Cover
Cover - shares | 9 Months Ended | |
Apr. 30, 2023 | May 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40066 | |
Entity Registrant Name | Ferguson plc | |
Entity Incorporation, State or Country Code | Y9 | |
Entity Tax Identification Number | 98-1499339 | |
Entity Address, Address Line One | 1020 Eskdale Road | |
Entity Address, Address Line Two | Winnersh Triangle | |
Entity Address, City or Town | Wokingham | |
Entity Address, Postal Zip Code | RG41 5TS, | |
Entity Address, Country | GB | |
City Area Code | 118 | |
Local Phone Number | 927 3800 | |
Title of 12(b) Security | Ordinary Shares of 10 pence | |
Trading Symbol | FERG | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 204,785,917 | |
Entity Central Index Key | 0001832433 | |
Current Fiscal Year End Date | --07-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Income Statement [Abstract] | ||||
Net sales | $ 7,140 | $ 7,284 | $ 21,896 | $ 20,595 |
Cost of sales | (5,000) | (5,079) | (15,273) | (14,274) |
Gross profit | 2,140 | 2,205 | 6,623 | 6,321 |
Selling, general and administrative expenses | (1,435) | (1,415) | (4,376) | (4,091) |
Impairments and other charges | 127 | 0 | 127 | 0 |
Depreciation and amortization | (81) | (78) | (243) | (224) |
Operating profit | 497 | 712 | 1,877 | 2,006 |
Interest expense, net | (48) | (22) | (136) | (71) |
Other expense, net | (2) | 0 | (7) | (2) |
Income before income taxes | 447 | 690 | 1,734 | 1,933 |
Provision for income taxes | (111) | (144) | (429) | (416) |
Income from continuing operations | 336 | 546 | 1,305 | 1,517 |
Income from discontinued operations (net of tax) | 0 | 0 | 0 | 25 |
Net income | $ 336 | $ 546 | $ 1,305 | $ 1,542 |
Earnings per share - Basic: | ||||
Continuing operations, Basic (in usd per share) | $ 1.64 | $ 2.52 | $ 6.30 | $ 6.91 |
Discontinued operations, Basic (in usd per share) | 0 | 0 | 0 | 0.11 |
Earnings per share, Basic (in usd per share) | 1.64 | 2.52 | 6.30 | 7.02 |
Earnings per share - Diluted: | ||||
Continuing operations, Diluted (in usd per share) | 1.63 | 2.50 | 6.28 | 6.88 |
Discontinued operations, Diluted (in usd per share) | 0 | 0 | 0 | 0.11 |
Earnings per share, Diluted (in usd per share) | $ 1.63 | $ 2.50 | $ 6.28 | $ 6.99 |
Weighted-average number of shares outstanding: | ||||
Basic (in shares) | 205.4 | 217.1 | 207.1 | 219.5 |
Diluted (in shares) | 206.1 | 218 | 207.9 | 220.6 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 336 | $ 546 | $ 1,305 | $ 1,542 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (7) | (13) | (25) | (27) |
Pension income (loss), net of tax expense of $0, $0, $1, and $10 respectively. | 4 | (4) | 11 | (22) |
Total other comprehensive income (loss), net of tax | (3) | (17) | (14) | (49) |
Comprehensive income | $ 333 | $ 529 | $ 1,291 | $ 1,493 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
OCI, defined benefit plan, tax expense (benefit) | $ 0 | $ 0 | $ 1 | $ 10 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Millions | Apr. 30, 2023 | Jul. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 625 | $ 771 |
Accounts receivable, less allowances of $54 and $27, respectively | 3,382 | 3,610 |
Inventories | 4,089 | 4,333 |
Prepaid and other current assets | 783 | 834 |
Assets held for sale | 30 | 3 |
Total current assets | 8,909 | 9,551 |
Assets, Noncurrent [Abstract] | ||
Property, plant and equipment, net | 1,542 | 1,376 |
Operating lease right-of-use assets | 1,321 | 1,200 |
Deferred income taxes, net | 265 | 177 |
Goodwill | 2,090 | 2,048 |
Other intangible assets, net | 661 | 782 |
Other non-current assets | 576 | 527 |
Total assets | 15,364 | 15,661 |
Liabilities, Current [Abstract] | ||
Accounts payable | 3,297 | 3,607 |
Short-term debt | 55 | 250 |
Current portion of operating lease liabilities | 343 | 321 |
Dividend payable | 153 | 0 |
Share repurchase liability | 114 | 324 |
Other current liabilities | 1,163 | 1,297 |
Total current liabilities | 5,125 | 5,799 |
Liabilities, Noncurrent [Abstract] | ||
Long-term debt | 3,839 | 3,679 |
Long-term portion of operating lease liabilities | 995 | 878 |
Other long-term liabilities | 684 | 640 |
Total liabilities | 10,643 | 10,996 |
Shareholders’ equity: | ||
Ordinary shares, par value 10 pence: 500,000,000 shares authorized, 232,171,182 shares issued | 30 | 30 |
Paid-in capital | 799 | 760 |
Retained earnings | 8,128 | 7,594 |
Treasury shares, 27,208,571 and 21,078,577 shares, respectively at cost | (3,346) | (2,782) |
Employee Benefit Trusts, 275,651 and 846,491 shares, respectively at cost | (46) | (107) |
Accumulated other comprehensive loss | (844) | (830) |
Total shareholders' equity | 4,721 | 4,665 |
Total liabilities and shareholders' equity | $ 15,364 | $ 15,661 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) $ in Millions | Apr. 30, 2023 USD ($) shares | Apr. 30, 2023 £ / shares | Jul. 31, 2022 USD ($) shares | Jul. 31, 2022 £ / shares |
Statement of Financial Position [Abstract] | ||||
Allowance for credit loss | $ | $ 54 | $ 27 | ||
Ordinary shares, par value (in pound sterling per share) | £ / shares | £ 10 | £ 10 | ||
Ordinary shares, shares authorized (in shares) | 500,000,000 | 500,000,000 | ||
Ordinary shares, shares issued (in shares) | 232,171,182 | 232,171,182 | ||
Treasury stock (in shares) | 27,208,571 | 21,078,577 | ||
Employee Benefit Trust (in shares) | 275,651 | 846,491 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Shareholders’ Equity (unaudited) - USD ($) $ in Millions | Total | Ordinary Shares | Paid-in Capital | Retained Earnings | Treasury Shares | Employee Benefit Trusts | Accumulated Other Comprehensive Loss |
Beginning balance at Jul. 31, 2021 | $ 5,003 | $ 30 | $ 704 | $ 6,054 | $ (931) | $ (58) | $ (796) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Other comprehensive income (loss) | 3 | ||||||
Ending balance at Oct. 31, 2021 | (793) | ||||||
Beginning balance at Jul. 31, 2021 | 5,003 | 30 | 704 | 6,054 | (931) | (58) | (796) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | 45 | 45 | |||||
Net income | 1,542 | 1,542 | |||||
Cash dividends declared | (550) | (550) | |||||
Other comprehensive income (loss) | (49) | (49) | |||||
Share repurchases | (1,506) | (1,414) | (92) | ||||
Shares issued under employee share plans | 0 | (50) | 7 | 43 | |||
Other | 18 | 18 | |||||
Ending balance at Apr. 30, 2022 | $ 4,503 | 30 | 749 | 7,014 | (2,338) | (107) | (845) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cash dividends (in usd per share) | $ 2.505 | ||||||
Beginning balance at Oct. 31, 2021 | (793) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Other comprehensive income (loss) | $ (35) | ||||||
Ending balance at Jan. 31, 2022 | 4,845 | 30 | 737 | 6,649 | (1,636) | (107) | (828) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | 12 | 12 | |||||
Net income | 546 | 546 | |||||
Cash dividends declared | (182) | (182) | |||||
Other comprehensive income (loss) | (17) | (17) | |||||
Share repurchases | (702) | (702) | |||||
Other | 1 | 1 | |||||
Ending balance at Apr. 30, 2022 | $ 4,503 | 30 | 749 | 7,014 | (2,338) | (107) | (845) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cash dividends (in usd per share) | $ 0.84 | ||||||
Beginning balance at Jul. 31, 2022 | $ 4,665 | 30 | 760 | 7,594 | (2,782) | (107) | (830) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Other comprehensive income (loss) | (37) | ||||||
Ending balance at Oct. 31, 2022 | (867) | ||||||
Beginning balance at Jul. 31, 2022 | 4,665 | 30 | 760 | 7,594 | (2,782) | (107) | (830) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | 39 | 39 | |||||
Net income | 1,305 | 1,305 | |||||
Cash dividends declared | (704) | (704) | |||||
Other comprehensive income (loss) | (14) | (14) | |||||
Share repurchases | (570) | (570) | |||||
Shares issued under employee share plans | 0 | (67) | 6 | 61 | |||
Ending balance at Apr. 30, 2023 | $ 4,721 | 30 | 799 | 8,128 | (3,346) | (46) | (844) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cash dividends (in usd per share) | $ 3.41 | ||||||
Beginning balance at Oct. 31, 2022 | (867) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Other comprehensive income (loss) | $ 26 | ||||||
Ending balance at Jan. 31, 2023 | 4,725 | 30 | 789 | 7,945 | (3,151) | (47) | (841) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation | 10 | 10 | |||||
Net income | 336 | 336 | |||||
Cash dividends declared | (152) | (152) | |||||
Other comprehensive income (loss) | (3) | (3) | |||||
Share repurchases | (195) | (195) | |||||
Shares issued under employee share plans | 0 | (1) | 1 | ||||
Ending balance at Apr. 30, 2023 | $ 4,721 | $ 30 | $ 799 | $ 8,128 | $ (3,346) | $ (46) | $ (844) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cash dividends (in usd per share) | $ 0.75 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Shareholders’ Equity (unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends (in usd per share) | $ 0.75 | $ 0.84 | $ 3.41 | $ 2.505 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 1,305 | $ 1,542 |
Income from discontinued operations | 0 | (25) |
Income from continuing operations | 1,305 | 1,517 |
Depreciation and amortization | 243 | 224 |
Share-based compensation | 38 | 44 |
Non-cash impact of impairments and net loss on disposal of assets | 127 | 14 |
Decrease (increase) in inventories | 315 | (808) |
Decrease (increase) in receivables and other assets | 313 | (636) |
(Decrease) increase in accounts payable and other liabilities | (441) | 439 |
Change in deferred taxes and income tax payable | (100) | (120) |
Other operating activities | 6 | 7 |
Net cash provided by operating activities of continuing operations | 1,806 | 681 |
Net cash used in operating activities of discontinued operations | (4) | 0 |
Net cash provided by operating activities | 1,802 | 681 |
Cash flows from investing activities: | ||
Purchase of businesses acquired, net of cash acquired | (179) | (275) |
Capital expenditures | (361) | (195) |
Other investing activities | (3) | (6) |
Net cash used in investing activities of continuing operations | (543) | (476) |
Net cash provided by investing activities of discontinued operations | 0 | 25 |
Net cash used in investing activities | (543) | (451) |
Cash flows from financing activities: | ||
Purchase of own shares by Employee Benefit Trusts | 0 | (92) |
Purchase of treasury shares | (784) | (918) |
Repayments of debt | (2,280) | (575) |
Proceeds from debt | 2,250 | 1,564 |
Change in bank overdrafts | 1 | 14 |
Cash dividends | (557) | (364) |
Other financing activities | (19) | (12) |
Net cash used in financing activities | (1,389) | (383) |
Change in cash, cash equivalents and restricted cash | (130) | (153) |
Effects of exchange rate changes | 20 | (19) |
Cash, cash equivalents and restricted cash, beginning of period | 785 | 1,342 |
Cash, cash equivalents and restricted cash, end of period | 675 | 1,170 |
Supplemental Disclosures: | ||
Cash paid for income taxes | 529 | 536 |
Cash paid for interest | 156 | 82 |
Accrued capital expenditures | $ 11 | $ 10 |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Apr. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies Background Ferguson plc (the “Company”) (NYSE: FERG; LSE: FERG) is a public company limited by shares incorporated in Jersey under the Companies (Jersey) Law 1991 (as amended). The Company is a value-added distributor in North America providing expertise, solutions and products from infrastructure, plumbing and appliances to HVAC, fire, fabrication and more. We exist to make our customers’ complex projects simple, successful and sustainable. Ferguson is headquartered in the United Kingdom (“U.K.”), with its operations and associates solely focused on North America and managed from Newport News, Virginia. The Company’s registered office is 13 Castle Street, St Helier, Jersey, JE1 1ES, Channel Islands. Basis of presentation The accompanying unaudited condensed consolidated financial statements and notes to the condensed consolidated financial statements are presented in accordance with the rules and regulations of the SEC and accounting principles generally accepted in the United States of America (“U.S. GAAP”), but do not include all the disclosures normally required in annual consolidated financial statements. The unaudited condensed consolidated financial statements, in the opinion of management, contain all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. The July 31, 2022 condensed consolidated balance sheet was derived from the audited financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report. The financial results for the interim periods may not be indicative of the financial results for the entire fiscal year. Use of estimates The preparation of the Company's interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions affecting certain reported amounts. Actual results may differ from those estimates. Cash, cash equivalents and restricted cash Cash and cash equivalents include cash on hand, deposits with banks with original maturities of three months or less and overdrafts to the extent there is a legal right of offset and practice of net settlement with cash balances. Restricted cash primarily consists of deferred consideration for business combinations, subject to various settlement agreements, and is recorded in prepaid and other current assets in the Company’s condensed consolidated balance sheets. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows. As of (In millions) April 30, 2023 July 31, 2022 Cash and cash equivalents $625 $771 Restricted cash 50 14 Total cash, cash equivalents and restricted cash $675 $785 Recently issued accounting pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting. This ASU, and subsequent clarifications, provide practical expedients for contract modification accounting related to the transition away from the London Interbank Offered Rate (“LIBOR”) and other interbank offering rates to alternative reference rates. The Company has evaluated the impact of reference rate reform and concluded the impact is not material to the Company’s consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments address how to determine whether a contract liability is recognized by the acquirer in a business combination and provides specific guidance on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts in a business combination. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company does not expect a material impact to the Company’s consolidated financial statements. Recent accounting pronouncements pending adoption that are not discussed above are either not applicable, or will not have, or are not expected to have, a material impact on our consolidated financial condition, results of operations, cash flows or related disclosures. |
Revenue and segment information
Revenue and segment information | 9 Months Ended |
Apr. 30, 2023 | |
Segment Reporting [Abstract] | |
Revenue and segment information | Revenue and segment information The Company reports its financial results of operations on a geographical basis in the following two reportable segments: United States and Canada. Each segment generally derives its revenues in the same manner. The Company uses adjusted operating profit as its measure of segment profit. Adjusted operating profit is defined as profit before tax, excluding central and other costs, restructuring costs, impairments and other charges, amortization of acquired intangible assets, net interest expense, as well as other items typically recorded in net other (expense) income such as (loss)/gain on disposal of businesses, pension plan changes/closure costs and amounts recorded in connection with the Company’s interests in investees. Certain income and expenses are not allocated to the Company’s segments and, thus, the information that management uses to make operating decisions and assess performance does not reflect such amounts. Segment details were as follows: Three months ended Nine months ended April 30, April 30, (In millions) 2023 2022 2023 2022 Net sales: United States $6,827 $6,938 $20,863 $19,528 Canada 313 346 1,033 1,067 Total net sales $7,140 $7,284 $21,896 $20,595 Adjusted operating profit: United States $664 $736 $2,088 $2,064 Canada 7 20 54 77 Central and other costs (14) (9) (39) (39) Corporate restructurings (1) — (5) — (12) Impairments and other charges (2) (127) — (127) — Amortization of acquired intangible assets (33) (30) (99) (84) Interest expense, net (48) (22) (136) (71) Other expense, net (2) — (7) (2) Income before income taxes $447 $690 $1,734 $1,933 (1) For the three and nine months ended April 30, 2022, corporate restructuring costs related to the incremental costs of the Company’s listing in the United States. (2) See Note 4 for details regarding impairments and other charges. Our products are delivered through a common network of distribution centers, branches, specialist sales associates, counter service, showroom consultants and e-commerce. The Company recognizes revenue when a sales arrangement with a customer exists, the transaction price is fixed or determinable and the Company has satisfied its performance obligation per the sales arrangement. The majority of the Company’s revenue originates from sales arrangements with a single performance obligation to deliver products, whereby the performance obligations are satisfied when control of the product is transferred to the customer which is the point the product is delivered to, or collected by, the customer. The Company determined that disaggregating net sales by end market at the segment level achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows may be impacted by economic factors. The disaggregated net sales by end market are as follows: Three months ended Nine months ended April 30, April 30, (In millions) 2023 2022 2023 2022 United States: Residential $3,534 $3,752 $10,956 $10,617 Non-residential: Commercial 2,231 2,190 6,764 6,180 Civil/Infrastructure 567 558 1,713 1,532 Industrial 495 438 1,430 1,199 Total Non-residential 3,293 3,186 9,907 8,911 Total United States 6,827 6,938 20,863 19,528 Canada 313 346 1,033 1,067 Total net sales $7,140 $7,284 $21,896 $20,595 No sales to an individual customer accounted for more than 10% of net sales during any of the periods presented. |
Earnings per share
Earnings per share | 9 Months Ended |
Apr. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share Basic earnings per share is calculated using our weighted-average outstanding ordinary shares. Diluted earnings per share is calculated using our weighted-average outstanding ordinary shares and the dilutive effect of share awards as determined under the treasury stock method. The following table shows the calculation of diluted shares: Three months ended Nine months ended April 30, April 30, (In millions, except per share amounts) 2023 2022 2023 2022 Income from continuing operations $336 $546 $1,305 $1,517 Income from discontinued operations (net of tax) — — — 25 Net income $336 $546 $1,305 $1,542 Weighted-average number of shares outstanding: Basic weighted-average shares 205.4 217.1 207.1 219.5 Effect of dilutive shares 0.7 0.9 0.8 1.1 Diluted weighted-average shares 206.1 218.0 207.9 220.6 Earnings per share - Basic: Continuing operations $1.64 $2.52 $6.30 $6.91 Discontinued operations — — — 0.11 Total $1.64 $2.52 $6.30 $7.02 Earnings per share - Diluted: Continuing operations $1.63 $2.50 $6.28 $6.88 Discontinued operations — — — 0.11 Total $1.63 $2.50 $6.28 $6.99 Excluded anti-dilutive shares 0.1 0.1 0.1 0.1 |
Impairments and other charges
Impairments and other charges | 9 Months Ended |
Apr. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairments & other charges | Impairments and other charges Internal use software The Company has been upgrading portions of its IT systems to enhance customer experience and associate productivity. One of the solutions developed targeted certain branch transactional processes and was piloted at select locations. In the third quarter of fiscal 2023, the Company determined that this solution did not meet our customer service, speed and efficiency goals. As a result, the Company chose not to proceed with this component and recorded a non-cash impairment charge of $107 million of previously capitalized software costs in the United States. Branch closures During the third quarter of fiscal 2023, the Company recorded charges of $20 million related to the closure of 44 smaller, underperforming branches in the United States, primarily related to impairment of lease assets and related fixed assets. |
Income tax
Income tax | 9 Months Ended |
Apr. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income tax | Income tax Ferguson manages its affairs so that it is centrally managed and controlled in the U.K. and therefore has its tax residency in the U.K. The provision for income taxes consists of provisions for the U.K. plus non-U.K. tax rate differentials with respect to other locations in which Ferguson’s operations are based. Accordingly, the consolidated income tax rate is a composite rate reflecting earnings in various locations and the applicable rates. The Company’s tax provision for each period presented was calculated using an estimated annual tax rate, adjusted for discrete items occurring during the applicable period to arrive at an effective tax rate. The effective income tax rates for the relevant periods were as follows: Three months ended Nine months ended April 30, April 30, 2023 2022 2023 2022 Effective tax rate, continuing operations 24.8 % 20.9 % 24.7 % 21.5 % During the year-to-date period of fiscal 2023, there have been no material changes to the Company’s unrecognized tax benefits when compared to those items disclosed in the Annual Report. As disclosed in the Annual Report, we consider foreign earnings of specific subsidiaries to be indefinitely reinvested. If at some future date, the Company ceases to be permanently reinvested in these foreign subsidiaries, the Company may be subject to foreign withholding and other taxes on these undistributed earnings and may need to record a deferred tax liability for any outside basis difference on these specific foreign subsidiaries. The potential impact in connection with these items has not materially changed since the end of fiscal 2022. |
Debt
Debt | 9 Months Ended |
Apr. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s debt obligations consisted of the following: As of (In millions) April 30, 2023 July 31, 2022 Variable-rate debt: Receivables Securitization Facility $175 $455 Term Loan 500 — Private Placement Notes: 3.43% due September 2022 — 250 3.30% due November 2023 55 55 3.44% due November 2024 150 150 3.73% due September 2025 400 400 3.51% due November 2026 150 150 3.83% due September 2027 150 150 Unsecured Senior Notes: 4.50% due October 2028 750 750 3.25% due June 2030 600 600 4.25% due April 2027 300 300 4.65% due April 2032 700 700 Subtotal $3,930 $3,960 Less: current maturities of debt (55) (250) Unamortized discounts and debt issuance costs (23) (24) Interest rate swap - fair value adjustment (13) (7) Total long-term debt $3,839 $3,679 Private Placement Notes During the first quarter of fiscal 2023, the 3.43% notes due in September 2022 were repaid at maturity. Bilateral Loan The Company previously maintained an unsecured $250 million 364-day revolving facility (the “Bilateral Loan Facility”) governed by the Revolving Facility Agreement, dated March 25, 2022, among the Company, Ferguson UK Holdings Limited, a wholly-owned subsidiary of the Company (“Ferguson UK”), Sumitomo Mitsui Banking Corporation, London Branch, as lead arranger, the lenders party thereto and SMBC Bank International PLC, as agent for the lenders (the “Bilateral Loan Agreement”). Effective December 29, 2022, the Company voluntarily cancelled the Bilateral Loan Facility in accordance with the terms of the Bilateral Loan Agreement. At the time of cancellation, no amounts were outstanding under the Bilateral Loan Agreement. Term Loan Agreement The Credit Agreement, dated October 7, 2022, among the Company, Ferguson UK, the lenders party thereto and the agent of the lenders party thereto (the “Term Loan Agreement”) provides for term loans in an aggregate principal amount of $500 million, the proceeds of which may be used for general corporate purposes. The Term Loan Agreement will mature on October 7, 2025. Term loans will bear interest at a rate per annum of the Term SOFR Rate, as defined in the Term Loan Agreement, plus a credit spread adjustment of 10 basis points plus a margin ranging from 100 to 150 basis points, determined on the basis of the Company’s corporate credit ratings (or if public credit ratings are not published, senior unsecured debt ratings). Ferguson UK may voluntarily prepay the term loans, in whole or in part, without premium or penalty, but subject to reimbursement of funding losses with respect to certain prepayments. Term loans that are prepaid may not be reborrowed. The Term Loan Agreement contains representations and warranties, affirmative and negative covenants and events of default, including, but not limited to, restrictions on the incurrence of non-guarantor subsidiary indebtedness, additional liens, mergers and sales of assets and changes in nature of business, in each case, subject to certain conditions, exceptions and thresholds. The Term Loan Agreement also requires the Company to maintain on a consolidated basis, as of the last day of each fiscal quarter, a maximum net leverage ratio of 3.50 to 1.00, with a step-up to 4.00 to 1.00 with respect to each of the four fiscal quarters ending immediately after certain material acquisitions. The Company unconditionally and irrevocably guarantees the term loans. Revolving Credit Facility The Company maintains a revolving credit facility (the “Revolving Facility”) under the Amendment and Restatement Agreement, dated October 7, 2022, among the Company, Ferguson UK, the lenders and arrangers party thereto, and the agent of the lenders party thereto (as amended from time to time, the “Revolving Facility Agreement”). The Revolving Facility has aggregate total available credit commitments of $1.35 billion. Borrowings under the Revolving Facility bear interest at a per annum rate of Term SOFR (as defined in the Revolving Facility Agreement) plus a credit spread adjustment of 10 basis points plus a margin ranging from 20 to 75 basis points, determined on the basis of the Company’s corporate credit ratings (or if public credit ratings are not published, senior unsecured debt ratings). The Company is required to pay a quarterly commitment fee and utilization fee in certain circumstances. All obligations under the Revolving Facility Agreement are unconditionally guaranteed by the Company and Ferguson UK, to the extent each entity is not the borrower with respect to such obligation. The Revolving Facility Agreement contains affirmative and negative covenants that, among other things, restrict, subject to certain conditions, exceptions and thresholds, the ability of the Company and its subsidiaries to incur indebtedness, grant liens on present or future assets or revenues, sell assets or engage in mergers or consolidations. The Revolving Facility Agreement also contains events of default, including, among others, cross-default and cross-acceleration provisions, in each case, subject to grace periods and thresholds. The Revolving Facility terminates in March 2026. As of April 30, 2023, no borrowings were outstanding under the Revolving Facility. Receivables Securitization Facility The Company maintains a Receivables Securitization Facility (as amended from time to time, the “Receivables Facility”) governed by the Receivables Purchase Agreement dated July 31, 2013, as amended from time to time. As of October 31, 2022, the Receivables Facility consists of accounts receivable funding for up to $1.1 billion, including a swingline for up to $100 million in same day funding, terminating on October 7, 2025. The Company has available to it an accordion feature whereby the facility may be increased up to $1.5 billion subject to lender participation. Interest is payable under the Receivables Facility at a rate of Term SOFR (as defined in the Receivables Facility) plus a credit spread adjustment of 10 basis points plus a margin. The Company does not factor its accounts receivable as the Receivables Facility is the Company’s only secured borrowing. The Receivables Facility contains affirmative and negative covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its subsidiaries party thereto from granting additional liens on the accounts receivable, selling certain assets or engaging in acquisitions, mergers or consolidations, or, in the case of the borrower, incurring other indebtedness. The Receivables Facility also contains events of default and cross-default provisions, including requirements that our performance in relation to accounts receivable remains at set levels (specifically, among other things, relating to timely payments being received from debtors on the accounts receivable and to the amount of accounts receivable written off as bad debt) and that a required level of accounts receivable be generated and available to support the borrowings under the arrangements. As of April 30, 2023, $175 million in borrowings were outstanding under the Receivables Facility. The Company pays customary fees regarding unused amounts to maintain the availability under the Receivables Facility. The Company was in compliance with all debt covenants for all of these debt obligations and facilities that were in effect as of April 30, 2023. |
Assets and liabilities at fair
Assets and liabilities at fair value | 9 Months Ended |
Apr. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities at fair value | Assets and liabilities at fair value The Company has not changed its valuation techniques for measuring fair value of any financial assets or liabilities during the periods presented. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and other debt instruments, such as the receivables securitization facility and term loans, approximate the fair values of those instruments. The Company’s derivatives (interest rate swaps which are considered fair value hedges) and investments in equity instruments are carried at fair value on the condensed consolidated balance sheets (Level 2 and Level 3 fair value inputs, respectively) and are not material. The notional amount of the Company’s outstanding fair value hedges as of April 30, 2023 and July 31, 2022 was $355 million. Carrying amounts and the related estimated fair value (Level 2) of the Company’s long-term debt were as follows: April 30, 2023 July 31, 2022 (In millions) Carrying Amount Fair Value Carrying Amount Fair Value Unsecured Senior Notes $2,330 $2,226 $2,328 $2,350 Private Placement Notes 904 878 1,153 1,142 |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Apr. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Legal matters The Company is, from time to time, involved in various legal proceedings considered to be normal course of business in relation to, among other things, the products that we supply, contractual and commercial disputes and disputes with employees. Provision is made if, on the basis of current information and professional advice, liabilities are considered likely to arise. In the case of unfavorable outcomes, the Company may benefit from applicable insurance protection. The Company does not expect any of its pending legal proceedings to have a material adverse effect on its results of operations, financial position or cash flows. |
Accumulated other comprehensive
Accumulated other comprehensive loss | 9 Months Ended |
Apr. 30, 2023 | |
Equity [Abstract] | |
Accumulated other comprehensive loss | Accumulated other comprehensive loss The change in accumulated other comprehensive loss was as follows: (In millions, net of tax) Foreign currency translation Pensions Total Balance at July 31, 2022 ($420) ($410) ($830) Other comprehensive loss before reclassifications (36) (3) (39) Amounts reclassified from accumulated other comprehensive loss — 2 2 Other comprehensive loss (36) (1) (37) Balance at October 31, 2022 (456) (411) (867) Other comprehensive income before reclassifications 18 6 24 Amounts reclassified from accumulated other comprehensive loss — 2 2 Other comprehensive income 18 8 26 Balance at January 31, 2023 (438) (403) (841) Other comprehensive (loss) income before reclassifications (7) 2 (5) Amounts reclassified from accumulated other comprehensive loss — 2 2 Other comprehensive (loss) income (7) 4 (3) Balance at April 30, 2023 ($445) ($399) ($844) (In millions, net of tax) Foreign currency translation Pensions Total Balance at July 31, 2021 ($396) ($400) ($796) Other comprehensive income before reclassifications — 1 1 Amounts reclassified from accumulated other comprehensive loss — 2 2 Other comprehensive income — 3 3 Balance at October 31, 2021 (396) (397) (793) Other comprehensive loss before reclassifications (14) (23) (37) Amounts reclassified from accumulated other comprehensive loss — 2 2 Other comprehensive loss (14) (21) (35) Balance at January 31, 2022 (410) (418) (828) Other comprehensive loss before reclassifications (13) (6) (19) Amounts reclassified from accumulated other comprehensive loss — 2 2 Other comprehensive loss (13) (4) (17) Balance at April 30, 2022 ($423) ($422) ($845) Amounts reclassified from accumulated other comprehensive income related to pension and other post-retirement items include the related income tax impacts. Such amounts consisted of the following: Three months ended Nine months ended April 30, April 30, (In millions) 2023 2022 2023 2022 Amortization of actuarial losses $2 $3 $8 $8 Tax benefit — (1) (2) (2) Amounts reclassified from accumulated other comprehensive loss $2 $2 $6 $6 |
Retirement benefit obligations
Retirement benefit obligations | 9 Months Ended |
Apr. 30, 2023 | |
Retirement Benefits [Abstract] | |
Retirement benefit obligations | Retirement benefit obligations The Company maintains pension plans in the U.K. and Canada. The components of net periodic pension cost, which are included in Other expense, net in the condensed consolidated statements of earnings, were as follows: Three months ended Nine months ended April 30, April 30, (In millions) 2023 2022 2023 2022 Interest cost ($13) ($10) ($38) ($30) Expected return on plan assets 12 12 36 35 Amortization of net actuarial losses (2) (3) (8) (8) Net periodic cost ($3) ($1) ($10) ($3) The impact of exchange rate fluctuations is included on the amortization line above. |
Shareholders_ equity
Shareholders’ equity | 9 Months Ended |
Apr. 30, 2023 | |
Equity [Abstract] | |
Shareholders’ equity | Shareholders’ equity The following table presents a summary of the Company’s share activity: Three months ended Nine months ended April 30, April 30, 2023 2022 2023 2022 Ordinary shares: Balance at beginning of period 232,171,182 232,171,182 232,171,182 232,171,182 Change in shares issued — — — — Balance at end of period 232,171,182 232,171,182 232,171,182 232,171,182 Treasury shares: Balance at beginning of period (25,619,935) (12,517,815) (21,078,577) (9,862,816) Repurchases of ordinary shares (1,588,636) (3,557,204) (6,181,156) (6,282,571) Treasury shares used to settle share-based compensation awards — 2,319 51,162 72,687 Balance at end of period (27,208,571) (16,072,700) (27,208,571) (16,072,700) Employee Benefit Trusts: Balance at beginning of period (283,604) (849,482) (846,491) (833,189) New shares purchased — — — (600,000) Employee Benefit Trust shares used to settle share-based compensation awards 7,953 2,840 570,840 586,547 Balance at end of period (275,651) (846,642) (275,651) (846,642) Total shares outstanding at end of period 204,686,960 215,251,840 204,686,960 215,251,840 Two Employee Benefit Trusts have been established in connection with the Company’s discretionary share option plans and long-term incentive plans. Dividends due on shares held by the Employee Benefit Trusts are waived in accordance with the provisions of the trust deeds. At April 30, 2023 and July 31, 2022, the shares held in trusts had market values of $39 million and $107 million, respectively. Share Repurchases In September 2021, the Company announced a program to repurchase up to $1.0 billion of shares. In March 2022 and September 2022, the Company announced an increase in its share repurchase program of $1.0 billion and $0.5 billion, respectively. As of April 30, 2023, the Company has completed $2.3 billion of the total announced $2.5 billion repurchase program. The Company is currently purchasing shares under an irrevocable and non-discretionary arrangement with $114 million in accrued repurchases remaining, which is recorded as a current liability in the condensed consolidated balance sheet. In June 2023, the Company extended the share repurchase program by an additional $0.5 billion, bringing the total authorized repurchases to $3.0 billion. |
Share-based compensation
Share-based compensation | 9 Months Ended |
Apr. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based compensation | Share-based compensation The Ferguson Group Ordinary Share Plan 2019 (the “OSP”) and the Ferguson Group Performance Ordinary Share Plan 2019 (the “POSP”) each provides for the grant of equity awards without limitation on the number of ordinary shares that can be awarded under the plan. The Ferguson Group Long-Term Incentive Plan 2019 (“LTIP”) contains guidelines that limit the maximum number of shares that can be granted under this plan. Awards granted under the OSP vest over a period of time (“time vested”), typically three years. Dividends do not accrue during the vesting period. The fair value of the award is based on the closing share price on the date of grant. Awards granted under the POSP vest at the end of a three-year performance cycle (“performance vested”). The number of ordinary shares issued upon vesting varies based upon the Company’s performance against an adjusted operating profit measure. Dividends do not accrue during the vesting period. The fair value of the award is based on the closing share price on the date of grant. Awards granted under the LTIP vest at the end of a three-year performance period. For grants awarded prior to fiscal 2023, the number of ordinary shares to be issued upon vesting will vary based on Company measures of inflation-indexed earnings per share (“EPS”), cash flow and total shareholder return (“TSR”) compared to a peer company set. Based on the performance conditions of these awards granted prior to fiscal 2023, these LTIP grants are treated as liability-settled awards. As such, the fair value of these awards is initially determined at the date of grant, and is remeasured at each balance sheet date until the liability is settled. Dividends accrue during the vesting period. As of April 30, 2023 and July 31, 2022, the total liability recorded in connection with these grants was $10 million and $11 million, respectively. In the first quarter of fiscal 2023, the Company granted awards under the LTIP in which the ordinary shares to be issued upon vesting vary based on fixed measures of Company defined EPS and return on capital employed (“ROCE”), as well as TSR compared to a peer company set. Dividend equivalents accrue during the vesting period. Based on the performance conditions of these awards granted in the first quarter of fiscal 2023, these grants are treated as equity-settled awards (“LTIP, equity-settled”) with the fair value determined on the date of grant. Specifically, the fair value of such awards that vest based on achievement of the EPS and ROCE measures was equal to the closing share price on the date of grant. The fair value of the awards that vest based on TSR was determined using a Monte-Carlo simulation, which estimated the fair value based on the Company's share price activity relative to the peer comparative set over the expected term of the award, risk-free interest rate, expected dividends, and the expected volatility of the shares of the Company and that of the peer company set. The following table summarizes the share-based incentive awards activity for the nine months ended April 30, 2023: Number of Shares Weighted-Average grant date fair value Outstanding at July 31, 2022 1,576,554 $100.03 Time vested grants 119,470 100.71 Performance vested grants 279,798 100.71 LTIP, equity-settled grants 37,676 91.84 Share adjustments based on performance (37,664) 108.33 Vested (615,611) 75.51 Forfeited (106,416) 110.83 Outstanding at April 30, 2023 1,253,807 $110.88 The following table relates to time vested, performance vested and long-term incentive awards activity: Nine months ended April 30, (In millions, except per share amounts) 2023 Fair value of awards vested $67 Weighted-average grant date fair value per share granted $99.94 The following table relates to all share-based compensation awards: Three months ended Nine months ended April 30, April 30, (In millions) 2023 2022 2023 2022 Share-based compensation expense (within SG&A) $11 $12 $38 $44 Income tax benefit 3 3 10 11 The total u nrecog nized sh are-based compensation expense at April 30, 2023 was $60 million and is expected to be recognized over a weighted-average period of 1.7 years. |
Acquisitions
Acquisitions | 9 Months Ended |
Apr. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions The Company acquired the following businesses during the nine months ended April 30, 2023. Each of the acquired businesses is engaged in the distribution of plumbing and heating products and was acquired to support growth, primarily in the United States. All transactions have been accounted for by the acquisition method of accounting. Name Date of acquisition Location Equity/asset deal Acquired % Monark Premium Appliance August 2022 USA Asset 100 % Guarino Distributing Company, L.L.C. November 2022 USA Asset 100 % Airefco, Inc. December 2022 USA Asset 100 % Power Process Equipment, Inc. December 2022 USA Asset 100 % Pipelines, Inc. January 2023 USA Asset 100 % The following table summarizes the preliminary purchase price allocation for the assets acquired and liabilities assumed in regards to the Company's acquisitions: (In millions) Intangible assets: Trade names and brands $4 Customer relationships 62 Other 1 Right of use assets 17 Property, plant and equipment 5 Inventories 87 Trade and other receivables 32 Lease liabilities (17) Trade and other payables (39) Provisions (4) Total 148 Goodwill 52 Consideration $200 Satisfied by: Cash $179 Deferred consideration $21 Total consideration $200 The fair values of the assets acquired are considered preliminary and are based on management’s best estimates. Further adjustments may be necessary when additional information becomes available about events that existed at the date of acquisition. Amendments to fair value estimates may be made to these figures during the measurement period following the date of acquisition. As of the date of this Quarterly Report, the Company has made all known material adjustments. The fair value estimates of intangible assets are considered non-recurring Level 3 measurements within the fair value hierarchy and are estimated as of each respective acquisition date. The goodwill on these acquisitions is attributable to the anticipated profitability of the new markets and product ranges to which the Company has gained access and additional profitability, operating efficiencies and other synergies available in connection with existing markets. All goodwill acquired during the nine months ended April 30, 2023 is in the United States segment with all goodwill expected to be deductible for tax purposes. Deferred consideration represents the expected payout due to certain sellers of acquired businesses that is subject to either 1) a contractual settle-up period or 2) contingent on achieving contractually defined performance metrics. If the deferred consideration is contingent on achieving performance metrics, the liability is estimated using assumptions regarding the expectations of an acquiree’s ability to achieve the contractually defined performance metrics over a period of time that typically spans one The businesses acquired during the year-to-date period of fiscal 2023 contributed $122 million to net sales and $3 million in losses to the Company’s income before income tax, including acquired intangible asset amortization, transaction and integration costs for the period between the applicable date of acquisition and April 30, 2023. The net outflow of cash related to business acquisitions is as follows: Nine months ended (In millions) April 30, 2023 Purchase consideration $179 Cash, cash equivalents and bank overdrafts acquired — Cash consideration paid, net of cash acquired 179 Deferred and contingent consideration (1) 17 Net cash outflow in respect of the purchase of businesses $196 (1) Included in other financing activities in the Condensed Consolidated Statements of Cash Flows. Pro forma disclosures If each acquisition had been completed on the first day of the prior fiscal year, the Company’s unaudited pro forma net sales would have been: Three months ended Nine months ended April 30, April 30, (In millions) 2023 2022 2023 2022 Pro forma net sales $7,140 $7,366 $22,005 $20,830 The impact on income before income tax, including additional amortization, transaction costs and integration costs would not be material in the three and nine months ended April 30, 2023 and 2022. These unaudited pro forma results do not necessarily represent financial results that would have been achieved had the acquisition actually occurred at the beginning of the prior fiscal year. |
Related party transactions
Related party transactions | 9 Months Ended |
Apr. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactionsFor the three and nine month periods ended April 30, 2023, the Company purchased $9 million and $22 million, respectively, compared with $5 million and $16 million in 2022, respectively, of delivery, installation and related administrative services from companies that are, or are indirect wholly-owned subsidiaries of companies that are, controlled or significantly influenced by a Ferguson non-executive director. No material amounts are due to such companies. The services were purchased on an arm’s-length basis. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Apr. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of consolidation | Basis of presentation The accompanying unaudited condensed consolidated financial statements and notes to the condensed consolidated financial statements are presented in accordance with the rules and regulations of the SEC and accounting principles generally accepted in the United States of America (“U.S. GAAP”), but do not include all the disclosures normally required in annual consolidated financial statements. The unaudited condensed consolidated financial statements, in the opinion of management, contain all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. The July 31, 2022 condensed consolidated balance sheet was derived from the audited financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report. The financial results for the interim periods may not be indicative of the financial results for the entire fiscal year. |
Basis of presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements and notes to the condensed consolidated financial statements are presented in accordance with the rules and regulations of the SEC and accounting principles generally accepted in the United States of America (“U.S. GAAP”), but do not include all the disclosures normally required in annual consolidated financial statements. The unaudited condensed consolidated financial statements, in the opinion of management, contain all normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. The July 31, 2022 condensed consolidated balance sheet was derived from the audited financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report. The financial results for the interim periods may not be indicative of the financial results for the entire fiscal year. |
Use of estimates | Use of estimates The preparation of the Company's interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions affecting certain reported amounts. Actual results may differ from those estimates. |
Cash and cash equivalents | Cash, cash equivalents and restricted cash Cash and cash equivalents include cash on hand, deposits with banks with original maturities of three months or less and overdrafts to the extent there is a legal right of offset and practice of net settlement with cash balances. Restricted cash primarily consists of deferred consideration for business combinations, subject to various settlement agreements, and is recorded in prepaid and other current assets in the Company’s condensed consolidated balance sheets. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting. This ASU, and subsequent clarifications, provide practical expedients for contract modification accounting related to the transition away from the London Interbank Offered Rate (“LIBOR”) and other interbank offering rates to alternative reference rates. The Company has evaluated the impact of reference rate reform and concluded the impact is not material to the Company’s consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments address how to determine whether a contract liability is recognized by the acquirer in a business combination and provides specific guidance on how to recognize and measure acquired contract assets and contract liabilities from revenue contracts in a business combination. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company does not expect a material impact to the Company’s consolidated financial statements. Recent accounting pronouncements pending adoption that are not discussed above are either not applicable, or will not have, or are not expected to have, a material impact on our consolidated financial condition, results of operations, cash flows or related disclosures. |
Legal matters | Legal matters The Company is, from time to time, involved in various legal proceedings considered to be normal course of business in relation to, among other things, the products that we supply, contractual and commercial disputes and disputes with employees. Provision is made if, on the basis of current information and professional advice, liabilities are considered likely to arise. In the case of unfavorable outcomes, the Company may benefit from applicable insurance protection. The Company does not expect any of its pending legal proceedings to have a material adverse effect on its results of operations, financial position or cash flows. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows. As of (In millions) April 30, 2023 July 31, 2022 Cash and cash equivalents $625 $771 Restricted cash 50 14 Total cash, cash equivalents and restricted cash $675 $785 |
Revenue and segment informati_2
Revenue and segment information (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting | Segment details were as follows: Three months ended Nine months ended April 30, April 30, (In millions) 2023 2022 2023 2022 Net sales: United States $6,827 $6,938 $20,863 $19,528 Canada 313 346 1,033 1,067 Total net sales $7,140 $7,284 $21,896 $20,595 Adjusted operating profit: United States $664 $736 $2,088 $2,064 Canada 7 20 54 77 Central and other costs (14) (9) (39) (39) Corporate restructurings (1) — (5) — (12) Impairments and other charges (2) (127) — (127) — Amortization of acquired intangible assets (33) (30) (99) (84) Interest expense, net (48) (22) (136) (71) Other expense, net (2) — (7) (2) Income before income taxes $447 $690 $1,734 $1,933 (1) For the three and nine months ended April 30, 2022, corporate restructuring costs related to the incremental costs of the Company’s listing in the United States. (2) See Note 4 for details regarding impairments and other charges. The Company determined that disaggregating net sales by end market at the segment level achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows may be impacted by economic factors. The disaggregated net sales by end market are as follows: Three months ended Nine months ended April 30, April 30, (In millions) 2023 2022 2023 2022 United States: Residential $3,534 $3,752 $10,956 $10,617 Non-residential: Commercial 2,231 2,190 6,764 6,180 Civil/Infrastructure 567 558 1,713 1,532 Industrial 495 438 1,430 1,199 Total Non-residential 3,293 3,186 9,907 8,911 Total United States 6,827 6,938 20,863 19,528 Canada 313 346 1,033 1,067 Total net sales $7,140 $7,284 $21,896 $20,595 |
Earnings per share (Tables)
Earnings per share (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table shows the calculation of diluted shares: Three months ended Nine months ended April 30, April 30, (In millions, except per share amounts) 2023 2022 2023 2022 Income from continuing operations $336 $546 $1,305 $1,517 Income from discontinued operations (net of tax) — — — 25 Net income $336 $546 $1,305 $1,542 Weighted-average number of shares outstanding: Basic weighted-average shares 205.4 217.1 207.1 219.5 Effect of dilutive shares 0.7 0.9 0.8 1.1 Diluted weighted-average shares 206.1 218.0 207.9 220.6 Earnings per share - Basic: Continuing operations $1.64 $2.52 $6.30 $6.91 Discontinued operations — — — 0.11 Total $1.64 $2.52 $6.30 $7.02 Earnings per share - Diluted: Continuing operations $1.63 $2.50 $6.28 $6.88 Discontinued operations — — — 0.11 Total $1.63 $2.50 $6.28 $6.99 Excluded anti-dilutive shares 0.1 0.1 0.1 0.1 |
Income tax (Tables)
Income tax (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Income Tax Expense | The effective income tax rates for the relevant periods were as follows: Three months ended Nine months ended April 30, April 30, 2023 2022 2023 2022 Effective tax rate, continuing operations 24.8 % 20.9 % 24.7 % 21.5 % |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s debt obligations consisted of the following: As of (In millions) April 30, 2023 July 31, 2022 Variable-rate debt: Receivables Securitization Facility $175 $455 Term Loan 500 — Private Placement Notes: 3.43% due September 2022 — 250 3.30% due November 2023 55 55 3.44% due November 2024 150 150 3.73% due September 2025 400 400 3.51% due November 2026 150 150 3.83% due September 2027 150 150 Unsecured Senior Notes: 4.50% due October 2028 750 750 3.25% due June 2030 600 600 4.25% due April 2027 300 300 4.65% due April 2032 700 700 Subtotal $3,930 $3,960 Less: current maturities of debt (55) (250) Unamortized discounts and debt issuance costs (23) (24) Interest rate swap - fair value adjustment (13) (7) Total long-term debt $3,839 $3,679 |
Assets and liabilities at fai_2
Assets and liabilities at fair value (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Recorded at Fair Value | Carrying amounts and the related estimated fair value (Level 2) of the Company’s long-term debt were as follows: April 30, 2023 July 31, 2022 (In millions) Carrying Amount Fair Value Carrying Amount Fair Value Unsecured Senior Notes $2,330 $2,226 $2,328 $2,350 Private Placement Notes 904 878 1,153 1,142 |
Accumulated other comprehensi_2
Accumulated other comprehensive loss (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The change in accumulated other comprehensive loss was as follows: (In millions, net of tax) Foreign currency translation Pensions Total Balance at July 31, 2022 ($420) ($410) ($830) Other comprehensive loss before reclassifications (36) (3) (39) Amounts reclassified from accumulated other comprehensive loss — 2 2 Other comprehensive loss (36) (1) (37) Balance at October 31, 2022 (456) (411) (867) Other comprehensive income before reclassifications 18 6 24 Amounts reclassified from accumulated other comprehensive loss — 2 2 Other comprehensive income 18 8 26 Balance at January 31, 2023 (438) (403) (841) Other comprehensive (loss) income before reclassifications (7) 2 (5) Amounts reclassified from accumulated other comprehensive loss — 2 2 Other comprehensive (loss) income (7) 4 (3) Balance at April 30, 2023 ($445) ($399) ($844) (In millions, net of tax) Foreign currency translation Pensions Total Balance at July 31, 2021 ($396) ($400) ($796) Other comprehensive income before reclassifications — 1 1 Amounts reclassified from accumulated other comprehensive loss — 2 2 Other comprehensive income — 3 3 Balance at October 31, 2021 (396) (397) (793) Other comprehensive loss before reclassifications (14) (23) (37) Amounts reclassified from accumulated other comprehensive loss — 2 2 Other comprehensive loss (14) (21) (35) Balance at January 31, 2022 (410) (418) (828) Other comprehensive loss before reclassifications (13) (6) (19) Amounts reclassified from accumulated other comprehensive loss — 2 2 Other comprehensive loss (13) (4) (17) Balance at April 30, 2022 ($423) ($422) ($845) |
Reclassification out of Accumulated Other Comprehensive Income | Amounts reclassified from accumulated other comprehensive income related to pension and other post-retirement items include the related income tax impacts. Such amounts consisted of the following: Three months ended Nine months ended April 30, April 30, (In millions) 2023 2022 2023 2022 Amortization of actuarial losses $2 $3 $8 $8 Tax benefit — (1) (2) (2) Amounts reclassified from accumulated other comprehensive loss $2 $2 $6 $6 |
Retirement benefit obligations
Retirement benefit obligations (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets | The Company maintains pension plans in the U.K. and Canada. The components of net periodic pension cost, which are included in Other expense, net in the condensed consolidated statements of earnings, were as follows: Three months ended Nine months ended April 30, April 30, (In millions) 2023 2022 2023 2022 Interest cost ($13) ($10) ($38) ($30) Expected return on plan assets 12 12 36 35 Amortization of net actuarial losses (2) (3) (8) (8) Net periodic cost ($3) ($1) ($10) ($3) |
Shareholders_ equity (Tables)
Shareholders’ equity (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Equity [Abstract] | |
Schedule of Stockholders' Equity | The following table presents a summary of the Company’s share activity: Three months ended Nine months ended April 30, April 30, 2023 2022 2023 2022 Ordinary shares: Balance at beginning of period 232,171,182 232,171,182 232,171,182 232,171,182 Change in shares issued — — — — Balance at end of period 232,171,182 232,171,182 232,171,182 232,171,182 Treasury shares: Balance at beginning of period (25,619,935) (12,517,815) (21,078,577) (9,862,816) Repurchases of ordinary shares (1,588,636) (3,557,204) (6,181,156) (6,282,571) Treasury shares used to settle share-based compensation awards — 2,319 51,162 72,687 Balance at end of period (27,208,571) (16,072,700) (27,208,571) (16,072,700) Employee Benefit Trusts: Balance at beginning of period (283,604) (849,482) (846,491) (833,189) New shares purchased — — — (600,000) Employee Benefit Trust shares used to settle share-based compensation awards 7,953 2,840 570,840 586,547 Balance at end of period (275,651) (846,642) (275,651) (846,642) Total shares outstanding at end of period 204,686,960 215,251,840 204,686,960 215,251,840 |
Share-based compensation (Table
Share-based compensation (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Award Activity | The following table summarizes the share-based incentive awards activity for the nine months ended April 30, 2023: Number of Shares Weighted-Average grant date fair value Outstanding at July 31, 2022 1,576,554 $100.03 Time vested grants 119,470 100.71 Performance vested grants 279,798 100.71 LTIP, equity-settled grants 37,676 91.84 Share adjustments based on performance (37,664) 108.33 Vested (615,611) 75.51 Forfeited (106,416) 110.83 Outstanding at April 30, 2023 1,253,807 $110.88 The following table relates to time vested, performance vested and long-term incentive awards activity: Nine months ended April 30, (In millions, except per share amounts) 2023 Fair value of awards vested $67 Weighted-average grant date fair value per share granted $99.94 |
Schedule of Share-Based Compensation Awards | The following table relates to all share-based compensation awards: Three months ended Nine months ended April 30, April 30, (In millions) 2023 2022 2023 2022 Share-based compensation expense (within SG&A) $11 $12 $38 $44 Income tax benefit 3 3 10 11 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions | Name Date of acquisition Location Equity/asset deal Acquired % Monark Premium Appliance August 2022 USA Asset 100 % Guarino Distributing Company, L.L.C. November 2022 USA Asset 100 % Airefco, Inc. December 2022 USA Asset 100 % Power Process Equipment, Inc. December 2022 USA Asset 100 % Pipelines, Inc. January 2023 USA Asset 100 % The net outflow of cash related to business acquisitions is as follows: Nine months ended (In millions) April 30, 2023 Purchase consideration $179 Cash, cash equivalents and bank overdrafts acquired — Cash consideration paid, net of cash acquired 179 Deferred and contingent consideration (1) 17 Net cash outflow in respect of the purchase of businesses $196 (1) Included in other financing activities in the Condensed Consolidated Statements of Cash Flows. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary purchase price allocation for the assets acquired and liabilities assumed in regards to the Company's acquisitions: (In millions) Intangible assets: Trade names and brands $4 Customer relationships 62 Other 1 Right of use assets 17 Property, plant and equipment 5 Inventories 87 Trade and other receivables 32 Lease liabilities (17) Trade and other payables (39) Provisions (4) Total 148 Goodwill 52 Consideration $200 Satisfied by: Cash $179 Deferred consideration $21 Total consideration $200 |
Business Acquisition, Pro Forma Information | If each acquisition had been completed on the first day of the prior fiscal year, the Company’s unaudited pro forma net sales would have been: Three months ended Nine months ended April 30, April 30, (In millions) 2023 2022 2023 2022 Pro forma net sales $7,140 $7,366 $22,005 $20,830 |
Summary of significant accoun_4
Summary of significant accounting policies - Cash and Cash Equivalents (Details) - USD ($) $ in Millions | Apr. 30, 2023 | Jul. 31, 2022 | Apr. 30, 2022 | Jul. 31, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 625 | $ 771 | ||
Restricted cash | 50 | 14 | ||
Total cash, cash equivalents and restricted cash | $ 675 | $ 785 | $ 1,170 | $ 1,342 |
Revenue and segment informati_3
Revenue and segment information - Narrative (Details) | 9 Months Ended |
Apr. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Revenue and segment informati_4
Revenue and segment information - Items not Allocated (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Net sales: | ||||
Total net sales | $ 7,140 | $ 7,284 | $ 21,896 | $ 20,595 |
Adjusted operating profit: | ||||
Adjusted segment operating profit | 497 | 712 | 1,877 | 2,006 |
Central and other costs | (14) | (9) | (39) | (39) |
Impairments and other charges | (127) | 0 | (127) | 0 |
Amortization of acquired intangible assets | (33) | (30) | (99) | (84) |
Interest expense, net | (48) | (22) | (136) | (71) |
Other expense, net | (2) | 0 | (7) | (2) |
Income before income taxes | 447 | 690 | 1,734 | 1,933 |
United States | ||||
Net sales: | ||||
Total net sales | 6,827 | 6,938 | 20,863 | 19,528 |
Adjusted operating profit: | ||||
Adjusted segment operating profit | 664 | 736 | 2,088 | 2,064 |
Canada | ||||
Net sales: | ||||
Total net sales | 313 | 346 | 1,033 | 1,067 |
Adjusted operating profit: | ||||
Adjusted segment operating profit | 7 | 20 | 54 | 77 |
Corporate restructurings | ||||
Adjusted operating profit: | ||||
Corporate restructurings | $ 0 | $ (5) | $ 0 | $ (12) |
Revenue and segment informati_5
Revenue and segment information - Disaggregation of Net Sales (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Total net sales | $ 7,140 | $ 7,284 | $ 21,896 | $ 20,595 |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 6,827 | 6,938 | 20,863 | 19,528 |
Canada | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 313 | 346 | 1,033 | 1,067 |
Residential | United States | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 3,534 | 3,752 | 10,956 | 10,617 |
Non-residential: | United States | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 3,293 | 3,186 | 9,907 | 8,911 |
Commercial | United States | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 2,231 | 2,190 | 6,764 | 6,180 |
Civil/Infrastructure | United States | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 567 | 558 | 1,713 | 1,532 |
Industrial | United States | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | $ 495 | $ 438 | $ 1,430 | $ 1,199 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Income from continuing operations | $ 336 | $ 546 | $ 1,305 | $ 1,517 |
Income from discontinued operations (net of tax) | 0 | 0 | 0 | 25 |
Net income | $ 336 | $ 546 | $ 1,305 | $ 1,542 |
Weighted-average number of shares outstanding: | ||||
Basic weighted-average shares (in shares) | 205.4 | 217.1 | 207.1 | 219.5 |
Effect of dilutive shares (in shares) | 0.7 | 0.9 | 0.8 | 1.1 |
Diluted weighted-average shares (in shares) | 206.1 | 218 | 207.9 | 220.6 |
Earnings per share - Basic: | ||||
Continuing operations, Basic (in usd per share) | $ 1.64 | $ 2.52 | $ 6.30 | $ 6.91 |
Discontinued operations, Basic (in usd per share) | 0 | 0 | 0 | 0.11 |
Earnings per share, Basic (in usd per share) | 1.64 | 2.52 | 6.30 | 7.02 |
Earnings per share - Diluted: | ||||
Continuing operations, Diluted (in usd per share) | 1.63 | 2.50 | 6.28 | 6.88 |
Discontinued operations, Diluted (in usd per share) | 0 | 0 | 0 | 0.11 |
Earnings per share, Diluted (in usd per share) | $ 1.63 | $ 2.50 | $ 6.28 | $ 6.99 |
Excluded anti-dilutive shares (in shares) | 0.1 | 0.1 | 0.1 | 0.1 |
Impairments and other charges (
Impairments and other charges (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 USD ($) branch | Apr. 30, 2022 USD ($) | Apr. 30, 2023 USD ($) | Apr. 30, 2022 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | ||||
Impairments and other charges | $ 127 | $ 0 | $ 127 | $ 0 |
Number of branches closed | branch | 44 | |||
Software and technology development costs | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairments and other charges | $ 107 | |||
Leases and Related Fixed Assets | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairments and other charges | $ 20 |
Income tax - Schedule of Effect
Income tax - Schedule of Effective Income Tax Rate (Details) | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate, continuing operations | 24.80% | 20.90% | 24.70% | 21.50% |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Apr. 30, 2023 | Oct. 07, 2022 | Jul. 31, 2022 |
Debt Instrument [Line Items] | |||
Subtotal | $ 3,930 | $ 3,960 | |
Less: current maturities of debt | (55) | (250) | |
Unamortized discounts and debt issuance costs | (23) | (24) | |
Interest rate swap - fair value adjustment | (13) | (7) | |
Long-term debt | 3,839 | 3,679 | |
Receivables Securitization Facility | Receivables Securitization Facility | |||
Debt Instrument [Line Items] | |||
Subtotal | 175 | 455 | |
Term Loan | Term Loan | |||
Debt Instrument [Line Items] | |||
Subtotal | $ 500 | $ 500 | 0 |
Private Placement Notes: | 3.43% due September 2022 | |||
Debt Instrument [Line Items] | |||
Interest rate (in percent) | 3.43% | ||
Subtotal | $ 0 | 250 | |
Private Placement Notes: | 3.30% due November 2023 | |||
Debt Instrument [Line Items] | |||
Interest rate (in percent) | 3.30% | ||
Subtotal | $ 55 | 55 | |
Private Placement Notes: | 3.44% due November 2024 | |||
Debt Instrument [Line Items] | |||
Interest rate (in percent) | 3.44% | ||
Subtotal | $ 150 | 150 | |
Private Placement Notes: | 3.73% due September 2025 | |||
Debt Instrument [Line Items] | |||
Interest rate (in percent) | 3.73% | ||
Subtotal | $ 400 | 400 | |
Private Placement Notes: | 3.51% due November 2026 | |||
Debt Instrument [Line Items] | |||
Interest rate (in percent) | 3.51% | ||
Subtotal | $ 150 | 150 | |
Private Placement Notes: | 3.83% due September 2027 | |||
Debt Instrument [Line Items] | |||
Interest rate (in percent) | 3.83% | ||
Subtotal | $ 150 | 150 | |
Unsecured Senior Notes: | 4.50% due October 2028 | |||
Debt Instrument [Line Items] | |||
Interest rate (in percent) | 4.50% | ||
Subtotal | $ 750 | 750 | |
Unsecured Senior Notes: | 3.25% due June 2030 | |||
Debt Instrument [Line Items] | |||
Interest rate (in percent) | 3.25% | ||
Subtotal | $ 600 | 600 | |
Unsecured Senior Notes: | 4.25% due April 2027 | |||
Debt Instrument [Line Items] | |||
Interest rate (in percent) | 4.25% | ||
Subtotal | $ 300 | 300 | |
Unsecured Senior Notes: | 4.65% due April 2032 | |||
Debt Instrument [Line Items] | |||
Interest rate (in percent) | 4.65% | ||
Subtotal | $ 700 | $ 700 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 1 Months Ended | ||||
Oct. 07, 2022 | Mar. 25, 2022 | Oct. 31, 2022 | Apr. 30, 2023 | Jul. 31, 2022 | |
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||
Term loan principal amount | $ 3,930,000,000 | $ 3,960,000,000 | |||
Private Placement Notes: | 3.43% due September 2022 | |||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||
Interest rate (in percent) | 3.43% | ||||
Term loan principal amount | $ 0 | 250,000,000 | |||
Line of Credit | Revolving Credit Facility | |||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||
Line of credit facility | $ 1,350,000,000 | ||||
Borrowings outstanding | 0 | ||||
Line of Credit | Revolving Credit Facility | Secured Overnight Financing Rate (SOFR) | |||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||
Credit spread adjustment | 0.10% | ||||
Line of Credit | Revolving Credit Facility | Minimum | Secured Overnight Financing Rate (SOFR) | |||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||
Additional margin spread on variable rate | 0.0020 | ||||
Line of Credit | Revolving Credit Facility | Maximum | Secured Overnight Financing Rate (SOFR) | |||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||
Additional margin spread on variable rate | 0.0075 | ||||
Line of Credit | Revolving Credit Facility | Bilateral Loan Agreement | |||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||
Line of credit facility | $ 250,000,000 | ||||
Debt instrument, term (in years) | 364 days | ||||
Receivables Securitization Facility | Receivables Securitization Facility | |||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||
Term loan principal amount | 175,000,000 | 455,000,000 | |||
Debt instrument, face amount | $ 1,100,000,000 | ||||
Swingline adjustment | 100,000,000 | ||||
Accordion feature, maximum amount | $ 1,500,000,000 | ||||
Total long-term debt | 175,000,000 | ||||
Receivables Securitization Facility | Receivables Securitization Facility | Secured Overnight Financing Rate (SOFR) | |||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||
Credit spread adjustment | 0.10% | ||||
Term Loan | Term Loan | |||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||
Term loan principal amount | $ 500,000,000 | $ 500,000,000 | $ 0 | ||
Leverage ratio, maximum | 3.50 | ||||
Leverage ratio, step-up | 4 | ||||
Term Loan | Term Loan | Secured Overnight Financing Rate (SOFR) | |||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||
Credit spread adjustment | 0.10% | ||||
Term Loan | Term Loan | Minimum | Secured Overnight Financing Rate (SOFR) | |||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||
Additional margin spread on variable rate | 0.0100 | ||||
Term Loan | Term Loan | Maximum | Secured Overnight Financing Rate (SOFR) | |||||
Schedule Of Long-Term And Short-Term Debt [Line Items] | |||||
Additional margin spread on variable rate | 0.0150 |
Assets and liabilities at fai_3
Assets and liabilities at fair value - Narrative (Details) - USD ($) $ in Millions | Apr. 30, 2023 | Jul. 31, 2022 |
Fair Value Disclosures [Abstract] | ||
Hedged liability, fair value hedge | $ 355 | $ 355 |
Assets and liabilities at fai_4
Assets and liabilities at fair value -Debt Measured at Fair Value (Details) - Level 2 - USD ($) $ in Millions | Apr. 30, 2023 | Jul. 31, 2022 |
Unsecured Senior Notes: | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | $ 2,330 | $ 2,328 |
Fair Value | 2,226 | 2,350 |
Private Placement Notes: | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | 904 | 1,153 |
Fair Value | $ 878 | $ 1,142 |
Accumulated other comprehensi_3
Accumulated other comprehensive loss - Change in AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Apr. 30, 2023 | Jan. 31, 2023 | Oct. 31, 2022 | Apr. 30, 2022 | Jan. 31, 2022 | Oct. 31, 2021 | Apr. 30, 2023 | Apr. 30, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | $ 4,725 | $ 4,665 | $ 4,845 | $ 5,003 | $ 4,665 | $ 5,003 | ||
Other comprehensive income before reclassifications | (5) | $ 24 | (39) | (19) | $ (37) | 1 | ||
Amounts reclassified from accumulated other comprehensive (loss) income | 2 | 2 | 2 | 2 | 2 | 2 | ||
Total other comprehensive income (loss), net of tax | (3) | 26 | (37) | (17) | (35) | 3 | (14) | (49) |
Ending balance | 4,721 | 4,725 | 4,503 | 4,845 | 4,721 | 4,503 | ||
AOCI Attributable to Parent | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | (841) | (867) | (830) | (828) | (793) | (796) | (830) | (796) |
Total other comprehensive income (loss), net of tax | (3) | (17) | (14) | (49) | ||||
Ending balance | (844) | (841) | (867) | (845) | (828) | (793) | (844) | (845) |
Foreign currency translation | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | (438) | (456) | (420) | (410) | (396) | (396) | (420) | (396) |
Other comprehensive income before reclassifications | (7) | 18 | (36) | (13) | (14) | 0 | ||
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | 0 | 0 | 0 | 0 | 0 | ||
Total other comprehensive income (loss), net of tax | (7) | 18 | (36) | (13) | (14) | 0 | ||
Ending balance | (445) | (438) | (456) | (423) | (410) | (396) | (445) | (423) |
Pensions | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Beginning balance | (403) | (411) | (410) | (418) | (397) | (400) | (410) | (400) |
Other comprehensive income before reclassifications | 2 | 6 | (3) | (6) | (23) | 1 | ||
Amounts reclassified from accumulated other comprehensive (loss) income | 2 | 2 | 2 | 2 | 2 | 2 | ||
Total other comprehensive income (loss), net of tax | 4 | 8 | (1) | (4) | (21) | 3 | ||
Ending balance | $ (399) | $ (403) | $ (411) | $ (422) | $ (418) | $ (397) | $ (399) | $ (422) |
Accumulated other comprehensi_4
Accumulated other comprehensive loss - Reclassification Out of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Tax benefit | $ 111 | $ 144 | $ 429 | $ 416 |
Net income | (336) | (546) | (1,305) | (1,542) |
Reclassification out of Accumulated Other Comprehensive Income | Employee Benefit Trusts | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amortization of actuarial losses | 2 | 3 | 8 | 8 |
Tax benefit | 0 | (1) | (2) | (2) |
Net income | $ 2 | $ 2 | $ 6 | $ 6 |
Retirement benefit obligation_2
Retirement benefit obligations - Net Periodic Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Retirement Benefits [Abstract] | ||||
Interest cost | $ (13) | $ (10) | $ (38) | $ (30) |
Expected return on plan assets | 12 | 12 | 36 | 35 |
Amortization of net actuarial losses | (2) | (3) | (8) | (8) |
Net periodic cost | $ (3) | $ (1) | $ (10) | $ (3) |
Shareholders_ equity - Summary
Shareholders’ equity - Summary of Share Activity (Details) - shares | 3 Months Ended | 9 Months Ended | ||||||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | Jan. 31, 2023 | Jul. 31, 2022 | Jan. 31, 2022 | Jul. 31, 2021 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Total shares outstanding at end of period (in shares) | 204,686,960 | 215,251,840 | 204,686,960 | 215,251,840 | ||||
Ordinary Shares | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Balance at beginning of period (in shares) | 232,171,182 | 232,171,182 | 232,171,182 | 232,171,182 | ||||
Change in shares issued (in shares) | 0 | 0 | 0 | 0 | ||||
Balance at end of period (in shares) | 232,171,182 | 232,171,182 | 232,171,182 | 232,171,182 | ||||
Treasury Shares | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Treasury stock, beginning balance (in shares) | (27,208,571) | (16,072,700) | (27,208,571) | (16,072,700) | (25,619,935) | (21,078,577) | (12,517,815) | (9,862,816) |
Repurchases of ordinary shares (in shares) | (1,588,636) | (3,557,204) | (6,181,156) | (6,282,571) | ||||
Treasury shares used to settle share-based compensation awards (in shares) | 0 | 2,319 | 51,162 | 72,687 | ||||
Treasury stock, ending balance (in shares) | (27,208,571) | (16,072,700) | (27,208,571) | (16,072,700) | ||||
Employee Benefit Trusts | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Balance at beginning of period (in shares) | 283,604 | 849,482 | 846,491 | 833,189 | ||||
New shares purchased (in shares) | 0 | 0 | 0 | (600,000) | ||||
Employee Benefit Trust shares used to settle share-based compensation awards (in shares) | 7,953 | 2,840 | 570,840 | 586,547 | ||||
Balance at end of period (in shares) | 275,651 | 846,642 | 275,651 | 846,642 |
Shareholders_ equity - Narrativ
Shareholders’ equity - Narrative (Details) $ in Millions | 9 Months Ended | 20 Months Ended | ||||||
Apr. 30, 2023 USD ($) trust | Apr. 30, 2022 USD ($) | Apr. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Jul. 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Class of Stock [Line Items] | ||||||||
Number of employee benefit trusts | trust | 2 | |||||||
Market value of shares held in trusts | $ 39 | $ 39 | $ 107 | |||||
Authorized stock to repurchased | 2,500 | 2,500 | $ 1,000 | |||||
Increase to share buy back program | $ 500 | $ 1,000 | ||||||
Purchase of treasury shares | 784 | $ 918 | 2,300 | |||||
Remaining liability related to agreement | $ 114 | $ 114 | ||||||
Subsequent Event | ||||||||
Class of Stock [Line Items] | ||||||||
Authorized stock to repurchased | $ 3,000 | |||||||
Increase to share buy back program | $ 500 |
Share-based compensation - Narr
Share-based compensation - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Apr. 30, 2023 | Jul. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share based payment, cost not yet recognized | $ 60 | |
Share based payment, cost not yet recognized, period for recognition (in years) | 1 year 8 months 12 days | |
Employee Stock | Ferguson Group Ordinary Share Plan | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share based compensation, award vesting period (in years) | 3 years | |
Employee Stock | Ferguson Group Performance Share Plan | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share based compensation, award vesting period (in years) | 3 years | |
Employee Stock | Ferguson Group Long-Term Incentive Plan | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share based compensation, award vesting period (in years) | 3 years | |
Liability in connection with grants | $ 10 | $ 11 |
Share-based compensation - Summ
Share-based compensation - Summary of Awards (Details) | 9 Months Ended |
Apr. 30, 2023 $ / shares shares | |
Number of Shares | |
Beginning Balance Outstanding (in shares) | shares | 1,576,554 |
Vested (in shares) | shares | (615,611) |
Forfeited (in shares) | shares | (106,416) |
Ending Balance Outstanding (in shares) | shares | 1,253,807 |
Weighted-Average grant date fair value | |
Outstanding, Weighted Average grant date fair value, Beginning Balance (in usd per share) | $ / shares | $ 100.03 |
Vested, Weighted Average grant date fair value (in usd per share) | $ / shares | 75.51 |
Forfeited, Weighted Average grant date fair value (in usd per share) | $ / shares | 110.83 |
Outstanding, Weighted Average grant date fair value, Ending Balance (in usd per share) | $ / shares | $ 110.88 |
Time vested grants | |
Number of Shares | |
Grants (in shares) | shares | 119,470 |
Weighted-Average grant date fair value | |
Granted, Weighted Average grant date fair value (in usd per share) | $ / shares | $ 100.71 |
Performance vested grants | |
Number of Shares | |
Grants (in shares) | shares | 279,798 |
Weighted-Average grant date fair value | |
Granted, Weighted Average grant date fair value (in usd per share) | $ / shares | $ 100.71 |
LTIP, equity-settled grants | |
Number of Shares | |
Grants (in shares) | shares | 37,676 |
Weighted-Average grant date fair value | |
Granted, Weighted Average grant date fair value (in usd per share) | $ / shares | $ 91.84 |
Share adjustments based on performance | |
Number of Shares | |
Share adjustments based on performance (in shares) | shares | (37,664) |
Weighted-Average grant date fair value | |
Share adjustments based on performance, Weighted Average grant date fair value (in usd per share) | $ / shares | $ 108.33 |
Share-based compensation - Su_2
Share-based compensation - Summary of Time Vested, Performance Vested and Long-Term Incentive Awards (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Apr. 30, 2023 USD ($) $ / shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Fair value of awards vested | $ | $ 67 |
Time Vested, Performance Vested, and Long Term Incentive Awards | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Weighted-average grant date fair value per share granted (in usd per share) | $ / shares | $ 99.94 |
Share-based compensation - Sche
Share-based compensation - Schedule of Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||||
Share-based compensation expense (within SG&A) | $ 11 | $ 12 | $ 38 | $ 44 |
Income tax benefit | $ 3 | $ 3 | $ 10 | $ 11 |
Acquisitions - Businesses Acqui
Acquisitions - Businesses Acquired (Details) | Jan. 31, 2023 | Dec. 31, 2022 | Nov. 30, 2022 | Aug. 31, 2022 |
Monark Premium Appliance | ||||
Business Acquisition [Line Items] | ||||
Acquired % | 100% | |||
Guarino Distributing Company, L.L.C. | ||||
Business Acquisition [Line Items] | ||||
Acquired % | 100% | |||
Airefco, Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquired % | 100% | |||
Power Process Equipment, Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquired % | 100% | |||
Pipelines, Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquired % | 100% |
Acquisitions - Schedule of Asse
Acquisitions - Schedule of Assets and Liabilities Acquired (Details) $ in Millions | 9 Months Ended |
Apr. 30, 2023 USD ($) | |
Business Acquisition [Line Items] | |
Right of use assets | $ 17 |
Property, plant and equipment | 5 |
Inventories | 87 |
Trade and other receivables | 32 |
Lease liabilities | (17) |
Trade and other payables | (39) |
Provisions | (4) |
Total | 148 |
Goodwill | 52 |
Total consideration | 200 |
Cash | 179 |
Deferred consideration | 21 |
Trade names and brands | |
Business Acquisition [Line Items] | |
Intangible assets: | 4 |
Customer relationships | |
Business Acquisition [Line Items] | |
Intangible assets: | 62 |
Other | |
Business Acquisition [Line Items] | |
Intangible assets: | $ 1 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Revenue since acquisition date | $ 122 | |||
Earnings (loss) since acquisition date | (3) | |||
Pro forma net sales | $ 7,140 | $ 7,366 | $ 22,005 | $ 20,830 |
Minimum | ||||
Business Acquisition [Line Items] | ||||
Service period (in years) | 1 year | |||
Maximum | ||||
Business Acquisition [Line Items] | ||||
Service period (in years) | 3 years |
Acquisitions - Net Cash Outflow
Acquisitions - Net Cash Outflow (Details) - USD ($) $ in Millions | 9 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | ||
Purchase consideration | $ 179 | |
Cash, cash equivalents and bank overdrafts acquired | 0 | |
Cash consideration paid, net of cash acquired | 179 | $ 275 |
Deferred and contingent consideration | 17 | |
Net cash outflow in respect of the purchase of businesses | $ 196 |
Acquisitions - Pro Forma (Detai
Acquisitions - Pro Forma (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | ||||
Pro forma net sales | $ 7,140 | $ 7,366 | $ 22,005 | $ 20,830 |
Related party transactions (Det
Related party transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Non-Executive Directors | ||||
Related Party Transaction [Line Items] | ||||
Purchases from related party | $ 9 | $ 5 | $ 22 | $ 16 |