Watsco Q2 Earnings Miss as Margins Slip; Jackson Supply Acquired for $186M
WSO is trading near its 52-week low of $300.66 (9.8% above the low).
Summary
Watsco's Q2 2026 EPS of $4.00 missed estimates as gross margin fell to 27.5%. The company acquired Jackson Supply for $186M in stock and disclosed a legal fight with Gree over distribution rights.
Key Events · Earnings and Guidance · WSO
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Q2 Earnings Miss
EPS of $4.00, down 12% YoY, on revenue of $2.1B (+2%). Gross margin fell 180 bps to 27.5% due to pass-through of 2025 OEM price hikes.
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Jackson Supply Acquisition
Acquired June 1, 2026 for 517,884 shares of common stock valued at $186.2M. Adds $230M in annual sales and 25 locations across the Sunbelt.
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Gree Distribution Dispute
Gree filed a declaratory judgment action in March 2026 seeking to terminate the exclusive distribution agreement. Watsco counterclaimed for renewal. Less than 3% of revenue is at risk.
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Tariff and Regulatory Updates
Supreme Court invalidated some IEEPA tariffs; Section 232 modifications increased costs on HVAC components. EPA final rule allows continued sale of matching 410A systems.
Analysis · WSO · Trade & Services
Watsco's Q2 2026 earnings fell 12% to $4.00 per share, missing expectations as gross margin contracted 180 basis points to 27.5% — the pass-through of steep 2025 OEM price hikes squeezed profitability even as revenue grew 2%. The company also closed the $186 million stock acquisition of Jackson Supply Company, adding 25 Sunbelt locations and $230 million in annual sales. A legal dispute with Gree over exclusive distribution rights adds uncertainty, though the affected revenue is less than 3% of the total. Tariff volatility and the EPA's final rule on 410A systems are ongoing operational headwinds.
How filings like this one have moved
In the 30 days to Oct 1, 2026, 30.2% of the 1625 measured filings Wiseek scored 7 moved their stock by 5% or more by the next session's close. The median move was -0.52%. These are measured outcomes after filings of this importance, not a forecast for this one.
Measured one observation per ticker per day, after exclusions. Current figures: Filing Impact Tracker · open dataset
At the time of this filing, WSO was trading at $330.10 on NYSE in the Trade & Services sector, with a market capitalization of approximately $13.5B. The 52-week trading range was $300.66 to $459.00. This filing was assessed with negative market sentiment and an importance score of 7 out of 10.