Download full report with analyst certification and important disclosures
May 30 2019, 07:15 IST/BST
Ferguson had a tough Q2 with additional overhead weighing on margins. Management reacted quickly and cut headcount, but the damage was done and FY guidance was cut. The share price recovered from that disappointment only to trade off again in the last week. That stemmed from weak market updates — Lowes’ Q1 results in particular. While the US housing data are clearly mixed, we view the risk of further cuts to guidance as low. The group has already cut its H2 sales outlook (3-5%) and, at the same time, guided the market lower on margin flow-through. Even with a harsh weather impact in February we expect an in line Q3 result.