Watsco, Inc. Earnings Recaps
Q3 2026
Oct 28, 2026
Watsco shares fell 1.4% after earnings, a roughly flat reaction. Sales rose 7%, but same-store growth was 4%; management described improving demand without providing a new outlook or guidance.
Key takeaways
- Third-quarter sales reached a record $2.22 billion, up 7% year over year and 4% on a same-store basis; residential HVAC equipment sales grew 7%.
- EPS was $3.77. Gross profit was a record $586 million, with a 26.4% gross margin; operating income was $225 million and operating margin was 10.1%.
- SG&A increased 5% excluding Jackson Supply, primarily due to variable expenses. Management said gross margins had remained in a narrow range and reiterated a long-term goal of 30%.
- E-commerce sales grew 12% year to date and accounted for 37% of sales over the last 12 months. OnCallAir generated $2 billion in gross merchandise value from homeowner proposals, up 14% over the comparable period.
- Watsco ended the quarter with $649 million in cash and no debt. Year-to-date operating cash flow increased 79% to $304 million; the company completed its Granite Group acquisition in October.
Q3 2025
Oct 30, 2025
Watsco, Inc. reported solid earnings and record cash flow amidst a challenging market environment, driven by strategic pricing gains and effective management of product transitions.
Key takeaways
- Q3 sales decreased 4%, with U.S. sales down 3%, but gross margins improved by 130 basis points to 27.5%.
- Record cash flow of $355 million achieved in Q3, with continued focus on reducing inventory and working capital.
- E-commerce sales penetration reached 34%, with certain markets achieving 60-70%, indicating robust growth in digital engagement.
- The upcoming transition to next-generation equipment is largely complete, setting the stage for operational simplification and margin expansion towards the 30% target.
- Investments in technology and innovation are expected to enhance competitive positioning, drive customer engagement, and optimize pricing strategies.