09:17 AM EDT, 09/17/2024 (MT Newswires) -- Ferguson's (FERG) fiscal fourth-quarter earnings came in ahead of market estimates while revenue missed expectations as residential end markets in the US "remained muted."

The plumbing and heating products company on Tuesday posted adjusted earnings of $2.98 per share for the quarter ended July 31, up from $2.77 the year before. The consensus on Capital IQ was for normalized EPS of $2.86. Sales increased 1.4% year over year to $7.95 billion, but missed the Street's view for $8.02 billion.

Weakness in certain commodity categories resulted in overall price deflation of about 2%, according to the company. On an organic basis, revenue fell 0.2% while volume rose about 2%.

"Despite market headwinds and deflation during the year, we continued to outperform our markets, returned to volume growth, expanded gross margins and delivered solid operating margin performance," Chief Executive Kevin Murphy said in a statement.

Sales in the US improved to $7.53 billion from $7.43 billion in the 2023 quarter, amid a 3% gain in non-residential revenue. Residential revenue was flat as housing start and permit activity weakened during the second half, while repair, maintenance and improvement work remained soft, the company said. Sales in Canada inclined 2% from last year to $418 million.

For fiscal 2025, Ferguson expects sales to increase by low single digits while the Street is looking for revenue of $31.08 billion. The outlook assumes that the company's markets will be down low single digits, including pricing to be "slightly down" for the year. In fiscal 2024, sales fell 0.3% to $29.64 billion.

"Our fiscal 2025 guidance reflects modest full year growth with continued market outperformance," according to Murphy. "While we anticipate an ongoing challenging near term market environment, we will continue to invest in scale and capabilities to take advantage of multi-year structural tailwinds."

Adjusted operating margin is pegged at 9% to 9.5% for the ongoing fiscal year, compared with 9.5% recorded in fiscal 2024. Capital expenditures are set to come in between $400 million and $450 million.

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