Watsco

Q2 FY2026 EarningsQ2 FY26 missed consensus across top and bottom lines: revenue $2.10B vs. $2.15B expected, and normalized EPS $4.00 vs. $4.40 expected. Gross margin of 27.5% fell short of the 28.3% consensus due to the pass-through of OEM inflationary pricing and unfavorable product mix. Despite a 5% same-store sales increase in domestic residential HVAC equipment, high facility and transportation costs led to an operating margin contraction to 11.3%, significantly missing the implicit consensus target.