Watts Water Technologies Reports Strong Third Quarter 2025 Results

Core Insights - Watts Water Technologies reported strong third quarter results for 2025, exceeding expectations due to robust performance in the Americas, which offset market weaknesses in Europe [2][6][7] - The company announced the acquisition of Haws Corporation, enhancing its product offerings in emergency safety and hydration solutions [2][6] - The company is optimistic about its ability to navigate trade challenges and is increasing its full-year sales and margin outlook for 2025 [2][14] Financial Performance - Net sales for Q3 2025 reached $611.7 million, a 13% increase from $543.6 million in Q3 2024, with organic sales growth of 9% [5][6] - Operating income rose to $111.4 million, up 20% from $93.2 million in the previous year, with an operating margin of 18.2%, an increase of 110 basis points [5][8] - Adjusted diluted earnings per share increased to $2.50, a 23% rise from $2.03 in Q3 2024 [5][6] Regional Performance - In the Americas, sales were $464 million, a 16% increase on a reported basis and 13% organically, driven by favorable pricing and demand [9][10] - European sales reached $112 million, a 4% increase on a reported basis but a 2% decrease organically, impacted by lower volumes and market weakness [10] - APMEA (Asia-Pacific, Middle East, and Africa) sales were $36 million, showing a 1% decrease on a reported basis, with flat organic sales [11] Cash Flow and Capital Allocation - For the first nine months of 2025, operating cash flow was $247 million, with free cash flow of $216 million, compared to $204 million in the same period last year [12] - The company repurchased approximately 15,000 shares for $3.9 million during Q3 2025, with $133 million remaining under the stock repurchase program [13] Full Year 2025 Outlook - The company expects reported sales to increase between 7% to 8% and organic sales to grow between 4% to 5% for the full year [14] - Operating margin is projected to be between 18.1% and 18.2%, with adjusted operating margin expected between 19.1% and 19.2% [14]