AOS Q2: Revenue flat, operating income -19% on China weakness, margin pressure, and $23M restructuring

Filed July 30, 2026 · Period ending June 30, 2026 · Compared to 10-Q Jul 24, 2025 · ~2 min read

Key Changes

• high

  Operating income fell 19% to $166M despite flat revenue, driven by 70bp gross margin compression (lower volumes, higher steel costs) and a $23M North America water treatment restructuring charge. North America segment margin dropped 380bp to 21.6%; Rest of World margin halved to 5.2%.

  MD&A: Segment Results verify on EDGAR →
• high

  China third-party sales now projected to decline low double-digits in 2026 (vs. prior 5-8% decline for 2025), reflecting persistent weak consumer demand and the end of government appliance subsidies. Rest of World segment margin guidance cut to 6-7% from prior 8-9%.

  MD&A: China Outlook verify on EDGAR →
• high

  Full-year EPS guidance narrowed to $3.60-$3.75 (adjusted $3.70-$3.85), down from prior $3.60-$3.90 (adjusted $3.70-$4.00), citing persistent softness in North American residential water heater volumes now expected to decline low single-digits.

  MD&A: Guidance verify on EDGAR →