Ferguson Plc Expects 2024 Margin of 9.2%-9.8%

Ferguson Plc has recently released its financial results for the six months ending January 31, 2024. The company's net sales guidance for the 2024 fiscal year assumes a mid-single digit market decline with continued company market outperformance, contribution from completed acquisitions, and one additional sales day. The overall impact of price inflation is estimated to be broadly neutral for the year.

The adjusted operating margin for the 2024 fiscal year is expected to be between 9.2% and 9.8%. The company's interest expense is forecasted to be between $190 million and $210 million, while the adjusted effective tax rate is anticipated to be approximately 25%. Capital expenditures for the 2024 fiscal year are projected to range from $400 million to $450 million.

Kevin Murphy, CEO of Ferguson, expressed confidence in the company's performance, stating that sales were slightly lower than the previous year, but organic performance improved from the first quarter. He also mentioned that current open orders and sales per day trends support the expectation of improvement through the balance of the fiscal year against easing comparables.

The company's profit forecast, which includes the aforementioned financial guidance, continues to be valid according to the board's confirmation at the date of the U.K. prospectus. Adjusted operating margin is defined as adjusted operating profit divided by net sales, where adjusted operating profit is defined as operating profit before restructuring costs, impairments and other charges, and acquisition-related intangible amortization. Following these announcements, the company's shares moved 0.2%, and are now trading at a price of $211.96. Check out the company's full 8-K submission here.

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