Initiation of Coverage- Will Its Adapting to Market Dynamics & Deflationary Pressures Support Sustainable Margin Recovery? 

Ferguson plc’s latest financial results present a mixed picture, reflecting both strategic progress and ongoing challenges. The company reported a 3% increase in net sales to $6.9 billion for the second quarter, despite contending with 2% commodity-led deflation. Organic revenue contributed 2.1%, with an additional 1.2% growth from acquisitions. However, gross margin fell by 70 basis points to 29.7% due to weak end-market demand and persistent deflation, alongside a sales mix impact from outsized growth in HVAC and Waterworks sectors.