Revenue and segment information

3 Months Ended

Oct. 31, 2025

Segment Reporting [Abstract]

Revenue and segment information

Segment and net sales 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 as described in Note 1, Summary of significant accounting policies included in the Annual Report. The Company uses adjusted operating profit as its measure of segment profit. 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.

This segment structure reflects the financial information and reports used by the Company’s management, specifically its chief operating decision makers (“CODM”), to make decisions regarding the Company’s business, including resource allocations and performance assessments, as well as the current operating focus in compliance with ASC 280, Segment Reporting. The Company’s CODM are the Chief Executive Officer and the Chief Financial Officer.

The significant expenses reviewed by the CODM include operating costs and costs of sales. The operating costs evaluated by the CODM are primarily SG&A, including depreciation expense on long lived assets and software amortization expense.

The CODM use segment adjusted operating profit to evaluate performance and allocate resources (including employees, property, and financial or capital resources) in conjunction with the annual budget process, as well as during periodic business reviews.

Segment results were as follows:

	Three months ended
	October 31,
(In millions)	2025	2024
Net sales:
United States	$7,757	$7,369
Canada	412	403
Total net sales	8,169	7,772
Cost of sales:
United States	(5,361)	(5,136)
Canada	(302)	(296)
Operating costs:
United States	(1,590)	(1,536)
Canada	(94)	(84)
Adjusted operating profit:
United States	806	697
Canada	16	23
Total segment adjusted operating profit	822	720
Central and other costs(1)	(14)	(14)
Corporate restructuring expenses	(2)	(3)
Amortization of acquired intangible assets	(35)	(38)
Interest expense, net	(46)	(46)
Other (expense) income, net	(13)	5
Income before income taxes	$712	$624

(1)Primarily includes SG&A, including depreciation expense on long lived assets and software amortization expense that is not related to a segment.

Capital expenditures and depreciation and amortization by segment were as follows:

	Three months ended
	October 31,
(In millions)	2025	2024
Capital expenditures:
United States	$114	$76
Canada	4	1
Total capital expenditures	$118	$77
Depreciation and amortization:
United States	$89	$85
Canada	5	5
Total depreciation and amortization(1)	$94	$90
(1) Includes amortization of acquired intangible assets of $35 million and $38 million in the three months ended October 31, 2025 and 2024, respectively. These amounts are not included in segment adjusted operating profit.

Assets by segment included:

	As of
(In millions)	October 31, 2025	July 31, 2025
Assets:
United States	$15,914	$15,757
Canada	990	1,008
Total segment assets	16,904	16,765
Corporate	790	964
Total assets	$17,694	$17,729

Long-lived assets are as follows:

	As of
(In millions)	October 31, 2025	July 31, 2025
Long-lived assets:
United States	$1,836	$1,795
Canada	50	51
Total long-lived assets	$1,886	$1,846

Net sales disaggregation

A disaggregation of net sales by customer group in the United States is as follows:

	Three months ended
	October 31,
	2025		2024
Customer Group
Waterworks	25	%	23	%
Ferguson Home	21	%	21	%
Commercial/Mechanical	15	%	13	%
Residential Trade Plumbing	14	%	16	%
HVAC	11	%	13	%
Industrial	7	%	7	%
Facilities Supply	4	%	4	%
Fire & Fabrication	3	%	3	%
Total United States	100	%	100	%

The Company does not disaggregate sales for Canada based on materiality. No sales to an individual customer accounted for more than 10% of net sales during any of the periods presented.

The Company is a value-added distributor in North America, providing a wide range of products from plumbing, HVAC, appliances, and lighting to PVF, water and wastewater solutions, and more. We offer a broad line of products, and items are regularly added to and removed from the Company's inventory. Accordingly, it would be impractical to provide sales information by product category due to the way the business is managed, and the dynamic nature of the inventory offered.