and committed purchasers letters of credit banks and facility agents party each thereto Royal Bank of Canada as administrative agent and Ferguson plc f k a Wolseley plc as parent amending the Receivables Purchase Agreement incorporated by reference to Exhibit 10 3 of the Current Report on Form 8 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on October 13 2022
Omnibus Amendment to Receivables Purchase Agreement and Purchase and Contribution Agreement dated December 29 2022 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the lenders as conduit purchasers and committed purchasers letters of credit banks and facility agents party each thereto Royal Bank of Canada as administrative agent and Ferguson plc f k a Wolseley plc as parent amending the Receivables Purchase Agreement and the Purchase and Contribution Agreement incorporated by reference to Exhibit 10 1 of the Quarterly Report on Form 10 Q File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on March 8 2023
Omnibus Amendment to Receivables Purchase Agreement and Purchase and Contribution Agreement dated February 10 2023 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC f k a Ferguson Enterprises Inc as servicer the originators the lenders as conduit purchasers and committed purchasers letters of credit banks and facility agents party each thereto Royal Bank of Canada as administrative agent and Ferguson plc f k a Wolseley plc as parent amending the Receivables Purchase Agreement and the Purchase and Contribution Agreement incorporated by reference to Exhibit 10 2 of the Quarterly Report on Form 10 Q File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on March 8 2023
Omnibus Amendment and Consent Ferguson Receivables LLC dated as of June 23 2023 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC as servicer the originators the conduit purchasers committed purchasers letters of credit banks and facility agents party each thereto Royal Bank of Canada as administrative agent and Ferguson plc f k a Wolseley plc as parent amending the Receivables Purchase Agreement and the Purchase and Contribution Agreement incorporated by reference to Exhibit 10 21 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Assignment and Assumption Agreement dated August 1 2024 by and between Ferguson Delaware Inc and Ferguson Enterprises Inc incorporated by reference to Exhibit 10 25 of the Annual Report on Form 10 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on September 25 2024
Omnibus Amendment and Consent Ferguson Receivables LLC dated as of October 29 2024 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC as servicer the originators the conduit purchasers committed purchasers letters of credit banks and facility agents party each thereto Royal Bank of Canada as administrative agent and Ferguson Enterprises Inc as parent amending the Receivables Purchase Agreement and the Purchase and Contribution Agreement incorporated by reference to Exhibit 10 1 of the Current Report on Form 8 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on October 31 2024
Omnibus Amendment to Receivables Purchase Agreement and Purchase and Contribution Agreement dated January 15 2025 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC as servicer the originators the lenders as conduit purchasers and committed purchasers letters of credit banks and facility agents party each thereto Royal Bank of Canada as administrative agent and Ferguson Enterprises Inc as parent amending the Receivables Purchase Agreement and the Purchase and Contribution Agreement incorporated by reference to Exhibit 10 2 of the Quarterly Report on Form 10 Q File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on March 11 2025
Omnibus Amendment and Consent dated April 21 2025 among Ferguson Receivables LLC as seller Ferguson Enterprises LLC as servicer the originators the lenders as conduit purchasers and committed purchasers letters of credit banks and facility agents party each thereto Royal Bank of Canada as administrative agent and Ferguson Enterprises Inc as parent amending the Receivables Purchase Agreement and the Purchase and Contribution Agreement incorporated by referenced to Exhibit 10 2 of the Quarterly Report on Form 10 Q File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on June 3 2025
Ferguson Enterprises LLC f k a Ferguson Enterprises Inc Executive Retirement Plan I incorporated by reference to Exhibit 10 22 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Ferguson Enterprises LLC f k a Ferguson Enterprises Inc Executive Retirement Plan II incorporated by reference to Exhibit 10 23 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Amendment No One to Ferguson Enterprises LLC f k a Ferguson Enterprises Inc Executive Retirement Plan II incorporated by reference to Exhibit 10 24 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Amendment No Two to Ferguson Enterprises LLC f k a Ferguson Enterprises Inc Executive Retirement Plan II incorporated by reference to Exhibit 10 25 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Amendment No Three to Ferguson Enterprises LLC f k a Ferguson Enterprises Inc Executive Retirement Plan II incorporated by reference to Exhibit 10 26 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Amendment No Four to Ferguson Enterprises LLC f k a Ferguson Enterprises Inc Executive Retirement Plan II incorporated by reference to Exhibit 10 27 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Amendment No Five to Ferguson Enterprises LLC f k a Ferguson Enterprises Inc Executive Retirement Plan II incorporated by reference to Exhibit 10 28 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Ferguson Enterprises LLC f k a Ferguson Enterprises Inc Executive Retirement Plan III incorporated by reference to Exhibit 10 29 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Amendment to the Ferguson Enterprises LLC f k a Ferguson Enterprises Inc Executive Retirement Plan III effective as of January 1 2017 incorporated by reference to Exhibit 10 30 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Amendment to the Ferguson Enterprises LLC f k a Ferguson Enterprises Inc Executive Retirement Plan III effective as of January 1 2019 incorporated by reference to Exhibit 10 31 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Ferguson Enterprises Inc 2023 Omnibus Equity Incentive Plan incorporated by reference to Exhibit 10 1 the Current Report on Form 8 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on August 1 2024
Ferguson Enterprises Inc Employee Share Purchase Plan 2021 incorporated by reference to Exhibit 10 2 the Current Report on Form 8 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on August 1 2024
Ferguson Enterprises Inc Long Term Incentive Plan 2019 incorporated by reference to Exhibit 10 33 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Ferguson Enterprises Inc Ordinary Share Plan 2019 incorporated by reference to Exhibit 10 34 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Ferguson Enterprises Inc Performance Ordinary Share Plan 2019 incorporated by reference to Exhibit 10 35 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Omnibus Amendment to The Ferguson Group International Sharesave Plan 2019 The Ferguson Group Long Term Incentive Plan 2019 The Ferguson Group Ordinary Share Plan 2019 and The Ferguson Group Performance Ordinary Share Plan 2019 incorporated by reference to Exhibit 10 3 the Current Report on Form 8 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on August 1 2024
Amended Restated Employment Agreement dated as of September 1 2022 by and between Ferguson Enterprises LLC on behalf of itself and Ferguson Delaware Inc f k a Ferguson plc and Kevin Murphy as amended August 30 2023 incorporated by reference to Exhibit 10 39 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Amended Restated Employment Agreement dated as of September 1 2022 by and between Ferguson Enterprises LLC on behalf of itself and Ferguson Delaware Inc f k a Ferguson plc and William Brundage as amended August 30 2023 incorporated by reference to Exhibit 10 40 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Form of Amendment to Executive Director Employment Agreement incorporated by reference to Exhibit 10 45 of the Annual Report on Form 10 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on September 25 2024
Amended Restated Employment Agreement dated as of August 1 2022 by and between Ferguson Enterprises LLC on behalf of itself and Ferguson Delaware Inc f k a Ferguson plc and Ian Graham as amended August 30 2023 incorporated by reference to Exhibit 10 41 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Amended Restated Employment Agreement dated as of December 7 2022 by and between Ferguson Enterprises LLC on behalf of itself and Ferguson Jersey Limited f k a Ferguson plc and Andy Paisley as amended September 1 2023
Amended Restated Employment Agreement dated as of June 1 2022 by and between Ferguson Enterprises LLC on behalf of itself and Ferguson Delaware Inc f k a Ferguson plc and William Thees as amended August 30 2023 incorporated by reference to Exhibit 10 43 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Amendment to Amended Restated Employment Agreement dated February 1 2025 by and between Ferguson Enterprises LLC on behalf of itself and Ferguson Enterprises Inc and William Thees incorporated by reference to Exhibit 10 1 of the Quarterly Report on Form 10 Q File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on March 11 2025
Form of Legacy Non Employee Director Appointment Letter incorporated by reference to Exhibit 10 50 of the Annual Report on Form 10 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on September 25 2024
Form of Non Employee Director Appointment Letter incorporated by reference to Exhibit 10 51 of the Annual Report on Form 10 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on September 25 2024
Form of Non Employee Director Restricted Stock Unit Award Agreement Pursuant to the Ferguson Enterprises Inc 2023 Omnibus Equity Incentive Plan approved by the Compensation Committee September 11 2024 incorporated by reference to Exhibit 10 52 of the Annual Report on Form 10 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on September 25 2024
Form of Restricted Stock Unit Award Agreement Pursuant to the Ferguson Enterprises Inc 2023 Omnibus Equity Incentive Plan approved by the Compensation Committee September 11 2024 incorporated by reference to Exhibit 10 53 of the Annual Report on Form 10 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on September 25 2024
Form of Performance Award Unit Agreement Pursuant to the Ferguson Enterprises Inc 2023 Omnibus Equity Incentive Plan approved by the Compensation Committee September 11 2024 incorporated by reference to Exhibit 10 54 of the Annual Report on Form 10 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on September 25 2024
Form of Stock Option Agreement Pursuant to the Ferguson Enterprises Inc 2023 Omnibus Equity Incentive Plan approved by the Compensation Committee September 11 2024 incorporated by reference to Exhibit 10 55 of the Annual Report on Form 10 K File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on September 25 2024
Form of Amendment to Ferguson Enterprises Inc 2023 Omnibus Equity Incentive Plan Stock Option Grant Notice and Stock Option Award Agreement approved by the Compensation Committee September 11 2024 incorporated by reference to Exhibit 10 3 of the Quarterly Report on Form 10 Q File No 001 42200 filed by Ferguson Enterprises Inc with the SEC on June 3 2025
Form of Restricted Stock Unit Award Agreement Pursuant to the Ferguson plc 2023 Omnibus Equity Incentive Plan incorporated by reference to Exhibit 10 2 of the Current Report on Form 8 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on November 29 2023
Form of Performance Award Unit Agreement Pursuant to the Ferguson plc 2023 Omnibus Equity Incentive Plan incorporated by reference to Exhibit 10 3 of the Current Report on Form 8 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on November 29 2023
Retirement Policy for Ferguson Group Share Plans incorporated by reference to Exhibit 10 46 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Ferguson Enterprises LLC f k a Ferguson Enterprises Inc Executive Life Insurance Plan II incorporated by reference to Exhibit 10 47 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Amendment No 1 to Ferguson Enterprises LLC f k a Ferguson Enterprises Inc Executive Life Insurance Plan II incorporated by reference to Exhibit 10 48 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Amendment No 2 to Ferguson Enterprises LLC Executive Life Insurance Plan II incorporated by reference to Exhibit 10 49 of the Annual Report on Form 10 K File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on September 26 2023
Amendment No 3 to the Ferguson Enterprises LLC Executive Life Insurance Plan II incorporated by reference to Exhibit 10 7 of the Quarterly Report on Form 10 Q File No 001 40066 filed by Ferguson Delaware Inc f k a Ferguson plc with the SEC on December 6 2023
Form of Director and Officer Indemnification Agreement incorporated by reference to Exhibit 10 55 of the Registration Statement on Form S 4 filed by Ferguson Enterprises Inc with the SEC on April 18 2024
List of Subsidiary Guarantors incorporated by reference to Exhibit 22 1 of the Registration Statement on Form S 3 File No 333 282398 filed by Ferguson Enterprises Inc and Ferguson UK Holdings Ltd with the SEC on September 30 2024
The Registrant agrees to furnish to the SEC upon request copies of any instruments that define the rights of holders of long term debt of the Registrant that are not filed as exhibits to this Annual Report
Pursuant to the requirements of Section 13 or 15 d of the Securities Exchange Act of 1934 the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned thereunto duly authorized
KNOW ALL MEN BY THESE PRESENT that each person whose signature appears below hereby constitutes and appoints Kevin Murphy and William Brundage as his or her true and lawful attorneys in fact and agents with full power of substitution for him or her in any and all capacities to sign any and all amendments to this Annual Report and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission granting unto such attorneys and agents full power and authority to do any and all acts and things necessary or advisable in connection with such matters and hereby ratifying and confirming all that the attorneys and agents or his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof
Pursuant to the requirements of the Securities Exchange Act of 1934 this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of September 26 2025

Company Name	Ferguson Enterprises Inc. /DE/ Vist SEC web-site
Category	WHOLESALE-HARDWARE & PLUMBING & HEATING EQUIPMENT & SUPPLIES
Trading Symbol	FERG