CompanyGraph
Ferguson Enterprises Inc
FERG · NYSE Arca · United States
Delivers plumbing and HVAC parts to job sites the same day through 1,800 branches covering nearly all U.S. construction markets.
Ferguson supplies plumbing and HVAC parts to contractors who cannot wait — a burst pipe or failed compressor shuts down a job site until the right part arrives, so same-day delivery is the service, not a convenience. To make that possible, Ferguson has positioned 1,800 branches so that 95% of U.S. construction markets sit within 60 miles of a stocked location, and eleven regional distribution centers feed those branches continuously so no single location has to carry deep inventory on its own. A dedicated truck fleet then converts that proximity into timed job-site delivery, which is something neither e-commerce platforms nor general industrial distributors can match because their fulfillment runs on days, not hours. The whole structure depends on holding that branch footprint: the urban-periphery properties that make the 60-mile geometry work are zoning-restricted and increasingly unavailable, so a competitor cannot simply buy their way in — but it also means that if a construction downturn cuts per-branch volume below what it costs to keep each location staffed and stocked, Ferguson cannot shed branches without dismantling the very coverage that makes same-day delivery possible.
How does this company make money?
Ferguson sells plumbing, HVAC, and PVF products at a markup over what it pays suppliers, delivering $29.6 billion in revenue in fiscal 2024. Most of that revenue comes from consumable repair and maintenance items and replacement components that contractors reorder frequently, rather than large one-time equipment purchases — which means demand is relatively steady even when new construction slows.
What makes this company hard to replace?
Contractors run their projects through Ferguson credit accounts that are already tied into their daily workflows, and their job sites are built around established delivery routes and credit terms that would have to be rebuilt from scratch with any new supplier. Beyond that, Ferguson branch staff carry specialized knowledge of plumbing, HVAC, and PVF specifications and local building codes that a general e-commerce platform cannot replicate — for a contractor facing a complex infrastructure spec mid-project, that knowledge has real daily value.
What limits this company?
To maintain same-day delivery, each branch must sit on the urban edge of a metro area — close enough to reach job sites quickly, but with space for warehouse operations and truck access. Those specific properties are hard to find because industrial zoning is tightly restricted in exactly the metropolitan rings where construction is most active, and land costs are high. Money alone cannot speed up the process of finding and securing those locations.
What does this company depend on?
Ferguson cannot run without five things: residential and commercial construction permit activity that generates the repair and installation demand its branches serve; product allocation agreements with major HVAC manufacturers like Carrier and Trane; a dedicated truck fleet to move parts from branches to job sites; regional distribution center space to stage inventory before it reaches branches; and trade credit facilities to finance the inventory float across hundreds of thousands of parts — $29.6 billion worth in fiscal 2024.
Who depends on this company?
Residential and commercial plumbing contractors rely on Ferguson for same-day access to emergency pipe fittings and fixtures when a job hits an unexpected problem mid-build. HVAC technicians depend on it for immediate replacement compressors and controls, because a building's climate system cannot stay offline while a part ships from a warehouse three states away. Municipal water and wastewater infrastructure projects need specialized PVF components that general industrial distributors simply do not stock.
How does this company scale?
Standardized warehouse layouts and inventory management systems let Ferguson open new branches in similar metro markets without reinventing the operation each time. What does not scale as easily is the local side: each branch has to build its own relationships with area contractors, learn regional building codes, and earn trust through consistent personal service — that groundwork cannot be copied from one city and pasted into another.
What external forces can significantly affect this company?
Federal spending through the Bipartisan Infrastructure Law is pushing municipal water system upgrades, which creates bursts of demand for PVF products that are hard to predict and plan around. Interest rate cycles shape how many new homes and buildings get started, shifting the mix between new installation work and repair demand. Climate regulations are requiring HVAC systems to meet new efficiency standards, which forces product specification changes that vary by state and require Ferguson's branches to continuously update what they stock.
Where is this company structurally vulnerable?
If construction activity fell sharply and stayed low for long enough, each branch would handle fewer orders while still carrying the full cost of local inventory, warehouse space, and dedicated delivery. Ferguson cannot quietly close branches to cut costs, because removing even a handful of locations would punch holes in the 60-mile coverage network that makes same-day delivery possible everywhere else. The density that is the company's main strength becomes a fixed cost it cannot escape during a prolonged downturn.