Ferguson Plc., the British plumbing and heating products distributor does nearly all its business in the U.S., is coming off a weak first quarter.
For the third quarter of fiscal 2023 ended April 30, Ferguson posted sales of $7.140 billion, a decrease of 2% from sales of $7.284 billion in the prior year. Net operating profit was $497 million compared with $712 million in the third quarter of fiscal 2022.
Ferguson does not break out as many ecommerce metrics as it once did. But in the third quarter the company did say that residential ecommerce accounted for about 9%, or $614.4 million, of total U.S. sales of $6.827 billion.
Ferguson ecommerce revenue was down primarily because of softening consumer demand, CEO Kevin Murphy told analysts on the Q3 earnings call.
“That residential digital commerce business saw pressure, so it’s a balance between the project-minded consumer and the decorative pro, with the pro holding up much better than the project-minded consumer, which was the principal driver of the decline,” Murphy said. “And so, if we look at where that pressure exists in the residential market, it really is in residential new construction on the trade plumbing side and then the project-minded consumer on the residential digital commerce side of the business.”
Ferguson also expects its residential ecommerce business to remain soft — at least for a while.
“The traffic in our showroom continues to be very supportive. Project and project growth continues to be supportive as well as price,” Murphy told analysts. “When you look at the digital commerce side, again, that is a balance between the like decorative pro and a project-minded consumer. That consumer piece has been a bit more challenging.”