Ferguson (FERG) 10 Dec 242025 Q1 Earnings call transcript

Good morning, all, and thank you for joining us for Ferguson's first quarter conference call. My name is Carl. I'll be coordinating your call today. [Operator Instructions] I'd now like to hand over to your host, Brian Lantz, Ferguson's VP of Investor Relations and Communications.

You may now begin the conference.

welcome First and Call Earnings everyone, Webcast. and morning, to Quarter Ferguson's Conference Good a review chance we had you've Hopefully, to morning. issued the this announcement earnings The of Investors on in SEC announcement website our page. corporate and section web filings is available our the be will available later call this today. of made Recording

I want to our that in uncertainties the of website. these projected, could discussed actual results that everyone materially our be disclaim XX-K from available may statements uncertainties the SEC's and risks to only including and statements. we Form today on to the today, Also, represent certain and update various looking risks remind any differ obligation those forward are and forward-looking some statements subject any to as cause company's expectations of

today's non-GAAP discuss website In to including Please and call, financial measures. earnings also those to our the announcement directly on GAAP we regarding non-GAAP measures, will refer information financial certain our measures. presentation comparable reconciliations most additional addition, for on

me call With CFO. turn today now our Murphy, will I Brundage, Kevin the and are Bill to CEO; our Kevin. the over on call

for in execution associates I'll closing have come then on focused financials. cover you, back performance. the from performance welcome, Brian, and Ferguson's Bill remained I'll to quarter our conference market our end your [Audio and the Bill view comments before end Thank by before call. a some call, on customer over today's to and the first first service. group to everyone, results quarter more provide turning I'll give the On our also first I detailed call and at take quarter, Gap] Again, highlights of customer by

nearly of markets to $X.X of year market X% X%. of outperform despite continue sales with and deflation headwinds We ahead approximately last broader billion,

investment X.X% the year. operating $XXX And operating diluted we margin. representing operating a earnings per We our growth servicing on volumetric $X.XX resilient. costs, adjusted was and million, were adjusted prior profit on manage to of X.X% focusing share in of continue continued business. margins Gross delivered Adjusted down

largely by in year products. as out with expected, deflation price growth offset This commodity-based has started volume continued

business return as to and growth. in locally scale outperformance markets our our confidence our mix Our continued to balanced deploy gives ability us

performance levels in of the United quarter. end to our markets, fourth end by sales comprise revenue, half by X.X%. to the grew Turning saw Net market which activity similar States. approximately U.S. Residential

the first were Both new and residential maintenance overall prior remained And slightly been markets to and construction continued outperform quarter. with residential we quarter. resilient, markets to Nonresidential down more but fourth year-over-year the the improvement in flat repair, levels have with also to compared year. revenue similar activity down

take with of continue approximately share We revenue X%. to growth total

were with on and order in intentional capital And commercial activity stronger infrastructure our shipments, us Sales projects. civil bidding and continued well. solid volumes continues flat. open market see balanced exposure to industrial position We've large to

construction revenue now headwinds our and improvement as in across continued third quarters the well X%, Moving sequentially by with States. fourth in and both performance Residential the maintenance repair trade deflation. to grew United despite price new plumbing both consistent as customer and groups

the to continue revenues remodel couple weak. to by broader digital building Residential to quarters. the residential were growth And continues X% down commerce XX% similar trade dual market. up by demand past invest higher-end hold grew the better HVAC contractor. declined remodel distinct The we consumer servicing including and market remodel as as X%, initiatives, remained in of than

metering and in weakness meters residential. revenues were works, technology and public up municipal X%, Waterworks general with offsetting in activity

diversification growth. us efforts and into for Our position soil stabilization well geosynthetics continue to

projects. driven X% partially by data year projects offset weaker nonresidential in on comparable of X% strong prior top The activity centers, with such traditional Commercial/Mechanical customer group capital grew large by a as

combined a Our to a of sales and commodity value end our committed flat Industrial, Fire remain decline total delivered productivity customers to deflation We and specialized broad for exposure, net customer the groups balanced a pipe X%, maximizing and comparable. steel Fabrication and project. against impacted and Facilities by professional heavily market Supply driving

results to let over me Bill Now to you cover pass detail. the more in financial

Thank approximately you, billion growth by a X.X% last Kevin, of sales were organic with approximately increased driven volume ahead morning, volumetric and X%, X.X%. good by Net of volume X.X%, of everyone. On total X%. offset year, decline an organic basis, by up acquisition $X.X revenue of

commodity-related Continued deflation modest overall of around drove categories certain price weakness X%. in

XX.X%, organic and of driven inflation by basis XX capabilities, over was expansion teams investments investment and Operating growth our was trainee in decrease class, digital margin a project including efforts, tools. Gross HVAC in growth continued cost growth, large volumetric points last annual year. capital

And X.Xx Adjusted at adjusted was margin. remains $XX our down delivering to year by adjusted share the operating operating million a lower $XXX X.X% EBITDA. repurchases. impact profit profit, offset strong by lower sheet operating net was million, EPS of diluted than Adjusted $X.XX balance of of driven adjusted debt partially X.X% last

to Net million X.X% offset U.S. profit a of contribution of $XX million year, decreased segment over the delivering sales margin of X.X%. Moving in by by organic acquisitions. with operating from X.X% our decline X.X%, an $XXX adjusted an the results. operating prior grew Adjusted

have adverse Markets and organic acquisitions, exchange ahead impact X.X% with Adjusted sales with partially X.X% were net foreign year. to the flat last offset similar In that $XX broadly residential. resilient was in X.X% by of growth been a nonresidential million X.X% more operating the of than profit a last rates. quarter of activity from from to of Canada, States remaining contribution United year,

initiatives $XXX Working performance. due a to Moving higher HVAC trends were first growth seasonal of as historical timing well in investments to efficiency the investments support as to and transition our to cash standards. than touch our million quarter the capital during new

$XXX As a result, cash million in quarter. was the flow operating

in We have free first through $XXX organic $XX the invest resulting investing in of cash CapEx, growth in million continued to flow million quarter.

allocation. capital to Turning

We're advantages of organic above-market investing million to conversions growth. HVAC the counter invested trade on investing efficiency our a digital expansion. to invest into growing professionals. to material in chain of tools business plumbing CapEx and automation, and optimize in segment our continue for also drive and quarter we We're such of technology. and first And noted, as in network $XX combination previously both the we As to dual competitive sell areas to a build supply

cash X% We to raised the $X.XX prior our reflecting quarter, share year this dividend the over our business generation. in for confidence per and

continue capability We fragmented markets through our and bolt-on to geographic acquisitions. consolidate

pleased and to and are Fresno acquisitions, announce completed Supply We Templeton. X Pipe

million we X are And to We committed our net low to we end to when the to shareholders adjusted EBITDA. Xx approximately are below via under finally, debt target share of our X.X $XXX surplus shareholders And returning share the with quarter, repurchases we returned million reducing program. repurchase this range approximately current share of $XXX count quarter to million. capital the leverage outstanding by ended

to guidance. on fiscal XXXX Moving our

as said, started largely expected. a our Kevin has the as year As result, unchanged. is we guidance And

We single deflation expect net inclusive sales down on single-digit being digits, of to in based markets grow driven slightly down low in low range commodity-based for pricing our being ongoing by products. year the the

by already under basis approximately XXX which outperformance a partially X day continued quarter. offset acquisitions, fewer contribution third points just and XXX the completed market sales in expect of X% is from to We

range operating adjusted X% an margin X.X%. expect to between We

expense Interest million to $XXX be $XXX will between million.

to approximately between $XXX and Our we expect million XX%, to rate $XXX invest be adjusted million CapEx. effective tax in will

model, agile strong exposure us market We the positions future. balance believe continued sheet, well that end investment our business balanced for and

back Thank you, to and I'll pass now Kevin.

Thank you, Bill.

in disciplined our deflation. we execution and are who me we first our of remarks, As associates, have conclude let by characterized reiterate an price displayed market headwinds proud how environment commodity

on steadfast for that the remains principles and market our strategy leadership. sustained growth focus Our underpin

As as expected. a year started has result, we our fiscal largely

in consolidate markets and balance return capital acquisitions our strong shareholders. through Our organic enables to to sheet us fragmented growth, invest

operate on arise. maintain We flexibility to at lower will end target of they leverage continue strategic our capitalize opportunities the to the range, as

remains enhancing and pressures Our for commitment creating to enhancing important our for unwavering. solutions customers delivering to environment, real customers. tools, in provide the costs, value-added on efficiencies, our is force. benefits we're This labor quality challenging By the especially current our macroeconomic digital trade the given reducing our productivity

We expect markets leverage outperform as structural our to we tailwinds. continue to multiyear

believe and size, underbuilt the well and and capital and demand market, in specialized professionals. large nonresidential plumbing opportunities scale projects take of growing we advantage for housing we strategy, U.S. HVAC the are to aging Our positioned

Thank questions. your you take to over for I'll your Operator, to happy time and the I today. are now hand back call Bill you.

Keith [Operator from Instructions] Our Truist. question Hughes comes first from

the Yes. There was a SG&A bit deleverage of good in quarter.

the year. for could about that, the fiscal would what remainder like that you of If look talk

Keith, is for Yes. this Thanks the question. Bill.

start that me Let one. with

when year. the and some back guidance If set year, come market line half to into put to going in fiscal continued And SG&A, we expect on And to commodity what that deleverage, you first we full the seen. for top out the on was facing year it headwinds go we've we the particularly effectively, the particularly that, acknowledge that's pressure deflation. some of

If the have look at equivalents growth about rate at nice that. the volumes a you were volume teams up and done full-time total And managing quarter, job a X%. headcount in really below

underlying in we So the business. are productivity driving

base and But X% total That cost investment. wage with continued our difference volume up growth, is driven inflation by is about X%.

like the areas investing in are trainees the year. of through typical roughly We XXX we our So class. trainee in brought fiscal start

project counter about to a We large We're project, HVAC in invested we've continuing talked in. bit expansion. mega our invest the that teams

back of with to volume combined a growth and combination a really investment. been volume it's now for growth continued quarters we've reminder that X So

expect Yes. growth, sure to to as customers. we we want growth to on can for to return we But that. our that to to to execute And make going be on Keith, markets our ready we're volume capitalize invest continue also that

adding capabilities good Bill got counters we're our out the up look we've on our growth pay And counters X% tailwind levels way you today very as year. And greenfield build at a out it's on XXX, HVAC plumbing HVAC prior built perspective, XXX as market indicated, real from comparable across from starting activity to the over as where dividends over locations. we a to seeing XX%

capital we're doing customer activity. on that nonresidential capitalize to really offsetting Commercial/Mechanical add able You from aggressively some to Industrial project building to traditional to Waterworks fire suppression teams groups up to there sure with that's be across and funnel that make we're that's out projects large out to what work to good

seeing margin, specific a quarters. other from pricing some quarter we're but points, on flipped Price Okay. this basis is the about that several question Anything compression XX modest One in caused it's same improvement what stopped. -- only improvements margins. little more gross margin been the in down with for Gross down, environment?

Yes, think on of a at growing back on when to XX%. commodity continued you HVAC the to But mix, bit at business also seasonality look Keith, gross pressure comment go put and deflation I continues margins. Kevin's

is Our Waterworks X%. business up

margin. gross businesses that's the And the bit So overall that on the have in stepped into us for term right slightly fastest a growing margin pressure the we mix gross the are putting now short a as lower quarter. of

Keith, the pleased growing As sits as again, we where happening. teams business with we're of sat those are profile from also and pretty today, growing in commodity a gross gross And margin the we And volume pleased here out margin our deflation are categories. is that share with perspective.

next question from Jefferies. Phil of Our Ng comes

lighter. bigger your XQ guide. piggybacking impressive QX typically at was I was balance, It look little margins low Keith's the certainly, closer on I op end It's of the are pretty margin gross margin guess. And despite was guess were on line the question top your quarters, op to QX a When and year I full much line, down and margin. deflation. pretty on that

little more, your perhaps you back I maybe envision op investments think the kind on think through how half. of of midpoint? kind how And guess, a through the it could Bill, better margin about results? op look of do OpEx? of some paying help to out talked dividends kind a you things envision margins you the us year? Is the us you've So taking more function Kind your towards HVAC these progression side Are counter more help of of through do of, pricing in shaking of then kind the

Yes, sure, Phil.

back, step of expectations margins year in the our X.X% our a are quarter full line was so largely expectations. range unchanged. And again, that X% And take when you with to in operating

first sit when deflation. the latest today first certainly, on have we pressure we Again, environment in through stepped continued we we're and with some particularly that the more second that we deleverage commodity as a our QX expected pressure SG&A commodity looking here And on margins. recognizing seasonally still at half low still the would facing operating headwinds, expect growth quarter, half, I some in quarter, continued

couple through actually those move of noted year, improvement we the a But as we and do you reasons. expect

First off, we at X are at quarters volume a growth. growth volume for in We've been row.

continue. growth that expect volume We to

that, build. us And continue will Our some year. volumes gives we inflected improve the positive, move which growth do order as fiscal confidence those have through open to that

we lastly, then year. a of expect we the to reasons pressures deflationary couple do are that. There move for And ease as through

First a past. some finished increase a price we into the the year goods about than a as lot announcements. environment the increase price in We're a from turn talked calendar starting bit off, and returns finished perspective, goods we've traditional see year spottier environment to pricing to more traditional being

So comparables particularly finished overall we move that deflationary to on would of will revenue, through the what's half expect to it's goods X-year very happen again, difficult year. through ease to And move would the XX% basis, we the while as expect predict positive continue stack second then our commodity inflect going is as to the the our on a comparables, which, with pricing we of about we commodities, pricing, year.

today, here again. for year. to are slightly We still first the pricing the expecting sat X% be we overall quarter in down So about down were

we margins, with which unchanged. full improvement should help, That should as to that's volumes why we on today through expecting operating along help the year. half the some is So second sit with we year are improved move here a guide pricing

very in your hear and the infrastructure the Okay. It's shrink markets That's color, in to encouraging civil quarter. great Bill. see and

how also for have good. these some You've been projects pretty heavy talked bidding activity about of mega

So that's encouraging.

post the out potentially saw and see projects you you on election. put companies -- seen that, some of from ahead if step you pause we calling of heard private up the into cover larger election? activity -- the We've bidding Curious if our have perhaps

end, a what help us how and And it's with on Trump you whether a see probably EDRA U.S. kind what a perhaps But the of good of which impacting is stuff think manufacturing, presidency seeing do guy. end bring. more through presidency, might maybe other it businesses, hampered. markets, your Trump be could different Kind you're

have traditional And thank for largely projects offset nonreservoir. you. Phil, couple Yes, you're quarters. last of capital the that Large right. We've said that

commercial large then we're and the If plays bidding activity down to continued on into side go good for Waterworks seeing into the That the Commercial/Mechanical you deeper through that, capital. business of start our world like.

refer fast I mean inside data as we go, As of the and center data as that's to XXX% you funded center imagine, heavy you can activity, fairly XXX% the work. can. would it as go

a work the And of way that those, a a especially holistic approached fire, approached as has attractive to as is And attractive overindexes we've and Commercial/Mechanical. very on share us us candidly, set Industrial more product couple different nonres project. fronts. them versus we've water, in one, our for across traditional been Number

stance on continue we So see to bullish that. a

and construction on the shipments But some our depend looked Maybe pace On activity. we're fast. that the if timeline as side, battery will, really EV is does for well and what it the press activity really, seeing. about construction you announcement it's onshoring as realistic the a release, as that like. meeting activity the of not And project the on aren't

a And the force of force. the some of projects combined by of labor these it limiting factor, geography of around that's affected some with some the labor being

So I gestation the of period just natural projects. think those it's

data in change what a with a don't that of can think there'll center terms slowdown be In in administration, happen we activity.

we an us fits you EV project we the there's to speaking, large starts grow to In attractive will place what's But that fact, and some opposite. be perspective, a quite in go said, for world. be continues look going happening forward. capital think When at continue and as we from as generally to spotty

Barclays. of Bouley Matthew from comes question next Our

from end be back perspective front-loaded? either on year-over-year investments Is OpEx ask shaking I of the depending more a up maybe case there growth. you where X% of a little side some a that of back to sort to with is the these there wanted Or timing end on scenario that on happens would kind pull markets out? a that how

how guide. thinking margin I operating year-over-year X% mean of a growth into full if year curious, plays just the we're that in Just about kind OpEx,

again that growth So curious like what just could there. look around year-over-year

as Matt, continue to medium-term as outlook the thank the about market. our you residential the for of single-family you. opportunity side house, perspective. talk the in of longer look we're maybe the volume market, you we're underbuilt is in look about importantly, if term, happen from what Yes, over half And we invest seeing growth today. going which to at a business. to need We're housing our We But

some though we the the place to We're ] of the the encouragement. accelerate. think give across activity [ where isn't West, of starting end business signs Southeast and really long Waterworks seeing and side Central family some on some good to to curve even for start that us sparks and We're South the that XX-year see single the our can bidding the of we the

the continue out continues our more volumetric our downturn We're right force, shortchanging ability a not labor at for going also accelerate look to but this term. of opportunity we as to to medium that business case build

some the of are could in network. argue trainee in Obviously, we brought those terms in we're investments, bit returns Matt, I upfront come in, class mean, a how you our rolling a on your frontloaded are those to of across bit counter of HVAC over out that term, Yes, terms use and time. investments, the

profile are we optimistic the of about that. very return so And

returns initiatives. great HVAC We're business seeing growth on those the early and

we're press going forward so that. to with And

we year. And turn what and we'll that if actions, as get environment through cost-cutting and but reduction market invest we're volumes expect continuing we Now against to the if the we markets don't are fiscal worse, today. turns move cost different dramatically the take the expecting, negative, if

I guide are guess And what get year color. I finished more the full are of super kind zooming guess or kind commodity side, helpful into you stable? then a the of still level little roughly conversely, seeing sequential you the commodity it to That's on on side, of secondly, your side, declines goods as in it. guys we think any price has the good been And assuming in inflation guide? to order about Got finished

single-digit were we in into goods, year-over-year on in back some And broadly terms get turn we and call, year have I earlier activity we increase year. flat mentioned coming finished move this the of half some that as of On the as low we'll through price as QX additional finished goods Yes. we are of sort pricing calendar expecting through goods pricing. finished still

That, coupled us with overall continues us ease. give a the deflationary pressures that confidence commodity will -- give will comparables easing, those bit to of

of we're a that couple returned within commodity inflation seeing In the terms still commodity buckets, to now. categories of have

mentioned the and on So year-over-year. That's tube copper in inflation were we fittings QX, some continuing. showing last call

bit We and say still but pressure on that, still sequentially more have on steel I PVC. been there. stable, that's little would there's a some pressure pipe

we today calendar sit we still into improve expecting that work need to 'XX. So we second to as through. we we as here and the move But some headwinds those through expect we're commodity look again, deflation quarter,

Our next question comes of Markets. from Mike Capital Dahl RBC

actually given administration. shifted thoughts you that since recent of kind be remind it of was but about if and I the managing on the could earlier, can of brought election kind got political exposures the in how your -- of Steven on focus recent You've last cost shakeup helpful tariffs, The Dahl. international us Mike your has for up think

look different the good as and product a our if in overall sourcing of and at base as of category supplier XX,XXX Yes, base from Steven. anyone over breadth We've products approach, got industry. we you source suppliers. COGS Thanks,

over as countries, lighting own branded like in supplier small of still like. multiple bifurcate largest brand But some brand we products. calls, own have and speaking, countries largely we said the you products the products, broadened and and brand exposure. from is China U.S. We for appliances If and have our have and exposure, XX generally areas that we past source China the into second in some mitigated across that own

from move on XX% price is then wide our again, variety product we're of a based And sourcing And manufacturers. product our we strategy and of will the business branded, that value.

through the pass shown landscape that terms ability in We've to of price how changes.

If move macro that provided you could price and continues we look some will, cause as inflation to helpful. of us, it price be at on market a believe for deflationary we which environment can it degree believe overall, for the

of question next John Lovallo UBS. from Our comes

actually for the of through you on guess if is I but organic and John. basis? This sorry Johnson trended kind on volume into sales and guys this, Matt just a you both already November, pricing could about quarter first, hit talk how

on QX. overall And for on a of wasn't sales been organic deflation the has overall X quite from the commodity actually in That There deflation consistent perspective, variability the quarter lot here quarter we November deflation. been overall last step quarters. through consistent Yes. X% a the overall revenue pretty or trend has growth into second with as

Appreciate guess, I And just then, that. touching on M&A.

you just acquisition this So give one quarter. in ramp-up guys sort you valuation on any if of are expecting today activity and expectations how to in look in relative update XXXX? you and an time Could us guys year the completed guys last pipeline the

an made runway go M&A Yes, you from the healthy. to there's look of perspective. quite to after still at industry, our for medium-sized competitors, up pipeline us small ample XX,XXX-plus is When

So we an pipeline. active have

changes expectations. months terms in lot the a not of Valuation, to over of last XX X valuation

very we've robust think healthy and so And pipeline looking I got forward. a

any terms timing, that When these given terms to In thing most to family-run the businesses, in are always hardest going that's of these decision businesses. time. the we're call at once-in-a-lifetime come of And the decision. their acquisitions medium-sized at you is to small business to of sell through are often a look how doing,

have and as X% difficult. fragmented our is somewhere to in acquisitions markets through ability add revenue to continue do X% to period terms time. we've we forward, that question? in incremental got But So another doubt over calling our timing of we in no look annualized any Operator, given consolidate

Yes.

David Blair. comes from Our Manthey And from Ryan Baird. next Merkel comes our of next of question William question

to overall look OpEx this guidance here and the OpEx that grew hit to growth the revenues we major forward in any on assumes here, grow year then And back unusual in on the the is should we revenue as Am of year? your rate, X% through If that Just I that in of without X% OpEx, that give items half going then take, the growth fiscal flattish and is leverages what those expense in quarter your remaining operating again. right? mid-single-digit something volume assume progression or quarters outlook accelerates expenses. hearing

about Yes, inclusive overall We right. in acquisitions, But Dave, look of cost. volume would at that's right. that's the which quarter X%, up about with comes certainly

If mid-single-digit add and you investments inflation, that's that add take of bit get we've and how that volume that infrastructure wage X you growth you and the of growth. a to made

plan We the of But as year. as pressures to SG&A growth move the and watch half through close deflationary should the we fiscal move markets as our leverage particularly year. we that keep as on those to through a that back return ease, improve

we through least say at to looking you're year. of revenue acceleration correct? Is move a for safe as bit it is the growth that But that

That's Yes. correct.

perspective, deflation. the a and expect the revenue of back volumes year overall bit We improve an from easing to half

year-to-year days? selling we anything as and Bill, expenses that just should X Okay. delta And we that And then quarter. Could an impactful is what in in else, talk fewer the that from that keep to then it is so -- you revenue mind relates idea there month third day standpoint? of how margins, about pointed the in get you out a hits given

is. to quarter that in X -- It's fewer third in Yes. the month. it I'd not the out the quarter. pull month day relevant which There's have Dave,

leap I we think February last in days it's XX because had year. the year

we leverage going think not if in the of managing progression, investment SG&A just unique the through continued come count that's to of the in really as head anything back And there's business. volumetric year, more about I move the

final Research comes question Thompson Kathryn from Group. Thompson of Our

Brian Kathryn. It's for actually on Biros

you the sales, can some label? that of other the in margin On you that XX% internal have that it's margins margin things help are performance, have I gross just your to control and on think touch initiatives. private

you downward would hear those offset I your helpful helping pressures are think mentioned be what of it the out to that to is of control. how

brand, point, will mean a just time. Yes, today, and To that investment under improve our we should our of grow is and as own it's it, lever label, private over gross that an XX% call believe absolutely. over absolutely I area Kevin's we our we margins time. revenue that

if look and the at to that, and in pricing services. you we and value-added addition analytics areas add continue to business, we're investing side that continue we pricing that pricing value. charge around solutions the of to In for tools not And to mention

So those there improving time. have around gross number over of we a that levers are margins

own value brand only for we strategy. provide own in marketplace. The environment but point, to trade us product is is best base Bill's our best the thing like challenging margin And contractor you piece. one because productivity in manifest continue reflection to that highlighted the And of a add to labor force brand, to that starts is that itself in the areas to gross

of while the we best that sell their can gross grow to to When strategy is we at suppliers, can product we expansion. margins. that look making through the such we partnerships out the that enhancing contractor take durable that our that the you our have When branded long-term sure with chain sustainable supply path productivity, gross cost margin

And in I Okay. was what end residential more like it assume, XX% market. down a you quarter, the maybe look and on meaningfully? HVAC kind and tough in come I to already expansion progressing a think then how that's in environment can plans, the could up one that back like last starts here explain of

like? to just think trying that environment, about So does we have an what easier look

Certainly, comp growth on look fix, well is new break as the replace a XX% at X% that business pleased bit really were the of and you We side Yes. of HVAC business, with as attractive mix as up repair more the prior of the a construction. from year.

of way with XX get And XXX track the fiscal the so over were were HVAC on we the locations next tune end XXX. over counter in so by to build of expertise able far, out pleased and months, over XXX which the we the and over product to a our to year existing on

our space, and growing in outside sales base associate HVAC additionally, expertise the with professionals M&A our that But with HVAC obviously the landscape. complementing then the growing our greenfields and

pleased we're so with And what like. that looks

Certainly, Today, as that opportunity more repair see we versus improve that as about HVAC improving towards a what skewing we replace. And think bit certainly, also we're overall, will the is. economy an help construction to with as generally, business ramp side approach new will and got start that traction But really that in well. of space. we've the the the up, HVAC pleased that

back I'd Kevin pass like This closing remarks. for for to concludes our Murphy any to today. questions

you. Yes, me dealing we their began deflation. saying of and customers were because by with as the our customers' our in headwinds associates Thank again, commodity their focus to we better And where ongoing market making and Ferguson. let that's Yes. on for our close, you face thank execution projects and end

as indicated And has that Q&A, has our as that But started invest approach outperform budget. for like our remain to involves return strong productivity HVAC we to to customers. contractor trade large time markets out can delivering Bill make professional we areas very during multiyear as those so deliver structural on expected. data in the we that's largely year plumbing, they growth. we a to some committed continuing on this specialized And capital tailwinds for projects projects capitalize dual multi-customer centers group and and on faster like going the And

soon. to your to again forward much. very you appreciate Look today. time So thank very We you talking

today's for thank call. like joining. to We'd conclude We everyone

disconnect lines. now may You your