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As a reminder, we have navigated through a immense product transition in 2023 following the step-up minimum efficiency standards mandated across the United States by the U.S. Federal government.
Approximately 60% of the HVAC systems we are now selling represent new products.
Let me repeat that. 60% of the sensors we're selling are new products. Thousands of customers have been trained.
Our digital product library has been updated, adding over 400,000 new SKUs since the start of the year.
product transition
Transcript
2023 Q3
23 Oct 23
The product shortages are a consequence of an immense product transition that is playing out this year following the step-up of minimum efficiency standards mandated across the United States.
Approximately 60% of the equipment we are selling today represents new or revamped products. Pricing capture and margins consistency have done well, as evidenced by our gross margin performance for the quarter and the year-to-date.
We are converting inventory and balancing our product offerings across our footprint.
We have trained thousands of customers on the new products.
We have updated our digital library to include all of the new products, adding over 400,000 new SKUs since the start of the year.
The transition, however, has been uneven.
One of our primary OEM partners was disproportionately impacted, affecting product availability of higher efficiency systems and, therefore, affecting our sales. We estimated a second sales impact of $75 million to $80 million, and as much as $125 million for the 6-month period ended June 30. The reality is all of our OEM partners have been affected to some measure and all are working to improve supply chain and help us meet the needs of our customers.
As we mentioned, beyond the tough comps and supply chain issues, the arrival of a hot summer weather was delayed this year as evidenced by the decline in cooling degree days. Cooling degree days is measured by the U.S. government, so we have a lot of information as to the demand for cooling systems during the year. Summer has now arrived and current business conditions are encouraging. Apart from the product transition, which largely affected our residential business, other facets of the business are performing very well.
supply chain and product transition
Transcript
2023 Q2
23 Oct 23
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