Watsco ecommerce sales grow 13%, digital revenue reaches 37% of total sales. Beth Duckett | Jul 31, 2026 3.5 minutes Watsco said contractors were using its digital tools, fueling growth as the HVAC distributor reported Q2 earnings results. Ecommerce remained a growth engine for Watsco Inc. sales in the first half of 2026, rising 13% as the heating, ventilation, and air conditioning (HVAC) distributor began stabilizing after several years of market disruption. Watsco's online growth far outpaced its overall sales performance. For the six months ended June 30, the company reported that total revenue inched up 1%, reaching $3.64 billion. In Q2 alone, revenue rose 2% to $2.10 billion, or 1% on a same-store basis. Online sales reached $2.7 billion for the 12 months ended June 30, representing 37% of Watsco's total sales. "The last five years brought a pandemic, supply chain disruptions, regulatory transitions and tariff volatility," chairman and CEO Albert Nahmad told investors on the company's earnings call. "Now the operating environment is normalizing, revenue is growing and a digital ecosystem is producing measurable results." How Watsco is expanding its digital platforms. Watsco said it has invested more than $250 million in its digital platforms over the past five years. That spending is continuing at an annual rate of about $68 million. The company said investments include customer engagement tools, internal platforms and "AI capabilities that help customers grow and deliver technical know-how quicker." During Q2, Watsco launched SupplySync.com, a platform aimed at large institutional customers. A.J. Nahmad, the president at Watsco, called it an "incremental growth opportunity" that can leverage Watsco's existing scale and infrastructure. OnCallAir also continued to scale. The digital sales platform allows contractors to quote HVAC products to homeowners. Products sold through it generated $1 billion in gross merchandise value (GMV) during the first six months of 2026, up 14% year over year. For the 12 months ended June 30, Watsco said contractors used OnCallAir to present proposals to roughly 342,000 households, generating $1.90 billion in GMV. That marked a 15% increase from the prior comparable period. "Simply put, the contractors we serve digitally are growing faster, attrit less and we believe we can lower our cost to serve at scale over time," A.J. Nahmad said. Additionally, Watsco's HVAC Pro+ mobile apps and ecommerce platform allow contractors to source products, check inventory and pricing, and access technical help. A.J. Nahmad said the apps now have more than 70,000 monthly active users. Watsco Q2 financial results. Watsco's U.S. residential HVAC equipment sales rose 5% in Q2, led by a 2% increase in unit volume and a 2% rise in average selling prices. Executives noted strong demand in northern states, while new construction softened in Florida and Texas. Despite higher sales, gross profit declined 4% to $579 million. Gross margin fell to 27.5% from 29.3% a year earlier. Watsco attributed much of the decline to a difficult comparison with 2025. Last year, HVAC manufacturers imposed aggressive price increases in response to inflation and tariffs, temporarily benefiting Watsco's margins, Albert Nahmad said. Manufacturer pricing returned to more typical levels in 2026. The transition to A2L refrigerants also affected the comparison. A2L refrigerants have lower toxicity and limited flammability. Last year, federal restrictions on higher-impact refrigerants began taking effect, requiring Watsco to update its inventory and product catalog. Watsco said the transition is now largely complete. So far in 2026, the company has added more than 10,000 SKUs related to the A2L product launch. Watsco closes Jackson Supply acquisition. On June 1, Watsco also completed its acquisition of Jackson Supply Company. The Texas-based HVAC distributor generated $230 million in sales in 2025. It serves roughly 5,000 contractor customers from 25 locations across seven Sunbelt states. Jackson Supply Company contributed about $20 million to Watsco's revenue during June, executive Rick Gomez told investors. He said Jackson's existing management remains in place and aims to double the business. "They have a very aggressive plan to do more of what they've been doing with our capital, our relationships, our technology, and a team that's been together as a family and is staying together as a family moving forward," Gomez said. Watsco ended Q2 with $464 million in cash and cash investments and no debt, giving it room for additional technology investments and acquisitions. Since entering HVAC distribution in 1989, Watsco said, it has acquired more than 70 businesses. Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here's our last update on Watsco ecommerce sales. More on This Industries Mary Meisenzahl | May 1, 2026 Mary Meisenzahl | Aug 4, 2026 Abbas Haleem | Aug 10, 2026 Beth Duckett | Jul 2, 2026

Watsco Inc reported second quarter 2026 results with revenue increasing 2% to $2.1 billion. The HVAC distributor posted earnings per share of $4, with operating income of $238 million representing an 11.3% margin. The company's residential HVAC equipment sales grew 5% during the quarter. E-commerce sales expanded 13%, now accounting for 37% of total sales over the past 12 months. Gross margin declined to 27.5% from 29.3% in the prior year, impacted by more moderate pricing actions from equipment manufacturers. Operating cash flow improved by $168 million for the six-month period. Watsco ended the quarter with $464 million in cash and no debt. The company raised its annual dividend 10% to $13.20 per share, marking 52 consecutive years of dividend payments. The firm acquired Jackson Supply, which generates $230 million in annual sales across 25 locations in Sunbelt markets.

Watsco (NYSE:WSO) falls 13% today after missing Q2 estimates. 29 July 2026 05:17 PM PDT Summarize with AI You are reading a free article with opinions that may differ from the recommendation given by Kalkine in its paid research reports. Become a Kalkine member today to get access to its research reports, in-depth technical and fundamental research. Learn more Key Highlights * WSO shares fell 12.92% Wednesday to $320.02, a 3-year low, down from a prior close of $367.51. * Second-quarter EPS of $4.00 missed a $4.47 to $4.51 consensus, with revenue of approximately $2.10 billion also falling short of a $2.14 billion to $2.15 billion estimate. * Gross margin compressed to 27.5% from 29.3% a year earlier as last year's tariff- and OEM-driven pricing gains normalized. * Commercial sales softened amid the industry-wide VRF-to-A2L refrigerant transition, even as residential HVAC equipment sales rose 5%. * The company completed its acquisition of Jackson Supply, adding 25 locations, and raised its annual dividend 10% to $13.20 per share, marking the 52nd consecutive year of dividends. Margin Compression Drives Sharp Decline Watsco (NYSE:WSO) shares plunged Wednesday after the HVAC distributor posted second-quarter results that missed Wall Street estimates on both lines, with EPS of $4.00 versus a $4.47 to $4.51 consensus and revenue of approximately $2.10 billion versus a $2.14 billion to $2.15 billion estimate. Watsco is the largest distributor of heating, ventilation, air conditioning and refrigeration equipment, parts and supplies in North America, operating a network of over 670 locations. Gross margin compressed to 27.5 percent from 29.3 percent a year earlier, as last year's tariff- and OEM-driven pricing gains normalized, while commercial sales softened amid the industry-wide transition from VRF to A2L refrigerants, overshadowing a 5 percent rise in residential HVAC equipment sales. The selloff mirrored broader weakness across HVAC and industrial peers reporting margin pressure this week, and came alongside a separate announcement that Watsco is expanding its footprint with the acquisition of Jackson Supply, adding 25 locations, though that news was not enough to offset investor concern over profitability trends. Technology Initiatives and Dividend Increase Provide Some Offset Watsco carries a market capitalization of approximately $13.18 billion and trades at a trailing price-to-earnings ratio of 26.56, with reported earnings per share of $12.05. Shares have traded in a 52-week range of $307.18 to $459.99, and the stock offers a dividend yield of 3.94 percent following a 10 percent increase in the annual dividend to $13.20 per share, marking the 52nd consecutive year of dividends. The company's technology initiatives continued to show traction, with e-commerce sales growing 13 percent and now representing 37 percent of total sales, 60 to 70 percent in some markets, while its new Supply.com platform, launched in the second quarter to serve institutional customers, generated $1.9 billion in gross merchandise value, up 15 percent. Management reiterated its long-term goal of a 30 percent gross margin and noted market stabilization with July organic growth of 4 to 5 percent. Conclusion Watsco's sharp decline reflects investor concern over margin compression and softening commercial demand amid the industry's refrigerant transition, even as the company's residential business, technology platforms and dividend growth remain intact. With management citing early signs of market stabilization heading into July, the durability of that recovery will be the key factor determining whether the stock can rebound from its 3-year low. This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research before making financial decisions. FAQs. Q: Why did Watsco stock fall to a 3-year low? A: Shares declined after the company missed second-quarter revenue and earnings estimates, with gross margin compressing as last year's tariff-related pricing gains normalized and commercial demand softened. Q: What is causing weakness in Watsco's commercial sales? A: Commercial sales softened amid the industry-wide transition from VRF to A2L refrigerants, even as residential HVAC equipment sales grew 5%. Q: did Watsco increase its dividend? A: Yes, the company raised its annual dividend 10% to $13.20 per share, marking the 52nd consecutive year of dividend payments. Download Free Report - Explore 3 Stock Ideas & Industry Insights Unlock 3 stock ideas and key industry insights in its free report. This information is general in nature and does not consider your personal objectives, financial situation, or needs. It is not financial advice. All investments involve risk - consider independent advice before making any investment decisions. Disclaimer: