Watsco Q2 Earnings: Revenue Up 2% to $2.1B, EPS Down 12% to $4.00; Jackson Supply Acquisition Closed
WSO is trading near its 52-week low of $323.05 (9.8% above the low).
Summary
Watsco reported Q2 2026 revenue of $2.1B (+2% YoY) and EPS of $4.00 (-12% YoY). Gross margin fell to 27.5% from 29.3% as OEM pricing normalized. The Jackson Supply acquisition closed, and e-commerce sales grew 13%. The company remains debt-free with $464M in cash.
Key Events · Earnings and Guidance · WSO
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Q2 Revenue Up 2%, EPS Down 12%
Revenue reached $2.1B, driven by a 5% increase in domestic residential HVAC equipment sales. EPS fell to $4.00 from $4.52 a year ago, reflecting gross margin compression.
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Gross Margin Contracts 180 bps
Gross margin declined to 27.5% from 29.3% as OEM pricing actions normalized after last year's tariff-driven increases. Management views current margins as more representative of underlying conditions.
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Jackson Supply Acquisition Closed
The acquisition of Jackson Supply, with ~$230M in annualized sales across 25 Sunbelt locations, was completed in June 2026, expanding Watsco's footprint in high-growth markets.
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E-Commerce and OnCallAir Growth
E-commerce sales grew 13% in H1 2026, reaching a $2.7B annualized run-rate (37% of total sales). OnCallAir GMV hit $1B in H1, up 14%, with quotes presented to 342,000 households over the trailing twelve months.
Analysis · WSO · Trade & Services
Watsco's second-quarter results show stabilizing demand after last year's A2L refrigerant transition, with residential equipment sales up 5%. However, gross margin contracted 180 basis points as OEM pricing actions normalized, and EPS fell 12%. The company closed the Jackson Supply acquisition, adding density in Sunbelt markets, and highlighted strong e-commerce growth (13% in H1) and OnCallAir GMV up 14% to $1B. With $464M in cash and no debt, Watsco has ample capacity for further acquisitions and technology investments. The results are mixed: top-line resilience and digital momentum are positives, but margin compression and earnings decline warrant attention.
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At the time of this filing, WSO was trading at $354.58 on NYSE in the Trade & Services sector, with a market capitalization of approximately $14.9B. The 52-week trading range was $323.05 to $491.55. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.