Miami-based Watsco — North America’s largest HVACR distributor — reported its 2024 third quarter results on Oct. 23, showing healthier unit sales of HVAC equipment and an increase in digital sales.
Watsco posted total 3Q sales of $2.16 billion that were up approximately 2% year-over-year, but remained flat on a same-store basis.
The company’s 3Q gross margin of 26.2% decreased 50 basis points year-over-year. Operating profit of $250 million on margin of 11.6% decreased from the $256 million and 12.1% of a year earlier, while net profit of $566.2 million was flat.
PREMIUM: See MDM’s New Watsco Case Study Series
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- Part 1: Inside Watsco’s Market Leading Buy and Build Strategy (Oct. 1)
- Part 2: Scaling Success: Watsco’s Digital Commerce Evolution (Oct. 21)
- Part 3: Stay tuned!
By Watsco product line during 3Q (excluding acquisition):
- HVAC equipment (70% of sales) increased 3% year-over-year
- Other HVAC products (26% of sales) decreased 3% year-over-year
- Commercial refrigeration products (4% of sales) remained flat year-over-year
“During the third quarter, Watsco achieved record sales and net income, produced strong cash flow and made further strides to improve operating efficiency across its network,” Watsco Chairman and CEO Albert Nahmad said in the company’s financial release. “We believe the market environment for HVAC products stabilized this year, and we look forward to helping our customers navigate next year’s regulatory transition toward the new A2L systems. This regulatory change will ultimately impact approximately 60% of our sales and offers our contractor customers the opportunity to upgrade older HVAC systems with new products that are both more energy-efficient and environmentally-friendly.”
Watsco said that its 3Q results demonstrated the company’s improved efforts to recover sales and market share with one of its key OEMs, following the challenges posed by product and supply chain disruptions that affected customer relationships in 2023.
Additionally, Watsco’s 3Q report noted that the company has recently created technologies aimed at improving the customer experience, increasing operational efficiencies and fostering growth. At present, the company said around 61,000 contractor businesses and technicians interact with Watsco through digital channels. Since introducing its technology ecosystem, the company has seen accelerated sales growth among digital clients, acquired new customers and lowered customer attrition rates.
Watsco was No. 1 on MDM’s Top Distributor’s List for HVACR and No. 7 for Industrial Supplies.
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