On Oct. 19, Miami, Florida-based HVACR equipment distributor Watsco reported its 2023 third-quarter earnings, which included 4% year-over-year sales growth over to a “record” $2.13 billion.

For 3Q 2023, the company also reported a 3% increase in gross profit to a record $567 million (gross margin of 26.7%) and a 9% increase in operating income to a record $257 million (8% increase on a same-store basis). Watsco also reported a 50 basis-point increase in operating margin to a record 12.1%.

Among sales trends for the quarter, the company saw 6% growth in HVAC equipment (70% of sales), a 3% decline in other HVAC products (26% of sales), and 9% growth in commercial refrigeration products (4% of sales).

“Results also reflect a significant product transition to new, higher-efficiency HVAC systems in response to regulatory requirements that took effect on January 1, 2023,” Watsco said in its report. “The company estimates that 60% of the HVAC equipment SKUs presently carried at its locations represent new products.”

For the first nine months of the year, Watsco reported sales of $5.68 billion, flat compared to last year (1% decrease on a same-store basis).

In September, the company announced it has completed its acquisition of Gateway Supply Company, Inc., a distributor of plumbing and HVAC products based in Columbia, South Carolina. The purchase price was $103 million, according to an analyst note from Baird’s Equity Research Industrial division.