SMITH A O CORP — Form 8-K

A.O. Smith reported Q2 2026 sales of $1.004B (down 1% YoY) and diluted EPS of $0.91 (down 15% YoY). North America segment grew 5% to $820.5M, benefiting from the Leonard Valve acquisition ($16M sales contribution) and 21% boiler growth, but residential water heater volumes declined. Rest of World sales fell 19% to $194.9M, driven by 28% China sales decline in local currency. The company narrowed full-year 2026 guidance: sales growth to 2–3% (from 2–4%), diluted EPS to $3.60–$3.75 (from prior range), and adjusted EPS to $3.70–$3.85 (from $3.70–$4.00). Restructuring charges of $22.6M in North America water treatment are expected to yield $6–8M annual savings by 2027. Share repurchase target increased 50% to $300M for full year 2026. Leverage ratio rose to 25.7% from prior year due to $470M Leonard Valve acquisition funding.