Company: AOS
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000091142-25-000075
Chunk: 27

Company: SMITH A O CORP
Filing Date: 2025-04-29
Form: 10-Q
Item: Part I, Item 8
Chunk 27
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 America water treatment products will be between $235 million and $245 million, a year-over-year decrease of approximately five percent as we de-emphasize certain channels and focus on our more profitable channels.

In our Rest of World segment, our first quarter 2025 third-party sales in China declined four percent due to continued weak consumer demand. In 2025, we project our third-party sales in China to decrease between five to eight percent in local currency compared to 2024 as we expect consumer demand softness will persist in 2025. 

Combining all of these factors, we expect our 2025 consolidated sales to be approximately flat to up two percent compared to 2024. Given the uncertainty of the tariff environment, our guidance does not include our announced pricing which we project will offset, along with other actions, the current announced tariffs through the date of this filing. In addition to pricing, our other actions include footprint optimization, strategic sourcing actions and other cost containment initiatives. Our guidance also excludes the impacts from potential future acquisitions.

18

Results of Operations

(dollars in millions)Three Months EndedMarch 31,20252024Net sales$963.9 $978.8 Cost of products sold588.5 594.1 Gross profit375.4 384.7 Gross profit margin %38.9 %39.3 %Selling, general and administrative expenses192.6 192.2 Interest expense2.9 1.0 Other income, net(1.2)(1.2)Earnings before provision for income taxes181.1 192.7 Provision for income taxes44.5 45.1 Net Earnings$136.6 $147.6 

Our sales in the first quarter of 2025 were $963.9 million, and lower than the first quarter of 2024 sales of $978.8 million. Compared to the prior year quarter, our net sales decrease was primarily driven by lower residential and commercial water heater volumes in North America, lower sales in China, and an unfavorable currency translation of approximately $7 million due to the depreciation of foreign currencies compared to the U.S. dollar, which more than offset our higher sales of boilers and incremental sales related to the 2024 acquisition of Pureit that added approximately $12 million in the first quarter. 

Our gross profit margin in the first quarter of 2025 was 38.9 percent, down compared to 39.3