The company reported growth in both residential unit volume and average selling prices during the third quarter

The residential HVAC market is continuing to stabilize following the transition to A2L products, according to Watsco.

What’s happening: North America’s largest distributor on Tuesday reported a seven percent year-over-year increase in residential equipment sales during the third quarter, including five percent growth in unit volume and a two percent increase in average selling prices. (Those figures reflect same-store sales, excluding acquisitions.)

On the company’s earnings call, Watsco VP of Corporate Development Rick Gomez said the five percent unit growth reflected a low double-digit increase on the “residential new construction, multi-family side of the market” and low single-digit growth in add-on/replacement (AOR).
That’s an improvement from the second quarter, when residential AOR volumes were flat year-over-year.
The big picture: “[W]e are closer to a trend line, but we are not quite at the trend line. Units are still, call it, 10 percent to 15 percent below where they were two years ago,” Gomez said, referring to AHRI shipments. “Those volumes today are where they were around mid-2018.”

“I think more importantly, we are still dealing with a consumer that is uncertain and unsure about the state of things,” he added.
State of play: Through the first three quarters, Watsco’s residential equipment sales are up four percent year-over-year on a same-store basis.

Of note: Watsco completed its acquisitions of Sun Belt-focused Jackson Supply and Northeast-focused The Granite Group in June and early October, respectively, adding 107 locations and $730 million in annualized revenue.

The Granite Group marks Watsco’s fourth acquired business that serves dual-trade HVAC and plumbing contractors.
Of more than 800 locations, 112 now offer both HVAC and plumbing products, with Watsco CEO Albert Nahmad saying that the company is “committed to growing in the plumbing market.”
Looking ahead: Executive Vice President Paul Johnston said the company is seeing “a lot of” metal prices going up, including steel.

“We really do not have a lot of indication yet from the OEMs on what direction they are going to be going,” he noted. “But obviously with the cost of freight, with the cost of metal, which is what these products are made of, we expect to have some price increases this fall going into next year.”

Source https://homepros.news/watsco-residential-equipment-sales-grow-7-on-stabilizing-market/