Ecommerce surges 28% at a large HVAC distributor

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The second quarter was another good one for Watsco Inc., a distributor of heating, ventilation, and air conditioning (HVAC) equipment.

Ecommerce is a major contributor because it’s so efficient.

Albert Nahmad, chairman and CEO

Watsco Inc.

AlbertHNahmad-Watsco

Albert Nahmad, chairman and CEO, Watsco Inc.

In the second quarter ended June 30, the Miami-based company posted total sales of $1.85 billion, an increase of 37% from $1.36 billion in the second quarter of 2020. Net income was $172.1 million compared with net income of $104.2 million in the second quarter of 2020.

While Watsco did not break out year-over-year metrics, the company says it grew ecommerce by 28% year-over-year in the second quarter and that digital commerce sales are on track to exceed $1.7 billion in 2021. If Watsco hits that number, ecommerce sales would increase 11.1% from $1.53 billion in 2020, based on a projection by Digital Commerce 360.

The company is well on its way to reaching new heights in ecommerce sales, executives said this week.

Ecommerce accounted for “close to $1 billion” for the first half, executive vice president Barry Logan said on a Q2 earnings conference call on Thursday with investment analysts this week, according to a transcript from Seeking Alpha. Logan noted that Watsco’s ecommerce sales “run rate is about $1.8 billion for the last 12 months,” and he figured ecommerce sales were “close to $1 billion” for the six months ended June 30.

Ecommerce is ‘about a third of our sales’

“That’s about a third of our business now,” Albert Nahmad, chairman and CEO, added on the earnings call.

Nahmad also commented that ecommerce was making a significant contribution to Watsco’s overall performance. “Ecommerce is a major contributor because it’s so efficient,” he said.

He also attributes Watsco’s growth to the company’s ongoing investments. “Our results reflect continued investments in products, technology and people to drive sales and innovation throughout our business,” he says.

Watsco, which is heavily investing in its ecommerce sales channel, also posted several other digital metrics, including:

  • Mobile app users in Q2 grew 12% compared to last year to more than 25,000 users.
  • Total online orders— grew 22% to more than 400,000 in the second quarter.
  • Watsco’s product information management (PIM) system includes approximately 900,000 SKUs accessed by more than 350,000 contractors and technicians.

“Our teams remain focused on providing an exceptional customer experience as evidenced by the continued growth in customer adoption of our industry-leading technologies,” Nahmad says.

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