Watsco - B

Q2 FY2026 EarningsQ2 FY26 results missed consensus across key profitability metrics: revenue was $2.10B vs. $2.15B expected, and gross margin fell to 27.5% vs. 28.3% expected. Gross profit declined 4% YoY as the company faced headwinds from the pass-through of historical OEM price hikes, resulting in a 180 bps margin contraction. While U.S. residential sales remained a bright spot (+5% YoY), a significant 8% drop in commercial HVAC revenue and an 11% decline in GAAP net income ($163.3M vs. $169.9M expected) highlighted overall earnings pressure.