A O Smith Corp (AOS) 2025 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to the A O Smith third quarter 2025 earnings call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

您好，感謝您的耐心等待。歡迎參加A O Smith 2025年第三季財報電話會議。（操作人員指示）請注意，今天的會議正在錄音。（操作說明）

I would now like to hand the conference over to your speaker today, Helen Gurholt.

現在我謹將會議交給今天的演講嘉賓海倫·古爾霍爾特。

Good morning, and welcome to the A O Smith third quarter conference call. I'm Helen Gurholt, Vice President, Investor Relations and Financial Planning and Analysis. Today, I'm joined by Steve Shafer, Chief Executive Officer; and Chuck Lauber, Chief Financial Officer.

早上好，歡迎參加A O Smith第三季電話會議。我是 Helen Gurholt，副總裁，負責投資人關係、財務規劃與分析。今天，和我一起的有執行長史蒂夫·謝弗和財務長查克·勞伯。

Within today's presentation, we have provided non-GAAP measures. Free cash flow is defined as cash from operations less capital expenditures. Reconciliations from GAAP measures to non-GAAP measures are provided in the appendix at the end of this presentation and on our website.

在今天的演示中，我們提供了非GAAP指標。自由現金流定義為經營活動產生的現金流量減去資本支出。本簡報末尾的附錄和我們的網站上提供了 GAAP 指標與非 GAAP 指標的調整表。

A friendly reminder that some of our comments and answers during this conference call will be forward-looking statements that are subject to risks that could cause actual results to be materially different. Those risks include matters that we described in this morning's press release among others.

友情提醒：本次電話會議中的一些評論和回答屬於前瞻性陳述，存在一定風險，實際結果可能與預期有重大差異。這些風險包括我們在今天早上的新聞稿中描述的問題等等。

Also, as a courtesy to others in the question queue, please limit yourself to one question and one follow-up per turn. If you have multiple questions, please rejoin the queue. We will use -- we will be using slides as we move through today's call. You can access them on our website at investor.aosmith.com.

另外，為了不影響其他排隊提問的人，請每人每次只提一個問題和一個後續問題。如果您有多個問題，請重新排隊。在今天的電話會議中，我們將使用幻燈片。您可以在我們的網站 investor.aosmith.com 上訪問它們。

I'll now turn the call over to Steve to begin our prepared remarks.

現在我將把電話交給史蒂夫，讓他開始我們事先準備好的演講。

Thank you, Helen, and good morning, everyone. I would like to start by briefly thanking the many dedicated A O Smith employees and broader set of partners and customers in our ecosystem for another quarter of helping to make clean, hot and safe water available to millions of people. We appreciate all you do to make that happen.

謝謝你，海倫，大家早安。首先，我要簡要地感謝 A O Smith 的眾多敬業員工以及我們生態系統中更廣泛的合作夥伴和客戶，感謝他們在過去一個季度裡幫助我們為數百萬人提供清潔、熱水和安全的用水。我們感謝您為實現這一目標所做的一切。

Please turn to slide 4, and I will now review our financial performance in the quarter. Our global A O Smith team delivered third quarter sales of $943 million, a year-over-year increase of 4%, and EPS of $0.94, a 15% increase over 2024. North America sales grew 6%, primarily as a result of our pricing actions and strong commercial water heater and boiler volumes. We achieved North America segment margin expansion of 110 basis points and Rest of World segment margin expansion of 90 basis points.

請翻到第 4 張投影片，我現在將回顧本季的財務表現。我們的全球 A O Smith 團隊第三季銷售額為 9.43 億美元，年增 4%；每股收益為 0.94 美元，比 2024 年成長 15%。北美銷售額成長了 6%，主要得益於我們的定價策略以及商用熱水器和鍋爐的強勁銷售。我們實現了北美業務利潤率提升 110 個基點，世界其他地區業務利潤率提升 90 個基點。

Continued economic challenges and more limited availability of government stimulus programs led to a 12% decrease in local currency sales in China. Pureit contributed $17 million of sales in the quarter, and our legacy India business continued its strong double-digit growth trajectory by delivering 13% growth in local currencies.

持續的經濟挑戰和政府刺激計劃的日益有限導致中國本幣銷售額下降了 12%。Pureit 在本季度貢獻了 1700 萬美元的銷售額，而我們傳統的印度業務繼續保持強勁的兩位數增長勢頭，以當地貨幣計算實現了 13% 的增長。

North America water heater sales increased 6% in the third quarter, driven by pricing actions taken in response to higher tariffs and other input costs as well as higher commercial water heater volumes. Our market-leading high-efficiency condensing gas and heat pump products continue to have a compelling payback story in commercial applications. Our residential water heater volumes were also positive, so we believe that Q3 industry volumes declined year-over-year.

受關稅和其他投入成本上漲以及商用熱水器銷量增加的影響，北美熱水器銷量在第三季成長了 6%。我們市場領先的高效冷凝式瓦斯和熱泵產品在商業應用中持續展現出令人信服的投資回報。我們的家用熱水器銷量也為正，因此我們認為第三季產業銷量較去年同期下降。

As we expected, we believe our -- we believe we outperformed the residential and commercial markets in the quarter, in part due to our production efficiency initiative that limited the prebuy impact on our sales in the first half of the year.

正如我們所預期的，我們相信我們在本季的表現優於住宅和商業市場，部分原因是我們的生產效率提升計畫限制了預購對我們上半年銷售的影響。

Our North America boiler sales increased by 10% compared to the third quarter of 2024, led by the benefits of pricing actions and higher volumes of our high-efficiency boilers. North America water treatment sales decreased 5% in the third quarter, as continued growth in our priority channels was more than offset by an expected decrease from the retail channel. Our priority dealer, e-commerce and direct-to-consumer channels grew 11% in the quarter.

與 2024 年第三季相比，我們在北美的鍋爐銷量成長了 10%，這主要得益於價格策略的實施以及高效能鍋爐銷量的提高。第三季度，北美水處理產品銷售額下降了 5%，因為優先通路的持續成長被零售通路的預期下降所抵銷。本季度，我們的重點經銷商、電子商務和直接面向消費者的通路成長了 11%。

In China, third quarter sales decreased 12% in local currency, as the ongoing economic challenges and reduced availability of government subsidy programs along with an increasingly competitive environment led to lower volumes. Despite these challenges and the resulting volume pressure, we achieved 90 basis points of margin expansion compared to last year through the restructuring initiatives we undertook in 2024 and other cost-saving measures.

在中國，由於持續的經濟挑戰、政府補貼計畫的減少以及日益激烈的競爭環境，導致銷量下降，第三季銷售額以當地貨幣計算下降了 12%。儘管面臨這些挑戰和由此帶來的銷售壓力，但透過我們在 2024 年實施的重組計劃和其他節約成本的措施，我們實現了與去年相比 90 個基點的利潤率增長。

Please turn to slide 5. I would now like to take a moment and talk about our commitment to sustainability. For us, sustainability is not just a goal, but a core part of who we are and what we do every day. We are committed to not only developing and bringing to market innovative, high-efficiency products, but we are also dedicated to sustainability in our facilities and manufacturing processes.

請翻到第5張投影片。現在我想花一點時間談談我們對永續發展的承諾。對我們而言，永續發展不僅僅是一個目標，更是我們企業文化和日常工作的核心組成部分。我們不僅致力於開發和推出創新、高效的產品，而且還致力於在我們的設施和製造過程中實現永續發展。

Later this week, we will publish our sustainability progress report, which will include our sustainability scorecard and an update on our water conservation, greenhouse gas emissions and waste reduction goals. What the report will show is that we are meeting or exceeding the goals that we set out for ourselves.

本週晚些時候，我們將發布永續發展進度報告，其中將包括我們的永續發展記分卡以及我們在節水、溫室氣體排放和減少廢棄物目標方面的最新進展。報告將顯示，我們正在達到或超越我們自己設定的目標。

The outcome of these efforts are providing both sustainability and bottom line results. Example initiatives we have undertaken to support these goals include the test water recirculation system, which recycles water used during our product testing processes and our glass enamel reuse process, which captures waste glass enamel for reuse in our tank manufacturing process.

這些努力的成果既實現了永續發展，也帶來了實質的效益。為支持這些目標，我們採取了一些舉措，例如測試水循環系統，該系統回收產品測試過程中使用的水；以及玻璃搪瓷再利用工藝，該工藝可收集廢棄玻璃搪瓷，以便在儲罐製造過程中重複使用。

These are examples of how we are seamlessly -- how we seamlessly integrate sustainability into two of our priority areas, operational excellence and innovation. We remain dedicated to finding better ways of doing things, including how to improve our business while protecting our planet.

這些例子說明了我們如何將永續發展無縫地融入我們的兩個優先領域中——卓越營運和創新之中。我們始終致力於尋找更好的做事方法，包括如何在保護地球的同時改進我們的業務。

I'll now turn the call over to Charles, who will provide more details on our third quarter performance.

現在我將把電話交給查爾斯，他將詳細介紹我們第三季的業績。

Thank you, Steve, and good morning, everyone. Please turn to slide 6. Third quarter sales in the North America segment of $743 million increased 6% compared to the same period last year, primarily due to benefits of pricing actions as well as higher commercial water heater and boiler volumes.

謝謝你，史蒂夫，大家早安。請翻到第6張投影片。北美地區第三季銷售額為 7.43 億美元，比去年同期成長 6%，主要得益於價格策略的實施以及商用熱水器和鍋爐銷量的成長。

North America segment earnings were $180 million, an 11% increase over the third quarter of 2024. Segment operating margin was 24.2%, an increase of 110 basis points year-over-year, primarily due to pricing actions and higher volumes, more than offsetting higher material and other input costs.

北美業務部門獲利1.8億美元，比2024年第三季成長11%。分部營業利益率為 24.2%，較去年同期成長 110 個基點，主要得益於定價策略和銷售成長，足以抵銷材料和其他投入成本的增加。

Moving to slide 7. Rest of the World segment sales of $208 million decreased slightly compared to last year and included $17 million of sales from the Pureit acquisition. Sales in our legacy India business grew 13% in local currency.

切換到第7張投影片。世界其他地區銷售額為 2.08 億美元，與去年相比略有下降，其中包括收購 Pureit 帶來的 1,700 萬美元銷售額。我們位於印度的傳統業務的銷售額以當地貨幣計算增長了 13%。

China third-party sales decreased 12% on a constant currency basis. Rest of the World segment earnings of $15 million increased year-over-year as continued expense management and the benefits of restructuring actions more than offset lower volumes in China. Segment operating margin was 7.4%, an increase of 90 basis points compared to the prior period. Pureit will continue to be a headwind in the near term as we focus on integration, which is progressing well.

以固定匯率計算，中國第三方銷售額下降了12%。世界其他地區業務的獲利年增 1,500 萬美元，持續的費用控制和重組措施帶來的收益超過了中國市場銷售下降帶來的損失。分部營業利益率為 7.4%，較上期成長 90 個基點。短期內，Pureit 仍將構成不利因素，因為我們將專注於整合，而整合工作目前進展順利。

Please turn to slide 8. Operating cash flow grew 21% to $434 million, and free cash flow grew 35% to $381 million during the first nine months of 2025 compared to the same period last year, primarily due to lower inventory balances that were partially offset by other working capital outlays, including lower customer deposits in China. Our cash balance totaled $173 million at the end of September, and our net debt position was $13 million. Our leverage ratio was 9.2% as measured by total debt to total capital.

請翻到第8張幻燈片。2025 年前九個月，營運現金流成長 21% 至 4.34 億美元，自由現金流成長 35% 至 3.81 億美元，與去年同期相比，這主要是由於庫存餘額下降，但部分被其他營運資金支出所抵消，包括中國客戶存款減少。截至9月底，我們的現金餘額總計1.73億美元，淨債務為1,300萬美元。以總債務與總資本之比計算，我們的槓桿率為 9.2%。

Let's now turn to slide 9. Earlier this month, our Board approved a 6% increase in our quarterly dividend to $0.36 per share, making 2025 the 32nd consecutive year that A O Smith has raised its dividend. We repurchased approximately 5 million shares of common stock in the first nine months of 2025 for a total of $335 million.

現在我們來看第9張投影片。本月初，我們的董事會批准將季度股息提高 6%，至每股 0.36 美元，這將使 2025 年成為 A O Smith 連續第 32 年提高股息。2025 年前九個月，我們回購了約 500 萬股普通股，總金額達 3.35 億美元。

This is an increase compared to the same period last year, as we raised our planned full-year repurchase intentions from $306 million in 2024 to approximately $400 million of shares for 2025. Consistent with our key priorities, we are actively assessing strategic opportunities and have sufficient dry powder for acquisitions that meet our strategic and financial criteria. Our M&A priority continues to be deals that strengthen our core business or help us build new growth platforms.

與去年同期相比有所增加，因為我們將計劃的全年回購意願從 2024 年的 3.06 億美元提高到 2025 年的約 4 億美元股票。秉承我們的核心優先事項，我們正在積極評估策略機遇，並擁有充足的資金用於符合我們策略和財務標準的收購。我們的併購重點仍然是那些能夠加強我們核心業務或幫助我們建立新的成長平台的交易。

Please turn to slide 10 and our 2025 earnings guidance and outlook. We are narrowing the range and lowering the top end of our 2025 EPS outlook from a range of $3.70 to $3.90 per share to a range of $3.70 to $3.85 per share. We have included the following assumptions in our outlook.

請翻到第 10 頁，查看我們 2025 年的獲利預測和展望。我們將 2025 年每股盈餘預期範圍縮小，並將上限從每股 3.70 美元至 3.90 美元下調至每股 3.70 美元至 3.85 美元。我們的展望中包含以下假設。

We began to see the impact from tariffs in the third quarter and expect that our tariff costs will continue to increase into the fourth quarter as additional impacts make their way through our supply chain. Though the tariff landscape remains uncertain, we maintain our estimate that annualized tariffs will increase total company cost of goods sold by approximately 5%, which includes tariff rates currently in place as well as the mitigation efforts we have implemented.

我們在第三季開始感受到關稅的影響，預計隨著其他影響逐步滲透到我們的供應鏈中，我們的關稅成本將在第四季度繼續增加。儘管關稅情況仍不明朗，但我們仍估計，年度關稅將使公司銷售商品的總成本增加約 5%，其中包括目前實施的關稅稅率以及我們已實施的緩解措施。

As a reminder, our mitigation strategies include footprint optimization, strategic sourcing and other cost controls and pricing actions as necessary. Apart from tariffs, we expect overall material costs for the year to remain approximately flat versus last year, with steel costs rising 15% to 20% in the second half of 2025 compared to the first half.

再次提醒，我們的緩解策略包括優化佔地面積、策略採購以及其他必要的成本控制和定價措施。除了關稅之外，我們預計今年的整體材料成本將與去年基本持平，而2025年下半年的鋼鐵成本將比上半年上漲15%至20%。

We estimate that 2025 CapEx will be approximately $75 million. We expect to generate free cash flow of approximately $500 million. Interest expense is projected to be approximately $15 million. Corporate and other expenses are expected to be approximately $75 million. Our effective tax rate is estimated to be approximately 24%.

我們預計 2025 年資本支出約為 7,500 萬美元。我們預計將產生約 5 億美元的自由現金流。預計利息支出約1500萬美元。公司及其他費用預計約為 7,500 萬美元。我們的實際稅率估計約為 24%。

And we project our outstanding diluted shares will be 142 million at the end of 2025. I will now turn the call back over to Steve, who will provide more color around our key markets, top line growth outlook and segment expectations for 2025, remaining on slide 10. Steve?

我們預計到 2025 年底，我們的流通股（稀釋後）將達到 1.42 億股。現在我將把電話轉回給史蒂夫，他將在第 10 張投影片上詳細介紹我們的主要市場、營收成長前景和 2025 年的細分市場預期。史蒂夫？

Thanks, Chuck. Key assumptions in our top line outlook include the following. We project that 2025 US residential industry unit volumes will be flat to slightly down compared to last year, a slight decrease from our previous guidance due to residential new construction expectations that have come down since last quarter. Lower housing completions, particularly in multifamily as well as concern around consumer confidence, have led to this revised outlook.

謝謝你，查克。我們對整體業績展望的關鍵假設包括以下幾點。我們預計 2025 年美國住宅行業單元銷量將與去年持平或略有下降，這比我們之前的預期略有減少，原因是自上個季度以來住宅新建預期有所下降。住房竣工量下降，尤其是多戶住宅竣工量下降，以及對消費者信心的擔憂，導致了這種新的預期。

The wholesale channel impact is expected to be greater due to its heavier exposure to new construction. That said, we are encouraged by the resilient demand we are seeing in the commercial water heater market segment. And as a result, we are increasing our projection for commercial water heater industry volumes from flat to last year to up low single digits.

由於批發通路對新建案的依賴程度更高，預計其受到的影響會更大。儘管如此，我們對商用熱水器市場領域展現出的強勁需求感到鼓舞。因此，我們將商用熱水器產業銷售的預測從與去年持平提高到小幅成長。

We are pleased with our strong performance relative to the market in the third quarter and the share momentum we have going into the fourth quarter, supported by our winning products in this segment.

我們對第三季相對於市場的強勁表現以及進入第四季度的市佔率成長勢頭感到滿意，這得益於我們在該領域中表現優異的產品。

Economic challenges persist in China. While government stimulus programs helped to stabilize parts of the market in the first half of 2025, we believe the stimulus programs pulled forward a significant amount of demand. During the third quarter, national sub fees were discontinued, resulting in increased promotional activity and discounting from our competitors, much of which we chose not to participate in.

中國經濟挑戰依然存在。雖然政府刺激方案在 2025 年上半年幫助穩定了部分市場，但我們認為這些刺激方案提前釋放了大量需求。第三季度，全國分公司費用停止收取，導致競爭對手加強促銷並提供折扣，而我們選擇不參與其中的大部分活動。

Because we do not expect an improvement in market conditions in the near term, we are lowering our 2025 China sales outlook to a decline of approximately 10% in local currency. We continue to benefit from the restructuring actions taken in 2024, as well as other cost-saving measures, which we project will offset the margin impact of lower volumes for the year.

由於我們預期短期內市場狀況不會改善，因此我們將 2025 年中國銷售額預期下調至以當地貨幣計算下降約 10%。我們將繼續受益於 2024 年採取的重組措施以及其他節約成本的措施，我們預計這些措施將抵消今年銷售下降對利潤率的影響。

Our 2025 North America boiler sales projection of an increase of between 4% and 6% compared to 2024 is unchanged. We are very pleased with our growth in the first nine months of the year, although we believe we may have benefited from a minimal amount of prebuy related to price increases implemented in the second quarter. We continue to monitor our key markets closely.

我們對 2025 年北美鍋爐銷量的預測與 2024 年相比將成長 4% 至 6%，這項預測保持不變。我們對今年前九個月的成長非常滿意，儘管我們認為我們可能會受益於第二季實施的價格上漲所帶來的少量預購。我們將繼續密切關注主要市場。

We have not changed our guidance that North America water treatment sales will decline approximately 5% in 2025, as we deemphasize the less profitable retail channel. We continue to be pleased with the growth we have seen in our priority channels and our onboarding of new dealers during the year.

我們並未改變先前的預測，即到 2025 年，北美水處理產品的銷售額將下降約 5%，因為我們將減少對利潤較低的零售通路的投入。我們對今年重點通路的成長以及新經銷商的加入感到滿意。

Our plan to drive 250 basis points of operating margin improvement in 2025 for the North America water treatment business is on track. Finally, we expect the addition of Pureit will add approximately USD55 million in sales in 2025, slightly higher than our earlier guidance. It will not have a significant bottom line contribution this year, as we work through integration.

我們計劃在 2025 年將北美水處理業務的營業利潤率提高 250 個基點，目前該計劃進展順利。最後，我們預計 Pureit 的加入將在 2025 年帶來約 5,500 萬美元的銷售額，略高於我們先前的預期。由於我們正在進行整合，因此今年它不會對公司獲利做出重大貢獻。

Based on the continued economic challenges in China and the softening wholesale residential water heater market in the US, we have lowered our full-year sales outlook from 2% to 3% growth to a range of flat to up 1% compared to last year.

鑑於中國經濟持續面臨挑戰，以及美國住宅熱水器批發市場疲軟，我們將全年銷售預期從成長 2% 至 3% 下調至與去年持平或成長 1%。

We continue to expect our North America segment margin will be between 24% to 24.5%, and we expect that Rest of World segment margin will be approximately 8%. Please turn to slide 11. Last quarter, I laid out my areas of focus. Earlier this month, the top 140 leaders of A.O.

我們仍預期北美業務的利潤率將在 24% 至 24.5% 之間，預計世界其他地區的利潤率約為 8%。請翻到第11頁。上個季度，我列出了我的工作重點領域。本月初，A.O. 的 140 位最高領導人

Smith gathered to talk about the future of our company, to align on key priorities and inspire each other through the opportunity to connect and share ideas on how to deliver the next great chapter of the A O Smith legacy. I came away from this important time together confident in our path forward and with the commitment from our leadership team to execute. I look forward to sharing more regarding this leadership summit and our focus areas in the quarters to come. I am also pleased to welcome Chris Howe as our new Chief Digital Information Officer.

史密斯公司齊聚一堂，探討公司的未來，就關鍵優先事項達成一致，並透過交流和分享想法的機會互相激勵，共同譜寫 A O Smith 輝煌歷史的下一個偉大篇章。這段重要的共同經驗讓我對我們前進的方向充滿信心，也讓我相信我們的領導團隊會全力以赴。我期待在接下來的幾個季度與大家分享更多關於本次領導力高峰會和我們重點關注領域的資訊。我也很高興地歡迎克里斯·豪擔任我們新的首席數位資訊長。

Chris is the transformational leader that we need to help us invest wisely in new technologies for the future and unlock even more value potential in the technologies we are invested in today. In his previous roles, Chris led transformational effort to leverage enterprise software solutions or most recently worked on the forefront of generative AI solutions.

克里斯是我們需要的變革型領導者，他能幫助我們明智地投資未來的新技術，並釋放我們今天投資的技術中更大的價值潛力。在之前的職位上，克里斯領導了利用企業軟體解決方案的轉型工作，或最近從事生成式人工智慧解決方案的前沿工作。

He will be instrumental in ensuring we have the technical capabilities needed to support all our priorities, especially operational excellence and innovation. As we shared last quarter, and as part of our portfolio management priority, we announced the intention of our formal China strategic assessment. While we remain early in the process, we are making good progress.

他將發揮關鍵作用，確保我們擁有支援所有優先事項所需的技術能力，特別是卓越營運和創新能力。正如我們上個季度所分享的，作為我們投資組合管理優先事項的一部分，我們宣布了正式開展中國戰略評估的計劃。雖然我們仍處於早期階段，但我們正在取得良好進展。

We commissioned a third-party analysis of the China market, and it confirmed many of our assumptions entering the strategic assessment. One, our brand remains strong, well-known and respected among Chinese consumers, especially with regard to our innovative products and premium solutions.

我們委託第三方對中國市場進行了分析，分析結果證實了我們在策略評估中所做的許多假設。第一，我們的品牌在中國消費者中依然保持著強大的知名度和尊重度，尤其是在我們的創新產品和高端解決方案方面。

Two, our strategy to expand into broader categories that can be connected by smart home solutions and our AI Link capability was a necessary path forward. And three, we have a number of go-to-market and business model opportunities to better strengthen the business and capture our fair share of market recovery.

第二，我們拓展到可以透過智慧家庭解決方案和 AI Link 功能連結的更廣泛類別的策略，是前進的必要途徑。第三，我們有很多市場進入和商業模式的機會，可以更好地加強業務，並在市場復甦中佔據我們應有的份額。

We believe that we have a good understanding of our challenges and are evaluating potential opportunities to ensure the future success of this business, as we drive greater value for shareholders, employees and other stakeholders.

我們相信我們對自身面臨的挑戰有充分的了解，並且正在評估潛在的機遇，以確保公司未來的成功，同時為股東、員工和其他利害關係人創造更大的價值。

In conclusion, I am pleased with our third quarter execution, particularly in the North American segment. I'm also encouraged by the progress we are making on our strategic priorities, including portfolio work to help strengthen our business going forward. Regarding execution, we delivered a solid third quarter in North America, led by pricing performance and our strong commercial, high-efficiency portfolio while expanding margins through operational discipline.

總之，我對我們第三季的業績感到滿意，尤其是在北美地區。我也對我們在策略重點方面取得的進展感到鼓舞，包括有助於加強我們未來業務發展的投資組合工作。在執行方面，我們在北美實現了穩健的第三季業績，這得益於定價策略和我們強大的商業化、高效率的產品組合，同時透過營運紀律擴大了利潤率。

Looking forward, we remain confident in our ability to navigate the tariffs and competitive landscape in our core water heater and boiler businesses, where we serve a large replacement-driven market with a broad industry-leading portfolio and go-to-market model.

展望未來，我們仍然有信心應對核心熱水器和鍋爐業務中的關稅和競爭環境，我們服務於一個龐大的以更換為導向的市場，擁有廣泛的行業領先產品組合和市場推廣模式。

Regarding our portfolio, we are driving double-digit growth in priority areas, including boilers, select North America water treatment channels and India. At the same time, through our strategic assessment, we are working to understand and address what is required to improve the performance of our China business.

就我們的產品組合而言，我們正在優先領域實現兩位數的成長，包括鍋爐、北美部分水處理管道和印度市場。同時，透過我們的策略評估，我們正在努力了解和解決提高我們中國業務績效所需的問題。

Finally, we continue to generate cash, maintain a strong balance sheet and are ready with dry powder necessary to build out our portfolio in ways that complement our business today. With that, we conclude our prepared remarks and are now available for your questions.

最後，我們持續創造現金流，維持強勁的資產負債表，並已準備好充足的現金儲備，以與我們目前業務互補的方式拓展我們的投資組合。至此，我們準備好的發言稿就結束了，現在可以回答各位的問題了。

(Operator Instructions)

（操作說明）

Saree Boroditsky, Jefferies.

Saree Boroditsky，傑弗里斯。

Maybe just building on some of the China color. You obviously lowered expectations around China sales. Could you just talk about your performance versus the overall market there? And is this just a weaker market? Or is there any competitive dynamics going on?

或許只是藉鏡了一些中國元素。顯然，你們降低了對中國市場銷售的預期。能否談談貴公司在當地市場的整體表現？這僅僅是市場疲軟嗎？或者說，是否存在某種競爭動態？

Yes. It's a little bit of both. So the market continues to have its challenges. And as I mentioned, there's been a little bit of a pull-forward demand driven by the government subsidy program. So we're on the other side of that.

是的。兩者兼而有之。因此，市場依然面臨挑戰。正如我之前提到的，政府補貼計畫帶動了一定的提前購買需求。所以我們已經走到這一步了。

And I think within that down market, the competitive intensity continues to increase. So we see a lot of promotional activities trying to step in where government subsidies were playing a role to generate demand previously. And so that's adding to the competitive pressure.

我認為在市場低迷的情況下，競爭強度反而會持續增加。因此，我們看到許多促銷活動試圖填補政府補貼先前在刺激需求上所扮演的角色。因此，這加劇了競爭壓力。

And I think, as we see our path forward, as I mentioned, we've got confirmation that our brand remains very strong there. We have a really strong innovative portfolio to serve our customers, but we need to work through this period of challenging market conditions.

而且我認為，正如我之前提到的，從我們未來的發展方向來看，我們已經證實，我們的品牌在那裡仍然非常強大。我們擁有非常強大的創新產品組合來服務我們的客戶，但我們需要克服這段充滿挑戰的市場環境。

Appreciate that. And then obviously, one of the bright spots this quarter was in the North America commercial water heater sales. I think previously, you attributed some of the strengths to prebuy. So just maybe a little bit more detail on what you're seeing in that market and what's driving the strength there?

謝謝。顯然，本季的一大亮點是北美商用熱水器的銷售。我認為之前你將部分優勢歸功於買入前的優勢。那麼，能否更詳細地介紹一下您在該市場觀察到的情況，以及推動該市場強勁成長的因素？

Yes. It's been a strong market condition for commercial products, but I'd also say we have a really strong portfolio in that space. And I mentioned on the last earnings call, the launch of our FLEX commercial water heater, and -- so we've got that out in the marketplace that I think is performing very well. So it's a combination of a really strong market backdrop, but also in an area where we've got a really competitive product offering.

是的。商業產品的市場狀況一直很強勁，而且我認為我們在該領域也擁有非常強大的產品組合。我在上次財報電話會議上提到了我們推出的 FLEX 商用熱水器，而且——我們已經將該產品推向市場，我認為它的表現非常好。所以，這得益於非常強勁的市場背景，同時也得益於我們在這個領域擁有極具競爭力的產品。

And I would add that during the third quarter, we benefited from our production efficiency program to make sure that we were level loading a bit closer to the market. And some of that strength we saw in commercial and residential heater was a part of the output of that benefit in the level loading program.

我還要補充一點，在第三季度，我們受惠於生產效率提升計劃，確保我們的產能分配更接近市場需求。我們在商業和住宅供暖方面看到的一些優勢，正是均衡負載計劃帶來的益處的一部分。

Bryan Blair, Oppenheimer.

布萊恩布萊爾，奧本海默。

Just to level set on the China strategic review. We know there isn't a timetable as of now in terms of the ultimate decision, but given the insights from the assessment so far, has the range of potential outcome has been narrowed in any way?

只是為了對中國戰略評估進行全面評估。我們知道目前還沒有最終決定的時間表，但根據目前的評估結果，潛在結果的範圍是否有所縮小？

No, Bryan, not yet. I mean, we're still early enough in the process that we're not ruling out any outcomes at this point. So like I said, we've done some really good work just trying to profile and understand the market. We've gotten some third-party assessment to do that.

不，布萊恩，還沒到時候。我的意思是，現在還處於早期階段，所以我們目前還不能排除任何結果。正如我所說，我們已經做了很多卓有成效的工作，努力分析和了解市場。我們已經委託第三方機構進行了評估。

We've started the process of reaching out to other participants, which is why we wanted to announce that we were putting the business under the strategic assessment, but we're not at a point yet where we've kind of narrowed down or have a view of what the outcome of that is yet. It's still too early.

我們已經開始聯繫其他參與者，所以我們想宣布我們將對公司進行策略評估，但我們還沒有到能夠縮小範圍或預見評估結果的地步。現在下結論還為時過早。

Yes. Understood. Appreciate the color. The priority channel growth in North American water treatment, certainly encouraging in Q3, and that 11% nicely aligns with the 10% to 12% organic growth target you had put out at Investor Day. With mix now reset for the platform, is that kind of organic growth in play going forward?

是的。明白了。欣賞這種顏色。第三季北美水處理優先管道的成長確實令人鼓舞，11%​​ 的成長與您在投資者日上提出的 10% 至 12% 的有機成長目標非常吻合。隨著平台組合的重新調整，這種自然成長模式未來是否還會持續出現？

I mean, that's certainly how we think about the business long term. I would say there's still more work to be done, right? So we've done some reprioritization of the channels and where we think we can be competitive and win. I think there's still more work and investment in that space to build out that platform. But we feel good about the growth potential of that business.

我的意思是，這當然是我們對企業長期發展的考量方式。我認為還有很多工作要做，對吧？因此，我們對渠道進行了一些重新排序，確定了我們可以具有競爭力並贏得勝利的管道。我認為在這個領域還需要更多的工作和投資來完善這個平台。但我們對這項業務的成長潛力感到樂觀。

Jeff Hammond, KeyBanc Capital Markets.

Jeff Hammond，KeyBanc Capital Markets。

Just on the US resi water heater market, I think you didn't change your industry shipment assumptions, but seem to lean a little more cautious. So I just wanted to understand a little bit better how you see that playing out.

就美國家用熱水器市場而言，我認為你們並沒有改變對產業出貨量的假設，但似乎更加謹慎了一些。所以我想更清楚地了解你對這件事的看法。

Yes. Our outlook for the industry, we were talking about flat industry on our last call. And now, we're saying flat to slightly down. So we do see a little bit of pressure on the residential side. Most of that is coming through new home construction completions on the residential side that we're seeing some of that weakness.

是的。我們對產業的展望，在上一次電話會議上我們討論的是產業停滯不前。現在，我們說的是持平或略微下降。因此，我們確實看到住宅方面存在一些壓力。大部分疲軟都體現在住宅方面新建房屋的竣工數量上，我們看到了一些疲軟的跡象。

So we've taken it down just a tad.

所以我們稍微降低了一點。

And are you seeing kind of the market share recapture play out as you thought?

您是否看到市場份額的重新奪回正如您預期的那樣發生？

Yes. As we were looking at level loading our production this year, we've seen our performance relative to the market in Q3 come back and gain share back as we expected.

是的。今年我們一直在努力平衡產能，正如我們預期的那樣，第三季我們相對於市場的業績已經恢復，市場份額也重新獲得提升。

Okay. And then just -- I think you mentioned some additional tariff headwinds, maybe quantify or talk about where you're seeing that? And then just as you look at steel pricing and kind of forward tariffs into '26, how does that kind of inform pricing actions you need to take into '26? We're seeing -- we're hearing from kind of other channels that maybe next year is another above average increase. I just wanted to get your view there.

好的。然後──我想你提到了一些額外的關稅阻力，能不能量化一下或談談你具體在哪些方面看到了這些阻力？那麼，當你觀察鋼鐵價格和 2026 年的遠期關稅時，這會如何影響你 2026 年需要採取的定價策略呢？我們看到——也從其他管道聽到——明年可能還會出現高於平均的成長。我只是想聽聽你的看法。

Yes. This is Chuck. I mean, the mention on tariff pressure was really framing from third quarter to fourth quarter. It's probably maybe 20 basis points on North America margins, where we are seeing a bit heavier tariffs kind of accumulate. Our full year outlook at 5% has not changed.

是的。這是查克。我的意思是，提到關稅壓力實際上是從第三季過渡到第四季。北美地區的利潤率可能會下降 20 個基點，因為那裡的關稅相對較高，而且這種影響仍在累積中。我們對全年5%的成長預期保持不變。

So it's still a little bit of timing, putting a little pressure on the North American margins in the fourth quarter. We'll be back in January. We're giving a little bit of an outlook on cost. The tariff world is a bit volatile. So I think we'll kind of hold off commentary to see where material costs go in that respect.

所以，時機仍然有些關鍵，這會對第四季北美地區的利潤率帶來一些壓力。我們一月會回來。我們來簡單展望一下成本情況。關稅領域波動較大。所以我覺得我們應該暫緩發表評論，看看這方面的材料成本會如何改變。

Mike Halloran, Baird.

麥克哈洛蘭，貝爾德。

Could you talk a little bit through what you're seeing in the residential side of things in terms of the discretionary spend? I certainly heard the commentary earlier that some of that weakness that -- or incremental weakness you saw in the residential volume side from an outlook perspective is tied to new housing starts being a little bit lower, no surprise. Are you seeing anything different on the discretionary piece?

您能否談談您在住宅方面，特別是可支配支出方面觀察到的情況？我之前確實聽過這樣的評論：從前景來看，住宅市場數量方面出現的一些疲軟——或者說逐步疲軟——與新房開工量略低有關，這並不令人意外。你覺得自選部分有什麼不同嗎？

We really haven't seen that change. We do a survey every quarter, and we look at proactive replacement, as you know. And if we kind of look at that survey, there's quarters where it edges up, edges down. But overall, it's still above that 30%. Proactive replacement remains pretty resilient.

我們並沒有看到這種變化。如您所知，我們每季都會進行調查，並考慮主動更換方案。如果我們看一下那份調查報告，會發現有些季度略有上升，有些季度略有下降。但總體而言，仍高於 30%。主動替換仍然相當有效。

Certainly, something we'll watch as we go forward. But -- it's a backward since the last trailing 12 months survey. So we'll have to continue to watch that and make sure we understand if there is a trend developing. But right now, still above 30%.

當然，這是我們接下來會密切關注的事情。但是——這與上一次過去 12 個月的調查結果相比有所倒退。所以我們需要繼續觀察，確保我們了解是否存在某種趨勢。但目前仍高於 30%。

So -- and then following up on Jeff's other question, I know you're not giving '26 thought process, but if trends were to play out, and we weren't going to get any incremental actions, the pricing that you've taken in your mind is enough to make you price-cost positive or at least be price-cost neutral on the margin line or in terms of EBITDA dollars once kind of all the catch-up happens. Is that a thought process? Or is there still going to be some gaps relative to what you're seeing from an inflation perspective with the actions you've already taken?

所以——接著 Jeff 的另一個問題，我知道你沒有給出 2026 年的思考過程，但如果趨勢繼續發展，而且我們不會採取任何增量措施，那麼你腦海中考慮的定價足以使你的價格成本為正，或者至少在利潤率或 EBITDA 美元方面保持價格成本中性，一旦所有追趕措施都發生。那是一種思考過程嗎？或者說，從通膨角度來看，你目前採取的措施是否仍會存在一些差距？

Yes. When we do our price increases, and it really was no different other than the amount of the price increase this time with the tariff costs hitting us, we typically look to cover margin plus cost. So just a reminder, the last one was second quarter because it was effective. When we announce those prices, they go out, and certainly, we see pressures over time on the price, and we have a bit of a fade.

是的。當我們提價時（這次除了漲價幅度因關稅成本而有所不同之外，其他方面並無不同），我們通常會考慮在漲價幅度上覆蓋利潤加上成本。再次提醒一下，上一次是在第二季度，因為效果很好。當我們公佈這些價格時，它們就會發佈出去，當然，隨著時間的推移，我們會看到價格面臨壓力，並且會出現一些下跌。

So I think we'll kind of still reserve kind of the answer to that as we get into the next quarter, but we're comfortable with our price-cost relationship now. But as you'll see, there's some pressure when you look at our guidance and a little bit of pressure on margins in the fourth quarter.

所以我覺得我們還是會等到下一季再給答案，但我們目前對價格成本關係感到滿意。但正如你所看到的，從我們的業績指引來看，存在一些壓力，第四季的利潤率也面臨一些壓力。

Susan Maklari, Goldman Sachs.

蘇珊‧馬克拉里，高盛集團。

This is Charles Perron-Piche. First, I'd like to go back on the China market. Understanding the market conditions are tough, but I guess, do you have any thoughts on potential additional restructuring initiatives in the region given the environment and something that would be done ahead of potential strategic announcement?

這是查爾斯·佩隆-皮什。首先，我想重返中國市場。了解市場狀況很困難，但我想問的是，鑑於當前環境，您對該地區潛在的額外重組舉措有什麼想法嗎？以及在可能發布戰略公告之前應該採取哪些措施？

I think it's one of the things we're going to continue to kind of work through and learn more about as we go through our strategic assessment, and I kind of alluded to the fact that there's opportunities for us as we think about how we go to market, our business model. We're going to continue to evaluate those things. Whether we do those through partnerships or we do them for ourselves, it's something we still have to work through. But our goal is to make sure that the business is set up well for success. And obviously, a little bit of market recovery will help aid that in a bit.

我認為這是我們在進行策略評估的過程中需要繼續研究和深入了解的問題之一，我也暗示過，當我們思考如何進入市場、我們的商業模式時，我們會遇到一些機會。我們將繼續評估這些事項。無論我們是透過合作還是獨立完成這些事情，這仍然是我們需要努力解決的問題。但我們的目標是確保公司做好充分準備，走向成功。顯然，市場稍有復甦就會對此有所幫助。

But we're going to continue to kind of learn from the changing market environment and make the necessary changes. And whether that comes through things that we'll take on and self-help to do that or whether that's done through partnerships is one of the things we're assessing right now.

但我們會繼續從不斷變化的市場環境中學習，並做出必要的改變。而這究竟是透過我們自己承擔的事情和自助的方式來實現，還是透過合作來實現，是我們現在正在評估的問題之一。

Okay. That's helpful color. And then I think in your prepared remarks, you talked about the potential for a strategic acquisition within your or adjacent market. I guess, on this, can you talk about what is the pipeline for these types of opportunities in the current environment, along if the timing of any strategic decision on that is dependent on the potential announcement of the strategic review in China?

好的。這是個很有幫助的顏色。然後，我認為您在事先準備好的發言稿中談到了在您所在的市場或鄰近市場進行策略性收購的可能性。我想，關於這一點，您能否談談在當前環境下這類機會的管道情況，以及任何相關戰略決策的時機是否取決於中國可能宣布的戰略評估？

No, I think one of the strengths we have, right, is a strong balance sheet and our cash generation capabilities, so we've got an active pipeline. We continue to evaluate that from kind of a strategic lens, financial lens, where we want to go next. And as I mentioned, partly it's how do we strengthen the core of our business, how do we think about building new higher-growth businesses, and we're going to continue through that process. So I don't think it's connected to other decisions we're making across our portfolio at this time, and we're ready to move, I think, when the right opportunities come about.

不，我認為我們的優勢之一，對吧，就是我們強大的資產負債表和現金創造能力，所以我們有活躍的專案儲備。我們將繼續從策略角度和財務角度評估下一步的發展方向。正如我剛才提到的，部分原因是我們要如何加強我們業務的核心，我們要如何思考如何建立新的高成長業務，我們將繼續推進這個過程。所以我認為這與我們目前正在進行的其他投資組合決策無關，而且我認為，當合適的機會出現時，我們已經準備好採取行動。

David MacGregor, Longbow Research.

David MacGregor，Longbow Research。

I wonder if you could just give us an -- I was wondering if you could just give us an update on gas tankless and the progress to date on relocation of manufacturing and market development and just the impact on third quarter margin contribution and maybe the implied fourth quarter, which you've got in the '25 guide?

我想請您簡要介紹一下無罐汽油引擎的最新情況，以及迄今為止在生產轉移和市場開發方面的進展，以及對第三季度利潤貢獻的影響，或許還可以談談您在 2025 年指南中提到的第四季度業績？

Sure. As you know, we've made a big investment to enter with our own products into the gas tankless space. We've been building out the right set of products, the manufacturing capability here in North America. And all of that is progressing well. I think the market itself for tankless is under pressure, heavily connected back to the residential construction market that we talked about.

當然。如您所知，我們投入巨資，以我們自己的產品進軍無水箱瓦斯熱水器領域。我們一直在北美打造合適的產品組合和製造能力。所有這些進展都很順利。我認為無水箱熱水器市場本身正面臨壓力，這與我們之前討論過的住宅建築市場密切相關。

So from that standpoint, it remains kind of a challenging market. But I think we're really excited that I think we've got the right products, we've got the manufacturing capability ready. As we've talked about in the past, we've made some changes.

所以從這個角度來看，這仍然是一個充滿挑戰的市場。但我認為我們非常興奮，因為我們擁有合適的產品，也具備了生產能力。正如我們之前討論過的，我們做出了一些改變。

In the past, we were talking about launching in China, moving to North America. We've made some changes into that strategy, which has made some delays to our current plan in terms of how we're going to go after the market.

過去，我們曾討論過在中國推出產品，然後進軍北美市場。我們對策略進行了一些調整，這導致我們目前的市場拓展計畫有所延誤。

But I think we're happy with where we're at. We'd like to move faster in the marketplace. And I think as the market picks up and recovers, especially around new construction, and with the product offering we have and the supply chain we have, we'll be ready to compete successfully.

但我認為我們對現狀很滿意。我們希望在市場上更快發展。我認為隨著市場回暖復甦，尤其是在新建專案方面，憑藉我們現有的產品和供應鏈，我們將做好充分準備，成功參與競爭。

Are you getting good feedback -- sorry, go ahead.

你得到的回饋好嗎？ ——不好意思，請繼續。

I was just going to answer the question on margin pressure. It's -- we're anniversarying when we first launched the product last year, so the margin pressure is a bit less than the 40 basis points we had historically talked about. For the quarter, it's probably about 20 basis points. It's not overly significant. And I think you were asking about feedback.

我正準備回答關於保證金壓力的問題。——今年是我們首次推出該產品的周年紀念日，所以利潤率壓力比我們之前討論過的 40 個基點要小一些。本季大概是 20 個基點。這並不十分重要。我想你是在問回饋意見吧。

Yes. I was just going to get you to talk a little bit about what you're getting back from the marketplace and people. I know that you were undertaking a phased launch on that product in terms of just incremental models, and is the acceptance level relatively good at this point? Or are people waiting for the full assortment? Just any commentary on that would be helpful.

是的。我本來想請你談談你從市場和人們那裡得到了什麼。我知道你們當時正在分階段推出該產品，每次只推出少量型號，目前該產品的市場接受度是否相對較好？還是大家都在等待全系列產品上市？任何評論都將不勝感激。

Yes, folks love the product. And when they get their hands on it, and they get comfortable with it. And as you know, we've been building out our portfolio. So when we have the full portfolio, we'll be even more compelling. There's also elements of how we serve this market, right?

是的，大家都很喜歡這款產品。當他們真正上手使用，並且習慣了之後。如您所知，我們一直在拓展我們的投資組合。所以，當我們擁有完整的產品組合時，我們將更具競爭力。還有我們如何服務這個市場的問題，對吧？

A lot of more gas tankless tied to the new construction. So we're working out on the business model as well. But I would say, at the end of the day, the product is a market-leading product, and that's what we look to do when we got kind of our own product offering into this space.

隨著新建築的建成，無水箱瓦斯熱水器的數量也越來越多。所以我們也在研究商業模式。但我想說，歸根究底，這款產品是市場領先的產品，而這正是我們進入這個領域推出自己的產品時所追求的目標。

Nathan Jones, Stifel.

Nathan Jones，Stifel。

This is Adam Farley on for Nathan. Let me follow up on -- I wanted to follow up on the China commentary. I know fourth quarter is typically seasonally stronger quarter due to the shopping holidays. So what is your expectation for the selling season going into the fourth quarter, balancing that with some of the headwinds you guys are seeing there?

這裡是亞當法利替內森報道。我想就中國相關評論做進一步說明。我知道由於購物假期，第四季度通常是季節性銷售旺季。那麼，考慮到你們目前看到的一些不利因素，你們對第四季的銷售旺季有何預期？

Well, you're exactly right. It's typically the fourth quarter is one of our strongest quarters in China. Our outlook assumes that there is an uptick in volume in the fourth quarter compared to the third quarter. But I will say when you kind of frame our outlook for China overall to be down 10%, you'll note the fourth quarter gets a little more pressure on year-over-year comps compared to the third quarter. So without the -- with the discontinuation of the subsidy program, there's a bit of uncertainty in China on how the fourth quarter may play out.

沒錯，你說得完全正確。通常來說，第四季是我們在中國市場業績最好的季度之一。我們預計第四季銷量將比第三季有所成長。但我想說的是，當我們把對中國整體經濟的預期設定為下降 10% 時，你會注意到，與第三季相比，第四季同比數據將面臨更大的壓力。因此，隨著補貼計畫的終止，中國第四季的經濟狀況存在一些不確定性。

But right now, we have kind of normal cadence, but not at normal volumes. But just kind of relative to the third quarter, we do see a bit of an uptick.

但現在，我們的節奏基本上正常，但音量卻不正常。但與第三季相比，我們確實看到了一些成長。

That's helpful. And then maybe shifting to boilers, which was a bright spot in the quarter, I think you mentioned maybe you think there's a little bit of pre-buy there, but I was also wondering if the boiler sales cycle is maybe elongating at all due to general market uncertainty or maybe that's not an issue at all?

那很有幫助。然後，也許可以轉向鍋爐市場，這是本季的一個亮點。我想你提到過，你可能認為鍋爐市場存在一些預購情緒，但我也在想，由於市場整體的不確定性，鍋爐的銷售週期是否有所延長，或者這根本不是問題？

No. I mean, we do believe that there was some pre-buy, so there is certain boilers that, I'll call it, inventoriable size. They're small enough that you'd be willing to invest and put them in inventory. We've seen a couple of strong quarters in boilers. Typically, our strongest quarter is the third quarter.

不。我的意思是，我們確實相信存在一些預購，所以有一些鍋爐，我稱之為可庫存規模。它們個頭小，值得投資併入庫。我們看到鍋爐市場出現了幾個強勁的季度。通常來說，我們業績最好的季度是第三季。

So we do think we'll see a little bit of a headwind as we go into the fourth quarter for some of the unwind of the, call it, inventoriable boilers that will come out in the fourth quarter. But overall, the market quoting remains pretty steady, pretty consistent, particularly on the large CREST units. So we're not seeing any major change or elongation in, what I would say, quoting to the order cycle.

因此，我們認為進入第四季度後，由於一些待售的、可計入庫存的鍋爐將在第四季度下線，我們將面臨一些不利因素。但總體而言，市場報價依然相當穩定、相當一致，尤其是大型 CREST 單元。因此，我們沒有看到訂單週期出現任何重大變更或延長。

Andrew Kaplowitz, Citi.

安德魯‧卡普洛維茨，花旗集團。

Steve, obviously, you've had good operating experience in your past positions. Maybe just stepping back as you've looked at AOS, and given how many of your markets are relatively sluggish, how have you sized the potential opportunity for cost out overall at AOS and the potential to accelerate new product-related growth as you begin to transition into '26?

史蒂夫，很顯然，你在過去的崗位上累積了豐富的營運經驗。或許，在您審視 AOS 之後，考慮到您的許多市場相對低迷，您如何評估 AOS 整體成本削減的潛在機會，以及在您開始過渡到 2026 年時加速新產品相關增長的潛力？

Yes. Andy, so as I've mentioned, two of our priority areas are A O -- the operational excellence and how do we get more out of the A O Smith operating system and innovation. And I think that gets after both components of your question.

是的。安迪，正如我之前提到的，我們的兩個優先領域是 A O——卓越運營，以及我們如何從 A O Smith 運營系統和創新中獲得更多收益。我認為這正好回答了你問題的兩個面向。

I think -- we don't have a good sizing yet of what the value is at stake on that, but what I'll tell you is I'm encouraged by the fact that we can bring even more kind of discipline into our operating rhythm at A O Smith. I think we have great manufacturing capability, and we run a lot of our business with great people with a lot of experience. And I think bringing some discipline, and I mentioned Chris Howe joining us as our CDIO, I think discipline and leveraging some of the technology investments we've made is going to be a meaningful opportunity for us. And we haven't kind of framed that in numbers yet. We're sort of building the foundation that we can build on. And I think that's something we'll continue to talk to you all about going forward.

我認為——我們目前還沒有很好地評估這件事的價值，但我可以告訴你的是，我感到鼓舞的是，我們可以在 A O Smith 的營運節奏中引入更多的紀律。我認為我們擁有強大的製造能力，而且我們很多業務都是由經驗豐富的優秀人才所經營的。我認為引入一些紀律，就像我之前提到的克里斯·豪加入我們擔任首席數位資訊長一樣，我認為紀律以及利用我們已經進行的一些技術投資，對我們來說將是一個有意義的機會。我們還沒有用數字來具體說明這一點。我們正在打基礎，以便在此基礎上繼續發展。我認為這是我們接下來會繼續和大家討論的話題。

And then, on the innovation front, we also have a new CTO, and one of the things we're really focused on is how do we kind of increase the pace and success of our commercialization capabilities and -- across our businesses. And so that's another area of focus. And again, we're kind of putting the foundation in place. But we've got a great history at this company of breakthrough innovation, creating categories. And so tapping into that culture of innovation is something that's another big priority for us.

此外，在創新方面，我們也有一位新的首席技術官，我們真正關注的事情之一是如何提高我們商業化能力的步伐和成功率，以及——在整個業務領域。所以，這也是我們關注的另一個領域。再說一遍，我們正在打基礎。但我們公司在突破性創新和開創品類方面有著輝煌的歷史。因此，融入這種創新文化是我們的另一個重要優先事項。

That's helpful. And maybe just a little more color on inventories across your resi channels, anything you're seeing there? Obviously, resi HVAC is having much more difficult time than resi water heaters, given their own inventory problems over there. It doesn't seem to be the case with you guys here, but what's the risk given weaker consumer confidence that we could see some destocking?

那很有幫助。或許可以再詳細說說你​​們各個住宅通路的庫存狀況，你們那邊有什麼狀況嗎？顯然，鑑於家用暖通空調系統本身也存在庫存問題，家用暖通空調系統面臨的困境比家用熱水器大得多。你們那邊似乎沒有這種情況，但是考慮到消費者信心疲軟，我們可能會看到一些去庫存的情況，這會帶來什麼風險呢？

Right now, I would say we think that inventories in the channel on both residential and commercial side is at pretty normal levels, pretty much target levels. As there's hesitancy, maybe on new home construction, may see some of the distributors looking to be very prudent on how they manage inventories in the back half of the year. But we feel like channel inventories are pretty much where they should be right now.

目前，我認為住宅和商業管道的庫存都處於相當正常的水平，基本上達到了目標水平。由於市場對新建房屋可能會猶豫，一些經銷商可能會在下半年非常謹慎地管理庫存。但我們認為，目前的通路庫存基本上處於合理水準。

Tomohiko Sano, JPMorgan.

佐野智彥，摩根大通。

My first question is on CapEx. Could you talk about the CapEx guidance compared to three months ago, including what kind of items like did you revise for the full year, please?

我的第一個問題是關於資本支出（CapEx）的。能否談談與三個月前相比的資本支出預期，包括您對全年預算做了哪些調整？

Yes. We lowered our CapEx outlook just a little bit. We pushed out some of the investments that we had planned for the fourth quarter of this year into early next year. Some of those, not all of those were related to just watching the DOE commercial regulatory initiatives out there, and we're just being prudent on making those investments until we have a more surety around that.

是的。我們略微下調了資本支出預期。我們將原計劃於今年第四季進行的一些投資推遲到了明年年初。其中一些投資（並非全部）與密切關注美國能源部的商業監管舉措有關，在對這些舉措有更明確的把握之前，我們只是謹慎地進行這些投資。

And my follow-up is capital allocation. So you have been aggressive with buybacks and dividend increases, how do you prioritize capital allocations going forward, especially if the macro headwinds persist, please?

我的後續工作是資本配置。你們一直積極進行股票回購和提高股息，那麼展望未來，如果宏觀經濟逆風持續，你們將如何優先考慮資本配置？

I mean, certainly, the dividend is very important to us. We've raised it for 32 years. We look at that from a yield perspective, and we feel pretty comfortable with where we are at on that. Buybacks, we're framing really to not grow cash, which we're buying back a prudent amount, we believe to not grow cash and still reserve firepower for acquisitions. So as Steve mentioned, we have adequate firepower.

我的意思是，當然，股息對我們來說非常重要。我們已經養了它32年了。我們從收益率的角度來看這個問題，我們對目前的收益率狀況感到相當滿意。我們正在製定股票回購計劃，目的並非增加現金流，而是謹慎地回購股票，我們相信這樣做既不會增加現金流，又能為收購保留資金。正如史蒂夫所說，我們的火力夠強大。

We're looking for adding those acquisitions, and we're in a good position to do that.

我們正在尋求這些收購，而且我們目前處於有利地位，可以做到這一點。

And I'd say in terms of market conditions and how they change, we still recognize we need to deploy capital to our core business, and we have a very resilient core business from that standpoint. So making sure that we maintain a very strong core business that's cash flow generating is in that dynamic as well. And at the same time, we're looking to how do we provide more adjacencies that get us into kind of higher growth businesses.

至於市場狀況及其變化，我認為我們仍然認識到需要將資金投入到核心業務中，從這個角度來看，我們的核心業務具有很強的韌性。因此，確保我們保持一個非常強大的、能夠產生現金流的核心業務也是這種動態發展的一部分。同時，我們也在思考如何拓展更多相關業務，進入更高成長的業務領域。

(Operator Instructions)

（操作說明）

Scott Graham, Seaport Research Partners.

Scott Graham，Seaport Research Partners。

I'm sorry for jumping on late, balancing several conference calls. So I missed your prepared remarks. Was sort of the lean into the -- I should say, the reduction to the lower end of the guide range for the year, was that on China exclusively because it looks like the North American items are fairly flat versus last quarter? Was that China? Or was it something else?

很抱歉我來晚了，因為我同時要參加好幾通電話會議。我錯過了您事先準備好的發言稿。應該說，今年的業績預期下調，是否完全是因為中國市場，因為北美市場的業績看起來與上一季相比相當穩定？那是中國嗎？還是另有隱情？

Yes. Scott, there were two things we pointed out. There was obviously the softness, and we did revise down our China outlook for the year to down 10%. So that was a big part of it. The other thing we've highlighted is weakness on the residential side of the North America business, and we just see that a little bit softer now, where previously, we talked about it as a flat market.

是的。史考特，我們指出了兩件事。顯然存在疲軟的市場環境，因此我們將今年的中國市場預期下調了 10%。所以這是其中一個重要原因。我們強調的另一點是北美住宅業務的疲軟，現在我們看到這種情況有所緩和，而此前我們認為這是一個平穩的市場。

We now see it as flat to slightly down. So those two components are what have us being a little bit more cautious.

我們現在認為它持平或略微下降。正是這兩個因素讓我們更加謹慎。

Okay. And I'm sorry for having to ask that. It was something you already said. Does that presuppose that, or maybe contemplate that, the October industry shipments were better than September because September really dropped off there? Can you kind of talk about what you're seeing in the industry in October?

好的。很抱歉要問這個問題。你之前已經說過這​​句話了。這是否意味著，或者說考慮到，10 月的行業出貨量比 9 月好，是因為 9 月的出貨量大幅下降？您能談談您在十月觀察到的產業現況嗎？

Well, the industry shipments, August really was down quite a bit on the residential side. We think September will be -- not similarly down, but was also weak. And as we think about kind of our orders, and maybe that's where we can comment in October because we haven't seen any industry data yet for October. But in October, as we look at our orders, we haven't seen resiliency, particularly on the wholesale side, which is generally more influenced by new home construction. So it's been a bit weak overall.

嗯，8 月住宅建築業的出貨量確實大幅下降。我們認為9月的情況－雖然不會像9月那樣大幅下滑，但也同樣疲軟。我們正在考慮訂單情況，也許我們可以在 10 月對此發表評論，因為我們還沒有看到 10 月的任何行業數據。但從 10 月的訂單情況來看，我們並沒有看到任何韌性，尤其是在批發方面，而批發業務通常更容易受到新房屋建設的影響。所以整體表現有點疲軟。

So those all kind of -- all those factors come into play, Scott, when we're thinking about a flat industry last quarter, now flat to slightly down. We just see a little bit of pressure, particularly on the new home construction.

所以，斯科特，所有這些因素都會起作用，當我們考慮到上個季度行業持平，現在持平或略有下降的情況。我們看到了一些壓力，尤其是在新住宅方面。

And we've talked about our approach to trying to level load our production a bit more for the efficiency benefits of that, working closely with our customers to do that. So we saw Q3 where the industry was down a bit, but we also gained share as was our intention as we walked through the quarter because of the way we level-loaded our production.

我們已經討論過，為了提高效率，我們將努力使生產負荷更加均衡，並與客戶緊密合作來實現這一目標。所以我們看到第三季整個產業都在下滑，但我們也像我們預期的那樣，透過均衡生產的方式，獲得了市場份額。

Thank you. I would now like to turn the call back over to Helen Gurholt for any closing remarks.

謝謝。現在我謹將電話轉回給海倫·古爾霍爾特，請她作總結發言。

Thank you for joining us today. Let me conclude by reminding you that we are pleased with our growth in the quarter. We look forward to updating you on our progress in the quarters to come. In addition, please mark your calendars to join our presentations at three conferences this quarter, Baird on November 11; UBS on December 3; and Goldman on December 4.

感謝您今天蒞臨。最後，我想提醒各位，我們對本季的成長感到滿意。我們期待在接下來的幾個季度向您報告我們的進展。此外，請在日曆上標記，參加我們本季度在三場會議上的演講：11 月 11 日在 Baird 舉行的會議；12 月 3 日在瑞銀舉行的會議；以及 12 月 4 日在高盛舉行的會議。

Thank you, and enjoy the rest of your day.

謝謝，祝您今天餘下的時間愉快。

This concludes the conference. Thank you for your participation. You may now disconnect.

會議到此結束。感謝您的參與。您現在可以斷開連線了。