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Watsco First Quarter Performance Reflects Stabilizing Markets, Improved Operating Efficiency and Expanded Technology Adoption

WSO
  • Watsco, Inc. reported first-quarter 2026 operating results with revenues flat at $1.53 billion & gross profit flat at $428 million.
  • The company announced an agreement to acquire Jackson Supply Company, a Sunbelt HVAC distributor with $230 million in annual sales, expected to close in Q2 2026.
  • Operating income decreased 2% to $110 million & diluted earnings per share fell 3% to $1.87.
  • Cash used in operations improved by $159 million to $19 million compared to $178 million in the prior year period.
  • U.S. sales increased 2% while international sales declined 11%, resulting in a net 1% decrease in HVAC equipment sales volume.
  • The A2L refrigerant transition matured during Q1, impacting approximately 55% of products sold across 650 locations & driving a 9% increase in average selling prices.
  • E-commerce sales grew 16% to account for 36% of total sales over the trailing twelve months, while authenticated users of the HVAC Pro+ mobile apps reached 74,000.
  • Watsco increased its annual cash dividend by 10% to $13.20 per share in April 2026, marking 52 consecutive years of dividend payments.
  • The company maintains a debt-free balance sheet with $593 million in cash & short-term investments to support growth initiatives.
  • Jackson Supply will retain its existing management team following the acquisition, aligning with Watsco's strategy to invest in successful cultures.
  • The company reported a 20% increase in gross merchandise value for its OnCallAir digital sales platform, reaching $1.9 billion for the twelve months ended March 31, 2026.
  • Inventories increased significantly to $1.72 billion as the company built stock to support the ongoing A2L product transition.