Ferguson Enterprises reported better-than-expected second-quarter earnings and revised its full-year outlook as the HVAC and plumbing-supplies distributor overcame weaker residential and HVAC markets.

The company on Monday posted adjusted earnings of $3.39 a share, up from $1.52 a year ago and above Wall Street expectations of $3.30. Net sales grew 4.6% to $8.75 billion, beating the analyst consensus call for $8.68 billion, according to FactSet.

CEO Kevin Murphy said in the earnings release that the company saw growth in non-residential markets and that Ferguson "returned to growth" in the residential market "despite the challenging market backdrop."

"While the economic environment remains uncertain, our performance year-to-date enables the upward revision of our full-year guidance. We expect to continue delivering market outperformance by deploying scale locally and leveraging the long-term growth drivers of water infrastructure, large capital projects, climate, and comfort and aging and underbuilt housing," Murphy added.

Ferguson now expects mid-single digit sales growth for the full year from its prior low to mid-single growth expectations. The company raised its capital spending forecast for the current year to $375 million to $425 million from its previous $350 million to $400 million view.

Wall Street calls for 2026 sales of $32.74 billion, according to FactSet. That represents 4.6% growth from 2025.

Ferguson stock rose 1.3% to $260 in premarket trading on Monday. The stock last week was added to the S&P 500 and replaced Electronic Arts, which is being acquired. Shares have advanced more than 15% this year, outperforming the broader S&P 500.

Ferguson was a Barron's stock pick on April 22. Shares, since then, have declined 2%. The stock has advanced about 14% over the past 12 months.

Ferguson generates almost all its business in North America and is the largest plumbing and HVAC distributor in the U. S. -- worth about $45 billion, generating more than $30 billion in annual sales.

For the second quarter, Ferguson reported that organic revenue grew 4% in the U.S. even as the residential market remained "subdued." The company said that new residential construction activity in the U.S. was weak and that repairs and maintenance demand was also soft.

Even with these headwinds, Ferguson has managed to steadily grow earnings. A commercial construction boom concentrated in artificial-intelligence data centers has boosted the stock. A recovery in home sales would be another strong catalyst.