Watsco, Inc. (NYSE:WSO) Q3 2023 Earnings Call Transcript

A.J. Nahmad: We don’t have that in our history. We do not forecast because we are in a business that fluctuates considerably with weather. And that’s been our tradition. And I don’t know that we are going to change it. Barry, if you can help them without changing that.

Barry Logan: No, I was going to say we will give you our thoughts and our educated close reaction to what’s going on, but we are not going to give guidance, and we are not going to give – certainly not fourth quarter guidance when again, we are getting a 90-day period and trying to crystallize something. So, we have given you the trends. I think again that – if you think about where we started this year, where unit volumes were down 10% or more and worry – and the question was, will that get worse or better, it’s gotten much better as the years has gone on in a short period of time. Inventory flowing into the channel and earnest at this point. Our one vendor issue that hurt the first half of the year is now converting into a growth opportunity for the rest of the year.

So, just kind of leave it at that. And our focus has to also be looking into next year, and as we are the major partner for much of the OEMs that you can talk to, and growth and market share and expansion and more brands and more SKUs and new SKUs next year, we start to look ahead, and that’s pretty exciting. Fourth quarter, we will see. I wouldn’t say…

Al Nahmad: Alright. Barry…

Joe Ahlersmeyer: Okay. I appreciate that. Maybe just one more then, kind of related to the prior question about this year proportion. I noticed in the release in the second quarter, you talked about 60% of year-to-date sales representing the new equipment. And then now in the release it’s the same number, but you are talking about the number of SKUs at your locations. Just wondering if that was an intentional change, and if that was intended to communicate anything there?

A.J. Nahmad: That’s a fair question, but I don’t – maybe somebody else can answer it, because I am not sure. Barry, go ahead.

Barry Logan: Yes, it’s a clarification that the inventory we actually carry in our stores, that 60% is new, and that’s the clarification versus a digital catalog where it’s a much broader set of products what we actually carry in stores. And the point is, we emptied out 60% of what we sell a year ago into new products this year. It’s an immense change, and obviously, also an immense opportunity with what’s going on.

Joe Ahlersmeyer: Alright. Thanks a lot guys.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Al Nahmad for any closing remarks.

Al Nahmad: Once again, thanks very much for your interest in Watsco. We hope to continue to build this wonderful company and appreciate very much your interest. Bye-bye now.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.