Ferguson Enterprises Inc. (FERG), North America’s largest value-added distributor of essential water and air solutions, raised calendar 2026 net sales guidance to about 7% growth from mid-single digit growth after third-quarter sales of $9.03 billion, up 9.5%, and the August 31 close of FloWorks.

Organic growth accelerated to 7.0% from 3.8% in the second quarter, with acquisitions adding 2.7% and Canadian divestments subtracting 0.2%. Price inflation was low to mid single digits.

The company also lifted the adjusted operating margin range to 9.6%–9.8% from 9.5%–9.8% and moved interest expense guidance to about $235 million from about $200 million. Updated guidance reflects latest performance and the FloWorks acquisition.

Reported operating profit was $885 million, a 9.8% margin, up 4.9% from a year earlier. Adjusted operating profit was $962 million, a 10.7% margin, up 8.9%. Gross margin was 30.9%, down 40 basis points from the prior year, which the company said was temporarily elevated by the timing and extent of supplier price increases.

Reported diluted earnings per share were $3.08, down 4.9%, primarily due to the timing and extent of tax benefits in the comparable period. Adjusted diluted earnings per share were $3.43, up 7.9%, principally due to higher adjusted operating profit. Adjusted EBITDA was $1.03 billion, up 9.0%.

US net sales increased 10.2% to $8.62 billion, with organic growth of 7.4% and a 2.8% acquisition contribution. Non-residential sales grew 15%, the company said, as scale, expertise and value-added solutions drove share gains in a mixed market. Residential end markets, about half of US sales, remained pressured by weak new construction and soft repair, maintenance and improvement work; residential sales still grew 6%. Large capital project activity remained healthy, with growth in open order volumes and strong bidding. US adjusted operating profit was $952 million, up 8.8% or $77 million.

Canada net sales decreased 4.5% to $405 million as 0.6% organic growth was offset by a 3.2% divestment impact and a 1.9% foreign-exchange headwind. Canada adjusted operating profit was $23 million.

The company completed three acquisitions in the quarter, including FloWorks, and one subsequent to quarter-end, bringing 2026 acquisitions to eleven with about $1.5 billion of aggregate annualized revenue. FloWorks, a distributor of technical valves and flow-control solutions with more than 60 locations and 25 service centers in the United States and Canada, closed August 31. Brax Company added pump and pump-repair capacity in Southern California; Rogers Supply added twelve HVAC locations in Illinois and Indiana; Canyon Systems, acquired after quarter-end, established a water-and-wastewater process platform across six Western states.

During the quarter Ferguson deployed $108 million in capital expenditures and invested $1.7 billion in acquisitions. It priced $1.2 billion of senior unsecured notes and entered a $900 million unsecured term loan maturing in 2029 to finance FloWorks, with the remainder for general corporate purposes. Acquisition and integration costs of $25 million related to FloWorks appeared in the quarter, along with a $9 million loss on disposal of a non-operating entity.

Net debt to adjusted EBITDA rose to 1.7x from 1.3x at June 30. The company temporarily paused share repurchases in connection with FloWorks and said it expects to resume buybacks as leverage trends back toward the lower end of its 1–2x target range. It declared a quarterly dividend of $0.89, payable January 8, 2027.