Ferguson Enterprises Inc (FERG) 2025 Q2 法說會逐字稿

Good morning, ladies and gentlemen. My name is Lydia, and I will be your conference operator today. At this time, I'd like to welcome you to Ferguson's second quarter conference call. (Operator Instructions)

女士們、先生們，早安。我的名字是 Lydia，今天我將擔任您的會議主持人。現在，我歡迎您參加弗格森第二季電話會議。（操作員指令）

I'd now like to turn the call over to Mr. Brian Lantz, Ferguson's Vice President of Investor Relations and Communications. You may begin your conference call.

現在我想將電話轉給弗格森投資者關係和通訊副總裁 Brian Lantz 先生。您可以開始電話會議了。

Good morning, everyone, and welcome to Ferguson's second quarter earnings conference call and webcast.

大家早安，歡迎參加弗格森第二季財報電話會議和網路直播。

Hopefully, you've had a chance to review the earnings announcement we issued this morning. The announcement is available in the Investors section of our corporate website and on our SEC filings web page. Recording of this call will be made available later today.

希望您有機會查看我們今天早上發布的收益公告。該公告可在我們公司網站的投資者部分和美國證券交易委員會 (SEC) 文件網頁上查閱。此次通話的記錄將於今天稍後提供。

I want to remind everyone that some of our statements today may be forward looking and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected, including the various risks and uncertainties discussed in our Form 10-K available on the SEC's website.

我想提醒大家，我們今天的一些聲明可能具有前瞻性，並且受某些風險和不確定性的影響，這些風險和不確定性可能導致實際結果與預測結果有重大差異，包括美國證券交易委員會網站上的 10-K 表中討論的各種風險和不確定性。

Also, any forward-looking statements represent the company's expectations only as of today, and we disclaim any obligation to update these statements.

此外，任何前瞻性陳述僅代表本公司截至今天的預期，我們不承擔更新這些陳述的任何義務。

In addition, on today's call, we will also discuss certain non-GAAP financial measures. Please refer to our earnings presentation and announcement on our website for additional information regarding those non-GAAP measures, including reconciliations to the most directly comparable GAAP financial measures.

此外，在今天的電話會議上，我們還將討論某些非公認會計準則財務指標。有關這些非 GAAP 指標的更多信息，包括與最直接可比較的 GAAP 財務指標的對賬，請參閱我們網站上的收益介紹和公告。

With me on the call today are Kevin Murphy, our CEO; and Bill Brundage, our CFO; and I will now turn the call over to Kevin.

今天與我一起參加電話會議的還有我們的執行長凱文墨菲 (Kevin Murphy)；以及我們的財務長 Bill Brundage；現在我將電話轉給凱文。

Thank you, Brian, and welcome, everyone, to Ferguson's second quarter results conference call.

謝謝你，布萊恩，歡迎大家參加弗格森第二季業績電話會議。

On the call today, I'll cover highlights of our second quarter performance. I'll also provide a more detailed view of our performance by end market, customer groups and growth initiatives before turning the call over to Bill for the financials. I'll then come back at the end and give some closing comments before Bill and I take your questions.

在今天的電話會議上，我將介紹我們第二季業績的亮點。在將電話轉給比爾討論財務狀況之前，我也會更詳細地介紹我們在終端市場、客戶群和成長計畫方面的表現。然後，我會在最後回來做一些結束語，然後比爾和我回答你們的問題。

During the second quarter, our associates executed well for our customers, delivering continued volume growth driven by market outperformance. The sequential step-up in our volume growth rate generated sales of $6.9 billion, an increase of 3% over prior year despite continued commodity led deflation of approximately 2%. We delivered adjusted operating profit of $449 million as we managed through the sixth consecutive quarter of overall deflation in what was a subdued market.

在第二季度，我們的員工為客戶提供了出色的服務，在市場優異表現的推動下，實現了銷售持續成長。我們的銷售成長率連續上升，儘管大宗商品導致的通貨緊縮持續達到約 2%，但我們的銷售額仍達到 69 億美元，比去年同期增長了 3%。我們實現了 4.49 億美元的調整後營業利潤，因為我們成功度過了連續六個季度的整體通貨緊縮和低迷的市場。

We continue to execute our capital priorities, deploying approximately $500 million in capital during the quarter, and the $1 billion increase to our share repurchase authorization reflects our confidence in our business.

我們繼續執行我們的資本優先事項，本季部署了約 5 億美元的資本，而我們股票回購授權增加 10 億美元反映了我們對業務的信心。

We remain confident in both our residential and non-residential end markets over the medium term, and we continue to balance investment in our customer-facing associates, our capabilities and our value-added solutions.

我們對中期住宅和非住宅終端市場仍然充滿信心，並將繼續平衡對面向客戶的員工、我們的能力和增值解決方案的投資。

That said, we are taking near-term actions to increase speed and efficiency to better serve our customers and to better position the organization for future profitable growth.

也就是說，我們正在採取近期行動來提高速度和效率，以便更好地服務我們的客戶，並為組織未來的獲利成長做好更好的準備。

Turning to our performance by end market in the United States. Net sales grew by 3% despite continued deflation driven by commodity products across both residential and nonresidential end markets. The residential end market, which comprises approximately half of US revenue remains subdued across both new construction and repair maintenance and improvement.

談談我們在美國終端市場的表現。儘管受住宅和非住宅終端市場大宗商品影響，通貨緊縮持續，但淨銷售額仍成長了 3%。住宅終端市場約占美國收入的一半，無論是新建建築還是維修維護和改進，其收入仍然低迷。

Our teams grew revenues in our residential end market by approximately 2% in the quarter. The nonresidential market was slightly more resilient with continued activity on large capital projects where we saw healthy levels of shipments, bidding activity and open order volumes. We continue to take share with our total nonresidential revenue growth of approximately 4%.

本季度，我們的團隊在住宅終端市場的收入成長了約 2%。非住宅市場略有復甦，大型資本項目持續活躍，出貨量、投標活動和未結帳訂單量均維持健康水準。我們的非住宅總收入持續成長約 4%，佔據主導地位。

Sales grew modestly in both commercial and industrial with particular strength in civil infrastructure. Our intentional balanced market exposure, new versus repair, maintenance and improvement and residential versus nonresidential continues to position us well both in the current environment and well into the future.

商業和工業領域的銷售額均有小幅成長，尤其在民用基礎設施領域表現強勁。我們刻意平衡的市場暴露，新建與修繕、維護與改進、住宅與非住宅，使我們在當前環境和未來都處於有利地位。

Moving now to revenue performance across our customer groups in the United States. We are pleased with the continued sales growth in our HVAC customer group, an increase of 17% in the quarter, building on growth from the prior year as we continue to strategically invest in distinct growth initiatives, which I'll cover in a bit more detail later.

現在來談談我們在美國客戶群的收入表現。我們很高興看到 HVAC 客戶群的銷售持續成長，本季成長了 17%，這在去年同期成長的基礎上進一步鞏固了優勢，因為我們繼續對獨特的成長計畫進行策略性投資，稍後我將詳細介紹。

Residential trade plumbing revenues were flat, broadly consistent with recent quarters. Business faced continued headwinds in new construction and ongoing price deflation, while repair, maintenance and improvement is performing slightly better.

住宅貿易管道收入持平，與最近幾季基本一致。業務持續面臨新建築和持續價格通貨緊縮的阻力，而維修、維護和改進的表現略有改善。

We saw similar trends in residential building and remodel and residential digital commerce, where the higher end project is holding up better than the broader remodel market. We'll discuss later how these groups are coming together to create a unique experience in the market.

我們在住宅建築和改造以及住宅數位商務中看到了類似的趨勢，其中高端項目比更廣泛的改造市場表現更好。我們稍後將討論這些群體如何聯合起來在市場上創造獨特的體驗。

Waterworks revenues were up 10%, with robust activity in public works, general municipal and meters and metering technology offsetting weaknesses in residential. Additionally, our diversification efforts continue to drive incremental growth, positioning us well for the long term.

自來水廠收入成長了 10%，公共工程、一般市政工程以及儀表和計量技術的強勁成長抵消了住宅方面的疲軟。此外，我們的多元化努力持續推動增量成長，為我們長期發展奠定良好基礎。

Commercial mechanical customer group grew 2%, driven by large capital projects such as data centers, partially offset by weaker activity in traditional nonres projects. We're optimistic as we enter the third quarter as our open order book continues to grow.

商業機械客戶群成長了 2%，這主要得益於資料中心等大型資本項目，但傳統非不動產項目活動的減弱在一定程度上抵消了這一增長。隨著我們的未結訂單持續成長，我們對第三季充滿樂觀。

Our industrial Fire and Fabrication and facility supply customer groups delivered a combined net sales decline of 6%, heavily impacted by commodity deflation in steel pipe, particularly in our Fire and Fabrication business. We remain committed to driving productivity for our specialized professional customers and maximizing value to the total project across each of our customer groups.

我們的工業消防和製造以及設施供應客戶群的綜合淨銷售額下降了 6%，這主要受到鋼管大宗商品通貨緊縮的影響，尤其是在我們的消防和製造業務中。我們始終致力於提高專業客戶的生產力，並為每個客戶群實現整個專案的價值最大化。

Despite near-term market headwinds, we're very pleased with the results of our investments in key growth areas. Within HVAC, our markets are large, fragmented and highly attractive. We're taking a three-pronged approach to growth with a combination of dual trade counter product conversions, geographic expansion of our HVAC network and strategic acquisitions.

儘管近期市場面臨阻力，但我們對關鍵成長領域的投資結果感到非常滿意。在 HVAC 領域，我們的市場規模龐大、分散且極具吸引力。我們採取三管齊下的成長方式，包括雙重貿易櫃檯產品轉換、暖通空調網路的地理擴展和策略性收購。

We're meeting the needs of the rapidly growing dual trade professional by completing over 500 counter conversions that now better serve both plumbing, and HVAC professionals. We're ahead of our pace to complete our goal of over 650 dual trade counters in fiscal 2026.

我們完成了 500 多個櫃檯轉換，以滿足快速增長的雙重貿易專業人士的需求，現在可以更好地服務管道和暖通空調專業人士。我們已經提前完成了在 2026 財年設立超過 650 個雙邊貿易櫃檯的目標。

We deploy a multi-equipment brand strategy, partnering with a number of branded suppliers to ensure our customers have access to the product choice that they require. Additionally, our private label HVAC line Durastar has shown solid growth and is building momentum as a high-quality equipment line that's accessible across the United States for our customers.

我們部署多設備品牌策略，與多家品牌供應商合作，以確保我們的客戶能夠選擇所需的產品。此外，我們的自有品牌 HVAC 生產線 Durastar 展現出穩健的成長勢頭，並正在成為一條可供全美國客戶使用的高品質設備生產線。

Our Waterworks business is both our largest and most diversified customer group. We're involved from the design stage through project management. Our diverse business provides solutions for water, wastewater and storm water management as well as erosion control, urban green infrastructure, treatment plant construction and metering technology.

我們的水務業務是我們最大且最多元化的客戶群。我們從設計階段一直參與到專案管理。我們的多元化業務為水、廢水和雨水管理以及侵蝕控制、城市綠色基礎設施、處理廠建設和計量技術提供解決方案。

We've expanded our capabilities to offer more holistic solutions for our customers. Day in and day out, we're solving problems to support the nation's aging infrastructure. With the use of artificial intelligence, we advise our customers in areas such as preventative maintenance and leak detection.

我們擴展了我們的能力，為客戶提供更全面的解決方案。日復一日，我們都在解決問題以支持國家老化的基礎設施。利用人工智慧，我們在預防性維護和洩漏檢測等領域為客戶提供建議。

Our knowledgeable Waterworks associates leverage the scale of our business and our supply chain to provide outstanding service and deliver comprehensive solutions for our customers. Waterworks is also a unique and critical piece of our focus on large capital projects, an area where tailwinds have emerged in an otherwise muted nonresidential end market.

我們知識淵博的水務員工利用我們的業務規模和供應鏈為客戶提供卓越的服務和全面的解決方案。水務工程也是我們重點關注大型資本項目的一個獨特且關鍵的部分，在非住宅終端市場低迷的情況下，該領域出現了順風。

Our multi-customer group approach on large capital projects drives collaboration and expertise across our Waterworks, commercial, mechanical, industrial and fire and fabrication customer groups to solve complex project requirements. The sophistication and size of these projects, particularly data centers, demand extensive expertise, proficiency and the ability to scale.

我們在大型資本專案中採用的多客戶群方法推動了水廠、商業、機械、工業、消防和製造客戶群之間的協作和專業知識，以解決複雜的專案需求。這些項目（尤其是資料中心）的複雜性和規模需要廣泛的專業知識、熟練程度和擴展能力。

By engaging early in the project life cycle, we partner with owners, architects, engineers and general contractors. We influence and address project challenges effectively leading to successful outcomes. Finally, the recent launch of Ferguson Home represents another area of growth as a unified brand that fully integrates our showroom and digital channels, offering customers a seamless project-based experience.

透過在專案生命週期早期參與，我們與業主、建築師、工程師和總承包商建立合作夥伴關係。我們有效地影響和解決專案挑戰，從而獲得成功的結果。最後，最近推出的 Ferguson Home 代表了另一個成長領域，作為一個統一的品牌，它完全整合了我們的展廳和數位管道，為客戶提供無縫的基於專案的體驗。

This best-in-class omnichannel approach is the next step for the evolution of our digital footprint while leveraging the expert consultative approach within our showrooms. For our customers, this results in a more consistent and connected experience that simplifies and enhances residential projects, bringing additional value to our residential building and remodel and residential digital commerce customer groups.

這種一流的全通路方法是我們數位足跡發展的下一步，同時利用我們展廳內的專家諮詢方法。對於我們的客戶而言，這帶來了更加一致、更加互聯的體驗，簡化和增強了住宅項目，為我們的住宅建築和改造以及住宅數位商務客戶群帶來了額外的價值。

We're pleased with the progress of these key growth areas, and we'll continue to invest in them to drive long-term growth and returns. I'll now pass you over to Bill, who will discuss the financial results in more detail.

我們對這些關鍵成長領域的進展感到滿意，我們將繼續對其進行投資，以推動長期成長和回報。現在我將把麥克風交給比爾，他將更詳細地討論財務結果。

Thank you, Kevin, and good morning, everyone. Net sales of $6.9 billion were 3% ahead of last year. Organic revenue increased 2.1% with an additional 1.2% increase from acquisitions. Total volume increased by 5%, offset by continued commodity-led price deflation of approximately 2%. This represents our fourth consecutive quarter of volume growth.

謝謝你，凱文，大家早安。淨銷售額為 69 億美元，比去年增長 3%。有機收入成長了 2.1%，其中收購收入額外成長了 1.2%。總銷量成長了 5%，但被持續約 2% 的商品價格通貨緊縮所抵消。這是我們連續第四個季度實現銷售成長。

Gross margin was 29.7%, a decrease of 70 basis points over last year, impacted by weak end market demand and persistent deflation along with the sales mix impact of outsized growth in HVAC and Waterworks.

毛利率為29.7%，比去年下降了70個基點，受到終端市場需求疲軟、持續通貨緊縮以及暖通空調和水務部門過度增長的銷售組合影響。

Operating costs grew largely in line with our 5% sales volume growth. The 60 basis points decline in operating leverage was largely driven by the impact of price deflation on sales, along with the impact from continued selective investments in core capabilities for future growth.

營運成本的成長與我們 5% 的銷售量成長基本一致。經營槓桿下降 60 個基點的主要原因是價格通貨緊縮對銷售額的影響，以及為實現未來成長而持續選擇性地投資核心能力的影響。

As a result, adjusted operating profit of $449 million was down $71 million on the prior year, delivering a 6.5% adjusted operating margin. Adjusted diluted earnings per share of $1.52 was 12.6% lower than last year, driven by lower adjusted operating profit, partially offset by the impact of share repurchases.

因此，調整後的營業利潤為 4.49 億美元，較上年下降 7,100 萬美元，調整後的營業利潤率為 6.5%。調整後每股攤薄收益為 1.52 美元，較去年下降 12.6%，主要由於調整後營業利潤下降，但部分抵消了股票回購的影響。

And our balance sheet remains strong at 1.2 times net debt to adjusted EBITDA. Moving to our segment results. Net sales in the US grew 3% with an organic increase of 2% and a 1% contribution from acquisitions. Adjusted operating profit of $455 million decreased $70 million over the prior year, delivering an adjusted operating margin of 6.9%.

我們的資產負債表依然強勁，淨負債與調整後 EBITDA 比率為 1.2 倍。轉向我們的分部業績。美國淨銷售額成長 3%，其中有機成長 2%，收購貢獻 1%。調整後營業利潤為 4.55 億美元，較上年減少 7,000 萬美元，調整後營業利益率為 6.9%。

In Canada, net sales were 3.2% ahead of last year, with organic growth of 3.1% and a 5.4% contribution from acquisitions, partially offset by a 5.3% adverse impact from foreign exchange rates. Markets have been broadly similar to that of the United States with nonresidential activity remaining more resilient than residential.

在加拿大，淨銷售額比去年增長 3.2%，其中有機增長 3.1%，收購貢獻 5.4%，但外匯匯率造成的 5.3% 的不利影響部分抵消了這一增長。市場與美國市場大致相似，非住宅活動比住宅活動更具彈性。

Adjusted operating profit was $11 million in the quarter, $2 million above the prior year. Turning to our first half results. The year has been challenged by persistent commodity-led deflation and subdued end markets. Despite this, we have consistently outperformed our markets. Net sales were 1.8% ahead of last year, with organic sales up 0.8% and an acquisition contribution of 1.2%, offset by 0.2% from the adverse impact of foreign exchange rates.

本季調整後的營業利潤為 1,100 萬美元，比上年高出 200 萬美元。談談我們上半年的業績。這一年面臨著由大宗商品引發的持續通貨緊縮和終端市場低迷的挑戰。儘管如此，我們的表現始終優於市場。淨銷售額比去年增長 1.8%，其中有機銷售額增長 0.8%，收購貢獻為 1.2%，抵消了 0.2% 的外匯匯率不利影響。

Gross margin was 29.9%, down 40 basis points. Adjusted operating profit of $1.2 billion was down 10.7% compared to the prior year, delivering a 7.9% adjusted operating margin. And adjusted diluted earnings per share of $3.98 was down 9.5%.

毛利率為29.9%，下降40個基點。調整後營業利潤為 12 億美元，較上年下降 10.7%，調整後營業利益率為 7.9%。調整後每股攤薄收益為 3.98 美元，下降 9.5%。

Next, our cash flow performance. Adjusted EBITDA of $1.26 billion was down approximately $130 million on the prior year. Working capital investments of $200 million were above the prior year by $87 million, driven by investments in HVAC to support our growth initiatives as well as the transition to new equipment efficiency standards, along with an increase in receivables, driven by sales growth.

接下來是我們的現金流表現。調整後的 EBITDA 為 12.6 億美元，較上年下降約 1.3 億美元。營運資本投資為 2 億美元，比上年高出 8,700 萬美元，主要由於對 HVAC 的投資，以支持我們的成長計劃以及向新設備效率標準的過渡，以及受銷售成長推動的應收帳款增加。

Interest and tax were down approximately $40 million in the prior year. As a result, operating cash flow was $685 million. We have continued to invest in organic growth through CapEx investing $158 million, slightly down on the prior year as projects are taking longer to complete, resulting in free cash flow of $545 million in the first half.

上一年利息和稅收下降了約 4,000 萬美元。因此，營運現金流為 6.85 億美元。我們繼續透過投資 1.58 億美元的資本支出來投資有機成長，由於專案需要更長的時間才能完成，投資額比上年略有下降，導致上半年的自由現金流達到 5.45 億美元。

Turning to capital allocation. As previously mentioned, we invested $158 million into CapEx during the first half to drive further above-market organic growth. Our Board declared an $0.83 per share quarterly dividend. This is consistent with the first quarter and represents a 5% increase over the prior year, reflecting our confidence in the business and cash generation.

轉向資本配置。如前所述，我們在上半年投資了 1.58 億美元的資本支出，以進一步推動高於市場的自然成長。我們的董事會宣布每股季度股息為 0.83 美元。這與第一季一致，比上年增長了 5%，反映了我們對業務和現金創造的信心。

We continue to consolidate our fragmented markets through bolt-on geographic and capability acquisitions. We announced one completed acquisition during the second quarter, Templeton and its affiliate TEMSCO. In addition, subsequent to quarter end, we signed a definitive purchase agreement to acquire Independent Pipe & Supply, a leading commercial mechanical business in the Northeast.

我們繼續透過附加地理和能力收購來鞏固我們分散的市場。我們在第二季宣布完成一項收購，即Templeton及其附屬公司TEMSCO。此外，季度末之後，我們簽署了一份最終購買協議，以收購東北地區領先的商業機械企業 Independent Pipe & Supply。

And finally, we are committed to returning surplus capital to shareholders when we are below the low end of our target leverage range of 1 times to 2 times net debt to adjusted EBITDA.

最後，當我們的槓桿率低於目標槓桿範圍的低端（即淨債務與調整後 EBITDA 比率的 1 倍至 2 倍）時，我們承諾將剩餘資本返還給股東。

We returned $508 million to shareholders via share repurchases during the first half compared to $250 million in the first half of the prior year, reducing our share count by approximately 2.6 million. And today, we've announced an increase to our share repurchase program by an additional $1 billion, reflecting our confidence in the business.

我們上半年透過股票回購向股東返還了 5.08 億美元，而去年同期為 2.5 億美元，導致股票數量減少約 260 萬股。今天，我們宣布將股票回購計畫增加 10 億美元，這反映了我們對業務的信心。

As a result, we have approximately $1.4 billion outstanding under the share repurchase program. Next, I'll cover our revised outlook for fiscal 2025. We are pleased with our continued market outperformance, but challenging end markets and persistent commodity-led deflation have resulted in adjusted operating margins coming in below our expectations in the first half.

因此，我們在股票回購計畫下尚未償還的金額約為 14 億美元。接下來，我將介紹我們對 2025 財年的修訂展望。我們對我們持續的市場優異表現感到滿意，但終端市場的挑戰和大宗商品持續的通貨緊縮導致上半年調整後的營業利潤率低於我們的預期。

While we continue to expect improvement in the second half, we believe our markets will remain somewhat subdued and are, therefore updating our full year outlook. Our fiscal 2025 guidance is as follows: We maintain our view of total sales growth in the low single-digit range, with the continued assumption of markets being down low single digits, inclusive of pricing being slightly down for the year, driven by ongoing deflation in commodity-based products.

儘管我們仍然預計下半年情況會有所改善，但我們認為我們的市場仍將保持一定程度的低迷，因此我們更新了全年展望。我們對 2025 財年的指引如下：我們維持對總銷售額成長在低個位數範圍內的看法，並繼續假設市場銷售額將下降低個位數，包括受大宗商品持續通貨緊縮的影響，今年的價格將略有下降。

We expect continued market outperformance and just under a 1% contribution from already completed acquisitions, which is partially offset by one fewer sales day in the third quarter. We expect an adjusted operating margin range between 8.3% to 8.8%.

我們預計市場將繼續表現出色，已完成的收購將貢獻近 1%，但第三季的銷售日減少一天將部分抵銷這項貢獻。我們預計調整後的營業利潤率在 8.3% 至 8.8% 之間。

Interest expense will be between $180 million to $200 million. Our adjusted effective tax rate will be approximately 26%. And we've revised our CapEx estimate to be between $325 million to $375 million to reflect the extended project delivery time line and pace of expected capital deployment.

利息支出將在1.8億至2億美元之間。我們的調整後有效稅率約為26%。我們將資本支出估算修改為 3.25 億美元至 3.75 億美元之間，以反映延長的專案交付時間和預期的資本部署速度。

Also, as Kevin mentioned earlier, we are currently taking actions to increase speed and efficiency to better serve our customers and deliver value. While we have been disciplined in managing costs in relation to volume growth, there's additional opportunity to reduce complexity, simplify management structures, and drive greater speed and accountability within the organization. These actions we are taking will better position the organization for profitable growth.

另外，正如 Kevin 之前提到的，我們目前正在採取行動提高速度和效率，以便更好地服務客戶並提供價值。雖然我們在管理與產量成長相關的成本方面非常嚴格，但仍有機會降低複雜性，簡化管理結構，並提高組織內的速度和責任感。我們正在採取的這些行動將使組織更好地實現獲利成長。

Thank you, Bill. As we conclude our remarks, let me reiterate our thanks to our associates whose continued execution has driven further share gains despite a backdrop of market headwinds and commodity-led price deflation.

謝謝你，比爾。在結束我們的演講之前，請允許我再次向我們的同事表示感謝，儘管面臨市場逆風和大宗商品導致的價格通縮，但他們的持續努力推動了股價進一步上漲。

With leading positions in large, highly fragmented markets, we expect to continue to outperform our markets as we leverage our size, scale and strategy. We're operating in a unique time where we must continue to drive disciplined cost management.

憑藉在大型且高度分散的市場中的領先地位，我們期望透過利用我們的規模、範圍和策略繼續超越我們的市場。我們處在一個特殊的時期，必須繼續推動嚴格的成本管理。

We're taking actions to better position the organization for future profitable growth. We differentiate ourselves on service levels, focusing on value-added solutions, a suite of digital tools backed by the strength of our knowledgeable associates and a supply chain that delivers the best breadth and depth to our customers where and when they need it.

我們正在採取行動，使組織更好地定位，以實現未來的獲利成長。我們在服務水平上脫穎而出，專注於增值解決方案、以我們知識淵博的員工為後盾的數位工具套件以及能夠在客戶需要的時間和地點為他們提供最佳廣度和深度的供應鏈。

In residential markets, we continue to see strong long-term fundamentals with an aging and underbuilt housing stock in addition to our structural growth opportunity in HVAC. On the nonresidential side, our diverse exposure, coupled with multiyear tailwinds from large capital projects are expected to drive continued growth. We're well positioned for this growth as we engage in a more holistic involvement earlier in the design phase to leverage our scale, our value-added solutions and our digital capabilities.

在住宅市場，除了暖通空調領域的結構性成長機會外，我們繼續看到強勁的長期基本面，包括老化和建設不足的房屋存量。在非住宅方面，我們多元化的投資，加上大型資本項目的多年順風，預計將推動持續成長。由於我們在設計階段早期就進行更全面的參與，以利用我們的規模、增值解決方案和數位能力，因此我們已為這一增長做好了準備。

We believe our markets remain attractive over the medium term, and we continue to balance investment in our core customer-facing associates and our capabilities focusing on the principles that underpin our strategy for sustained growth and market leadership.

我們相信我們的市場在中期內仍然具有吸引力，我們將繼續在面向客戶的核心員工和我們的能力方面實現平衡投資，並專注於支撐我們持續成長和市場領導地位策略的原則。

Thank you for your time today. Bill and I are now happy to take your questions. Operator, I'll hand the call back over to you.

感謝您今天抽出時間。比爾和我現在很高興回答你們的問題。接線員，我會把電話轉回給您。

(Operator Instructions) Matthew Bouley, Barclays.

(操作員指示) 巴克萊銀行的 Matthew Bouley。

I wanted to ask first around the growth investments in OpEx and a lot of these areas you've been speaking about for a while, kind of the large capital projects and the HVAC counter conversions and now it sounds like you've got a few more growth initiatives beyond that as well.

我想先問一下有關營運支出 (OpEx) 的成長投資以及您一段時間以來一直在談論的很多領域，例如大型資本項目和 HVAC 櫃檯轉換，現在聽起來您還有其他一些成長計劃。

As you guys sort of invest for growth despite a bit of a choppy end market backdrop here, so basically, where are we in the cycle of these growth investments? I'm curious if you can maybe quantify any of the kind of year-over-year OpEx in the second half? And then maybe balance that with some of the areas that -- where you're looking to reduce costs that I heard you mention as well.

儘管終端市場背景有些波動，但你們仍進行成長投資，那麼基本上，我們處於這些成長投資的哪個週期？我很好奇，您是否可以量化下半年的年比營運支出？然後也許可以將其與一些您希望降低成本的領域進行平衡，我也聽到您提到這些領域。

Yeah, Matt, this is Kevin. I'll start and then pass it over to Bill. When you look at the investments that we're making, you're right to call out both HVAC and large capital projects, and I'll probably spread that into Waterworks as well as the rest of our traditional business.

是的，馬特，這是凱文。我先開始，然後交給比爾。當你看到我們正在進行的投資時，你會發現，你正確地指出了暖通空調和大型資本項目，我可能會將其擴展到水務工程以及我們其他傳統業務。

If you take HVAC, and we've talked about this in the past, we want to make sure that we're building out counter locations across the entirety of the United States that can take care of not only specialized HVAC contractors with a great product offering and experience set, but also the dual trade contractor that does all HVAC and plumbing.

如果您從事暖通空調行業，我們過去也討論過這個問題，我們希望確保我們在整個美國建立櫃檯，不僅可以照顧到具有良好產品和經驗的專業暖通空調承包商，還可以照顧到從事所有暖通空調和管道工程的雙重貿易承包商。

And so we're well on our way to that conversion. And so the investments in both people, product and expansion have been across 500 counters, and we're probably on track to north of 650 as we look towards the next fiscal year.

我們現在正在順利地實現這一轉變。因此，我們在人員、產品和擴張方面的投資已經涵蓋了 500 個櫃檯，展望下一個財政年度，我們可能預計將超過 650 個櫃檯。

We've also been growing organically because, as you know, we want to make sure that we have great HVAC capabilities across all markets in the nation. And so we've actually expanded to over 20 new markets from an HVAC perspective, again, complementing that traditional plumbing business and complementing the dual trade contractor that's growing in the market. So that's been a good source of that investment.

我們也一直在有機成長，因為如你所知，我們希望確保我們在全國所有市場都擁有強大的暖通空調能力。因此，從 HVAC 的角度來看，我們實際上已經擴展到 20 多個新市場，這再次補充了傳統的管道業務，並補充了市場上不斷增長的雙重貿易承包商。所以這是該項投資的一個很好的來源。

And then the third prong obviously being from an M&A perspective. On the large capital project side, it really has been taking the complexity and the scale of these projects and making sure that we're there to add productivity to the contractor base in areas like fabrication, valve and automation, what we're doing with digital product content for BIM models, we're also engaged in more up-funnel work together with the general contractor, the owner, the engineer to make sure that across multiple customer groups, we're bringing value to the job as a whole.

第三個方面顯然是從併購的角度出發。在大型資本項目方面，我們確實一直在考慮這些項目的複雜性和規模，並確保我們能夠在製造、閥門和自動化等領域為承包商提高生產力，我們正在為 BIM 模型處理數位產品內容，我們還與總承包商、業主、工程師一起參與更多上游工作，以確保在多個客戶群中，我們為整個工作帶來價值。

And then you look at the Waterworks side, and both from an M&A perspective as well as what we're doing organically is bringing more capabilities to water and wastewater treatment plant and infrastructure so that we can be more valuable to the project as a whole, more product sets, more execution, more up-funnel engagement. I think you're seeing that play out. We're pleased with that from a growth perspective, not only in the core Waterworks business but across the civil infrastructure space.

然後你看看水廠方面，無論是從併購的角度還是我們有機所做的，都為水和廢水處理廠和基礎設施帶來了更多的能力，以便我們對整個項目更有價值，更多的產品組合，更多的執行，更多的上行渠道參與。我想你正在目睹這一幕。從成長角度來看，我們對此感到滿意，不僅是在核心水務業務方面，而且在整個民用基礎設施領域。

So it really is across multiple customer groups and balancing that with driving the volumetric exposure that we have inside the business, and we're pleased with what that has been. But additionally, when you look at a business across time, there are areas that we can address from a spans and layers perspective, make sure that we're more streamlined, we're more accountable, we're driving focus for our customers

因此，它確實跨越多個客戶群，並透過推動我們業務內部的體積曝光來平衡這一點，我們對此感到滿意。但此外，當你從時間角度看待一家企業時，我們可以從跨度和層次的角度來解決一些問題，確保我們更加精簡，更加負責，更加專注於客戶

Yeah, Matt, maybe just to build on to that a bit from a quantification standpoint. As we mentioned in the prepared remarks, if you look at the cost growth that we had in the second quarter. Cost growth was about 5.5%. The vast majority of that was driven by that 5% volume growth.

是的，馬特，也許只是從量化的角度對此進行一點闡述。正如我們在準備好的評論中提到的那樣，如果你看看我們在第二季的成本成長。成本成長約5.5%。其中絕大部分是由5%的銷售成長所推動的。

And the teams, to Kevin's point, are doing a really nice job managing that volume. In fact, if you look at our full time equivalent headcount, it's about flat year-over-year versus that volumetric growth of 5%. So we're driving good underlying productivity in the core business.

正如凱文所說，這些團隊在管理這一數量方面做得非常出色。事實上，如果你看看我們的全職員工人數，你會發現與去年同期相比，這一數字基本上持平，而數量增長率為 5%。因此，我們正在推動核心業務的良好基礎生產力。

And if you think about that 60 basis points deleverage and you think about a 2% top line impact from deflation, worth about $130 million of sales from a pricing perspective is the 2% equivalent. That's driving roughly 40 of that 60 basis points of deleverage in the quarter.

如果您考慮 60 個基點的去槓桿率，並考慮通貨緊縮對營收造成 2% 的影響，那麼從定價角度來看，約 1.3 億美元的銷售額就相當於 2%。這推動了本季 60 個基點的去槓桿率中的約 40 個基點。

So the remainder is the fact that we're driving underlying productivity, offset by some cost inflation and those investments. So with really an underlying 20 basis points step-up in OpEx deleverage or OpEx cost as a percentage of sales in the quarter, we're quite pleased with how that was managed in a tough environment.

因此，剩下的事實是我們正在推動基礎生產力，但被一些成本通膨和那些投資所抵消。因此，儘管本季營運支出去槓桿或營運支出成本佔銷售額的百分比實際上上升了 20 個基點，但我們對在艱難環境下取得的管理成果感到非常滿意。

When you look forward to Kevin's point, we are taking some actions, and we're right in the midst of those actions really focused on noncustomer-facing roles, layers and structure. That work is well underway. We plan to execute most of that work in the third quarter and into the fourth quarter.

當您期待凱文的觀點時，我們正在採取一些行動，而我們正處於這些行動之中，真正專注於非面向客戶的角色、層次和結構。此項工作目前進展順利。我們計劃在第三季和第四季完成大部分工作。

And while I won't give an exact number, we -- our intention is to slow the rate of cost growth as we move through the second half, again, still against that backdrop of a challenging market.

雖然我不會給出一個具體的數字，但我們的目的是在下半年減緩成本成長率，同樣，在市場仍然充滿挑戰的背景下。

Excellent. Perfect. Comprehensive answer. Secondly, I wanted to ask about the two customer groups, HVAC up 17% and Waterworks up 10% and I'm sure the growth investments you've been making is part of the answer to this question. But I guess, firstly any way to quantify how much M&A is in those kind of roughly versus organic?

出色的。完美的。全面解答。其次，我想問兩個客戶群的情況，暖通空調客戶群成長了 17%，水務客戶群成長了 10%，我相信你們所做的成長投資是這個問題答案的一部分。但我想，首先，有沒有什麼方法可以量化其中的併購比例大致與有機比例？

And then I would just love to hear further elaboration on what drove the acceleration in both of those customer groups, maybe from a market perspective beyond your growth investments and kind of if you're expecting those to remain above the company average in terms of your second half guide?

然後，我很想聽聽是什麼推動了這兩個客戶群的加速發展，也許從成長投資之外的市場角度來看，以及您是否預計這些投資在下半年的指導中仍將保持在公司平均水平之上？

Yeah, Matt, the vast majority of the growth in both of those customer groups is organic. You can probably pencil in a couple of points of acquisition growth. So again, with 17% and 10%, respectively, growth from those customer groups, the vast majority is organic.

是的，馬特，這兩個客戶群的絕大部分成長都是有機的。您或許可以列出幾個收購成長點。因此，這些客戶群分別實現了 17% 和 10% 的成長，絕大多數都是有機成長。

And I'll take it in reverse, Matt, and talk water and then HVAC. From a Waterworks perspective, as the group has heard me talk over and over again, couldn't be more pleased with the balanced business mix that our Waterworks business operates in and drives.

馬特，我將反過來談談水，然後是暖通空調。從水務部門的角度來看，正如集團聽我反覆談論的那樣，對於水務業務運營和推動的平衡業務組合感到非常滿意。

And so if you look across residential, commercial, municipal, public works, that balance is serving us quite well, and we called out civil infrastructure as being a big part of the growth in this past quarter. If you look at our metering and automation group, our geosynthetics, our municipal sales, our water and wastewater treatment, that's all up double digits on a pretty sizable number, and so the investments that we're making to be great in that area are serving us well in the current period.

因此，如果你看看住宅、商業、市政和公共工程，你會發現這種平衡對我們非常有利，我們認為民用基礎設施是上個季度成長的重要組成部分。如果你看看我們的計量和自動化集團、土工合成材料、市政銷售、水和廢水處理，你會發現它們都以兩位數的速度增長，而且這個數字相當可觀，因此，我們在該領域進行的投資在當前時期為我們帶來了良好的服務。

And then I go back to -- on the HVAC side, it really is execution of the strategy, M&A, geographic, organic expansion, and then counter expansion for the dual trade professional. And so yeah, maybe there's a little bit of pull forward of product in residential new construction as you see the equipment conversion or there may be a bit of a small bit of inventory build, that's not the real drivers of what you're seeing out in the marketplace. It really is execution of what that multiyear strategy is.

然後我回到——在 HVAC 方面，它實際上是雙重貿易專業人士的策略執行、併購、地理擴張、有機擴張，然後是反向擴張。是的，正如您所看到的，住宅新建產品可能會有一點提前，例如設備轉換，或者可能會有少量的庫存積累，但這並不是您在市場上看到的真正驅動因素。這實際上是多年戰略的執行。

Philip Ng, Jefferies.

傑富瑞 (Jefferies) 的 Philip Ng。

I had a question on gross margins. Certainly, a little softer in the quarter, and you've lowered your full year guide for EBIT margins. So I guess, perhaps where is some of the downward surprise you're seeing? Is that more less price -- more pricing headwinds on the commodity side and/or limited pricing on your finished goods?

我對毛利率有疑問。確實，本季業績略顯疲軟，而且你們下調了全年息稅前利潤率預期。所以我想，您看到的意外下行趨勢可能在哪裡呢？這是否意味著價格會更低——商品方面的定價阻力會更大和/或成品價格會受到限制？

Just looking out to the back half of this year. I just want to get any update on how price increases are shaping up, whether it's finished goods or commodity side. And especially in the backdrop where tariffs are being implemented, how does that kind of impact your ability to push price good or bad?

展望今年下半年。我只是想了解價格上漲的最新情況，無論是成品還是商品方面。特別是在實施關稅的背景下，這會對您推動價格上漲或下跌的能力產生什麼影響？

Yeah, Phil, thanks for the question. If you look at that 70 basis points decline from prior year second quarter, it really is a confluence of a few factors. Firstly, we are still operating in an overall market that's down year-on-year with compressed volumes. We have persistent deflation. And I would point to that driving the majority of the decline year-over-year.

是的，菲爾，謝謝你的提問。如果你看一下與去年同期相比 70 個基點的下降，你會發現這確實是多種因素共同作用的結果。首先，我們仍然在整體市場較去年同期下滑、銷售壓縮的環境下營運。我們面臨持續的通貨緊縮。我想指出的是，這是造成年減的主要原因。

If you think about the fact that we're now in our sixth quarter of deflation, and that's lasted a bit longer than we expected at the beginning of the fiscal year and is lasting a bit longer as we turn to the second half. So deflation is a big component of that, really all on the commodity side, not on the branded product side.

如果您想一想，我們現在正處於通貨緊縮的第六個季度，並且這種情況持續的時間比我們在財年開始時預期的要長一些，而且在進入下半年時，這種持續時間還會更長。因此，通貨緊縮是其中一個重要的因素，實際上都是在商品方面，而不是品牌產品方面。

And then last but certainly not least, we just got done talking about a bit more explanation on the expanded growth in HVAC and Waterworks. And so there's some mix pressure there from a gross margin perspective that's driving the remainder of that gross margin pressure year-on-year.

最後但同樣重要的一點是，我們剛剛談完了有關暖通空調和水務領域擴大成長的更多解釋。因此，從毛利率的角度來看，存在一些混合壓力，導致剩餘的毛利率壓力逐年增加。

Any color on the pricing side in the back half? And then certainly, there's tariffs, right, being implemented on metal and stuff like that? Is that a good guy on your commodity side? And then any price increase on the finished goods side that you're seeing out there?

後半部定價方面有什麼詳情嗎？當然，對金屬和類似的東西也會徵收關稅，對吧？那是你們商品方面的好人嗎？那麼，您看到成品價格有任何上漲嗎？

Yeah. Phil, as Bill indicated, the persistent deflation really is driven by commodity input based deflation. And so you think about PVC resin or hot rolled coil on the steel side, that's really driving what that deflation looks like, and that's the biggest cause of what we're seeing from an overall margin perspective.

是的。菲爾，正如比爾指出的，持續的通貨緊縮實際上是由基於商品投入的通貨緊縮所驅動的。所以想想鋼鐵方面的 PVC 樹脂或熱軋捲，這才是真正推動通貨緊縮的原因，也是從整體利潤率角度我們看到的最大原因。

If you look at how the market is affecting, we compete in the market every day, and we're very pleased with the market outperformance from a revenue perspective and our teams are constantly and consistently working to make sure that we balance share gains, long-term customer relationships, price and margin, and what we're doing with our vendor community around getting the right cost of goods sold position for the value that we add in the marketplace, and that happens in every market, every day across every customer group on every project, and so we're pleased with the way that's progressing, and we're making sure that we manage that over time.

如果你看看市場是如何影響的，我們每天都在市場上競爭，從收入的角度來看，我們對市場的優異表現感到非常滿意，我們的團隊一直在努力確保平衡份額收益、長期客戶關係、價格和利潤，以及我們與供應商社區合作的方式，以獲得正確的銷售成本，以實現我們在市場上增加的價值，這在每個市場、每個市場

When you look at the tariff impact, that certainly will have some degree of a stabilizing effect on what that deflation looks like. I mean if you think about the steel market, and what we're seeing in price increases that have already been announced in the steel pipe side of the business. So we think that, that can be a stabilizing effect, but there's a great deal of uncertainty, and it's a pretty dynamic process as we look forward.

當你看看關稅的影響時，它肯定會對通貨緊縮產生一定程度的穩定作用。我的意思是，如果你考慮一下鋼鐵市場，我們看到鋼管業務已經宣布價格上漲。因此我們認為，這可以起到穩定作用，但也存在很大的不確定性，展望未來，這是一個相當動態的過程。

Okay. That's helpful. And just pivoting on demand trends, any color on fiscal 3Q intra-quarter trends, certainly feels like the consumer has weakened a bit in February, all the commentary around your commercial, especially your mega projects, infrastructure side of things, sounds pretty encouraging, admittedly there's been choppiness from what we're hearing on in tariffs and new policies with DOGE on that front. Are you seeing any choppiness on the heavy commercial side as well?

好的。這很有幫助。僅從需求趨勢來看，任何有關第三財季季內趨勢的信息都表明，消費者在 2 月份的消費勢頭有所減弱，所有關於商業的評論，特別是大型項目、基礎設施方面的評論，聽起來都非常令人鼓舞，誠然，從我們聽到的關於關稅和 DOGE 新政策的消息來看，這方面存在波動。您是否也看到重型商業運輸方面有波動？

Yeah. First off, Phil, from a February perspective, February top line was largely in line with the second quarter, so you can think of that as somewhere around that 3% overall growth rate. So pretty consistent as we stepped out of Q2 into Q3.

是的。首先，菲爾，從 2 月的角度來看，2 月的營收與第二季基本持平，因此您可以認為整體成長率在 3% 左右。當我們從 Q2 進入 Q3 時，情況相當一致。

With that said, February is a 20-day billing month that's always got some weather impact. So I wouldn't read too much from a trend perspective. If you look at -- if you take a step back and you think about the guidance we set out for the full year, we've said we expect to deliver low single-digit growth for the full year.

話雖如此，二月是一個20天的計費月，總是會受到天氣的影響。所以我不會從趨勢的角度解讀太多。如果你看一下——如果你退一步思考我們為全年制定的指導方針，我們已經說過，我們預計全年將實現低個位數的增長。

We're sitting just under 2% growth in the first half. I'd tell you that we still think the markets overall will be down in the low single-digit range like we set out at the beginning of the year, but probably a bit more pressured towards the lower end of that low single digits than we thought at the beginning of the year.

上半年我們的經濟成長略低於2%。我想說的是，我們仍然認為，整體市場將像我們年初預測的那樣，下降到個位數的低位，但下降壓力可能會比我們年初預測的更大。

Just to your point, as the markets have just been a bit more muted. And as we just talked about, deflation is lasting a bit longer. So that really sets us up for an expectation that the second half will still be in somewhere from a growth perspective in that low single-digit range, pretty consistent with the first half.

正如您所說，市場最近表現略顯低迷。正如我們剛才談到的，通貨緊縮還會持續一段時間。因此，這確實讓我們預期，下半年的成長速度仍將維持在個位數的低位，與上半年相當一致。

Quinn Fredrickson, Baird .

奎因·弗雷德里克森·貝爾德。

Can you give us any details on what individual commodities are doing in terms of large diameter versus small diameter PVC copper tubing, steel pipe, et cetera, and maybe how those are trending here quarter-to-date?

您能否向我們詳細介紹大直徑和小直徑 PVC 銅管、鋼管等個別商品的走勢，以及這些商品本季迄今的走勢如何？

Yeah, sure. If you think about -- if we start with copper tube, and we mentioned this in the last quarter call, copper had been in a bit of the inflation through the first quarter, and that continued into the second quarter, and we would expect that to continue. That was really exiting the first quarter, that was really the only commodity category that was in inflationary territory.

是的，當然。如果你想想——如果我們從銅管開始，我們在上個季度的電話會議上提到過這一點，銅在第一季度受到了一定程度的通膨影響，這種情況持續到了第二季度，我們預計這種情況還會持續下去。這確實是第一季令人震驚的現象，也是唯一處於通膨領域的商品類別。

As we just talked about, steel has been one of the biggest pressure points that we've had, and that's impacted the commercial mechanical business and the Fire and Fabrication business in particular. That's still in deflation today.

正如我們剛才談到的，鋼鐵是我們面臨的最大壓力點之一，它對商業機械業務、尤其是消防和製造業務產生了特別影響。現今仍處於通貨緊縮狀態。

As Kevin just alluded to, we've seen some announcements of price increases largely on the backs of tariff announcements. So we would expect that deflation to lessen as we move through the second half. But it remains to be seen what happens with those tariffs.

正如凱文剛才提到的，我們看到一些價格上漲公告，主要是由於關稅公告的緣故。因此，我們預計，進入下半年，通貨緊縮的趨勢將會減輕。但這些關稅的具體結果仍有待觀察。

We could have a change in that while we're on this call, quite frankly. And then PVC, as you outlined, is still probably the biggest commodity deflation category for us. A bit more deflation still on the plumbing side than on the Waterworks side, but both are still facing some pressure, and we expect that pressure to continue in the second half, which is driving some of that expectation of deflation lasting a touch longer.

坦白說，我們在通話過程中可能會對此做出改變。正如您所概述的，PVC 仍然可能是我們最大的商品通貨緊縮類別。管線方面的通貨緊縮程度比自來水廠方面的通貨緊縮程度要嚴重一些，但兩者都仍面臨一些壓力，我們預計這種壓力將持續到下半年，這導致通貨緊縮預期將持續更長時間。

Okay. And then secondarily, just the back half operating margin, sequential improvement that's embedded in the guide, would that be consistent with just normal seasonal upticks? Or does maybe some of the lessening commodity deflation and some of the cost actions that you've mentioned support better than seasonally normal?

好的。其次，僅就下半年的營業利潤率而言，指南中包含的連續改善是否與正常的季節性上漲一致？或者也許您提到的一些商品通貨緊縮的減少和一些成本行動的支持效果比季節性正常情況更好？

Yeah, I'd say the majority is seasonal. But if you look at the first half operating margin that we delivered of 7.9% and the full year guide of 8.3% to 8.8% implies a second half that's going to be somewhere in the mid-8% to mid-9% operating margin range.

是的，我想說大多數都是季節性的。但如果您看一下我們上半年的營業利潤率，即 7.9%，而全年預期為 8.3% 至 8.8%，則表示下半年的營業利潤率將在 8% 到 9% 左右的區間內。

So seasonally, we generally take a step up to your point in the second half, but also we're actioning every day, as Kevin mentioned earlier, to ensure that we're charging for our value from a gross margin perspective. And while gross margins were pressured in the second quarter, that pressure was particularly early in the second quarter in November and December. We've been encouraged by the movement and the progress that we've made in January and exiting February.

因此，從季節性來看，我們通常會在下半年採取進一步的行動，但正如凱文之前提到的，我們每天都在採取行動，以確保從毛利率的角度收取的費用符合我們的價值。雖然第二季毛利率面臨壓力，但這種壓力在第二季初（11月和12月）尤其明顯。我們對一月份和二月所取得的進展和動向感到鼓舞。

And then to your point, on the cost side, while the cost growth has been about 5% for the first half, and we expect that cost growth to continue, particularly in the third quarter as we do take some of these actions, again, our intention is to slow that rate of cost growth in relation to sales as we exit the year. Of course, some of that will be driven by the volume environment that we find ourselves in, in the second half.

然後回到您所提到的成本方面，雖然上半年成本增長率約為 5％，並且我們預計成本增長將持續，特別是在第三季度，因為我們確實採取了一些措施，但我們的目的是在年底時減緩與銷售額相關的成本增長率。當然，這在某種程度上將受到下半年我們所處的數量環境的影響。

John Lovallo, UBS.

瑞銀的約翰·洛瓦洛。

The first one is, are you seeing any DOGE -- are you guys seeing any DOGE impacts in any of the water infrastructure construction or institutional markets? And do any of the metering deployments of the big projects depend on federal funding?

第一個問題是，您是否看到任何 DOGE——您是否看到任何 DOGE 對水基礎設施或機構市場的影響？大型專案的計量部署是否依賴聯邦政府的資金？

Yeah, John, thanks for the question. No, we're not seeing any near-term impact from a DOGE perspective. There is some conversation around what the federal funding structure might look like. Today, when you look at the civil infrastructure growth that we experienced, the Waterworks growth in general, it's not coming from a flood of federal dollars.

是的，約翰，謝謝你的提問。不，從 DOGE 的角度來看，我們沒有看到任何近期影響。有人討論聯邦資金結構可能是什麼樣的。今天，當你看到我們所經歷的民用基礎設施成長，以及水務工程的整體成長時，你會發現這並不是來自聯邦政府的大量資金投入。

It is coming from the focus that we've got on helping our aging infrastructure around public line work, water and wastewater treatment plant construction, meters and metering technology and general infrastructure repair, maintenance and improvement.

我們專注於幫助老化的基礎設施，包括公共線路工程、水和廢水處理廠建設、儀表和計量技術以及一般基礎設施的維修、維護和改進。

It's difficult right now to understand what the federal funding picture is going to look like, but we're bullish on what the needs of that overall infrastructure investment has to be, especially in light of what we're seeing around the country, and so we will invest in that both organically and inorganically to make sure that we are part of that solution.

目前很難了解聯邦政府的資金狀況，但我們對整體基礎設施投資的需求持樂觀態度，特別是考慮到我們在全國範圍內看到的情況，因此我們將透過有機和無機的方式進行投資，以確保我們成為解決方案的一部分。

Understood. And then is there any way to help us kind of think about or quantify the mix impact to gross margin from the higher HVAC and Waterworks sales. I guess in addition to that, are you seeing any customers kind of trade down?

明白了。那麼有沒有什麼方法可以幫助我們思考或量化暖通空調和水務銷售成長對毛利率的影響。我想除此之外，您是否看到有顧客的消費水準有所下降？

Yeah, John. Broadly, I'd say two-third of the impact on gross margins was from the market and deflation with the remaining close to one-third being driven by mix. Again, that's going to vary quarter in, quarter out, depending on the mix of that business.

是的，約翰。整體而言，我認為對毛利率的影響有三分之二來自市場和通貨緊縮，其餘近三分之一則由多種因素造成。再次，這會隨著業務組合的不同而逐季變化。

And from a trade-down perspective, I wouldn't attribute much of that to trade down. We talked about HVAC. Just like we saw in '08, '09, we're seeing a bit of focus on the repair versus the replace that probably will continue, especially as we go through the refrigerant changes in, call it, the back half of our Q3 and the front half of our Q4, that's to be expected, but we aren't seeing a very large amount of trade down because of consumer balance sheets.

從降級消費的角度來看，我不會將其中的大部分歸因於降級消費。我們討論了暖通空調（HVAC）。正如我們在 2008 年和 2009 年看到的那樣，我們看到消費者更加關注維修而不是更換，這種情況可能還會持續下去，特別是當我們經歷製冷劑的變化時，也就是我們所說的第三季度後半段和第四季度前半段，這是可以預料的，但由於消費者的資產負債表，我們並沒有看到大量的交易下降。

Sam Reid, Wells Fargo.

富國銀行的薩姆·里德。

Awesome. I wanted to drill down a bit on Waterworks. You're obviously executing quite well in this category. But you also alluded to some weakness on the resi side. I wanted to understand was that weakness a little bit more pronounced sequentially, are you starting to see the large builders pull back on community count growth in response, perhaps to lower demand? Just want to unpack that comment in greater detail.

驚人的。我想要更深入地了解 Waterworks。顯然你在這個類別中表現得相當出色。但您也暗示了房地產方面存在一些弱點。我想了解的是，這種疲軟態勢是否會在連續期間更加明顯，您是否開始看到大型建築商為了應對需求下降而減少社區數量的增長？只是想更詳細地解讀一下那則評論。

Yeah, Sam, it really is around just what the growth in the market looks like. We haven't seen a pronounced turndown. We haven't seen any real change in builder activity. In fact, if we're looking forward, the bidding activity that we're seeing on the residential side of our Waterworks business has been encouraging.

是的，山姆，這確實與市場的成長有關。我們尚未看到明顯的下降趨勢。我們還沒有看到建築商活動有任何真正的變化。事實上，如果我們展望未來，我們看到水務業務住宅的競標活動是令人鼓舞的。

Now that's just bidding activity. And so we need to make sure that, that, a, plays out in actual projects being released and that when those projects are released, that all phases and sections are going to be released.

現在這只是競標活動。因此，我們需要確保在實際發布的項目中發揮作用，並且當這些項目發佈時，所有階段和部分都將發布。

So it's a bit too early to tell, but it isn't a pronounced movement downward. It really is a bit of a mix shift in what our Waterworks business has experienced from a growth perspective in public works versus residential.

所以現在說還為時過早，但這並不是一個明顯的下降趨勢。從公共工程和住宅工程的成長角度來看，我們的水務業務確實經歷了一些混合轉變。

And again, I'll go back to, we are really pleased with the balanced business mix that exists in that water business because it's not dependent on one particular sector inside the market.

我再說一遍，我們對水業務中平衡的業務組合感到非常滿意，因為它不依賴市場中的某個特定部門。

That helps. And then maybe switching gears here. I wanted to dig a little deeper on finished goods pricing, perhaps following up a bit from Phil's question. When I talk through realization on list price increases versus what you're actually seeing in the market. Are there any categories where you're getting something close to the list price increase, any categories where you're notably not getting or not seeing pricing flow through in line with those list price increases.

這有幫助。然後也許在這裡轉換話題。我想更深入探討成品定價，或許可以稍微回答一下菲爾的問題。當我談到標價上漲的實現情況與您在市場上實際看到的情況時。有哪些類別的商品價格接近標價上漲，有哪些類別的商品價格明顯沒有上漲或沒有依照標價上漲。

Yeah. Thank you. And when you think about the finished goods side, we're still fairly early in the year in terms of what those annual price increases look like, and we're still a little bit early in tariff realization, because you've got multiple things playing out at the same time in a pretty dynamic environment.

是的。謝謝。而當你考慮成品方面時，就年度價格上漲而言，我們還處於年初階段，而且在關稅實現方面也還處於早期階段，因為在一個相當動態的環境中，有多種因素同時發揮作用。

And so if I were to take a step back and look at us not only from an annual price increase perspective, but also in the tariff environment, we've got the broadest supplier base in the industry. It gives us the ability to navigate solutions for our customer that match price and value.

因此，如果我退一步來看我們，不僅從年度價格上漲的角度，而且從關稅環境來看，我們擁有業內最廣泛的供應商基礎。它使我們能夠為客戶提供符合價格和價值的解決方案。

We've got people and systems in place that we can react pretty quickly to what is a dynamic environment right now. We always take the opportunity to proactively communicate with our customers and our customers' customer to make sure that we're understanding what that price move looks. And that's hard work as we go through, especially when you think about tariff and annual price increase because you've got to address the projects that are already in flight line by line, project by project.

我們擁有適當的人員和系統，能夠對當前的動態環境做出快速反應。我們總是抓住機會主動與我們的客戶以及客戶的客戶溝通，以確保我們了解價格變動的情況。這是我們面臨的一項艱苦的工作，特別是當你考慮到關稅和年度價格上漲的時候，因為你必須逐條線路、逐個項目地解決已經在運行的項目。

And generally speaking, we will pass through that price. There are going to be some pressure points, but generally speaking, that's what we do. And so it's a bit early to tell how that is going to stick. And it's a bit early to tell what tariff is going to play with annual, but we're encouraged by that being a stabilizing effect as we think about what deflation has meant to the first half of our fiscal year.

一般來說，我們都會傳遞這個價格。會有一些壓力點，但總的來說，這就是我們所做的。因此現在判斷這種情況將會如何還為時過早。現在判斷關稅將對年度產生什麼影響還為時過早，但當我們思考通貨緊縮對我們財政年度上半年意味著什麼時，這會產生一種穩定作用，這讓我們感到鼓舞。

Mike Dahl, RBC.

加拿大皇家銀行 (RBC) 的 Mike Dahl。

Kevin, I wanted to go back to the gross margins again, interesting comment in terms of the sequential dynamics kind of being worse in November, December and then a little bit better coming through Jan, Feb, and your comments kind of married your prior ones, which talked about balancing share and getting paid for your product.

凱文，我想再次回到毛利率問題上，關於連續動態的有趣評論，11 月、12 月的情況更糟，而 1 月、2 月的情況稍有好轉，您的評論與您之前的評論相吻合，您之前的評論談到了平衡份額和獲得產品報酬。

Can you just talk about, did you reach a point where you thought that balance had gotten out of whack in November, December? I mean you certainly gained share from a top line standpoint. But did you -- do you feel like you were giving up too much to do that and now you're rebalancing a little bit as you kind of think about that trade-off in the back half of the year? Or how else would you characterize the competitive dynamics right now?

您能否談談，您是否認為 11 月或 12 月時平衡已經失衡了？我的意思是，從營收角度來看，你的市佔率肯定增加了。但是，您是否覺得您為此放棄了太多，而現在您正在重新調整平衡，考慮今年下半年的權衡？或者您如何描述當前的競爭態勢？

Yeah, Mike, you're right. We did experience November and December a bit more challenged, and we're encouraged by what January and February look like. As Bill said, it really was a mix of three different areas, you got sales mix with HVAC and Water, you've got persistent deflation that's playing out. And then you've got some challenging markets.

是的，麥克，你說得對。我們確實經歷了 11 月和 12 月的更多挑戰，而 1 月和 2 月的表現讓我們感到鼓舞。正如比爾所說，這實際上是三個不同領域的混合，即暖通空調和水務的銷售組合，以及持續的通貨緊縮。然後你就會面臨一些充滿挑戰的市場。

And the group is out there, especially when we think about the commodity side of the world and the input commodity deflating and making sure that we're right for our vendor partners, making sure that we're right for our customers that we have long-term relationships with and making sure that we're marrying that value with price and margin.

這個群體就在那裡，特別是當我們考慮世界的商品方面和投入商品的縮減，並確保我們適合我們的供應商合作夥伴，確保我們適合與我們有長期關係的客戶，並確保我們將該價值與價格和利潤結合起來。

And we're working that every day, and we're working at every customer and across customer groups. And so we need to make sure that we're addressing that in real time. I feel good about where we went through January and where we are in February. And quite frankly, the quarter particularly November and December was a pretty unique time in the market with all those things coming together. And so I feel good about where we're going.

我們每天都在致力於此，為每一位客戶、各個客戶群服務。因此我們需要確保即時解決這個問題。我對我們一月份的經歷和二月的狀況感到很滿意。坦白說，這個季度，特別是 11 月和 12 月，是市場上一個相當特殊的時期，所有這些因素都聚集在一起。因此我對我們的發展方向感到很滿意。

And as we look forward, we intend this business to be a 30%-plus gross margin business based on the value that we provide, assuming business mix stays reasonably similar, because we're going to continue to add value-added services that we charge for and make sure that we're adding productivity to our contractor customer.

展望未來，我們希望這項業務的毛利率能達到 30% 以上，基於我們提供的價值，假設業務組合保持合理相似，因為我們將繼續增加收費的增值服務，並確保為我們的承包商客戶提高生產力。

So yeah, I think generally speaking, as we're moving into the third quarter, we feel good about where we're headed.

是的，我認為總體而言，隨著我們進入第三季度，我們對我們的發展方向感到滿意。

That's helpful. And then secondly, I know a lot of questions have already been asked about the pricing dynamics, but just, I guess, to be more specific in your prior guide, I think you contemplated that second half would get back to flat to slightly positive.

這很有幫助。其次，我知道已經有很多關於定價動態的問題，但我想，更具體地說，在您之前的指南中，我認為您預計下半年將恢復平穩或略有上漲。

Now you're saying deflation lingers a little bit longer, but you do have some of these kind of tariff-based increases out there. Can just help us dial in what the pricing cadence should look like in the second half of the year? Is it still down each of 3Q and 4Q order of magnitude? Anything you can give us to quantify would be great.

現在您說通貨緊縮還會持續一段時間，但確實存在一些基於關稅的增加。您能否幫助我們了解今年下半年的定價節奏應該是什麼樣的呢？第三季和第四季的數量級是否仍然下降？如果您能給我們任何可以量化的資訊那就太好了。

Yeah, Mike, clearly, a little bit difficult to predict the future given the commodity impact there. But if I take a step back, the first half down about 2%, pretty consistent Q1 to Q2. We still expect pricing -- overall pricing levels to improve as we move through the second half.

是的，麥克，顯然，考慮到商品的影響，預測未來有點困難。但如果我退一步來看，上半年下降了約 2%，與第一季和第二季相當一致。我們仍然預計，隨著下半年的到來，整體物價水準將會改善。

I would still expect overall deflation in Q3, and as you get out to Q4, I think it remains to be seen, as Kevin said, what the true tariff impact, what the true branded price increase announcements are that will come through largely through Q3 and into Q4, so do we get back to flat? Probably close to that would be our best read. I don't think you'll see very positive pricing in the second half of this fiscal year as we continue to work through this environment.

我仍然預計第三季度將出現整體通貨緊縮，而到了第四季度，我認為仍有待觀察，正如凱文所說，真正的關稅影響是什麼，真正的品牌價格上漲公告是什麼，這些將主要在第三季度和第四季度體現出來，那麼我們會回到平穩狀態嗎？可能接近這個數字就是我們的最佳讀物。由於我們將繼續在這種環境下工作，我認為您不會在本財年下半年看到非常積極的定價。

Keith Hughes, Truist.

基斯·休斯，Truist。

You talked earlier on the call, you've been facing deflation for six or more quarters now. But the gross margin impact of that was far greater this quarter than what we've seen over that period of time. Specifically what happened in the reported quarter that caused it to have such a notable impact when it hasn't before.

您之前在電話會議上說過，你們已經面臨通貨緊縮六個季度或更長時間了。但本季的毛利率影響遠大於我們在這段時間內看到的影響。具體來說，在報告季度發生了什麼，導致它產生如此顯著的影響，而之前並沒有。

Yeah, Keith, I mean, I think we've tried to cover the unique factors that came together, the other piece I'd point out, it's clearly our seasonally lightest quarter. So while we're disappointed in the gross margin coming in where it did, the volumes being weak, competitive market, deflation lasting longer and then that mix, which I alluded to driving a portion of that really all came together in the quarter.

是的，基思，我的意思是，我認為我們已經嘗試涵蓋了各種獨特因素，我想指出的另一點是，這顯然是我們季節性最淡的一個季度。因此，雖然我們對毛利率的水平感到失望，但是銷量疲軟、市場競爭激烈、通貨緊縮持續時間較長，以及我提到的這些因素共同導致了本季度毛利率的下降。

As we exited the quarter and into the third quarter, as Kevin talked about, we think we're on a better trajectory. But look, there are lots of factors that will impact that margin. It's never going to be a flat line, in any quarter-to-quarter. So to Kevin's point, our intention, our belief is over the medium to long term, this is a 30%-plus gross margin business.

正如凱文所說，當我們結束本季並進入第三季時，我們認為我們正處於更好的軌道上。但請注意，有很多因素都會影響該利潤。無論是哪個季度，它永遠不會是一條平線。正如凱文所說，我們的目的和信念是從中長期來看，這是一個毛利率超過 30％ 的業務。

Yeah, Keith and we're going to continue to balance a bunch of different factors, making sure that we're the best path to market for our supplier community, making sure that we maintain long-term customer relationships, making sure that we gain share at the balanced and appropriate level and making sure that we've got the right price, margin mix. And so I think we're on the right track as we get through January, February and into Q3.

是的，基思，我們將繼續平衡各種不同因素，確保我們為供應商社群提供最佳的市場途徑，確保我們保持長期的客戶關係，確保我們在平衡和適當的水平上獲得份額，並確保我們有正確的價格和利潤組合。因此我認為，當我們度過一月、二月並進入第三季時，我們正走在正確的軌道上。

Okay. And just one question on products. The Fire business was off in the quarter, was most of that steel pipe deflation, and you talk about units, I guess, is my question.

好的。只有一個關於產品的問題。本季消防業務處於下滑狀態，大部分是鋼管通氣，我的問題是您談論單位。

You got it. We feel good about the volumes in that fire business, but it is very heavily weighted towards steel pipe, and that has been a very challenged commodity-based input product. And so that really drove what the operating environment was for our Fire business.

你明白了。我們對消防業務的銷售感到滿意，但該業務主要以鋼管為主，而鋼管是一種面臨巨大挑戰的商品投入產品。這確實決定了我們的 Fire 業務的營運環境。

We're still adding a ton of value on the fabrication side of the world and making sure that our projects are better because Ferguson was involved, but that steel pipe is a tough headwind to battle through.

因為弗格森事件的參與，我們仍在為全球製造業創造大量價值，並確保我們的專案更好，但鋼管是一個難以克服的逆風。

Will Jones, Redburn.

威爾瓊斯，雷德伯恩。

Just a couple if I can, please. -- to come back on the gross margin, but specifically the impact from deflation when you mentioned that. Are you actually highlighting that there are inventory losses, so to speak, in the quarter. And therefore, that's a temporary effect that may reverse? Or are there other mechanics where deflation can affect the gross margin.

如果可以的話，請給我一些。 ——回到毛利率的話題，具體來說，就是您剛才提到的通貨緊縮的影響。您是否實際上強調本季存在庫存損失？所以，這只是暫時的影響，可能會逆轉？或是否有其他導致通貨緊縮影響毛利率的機制。

And then second one, just again on business mix. I think in the past, you said that the businesses at the operating margin level are all fairly similar. Is that the case? And if HVAC and Waterworks continue to outgrow the rest of the business, I think likely. Do we think you should we be seeing an offset in SG&A recovery over the fullness of time?

然後第二個問題，再次討論業務組合。我想您過去曾說過，各個業務在營業利潤率水準上都相當相似。是嗎？如果暖通空調和水務部門的成長速度持續超過其他業務，我認為很有可能。我們是否認為我們應該看到銷售、一般及行政費用 (SG&A) 的回收在一段時間內出現抵銷？

Yeah. Will, I'll take it first from the back question and then turn it over to Bill. Yes, we have said that the operating margins are fairly consistent across all of our different customer groups even as gross margins vary, and the gross margin was impacted by the growth of Water and HVAC. And traditionally, that would flow through to operating margins that are consistent with the higher gross margin portions of the business.

是的。威爾，我先從後面的問題中挑出一個，然後再交給比爾。是的，我們說過，儘管毛利率有所不同，但所有不同客戶群的營業利潤率都相當一致，而且毛利率受到水和暖通空調業務成長的影響。傳統上，這將流向與業務較高毛利率部分一致的營業利潤率。

But as we said, we are also taking some very intentional investments in both HVAC and Water as we look into not only the second quarter, but as we go forward. And so there is some impact for those investments as we look to the future.

但正如我們所說的，我們還將在暖通空調和水務方面進行一些非常有針對性的投資，我們不僅著眼於第二季度，而且著眼於未來。因此，展望未來，這些投資會產生一些影響。

And on the gross margin side, Will, I wouldn't think about inventory losses on deflation. I would think about that deflation just putting a bit more pressure on the bidding and the quoting work that we're doing every day as we're out there battling for orders in what's a very challenging volumetric market. So we also think that we're likely nearer to the end of the beginning, now six quarters into deflation, but it's a challenging point in time that we're managing through right now.

威爾，就毛利率方面而言，我不會考慮通貨緊縮造成的庫存損失。我認為通貨緊縮會給我們每天進行的投標和報價工作帶來更多壓力，因為我們在一個非常具有挑戰性的大量市場中爭奪訂單。因此，我們也認為，我們可能已經接近通貨緊縮的開始階段，目前已進入通貨緊縮的六個季度，但這是我們目前要應對的一個具有挑戰性的時期。

And since I'm the last one, maybe sneak in one more, I think it was about three years ago that we had the Investor Day and you gave your financial framework for sales and margin and other items. Just when you reflect on that over the medium term, you're still happy that's the right way to think about the trend lines for both top line and margin?

因為我是最後一個，也許我再偷偷說一句，我想大約三年前我們舉辦了投資者日，您給出了銷售、利潤和其他項目的財務框架。當您從中期角度進行反思時，您是否仍然很高興這是思考營業額和利潤趨勢線的正確方法？

We're in a very unique time right now, Will, when you look at the inflationary environment that we've talked about, but also when you look at the market environment, embedded inside that growth algorithm was our markets outperforming GDP, us from a growth perspective, outperforming our markets, call it, 300 basis points to 400 basis points and then driving not only gross margin expansion as markets are more normal, but also productivity, leading to operating margin expansion.

威爾，我們現在正處於一個非常特殊的時期，當你看看我們所談論的通膨環境，同時當你看看市場環境時，嵌入在成長演算法中的是我們的市場表現優於 GDP，從成長角度來看，我們表現優於市場，可以說，300 個基點到 400 個基點，然後不僅推動毛利率擴大，因為市場更正常，而且生產率擴大率擴大，從而提高利潤率，從而擴大生產力，從而擴大生產力，從而擴大生產力。

We still believe in that. We've got to get back to a more normalized market environment, inclusive of price, and we intend to get back to that growth algorithm.

我們仍然相信這一點。我們必須回到更正常化的市場環境，包括價格，我們打算回到那個成長演算法。

Thank you. This concludes today's Q&A session. So I'll now hand over to Kevin Murphy for any closing remarks.

謝謝。今天的問答環節到此結束。因此，現在我將把結束語交給凱文墨菲。

Thank you, Lydia. I just want to again say thank you for your time today. Very much appreciated. And thank you to our associate base who have been battling through a challenging market. We are pleased with the organic outperformance in the market.

謝謝你，莉迪亞。我只是想再次感謝您今天抽出時間。非常感謝。並感謝我們的員工在充滿挑戰的市場中奮力拼搏。我們對市場有機的優異表現感到滿意。

We're encouraged by the balanced business mix that we have and our ability to take advantage of what we think are some very strong structural tailwinds, and the investments that we're making are going to serve us well over the near term as well as the medium and low. So thank you again for your time. We'll talk to you soon. Thanks.

我們對自己均衡的業務組合感到鼓舞，並且我們有能力利用我們認為的一些非常強勁的結構性順風，而且我們所做的投資將在短期以及中期和長期內為我們帶來良好的服務。再次感謝您抽出時間。我們很快就會和你談話。謝謝。