TRG | The Bottom Line – 9/19

Distribution remains in the headlines across the industry and at TRG with multiple touchpoints this week and next. This week, FERG delivered a knock out earnings report and the stock was up ~9%. Resi end markets were down 3% over the last year and FERG outperformed by 400 bps to deliver resi sales up 1%. Non-res end markets were flattish over the last year and FERG outperformed by 600 bps to deliver non-res sales up 6%. We expect this trend to continue as the benefits of scale compound over time and mega projects drive growth and allow FERG to capture multi-trade projects. QXO presented at multiple institutional investor conferences recently, highlighting the opportunity for operational gains and improved pricing that could recoup $200MM. Next week, TRG is hosting our September Fireside Chat with the CEOs of distributors Kodiak Building Partners (Kodiak) and Kodiak Interiors Group (KIG). KIG launched this past summer and is a standalone company formed from Kodiak’s growing appliances and interiors portfolio. Kodiak, meanwhile, will continue to focus on building out its lumber and building products distribution portfolio. 2025 has been an active year in the building products distribution landscape, and against that backdrop, TRG seeks to gain insights not only on current resi and non-res trends from Kodiak and KIG but also their respective perspectives of the future of distribution in the North American market.  Click Here To Register for the Fireside Chat on Thurs Sept 25.