Watsco, Inc. · WSO · FY2026 Q3 · Calendar Q4 2026
Watsco posts record Q3 as acquisitions lift sales and digital scale
Watsco's Q3 showed resilient demand and acquisition-led growth, while the path to sustained margin expansion remains the key test.
Earnings scorecard
Reported versus consensusMarket reaction
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Transcript intelligence
What changed
The current call added The Granite Group to the recent acquisition program alongside Jackson Supply, reported record Q3 sales and highlighted a debt-free balance sheet with $649 million in cash. Management also described continued scaling of SupplySync, VCR, Hydros and e-commerce.
Guidance delta
Management's guidance sentiment was maintained. The company continued to cite a path toward a 30% gross-margin target.
Key takeaways
- Q3 sales reached a record $2.22 billion, up 7% year over year, with operating margin of 10.1% and EPS of $3.77.
- Jackson Supply and The Granite Group expanded revenue and geographic reach; management said both acquisitions are being integrated.
- Digital initiatives remain central, including e-commerce and the planned expansion of SupplySync, VCR and Hydros.
- Management cited larger-customer mix, refrigerant effects and tariff volatility as margin headwinds.
- Cash generation and a debt-free balance sheet provide support for continued investment and potential acquisitions.
Management priorities
- Scale SupplySync to more institutional customers.
- Roll out VCR and Hydros further.
- Pursue additional HVAC and plumbing distribution acquisitions.
- Expand side-discharge product penetration.
- Increase e-commerce's share of sales.
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Try FN2 freeCompany context
Snapshot as of publicationWatsco, Inc., together with its subsidiaries, engages in the distribution of air conditioning, heating, and refrigeration equipment, and related parts and supplies in the United States, Canada, Latin America, and the Caribbean. It distributes equipment, including residential ducted and ductless air conditioners, such as gas, electric, and oil furnaces; commercial air conditioning and heating equipment systems; and other specialized equipment. The company also offers parts comprising replacement compressors, evaporator coils, motors, and other component parts; and supplies, such as thermostats, insulation materials, refrigerants, ductworks, grills, registers, sheet metals, tools, copper tubing, concrete pads, tapes, adhesives, and other ancillary supplies, as well as plumbing and bathroom remodeling supplies. It serves contractors and dealers that service the replacement and new construction markets for residential and light commercial central air conditioning, heating, and refrigeration systems. Watsco, Inc. was incorporated in 1956 and is headquartered in Miami, Florida.
Industrials peers this season
Latest reports in the same sector| Company | Quarter | EPS surprise | Market move | Headline |
|---|---|---|---|---|
| PCAR PACCAR Inc | FY2026 Q3 · Calendar Q4 2026 | — | -2.0% | PACCAR Q3: Parts Record, Supply Constraints Temper Outlook |
| HUBB Hubbell Incorporated | FY2026 Q3 · Calendar Q4 2026 | — | -5.1% | Hubbell: Strong Electrical Demand, Utility Constraints Temper Outlook |
| AIT Applied Industrial Technologies, Inc. | FY2027 Q1 · Calendar Q4 2026 | — | -9.4% | AIT raises EPS outlook as Engineered Solutions drives growth |
| LECO Lincoln Electric Holdings, Inc. | FY2026 Q3 · Calendar Q4 2026 | — | +9.0% | Lincoln Electric raises outlook as automation demand and backlog strengthen |
| BA The Boeing Company | FY2026 Q3 · Calendar Q4 2026 | — | -9.5% | Boeing highlights 737 certification, defense wins and backlog |
| XYL Xylem Inc. | FY2026 Q3 · Calendar Q4 2026 | — | -11.6% | Xylem shifts portfolio as revenue guidance moves lower |
Latest beats and misses
Who reports nextBeat on EPS
- CINFFY2026 Q3 · October 26, 2026+39.5% EPS+2.3% move
- VZFY2026 Q3 · October 26, 2026+3.1% EPS-3.5% move
- CXFY2026 Q3 · October 26, 2026+12.0% EPS-0.1% move
- CDNSFY2026 Q3 · October 26, 2026+2.9% EPS+1.8% move
- BAHFY2027 Q2 · October 23, 2026+18.9% EPS-0.3% move
- FCNCAFY2026 Q3 · October 23, 2026+19.9% EPS+8.2% move
Missed on EPS
- SUIFY2026 Q3 · October 26, 2026-20.0% EPS-4.1% move
- PSA-PIFY2026 Q3 · October 26, 2026-32.1% EPS— move
- PSA-PJFY2026 Q3 · October 26, 2026-32.1% EPS— move
- PSA-PHFY2026 Q3 · October 26, 2026-32.1% EPS— move
- PSA-PFFY2026 Q3 · October 26, 2026-32.1% EPS— move
- PSA-PSFY2026 Q3 · October 26, 2026-32.1% EPS— move
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Sources
- Earnings call transcript and parsed analysis · 2026-10-27T18:05:38.354241+00:00
- FN2 earnings calendar · 2026-10-27T01:23:15.065758+00:00
- Polygon adjusted daily market bars · 2026-10-27T19:00:41.716847+00:00
- Financial Modeling Prep analyst price-target consensus and quote snapshot · 2026-10-27T19:00:41.714251+00:00
Methodology
Reported and consensus figures come from FN2's earnings event records. Market reaction and volume are calculated from daily adjusted bars around the event; abnormal move subtracts the SPY move over the same window.
Transcript intelligence is a structured synthesis of the current and prior earnings-call analyses. Missing values stay missing and are never estimated.
By FN2 Research · Updated · As of 2026-10-27. For educational purposes only; not investment advice.