Watsco Q2 revenue up 2%; expects conventional supply-chain trends for 2026
WSO•Outlook
- Company expects more conventional supply-chain trends for remainder of 2026
- Watsco says stabilizing end-market demand following regulatory transitions
Overview
- US HVAC distributor's Q2 revenue rose 2% but missed analyst expectations
- Q2 adjusted EPS fell 12% to $4.00
- Company completed acquisition of Jackson Supply, expanding Sunbelt market presence
Result drivers
- A2L transition completion - Co said end-market demand stabilized after last year's transition to A2L refrigerants, which had affected domestic HVAC equipment sales
- Gross margin normalization - Gross margin declined due to normalized OEM pricing actions in 2026 compared with outsized benefits from inflation and tariffs in 2025
- Jackson Supply acquisition - Acquisition of Jackson Supply expanded presence in key Sunbelt markets and diversified product offering
Key details
| Metric | Beat/Miss | Actual | Consensus Estimate |
|---|---|---|---|
| Q2 Sales | Miss |
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