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Pool Corporation Stock Price: Quote, Forecast, Splits & News (POOL)

Perplexity Finance

Company Profile

Pool Corporation Price & Performance (POOL)

Stock Performance

Updated Apr 30, 6:03 PM UTC

Pool Corporation

$290.98USD

-$2.92 (-0.99%)

Open

$290.43

Market Cap

$10.98B

Year High

$395.60

High

$293.51

P/E Ratio

27.2

Year Low

$284.27

Low

$286.42

Dividend Yield

1.65%

Volume 24h

$63.82M

Latest News

Stephens Reduces Pool Corporation Price Target Amid Lingering Uncertainties
today
Stephens has lowered its price target for Pool Corporation from $400 to $350, reflecting concerns over ongoing sales and earnings challenges. The specialty retailer's Q1 results missed expectations, with analysts citing continued weakness in new pool construction and discretionary spending. Despite this, Pool maintains an "overweight" rating, suggesting potential for recovery.123
Analysts Adjust Pool Corp Outlook as Q1 Earnings Disappoint
Following a weaker-than-expected first quarter, several analysts have trimmed their price targets for Pool Corp. Stifel cut its target to $300 and BofA to $280, both maintaining cautious ratings. The company’s Q1 miss, attributed to revenue softness and competitive pressures, has led to lower EPS forecasts for 2025 and 2026.453
Earnings Miss Drives Pool Corp Stock Near 52-Week Low Despite Maintained Guidance
today
Pool Corp’s Q1 2025 earnings per share fell short of estimates, sending shares near their 52-week low. The company reported a 4% year-over-year sales decline but reaffirmed its full-year EPS guidance. Analysts remain divided, with price targets now ranging from $280 to $375 amid persistent macroeconomic and sector headwinds.671

What's Happening

Peers

Earnings

Report Date

Apr 24, 2025

Reported Revenue

1.1B

Miss -2.53%

Avg 1d Change

6.32%

Report Period

Q1 2025

Reported EPS

1.3

Miss -7.04%

Implied Move 1d

7.41%

Transcript

11m 12s

Our discussion, comments and responses to questions today may include forward looking statements. Including management's outlook for 2025 and future periods. Actual results may differ materially from those discussed today. Information regarding the factors and variables that could cause actual results to differ from projected results are discussed in our 10 ks. In addition, we may make references to non GAAP financial measures in our comments. A description and reconciliation of our non GAAP financial measures is included in our press release and posted to our corporate website in the Investor Relations section. We have also included a presentation on our investor website to summarize key points from our press release and call comments. We will begin today with comments from Peter Arvan, our President and CEO.

12m 5s

Thank you, Melanie, and good morning, morning to everyone on the call. Earlier this morning, we reported our first quarter results and affirmed our full year guidance for 2025. While the first quarter started off with some challenging weather in key markets, we began to see some improvement in conditions in March. Although, meaningful this year, the Easter holiday occurred three weeks later than last year falling into the second quarter versus the first. As expected, our maintenance product sales performed well during the quarter and so far into the season. The recurring non discretionary demand of these products is durable in all economic cycles and we believe we can continue to achieve above market growth based on our strategic initiatives around customer experience, private label products, Pool three sixty and our expanded footprint. At the time of our last call, there appeared to be some signs of macro stability approaching, but we have seen the challenging economic environment continue to weigh on new pool construction and to a lesser degree renovation activities. Our dealers are reporting that the uncertainty of the macroeconomic environment and persistently high interest rates is causing a wait and see pattern in demand for large discretionary purchases.

13m 22s

By and large, they are reporting that inquiries are steady but time to contract is still protracted. In aggregate, the permit data in the first quarter was softer than 2024, which is somewhat surprising given the more optimistic outlook prior to the recent tariff actions. We are hopeful that as things settle, consumer confidence will help stabilize that. When we compare our new pool construction related sales to the permit data, almost almost without exception, are outperforming the market, which gives us confidence that our overall value proposition to our customers continues to help us gain share in this area. Remodel activity will continue, but there may be some deferrals of discretionary remodel and or reconfiguration of plans to complete projects in phases. Despite these persistent conditions, we are encouraged by improving trends in our top line performance and we expect our initiatives will allow us to perform better than the market in all areas of our business as we push through the transition to a more normal industry environment. Another topic we would like to add some color on prior to discussing the quarter is our exposure to tariffs and how they are affecting the business as of the latest information that we have.

14m 38s

Our exposure to direct imports in total is relatively small and would amount to less than 1% of revenue. For clarification, this includes some building material and maintenance products. Chemicals as a category have little exposure because of domestic supply arrangements or exemptions. The biggest tariff impact in our business is being felt in the equipment area where the manufacturer manufacturers have exposure for whole goods or components that are impacting their costs. Since our last earnings call, our largest equipment vendors announced and implemented an in season price increase that ranged from 3% to 4% that took effect in April to address the March tariff announcements and we increased our selling prices accordingly. We observed similar patterns during the pandemic years and those increases passed through the channel with no reversals. Our current thinking is this will be the case this time as well. In addition to that, on Tuesday of this week, an additional 4% increase was announced by Pentair that will take effect on June second of this year. We will in the normal course raise our prices accordingly as these and future increases are announced, and come into effect. Melanie will add additional color in her remarks how we how we see these impacting our results.

15m 54s

No doubt we are living in a dynamic market condition. But the team is focused on execution and is very experienced. Next, let me turn to our first quarter results. We reported $1,100,000,000 in net sales as our teams continue to execute on our strategic priorities. First quarter sales were down 4% versus last year, but down 2% on a same selling day basis, a similar improving trend to what we saw in the end of twenty twenty four. After a challenging January and February with tougher weather comps, we saw overall top line growth in March. Maintenance product sales performed well chemical showing volume and revenue growth, including double digit growth in our private label chemical products. On new construction and remodel, we saw the continued effects of tight discretionary spending under the current macro backdrop but this area provided less of a drag on top line than we have seen. In recent quarters. Next, I will recap the P and L. Gross margin came in at 29.2% versus the 30.2% in the first quarter of twenty twenty four. Recall that last year we realized 110 basis point benefit from an import tax accrual reversal. Without that benefit, our prior year gross margin was closer to 29.1%, reflecting some year over year improvement, largely driven by our pricing optimization and supply chain initiatives.

17m 21s

Competitive pricing became more prevalent in the first quarter similar to we observed at this time last year and typical for this time of year. However, using price appears to be more a more pronounced tactic by our competitors of late. We evaluate these circumstances on a market by market basis and respond as we feel appropriate on a market by market basis. Both our field and support team managed controllable expenses and even with inflationary increases and investments in network expansion, operating expenses increased only 2% during the first quarter. We generated operating income of $77,500,000 and operating margin of 7.2%, reflecting structural improvements in the first quarter operating margin as compared to our pre pandemic first quarter operating margins that range from 5.7% to 6.5%. We generated diluted earnings per share of $1.42 including a $0.10 ASU tax benefit. Covering sales in more detail detail, by major geographic market sales increased 2% in Arizona came in flat for California and declined 1% in Florida, and 11% in Texas. As we mentioned, on our year end call, we saw challenging weather in January and February in varying markets which notably impacted sales in Texas and to a lesser extent some areas in Florida.

18m 50s

Again, did see improvement in March as total company revenues turned positive in contrast to January and February and continues in April. In Europe, net sales declined 4% in local currency and 6% in U. S. Dollars. As it continues to work through the macro uncertainties but is mostly holding the improved trends we began to see in the back half of 2024. While France, our largest presence in Europe sees pressure from tough market conditions on new construction, we see positive trends in Spain and Portugal signaling a solid setup for the season in those markets. For Horizon, net sales declined 4% in the quarter. While commodity pricing has shown sign of stabilization, the deflation impacted Horizon results by 4% on a year over year basis, most notably in PBC. Volumes came in flat overall for the period tempered by weather and a soft macro. Maintenance related sales are helping offset pressure on both commercial and residential irrigation but our team remains encouraged by our pipeline of projects heading into the second quarter. Related to our product sales mix, chemical sales were up 1% for the quarter with volume in increasing as well as total sales. As we observed last year, market prices declined during the first quarter compared to year end, but we believe pricing will rationalize further as the industry enters the busier selling season.

20m 19s

We remain focused on gaining shelf space in dealer stores with our best in class chemical programs, converting dealers chemical lines is a strategic focus area for our business. But it is a longer than normal selling process. Our success so far in this area is encouraging. Building material sales declined 5%, a sequential improvement from what we saw in the fourth quarter and much of last year. The improvement in our NPT branded product finish pool finish and tile, particularly in a tight environment highlights the power of our offering and the unmatched value seen by our customers. Equipment sales which excludes cleaners declined 4% during the quarter following spikes from repair activities in much of Florida during the first quarter of twenty twenty four. Our inventory is well positioned for the season as our early buy terms allow for delivery from our vendors in the fourth quarter or the first quarter of each year based on manufacturers capacity. Aftermarket demand remains healthy, automation and innovation remain top priorities for homeowners and our ability to partner with our vendors and utilize our expansive network to effectively bring those products to market highlighting the strength and value of our team.

21m 39s

Looking at our end markets, our commercial business sales increased 7% in the first quarter. We are pleased with the continued progress in this area as we leverage knowledge gained from recent acquisitions to align with our sales force, leverage brand names and expand our warehouse distribution capabilities and enhance our expertise serving this robust market. Sales to our independent retail customers declined 1% in the first quarter, showing some improvement trends ahead of the peak season. For the a Penny franchisees group representing our franchisees sales to their end customers. Sales came in flat for the quarter. Showing some impacts from varying Texas and Florida weather patterns and the normalization after hurricane repairs in the fourth quarter. Collectively, these results show the stability of the maintenance market and our progress to expand our capabilities to serve the key do it yourself end markets. For Pool three sixty, orders processed continue to expand [indiscernible] close to 13% of total sales for the first quarter of twenty twenty for the first quarter growing from 11% in the first quarter of last year. Utilize the opportunities that first quarter offers through industry shows and retail events to educate our consumers and potential customers customers on these value added tools.

23m 4s

Along with growth in orders process, we observed double digit growth in our private label chemical sales further highlighting our progress from the streamlined abilities of the Pool three sixty water test and Pool three sixty service to direct our customers to our private label solutions driving growth and productivity for our dealers and for Pool Corp. We continue to expand our wholesale distribution network opening two new locations in the first quarter, bringing our total locations to just shy of four fifty. Our Pinch A Penny franchise network added its first store in Arizona, positioning us to expand into this key do it yourself market. With three stores opening this quarter, we are now coming close to to 300 Pinch a Penny franchisees. As we enter the industry's seasonally most significant time of year, we confirm our full year EPS guidance range of $11.1 to $11.6 including the 10% or including an updated 10¢ estimated benefit from ASU. Through our thoughtful and innovative investments, we believe have positioned ourselves to capture more available demand than anyone else in the industry during the most critical part of the season. Our teams will focus on providing the best customer experience while leaning into advanced Pool three sixty to help our customers grow their business.

24m 27s

Pools remain highly sought after with continued concentration towards the higher end. Remodeling activity will continue despite some projects being spaced out over multiple projects or longer time spans. Through our robust distribution network, we will continue to focus on best serving both the professional contractors and servicers as well as the retailers to also reach the do it yourself pool owner. We will utilize our four domestic central shipping locations to create supply chain efficiencies and fulfill demand needed needs better than anyone in the industry. Benefited by our ample cash flows and disciplined capital allocation practice [indiscernible] we will invest in strategic growth and shareholder returns while maintaining a strong balance sheet. With the seasonally significant second quarter underway, our teams will be relentless in providing an industry leading customer experience and improving on capacity creation through utilizing of our innovative technology solutions, best in class team, unmatched value proposition and continued investment in the that builds upon itself. Unlike a year ago, this year we have additional in season price increases that will help offset the slower start to the year on discretionary spending. I would like to thank our Pool Corp team who I can always count on to operate on our initiatives, particularly well in this key time of year.

25m 54s

They continue to battle and win in a challenging end market in a challenging market and through our team through our teaming with supply partners creating value for our customers. I look forward to seeing what they will accomplish during the season. I will now turn the call over to Melanie Hart, our Senior Vice President and Chief Financial Officer for her detailed commentary. [indiscernible] Thank you, Pete.

26m 18s

Exiting the quarter, we saw improved momentum in March sales.

26m 22s

Finishing the month on a same day basis at 2% over prior year. The improvements we saw in March were not enough to cover for the tough weather we saw early in the quarter in January and February. Resulting in a 2% decrease on a same selling day basis compared to the prior year for the full quarter. We were successful in the quarter in passing through the vendor price increases that were put in place at the beginning of the year. These previously announced increases were expected to benefit sales by one to 2% on an overall product blend. With continued negative 1% impact for chemicals and commodities netting to an overall plus 1% for pricing in the quarter. We continue to be encouraged by our progress on our Chemical business, which is a good proxy for the over 60% of our sales that are derived from the maintenance of the installed base. Volumes increased for these products and benefited total sales for the quarter by an estimated 1%. Discretionary spend in the new construction and remodel areas has still not seen a recovery, resulting in an estimated 3% drag on sales activity. We did see negative comparables and permits across most of our large states, However, the trend continues to improve in some of our key markets.

27m 40s

Summing up the sales impact for the quarter, we saw a plus 1% on maintenance volumes plus 2% on realized vendor price increases, offset by a negative 1% on pricing impact from chemicals and commodities, a 2% loss on one less selling day, a decline of 3% on volumes on sales of discretionary products, for new pools and remodel activity, and a 1% impact on sales for declines in Horizon and Europe combined. The first quarter included one less selling day than prior year, for a total of one less selling day for the full year 2025 compared to 2024. Our gross margin for the quarter finished at 29.2%, or 10 basis points higher than prior year, when considering the 110 basis points positive impact recognized in first quarter twenty twenty four related to import taxes.

28m 31s

We realized benefits during the quarter from our pricing initiatives and supply chain. Including higher levels of private label chemical sales, with offsets from less favorable customer mix. In the current period, with lower discretionary demand, our larger customers are still winning a higher proportion of the business in the market. While this may put some pressure on margins, the stickiness of these larger customers is evident in our ability to capture sales in periods where demand for discretionary products is slower, as we are best at serving their broader needs. Early buy sales were similar in both periods, and so did not have a meaningful impact on margins. Product mix was a slight drag with lower building materials and strong growth in commercial sales, which also had a slight negative margin impact. We saw some instances of aggressive competitive pricing for certain orders that appears to be in response to continued softness in the market. On the margin side, this was the main difference from our initial forecast and diluted some of the benefits we have seen on our internal initiatives. Operating expenses for the first quarter $235,000,000 an increase of only 2% over prior year. First quarter includes the impact of our annual merit increases, continued investments in our technology offerings, as well as increased spend for the six sales centers operating second quarter of last year.

29m 55s

This modest expense increase demonstrates leverage gains from our ongoing capacity creation efforts and disciplined variable cost management. Operating income of $78,000,000 was a decrease of 31,000,000 compared to prior year including the $13,000,000 import tax impact that benefited first quarter of twenty twenty four. We reduced interest expense by 2,300,000.0 compared to the first quarter of twenty twenty four and reported diluted earnings per share of 1.42 compared to $2.4 in prior year which included an additional $09 from ASU and $0.24 from import taxes. Operationally, the resulting change in EPS would have been $0.29 primarily driven by top line activity. Overall for the quarter, we realized continuing improvement in sales trends, consistent performance in maintenance product categories, and strong volume growth in private label chemicals driven in part by our Pool three sixty applications. We also continue to grow both our wholesale distribution sales center network and franchisee store network while executing with strong expense discipline. We continue to benefit from our strong balance sheet position. Our days sales outstanding of twenty five point nine days reflects an improvement compared to twenty six point nine days in prior year, reflecting our continued strong credit management process and collections discipline.

31m 19s

In view of market conditions, we thoughtfully executed early buy ordering to ensure the right inventory was on hand. Inventory balances increased $171,000,000 from year end as we receive products across our vast footprint to position for sale. The balance at the March of 1,460,000,000.00 reflects less than the prior year of 1,500,000,000.0 for the inventory stocking improvements we have made. Inventory days on hand improved three days from prior year first quarter. We ended the quarter with total debt of $1,000,000,000 Debt and interest expense typically increases from first to second quarter as we build inventory for the season and as early buy payments are due during the second quarter. Even early in the season, as we increase our inventory position, we have been able to maintain our leverage ratio of 1.47 at the lower end of our target. We reported $27,000,000 in cash flow from operating activities during the quarter.

32m 16s

This year, higher inventory purchases and timing of related payments used incremental cash of $70,000,000 We also made the payment of the 2024 deferred tax amount which reflected $68,500,000 less in cash flow during the quarter, unrelated to the current year activity. During the quarter, we completed total share repurchases of 56,000,000 an increase of $40,000,000 over prior year. And have $291,000,000 remaining under our share repurchase authorization. At our upcoming board meeting, we will present our request to the board to increase our authorization so that we have plenty of capacity to continue our opportunistic share repurchase activity within the parameters of our disciplined capital allocation approach. Moving into our expectations for the current year, I'll start with the expected impact to our business of tariffs. We primarily source our products domestically and so expect that announced tariffs will have a minimal impact on our direct import. Examples of which would be in the tile and maintenance product categories and represent less than 1% of our total annual purchasing activities. Recently announced tariffs, we have received an incremental 3% to 4% price increase from around 20 or so of our vendors. As we have historically we would expect that those cost increases will be passed on to our dealer customers.

33m 36s

We communicate as these increases are announced by our vendors and adjust pricing as quickly as the market circumstances allow. The impact for the year and for the full year. This will increase our pricing benefit to 2% for the annual period. Our initial sales guidance of flat to a low single digit increase included 1% to 2% net on pricing volume growth on maintenance, and flat discretionary spending. Permit data, a reasonable approximation of new construction activity remains lower than the prior year levels through the end of the first quarter. There has also been a new level of uncertainty in the macro environment since February. Including sustained higher interest rates, increased tariffs, a volatile stock market, which we believe could be more impactful to our traditional homeowner demographic. Where our larger customers are confident in a similar number of bills as last year, other dealers in the market are still trying to fill [indiscernible] Gain more visibility in May and June, our two largest months of the year, However, at this point, we have considered in our range the possibility that we may still see some negative impact in the current year from lower discretionary spend. Our forecasted gross margin range of 29.7% to 30% included our estimates that internal initiatives related to supply chain, pricing, and increased private label would make up for the 20 bps of non recurring positive import benefit included in 2024.

35m 9s

At this point in the year, we are not anticipating any significant gross margin benefit recovery from new pool construction and remodel activity. Which is a significant component to reach the top end of our 30% gross margin target. And now believe that product mix could be a slight drag for the year. Additionally, we have considered that the current market environment may result in a competitive pricing environment putting pressure on margins outside of just the first quarter.

35m 36s

Our forecast for sales considers at the low end similar discretionary sales levels as first quarter, offset by the additional 1% tariff pricing. At the midpoint, continued improving trends on discretionary as we have seen late in 2024 and into early twenty twenty five, and the additional 1% tariff pricing. Our forecast for margins, considered at the low and midpoint, lower sales of higher margin discretionary products customer mix SKUs, to larger customers, and ongoing market pricing pressure.

36m 9s

And at the top end, a more traditional seasonal recovery of the market pricing. Expenses will continue to be very well managed and in accordance with the top line including the investments in the new sales centers and some incremental compensation expense we expect expenses for the year to increase around 3% over prior year. Our estimates for interest expense are still expected to be around 40,000,000 to 45,000,000 with higher interest expense in the second quarter after payment of early buys turning lower during third and fourth quarters as we collect on receivables from seasonal sales activity. Cash flow in 2025 is expected to be between 90100% of net [indiscernible] and will be impacted by the deferred tax payment made in the first quarter of twenty twenty five related to 2024. Our consistent capital allocation strategy, considers spend of approximately 50,000,000 to $60,000,000 on CapEx for the existing business including new sales center openings. An estimated 25,000,000 to $50,000,000 on acquisitions dividends of around 200,000,000 with the remainder of the cash to be used for debt pay down and to repurchase shares opportunistically. Our annual tax rate is expected to be approximately 25% excluding ASU. This rate is estimated to be 25.5% during the second and fourth quarters and lower in the third quarter.

37m 27s

We are expecting approximately 37,800,000.0 weighted average shares outstanding that will be applied to the net income attributable to common shareholders for the rest of the Our guidance remains unchanged at a diluted EPS range of $11.1 to $11.6 including the $0.10 ASU tax benefit recognized in the first quarter. We have proven our ability to manage the business in a profitable way during various market conditions and external Our Pool Corp team provides value to the pool industry our customers, and our vendors thus has a unique ability to outperform the market. The strategic actions we have taken in pricing, supply chain, technology, and network expansion are all showing positive results and position us for strong future performance as industry conditions ultimately normalize. The remainder of 2025 will continue along that positive path as we build upon our capabilities. To everyone for participating in today's call. I will now turn the call over to the operator to begin our question and answer session.

38m 32s

Thank you very much. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and to withdraw your question, please press star At this time, we will pause momentarily to assemble our roster. Our first question comes from the line of Ryan Merkel from William Blair. Please go ahead.

39m 18s

Good morning. Thanks for the question. I wanted to start with the second quarter.

39m 24s

Just want to get everyone on the same page. Are you expecting low single digit top line in the second quarter? Which would be consistent with the full year? And is that what you're seeing in April so far?

39m 38s

Yes. I think that's a fair way to look at it, Ryan.

39m 42s

Okay.

39m 43s

And would you be seeing about two points of price in the second quarter? Is that price more second half?

39m 53s

I think it's probably going to be more second half because of the latest increase won't take effect until the June. So, we'll see some in the second quarter, but the majority will come after after second quarter.

40m 6s

Okay.

40m 7s

And then I just want to go over the full year guidance again and we'll just talk the midpoint I just want to make sure I heard everything correctly. So it sounds like two points of price gross margins still flat. And then you think new pools you could still see some growth in the second half of the year? As we sit here today?

40m 31s

Yeah, so as we you look at the trends all the way throughout 2024 and even into the first quarter of twenty twenty five, although we're still comping negatively, they are continuing to improve with the exception of Texas. Really, the improvement we're seeing is in the Florida market in California and in Arizona. And so, if that continues to improve, we would see expected in the back half, kind of minus the hurricane comp, we could start to see some volume improvement. When you're looking at kind of the midpoint of the range. The low end of the range would be take a little bit more pessimistic view of that and would suggest that because of what's going on just in the macro environment, that we may continue to see some pressure from discretionary spend throughout the full year.

41m 23s

The outlier Ryan for us really in terms of construction activity so far this year is is Texas. Texas is definitely softer than the other key markets. What we're hearing from dealers is that was a very tough start to the year. And honestly, there's a lot of reasons why and I talked to several dealers myself and I get a lot of different assumptions. But some are weather related, some are the macro, some are interest rates, Of late, things have improved So the latest calls that we have with those dealers is they're feeling better than they were thirty, sixty days ago. But still, that's that's the that's the one that is harder to predict right now is how tech is gonna end up in terms of construction.

42m 18s

Okay.

42m 19s

Got it. And then just on gross margins, is flat still the right outlook there that would assume a little lift in the second half I asked just because you mentioned product mix might be a little more of a hurt now and then you mentioned competitive market conditions.

42m 35s

Yes, I would say in the modeling, flat would be now flat, again recognizing that flat is actually an improvement of 20 basis points. So flat would recognize that we're getting some benefits from our internal initiative. But it would also continue to see some of that really the the margin and product mix and customer mix could impact that. So when you look at kind of the range we have the flat as the high end, with some kind of modest impacts from some of the other external factors at the lower end.

43m 10s

Okay. That's helpful. Thank you. I'll pass it on. Thanks, Ryan.

43m 15s

Thank you.

43m 17s

Your next question comes from Quinn Fredrickson from Baird. Please go ahead.

43m 23s

Yeah. Hey. Thanks. Good morning. [indiscernible] curious what your expectation is for New Pool AS ASPs and or bigger ticket remodels this year and if that's changed at all? I recognize the typical pool owner is an affluent consumer, but there seems be some signs that even affluent consumers are being a bit pressured right now. So wondering if your contemplating any trade down in terms of features, automation or lower ASPs?

43m 51s

That's a good question. Question. We've gotten a lot of feedback from dealers that are what we've seen in the past is still true. That the higher end consumer or higher end pool buyer if you will, that business is good, was good and will be good. In fact, most dealers would tell you that work in that part of the market that their ASPs. So I can't tell you that those pools are getting more fancy. I they're pretty much staying the same. But given the continued softness at the entry level pool point, if you did just an average on the ASP of the pool, I would tell you that it is solid to up a little bit and that's purely based on mix. So I'm not hearing a lot of, at the construction side, a lot of trade downs. I did mention on the remodel side. I mean, the remodel market is interesting because a, it's a it's a very big market. And there's a lot going on in that, that has to be unpacked. Large remodel projects, what we are seeing, what dealers are telling us is that whereas in the past, and we started to see this frankly a couple of years ago, you just do the whole thing.

45m

They're breaking those up right, to say, okay, let's do the pool finish, let's do the interior, let's do the decking or let's do the equipment, but let's break it up over time order to get that done. So in total the job is getting done as being more spaced out. But the ASP, to answer your original question, is probably up a little bit, but that's purely based on mix.

45m 23s

Okay. Thank you. That's helpful. And then Melanie, a question about gross margin. If at the low end of the guidance that building materials do remain in the range of declines that you saw in 1Q, like you mentioned, how should we be thinking about gross margin in that scenario? Are there enough tailwinds from private label supply chain and pricing still to be approximately stable? Or are see some pressure in that scenario?

45m 50s

Yeah. No. We we we might see some pressure in that scenario because of the the lower mix of those higher higher margin products. Alright. Thank you.

46m 1s

Thank you. The next question comes from Susan Maklari from Goldman Sachs. Please go ahead.

46m 9s

Thank you. Good morning, everyone.

46m 11s

Morning.

46m 12s

My first question Good morning, Pete. My first question is, you know, adding to your comments on consumers breaking down some of that remodel work into smaller projects, Do you see any risk to the industry perhaps testing some of the pricey less elasticity that we've seen? And any thoughts on how that could impact perhaps certain areas of the business relative to others such as equipment where there is more maintenance and a necessary replacement nature to them?

46m 42s

No, not really. I think that there is some competitive situations where homeowners are so dealers are slower, so there are some competitive situations. But honestly that's typical for the industry. The only time that that really didn't happen was during the height of the pandemic when people were saying, I'll please come, I'll pay you. But right now, would tell you the competitive dynamics [indiscernible] there's always going to be some work that's done to try and win a contract. It could be, I'll be a little more competitive here or I will defer parts of the project.

47m 26s

Remember, the material is the smallest part of the job. Right? The labor piece is far bigger than the material piece. So even if you even if you shave a little bit on material, if a dealer wanted to be a little more aggressive, the bigger portion of the job is going to be the labor and the profit.

47m 47s

Okay, that's helpful. And then it's encouraging to hear that you continue to see a path to Pool outperforming the industry even with all these headwinds that are coming through. It sounds like you're gaining some good traction on some of these initiatives that you've got in place. Can you just talk a bit more on how you're thinking about those coming together as we enter the core of the season this year? And anything that's incremental there as you're looking out to perhaps later this year or even 2026?

48m 15s

Yeah, I think the investments that we've made in our chemical line, for instance, is and as I mentioned, for a dealer to switch the chemical line that's in the store, those are that's not you just don't walk in today and say, hey, please buy my chemicals and they they take everything off the shelf and put yours on the shelf That's a longer selling cycle because that's part of the identity of the retail store. So we have a great chemical line and we have great technology to go with it. And it's that's going to be something that will carry us for many years in the future. So it's nothing that, hey, we go in, we gobble up all the markets share and then sit. This is going to be a just a continued process to gain share. We have great product We have great technology. We have great marketing that goes with it. And I think that's something that will be a longer term growth avenue for us. Technology is another area too. The technology continues to get better, adoption continues to [indiscernible] our customers, our dealers continue to see value in that. So that's good.

49m 29s

And again in the pool industry, nothing changes fast. Everything is a everything takes time to do. So we are working on that. So in terms of technology, we've always mentioned that at work, even chemical brands too. Once you get into the season, nobody's going to do that. So we're really at the end of the selling season for that We'll start to see benefits for the sales that we made and conversions that we made. And then we'll go right back to the conversion selling at the end of the season. Because right now the dealers are going to run with what they have because the stores are busy and everybody's trying to open pools and getting somebody to switch right now is just not how the industry works.

50m 18s

Yeah, okay. Thank you for the color. Good luck with everything.

50m 21s

Thanks.

50m 22s

Thank you. The next question comes from David MacGregor from Longbow Research. Please go ahead.

50m 30s

Yes. Hello, everybody, and, my first question was really with regard to what happens if the macro should take a turn for the worse here.

50m 40s

And, you know, where do you have the greatest opportunity to flex the model in order protect margins?

50m 47s

Yes. A good question. Question. So, the macro takes takes a turn for the worse, it's really going to affect us on the discretionary spending, which is on new pool construction into a lesser degree on remodel. The good news is that even as the macro has gone up and down, maintenance and repair portion of our business, which is the largest portion of our business and it's also we're in the most important part of the year. This is people are getting ready to swim, want to swim, So that business is good. We continue to have a great value proposition. We always staff up this time of year in anticipation of the full season being in swing and there's full season in swing, your major construction season and the maintenance and repair. I would tell you that we are very judicious in terms of, staffing up and adding expenses. Many of our expenses, as you can imagine, are variable as it relates to transportation and labor. We take we keep a great eye on inventory, so we we pay very close attention to the demand trends and what we're going to do from an inventory perspective. So I think Pool Corp has demonstrated over the years that we're are very good at flexing from a cost perspective.

52m 7s

There is if you look at our we're a performance based company. So compensation expense is directly tied to performance of the company. So you have the variable portion of compensation. That would flex too. But again, this is nothing new for Pool.

52m 22s

I think we are a team of very skilled operators and this is not something that we haven't seen before. [indiscernible] thanks for that. Second question is just on pinch. Does a pullback in consumer confidence translate to growth in DIY versus do it for me? And if so, how is the pinch business positioning for this?

52m 44s

Interestingly enough, there there hasn't been that pullback. You would think that if the macro softens that it turns to a do it for me or DIY versus do it for me, but we're really haven't seen a major shift in that area. I would tell you that most of our dealers and pinch a penny as well, not only are they do they have great stores for people for the DIYer to come in and do their own thing, But they also do cleaning and service and maintenance. So I think both of our channel partners here, is obviously independent, which vastly outnumbers the Pinch of Penny stores. Very big channel for us. They do a great job in terms of value proposition and catering to both. And I think Pinch a Penny does that as well. But we have yet to see a shift to DIY versus do it for me. Those trends remain relatively intact.

53m 47s

Thanks Pete. Good luck. [indiscernible] Thanks. Thank you.

53m 53s

The next question comes from Steven Walkman from Jefferies. Please go ahead.

53m 59s

Hi, good morning, guys. Thanks for taking the question.

54m 3s

I wanted to follow-up Pete on your comments about certain areas of price competitiveness. Is there any more detail relative to the types of products or perhaps the types of competitors, where you're seeing this?

54m 23s

So as I've mentioned on almost every call, so competitiveness from a price perspective is nothing new. Most of our competitors that we have, whether it's the newer folks that have entered the market or the traditional players, in terms of their value proposition to the market don't have what we do. So the way that we they compete with Pool Corp is they walk in and say whatever Pool Corp is selling you for, we will sell it to you for less. We also have, in most cases, the majority have a significant market share. So we would be a target. Again, nothing new. When you have a quarter like first quarter where you know demand was would say, nothing to get excited about, right, in terms of of the discretionary and semi discretionary portion of the business. It basically means that people are going to push harder and do things that in my opinion are unsustainable. And as I mentioned in the comments, we compete head to head in these markets. We are in it for the long term. We've always been a value We always focus on being the easiest company to do business with and providing the best customer experience.

55m 40s

Sometimes we have to be a little more aggressive on pricing. We're we're not going to lose share. There's other times where we see things that I know and are and more importantly, our operators know are not sustainable and they don't chase things into the ground.

55m 58s

Great. That's helpful. Thank you. And then maybe related to this, but maybe this is for Melanie. But last time we went through a period of inflation, that had a very nice positive impact on your gross margin and you don't seem to be really baking much of that in this time. So I'm curious, is it just not widespread enough yet? Or is the fact that this is happening against perhaps a weaker end market environment than the last bout of inflation, does that sort of cap the opportunity here relative to to gross margin?

56m 33s

So it's it's really a little bit of all of the above. When we look at the number of vendors that we've heard from to date, so kind of caveating that that represents around, you know, 30% of our cost of products, which is how we get to the 1% benefit on the pricing for the rest of the year. When you look at kind of our current inventory balances, because many of that is made up of our larger vendors, so it's going to be in the big vendors the pool side, the big vendors on the irrigation side. For them, we actually have probably a little bit less of a proportion of inventory on hand because we have the ability to turn that inventory quicker. With that being said, as we did last time, with the price increases, We certainly have the capital and the balance sheet to be able to kind of strategically take advantage of opportunities as they come through the market. And so we are positioned to do that but do not have that kind of built into our current guidance at that point in time.

57m 37s

Steve, I think you made a Steve, think you made an astute observation that we're what is similar to last time is the pricing increases. You've been covering us for a long time, so you know that in season pricing increases are very atypical. So, the last time we had them was during pandemic and it was a crazy demand environment. This time we have increases that are coming from many of the large vendors. We expect them to to flow through to the market, on the announced day we will take we take those prices up. [indiscernible] vendor have opportunity, vendors have offered us opportunities to participate, you know, in some pre buys. However, given the difference in the overall demand environment, we look at those on a case by cases basis. So where they're financially attractive to us, we certainly have the capital and the infrastructure to take advantage of that. Where we view it as maybe not as attractive, given the demand environment, we may be a little more tempered.

58m 52s

It's it's great color. Appreciate it.

58m 58s

Thank you. Your next question comes from Scott Snieperger from Oppenheimer. Please go ahead.

59m 6s

Thanks very much. Good morning. Yeah. I'll I'll follow on that last one. It's tariff pricing specifically. Melanie, it's you mentioned 30% of the cost of product [indiscernible] been put to you by suppliers thus far. What do you anticipate from other suppliers? I know it's a very fluid environment. Just curious. And then Pete answered a question earlier saying, hey, probably more back half rate weighted because of this incremental price increase from suppliers or a primary supplier in June but you have the lower priced inventory from early buy in second quarter. So could you just kind of walk us through the impact, the timing impact here second quarter and back half? Thanks.

59m 56s

Yeah, so as it relates to kind of forecasted impacts from other suppliers, we have not considered any at this point in time. So, if we do get additional price increases from other suppliers, we would update as those come through. When you think about the timing of the increases, the the bulk of that pricing went into effect really on Monday, so most of the vendors had an after Easter as the effective date for those price increases. With the the most recently announced one coming through in with a June effective start date. And, you know, the answer as far as kind of the overall impact on the sell through same thing that we would expect that there is the opportunity for some benefits. In margin for that sell through. But when you think about kind of overall pricing sensitivity in the market, how quickly the customers are willing to accept those price increases. You know, it's gonna depend on the demand environment. So a little bit different from COVID, where, you know, they you know, the price increases were a bit be able to pass through. Because the consumers were, you know, beaten down the door to in order to get those pools installed.

1h 1m 12s

Understood, thanks. And then as a follow-up, Pete, you, and it's been somewhat of a common theme, but on your confidence in new pool construction volumes going forward. Yes, I heard you on Texas.

1h 1m 26s

It looked like permits in the first quarter in in Florida look particularly strong though. Was that weather related perhaps or is that truly organic and how much are you factoring permits into your guidance expectation and that includes not only permits but just feedback you're hearing it's a thematic question of how your level of confidence in in the volume of new construction. Thanks. Permits are a piece of the puzzle. So we look at we certainly look at the permit data and permit data can also be a bit misleading just because of timing and the timing that it takes to turn a permit in some areas then you have the weather component on, okay, yes, I pulled a permit, but then the weather has to cooperate in order to execute on that permit. So it's a piece of it. So we look at permit data, we look at weather, and then we also talk to our dealers every day frankly about the demand environment. But again, that's a it's a as I mentioned, it's a portion of our business. It's not the largest. It's not the largest portion. It's not even the second largest portion of the business, right?

1h 2m 42s

It's the of the three maintenance and repair, renovation, remodel and new construction, it's the smallest part of the three. So it's something that we watch As I mentioned, Texas is an area that we are paying particular attention to just because of the decline in permits. Florida Florida is performing well. Florida is an amazing market for us And Florida is is performing well. So I guess I would tell you the I don't really have any new color to add on my confidence in new construction. There's just so many factors at play. Everything we discussed. And then lay on top of that, you know, the macro and and how people are feeling about their disposable income, discretionary income, four zero one k value, and then of course, interest rates on those pools that will require some financing. I think if the Fed were to ease rates, that would certainly help encourage people. I think it would loosen up the housing market, which would also be a nice catalyst for, new pool construction.

1h 3m 51s

Thanks for that. And thanks, Melanie. Thank you.

1h 3m 57s

Your next question comes from Andrew Carter from Stifel. Please go ahead.

1h 4m 3s

Hey. Thank you very much. First question I wanted to ask.

1h 4m 6s

I just want to be crystal clear about the gross margin. You're now assuming flat The previous guidance was flat to up slightly, which you said in the script. Do you have does does that incorporate a week new construction remodel environment, therefore, building materials And just to be clear, the high end of EPS guidance achievable at the flat gross margin? That's my first question.

1h 4m 31s

The high end is a guidance is achievable at a flat gross margin.

1h 4m 35s

Okay. Thank you.

1h 4m 36s

That's that's easy.

1h 4m 38s

Second question, I guess, I would ask, and just to drill down is, I think you said it, is we get the price communicated to us. We take it as soon as possible. And, obviously, that was that was the COVID story. It are you able to in this environment, have you taken the price increases immediately when they were announced? And kind of how was your comp competition here? Or is there a longer delay? Are you waiting, etcetera?

1h 5m 7s

So, no, we're not waiting. So as in the normal course of business for Pool Corp, when they're with the effective date of the price increase, that's when we we elevate the prices to our dealers. We notify the dealers when we're when we get the receipt of the price increases and the manufacturers notify them too. And then on the effective date, we take the price up, which is something that is just what we always do. Your question you know, what competitors do, I mean, there is by and large the competitors do as well. I can tell you, I mean, we'd have to go market by market there are some cases where somebody might say, hey, I'm going to hold the price for you in an attempt to lure business. The other thing, somebody may do and we do too, which is if our dealers come to us and said, hey, Pete, we have got 10 pools sold, and we used your quote, which was pre price increase These pools are going to start imminently. Can we count on support on that? And of course, those are things that we would support as well. So it's not like on Monday, the price increase and therefore everything goes up.

1h 6m 19s

The majority of the price moves on Monday and then we would make exceptions to support dealers for prequoted jobs and to address competitive situations. But, you know, as a rule of thumb, by and large, when the price goes up, the data goes into effect we take the prices up too.

1h 6m 38s

Thanks. I'll pass it on.

1h 6m 41s

Thank you. Thank you.

1h 6m 45s

The next question comes from Sam Reid from Wells Fargo. Please go ahead.

1h 6m 50s

Awesome. Thanks so much. So no a pretty big swing at equipment spend between Q4 and Q1, up 6% to down 4%. It does sound like most of the impact was from demand shifts in Florida around storm recovery, which makes total sense. That said, a piece of the negative inflection also a function of discretionary pullback, maybe trade down from, let's call it, better best to good. And then more broadly, we all know equipment accounts for 30% of your mix. But how much of that is pure maintenance versus perhaps discretionary?

1h 7m 29s

Yeah, I think your assumption on the difference between fourth quarter and first quarter is essentially Florida. And the hurricanes and the amount of equipment that got replaced in many cases twice for the back to back storms. So I think that's a [indiscernible] trade downs. I don't really see a lot of don't really see a lot of trade downs. I I was just looking through our product dataset earlier this week and I was thinking that we might see it. And I haven't seen it. You know, people are still very tech, you know, their demand for tech for new pool equipment, especially if somebody is going to spend that kind of money to replace replace something that should have a ten year lifespan. They're not looking to go backwards and say, give me give me old technology and mechanical time clocks and no automation. I think the the trend is solidly in place there. Your last part of the question, I think is related to equipment demand. How much is maintenance and how much is new construction. Certainly in the first quarter, with new construction not being not being robust. That certainly plays a bigger portion plays a bigger part in the maintenance and equipment.

1h 8m 53s

Now, remember, think about the market. So, in your seasonal markets, the equipment that you sell in the seasonal market is usually early buys that the dealers are taking because they're not installing the equipment. They would have started to do some repairs in the seasonal markets in March timeframe. So most of that is stocking their shelves for the upcoming season. When you get into the year round markets, then the percentages don't really change. As a rule of thumb, we look at equipment and say for every pump we would sell for a new pool, we probably sell [indiscernible] For repair and maintenance.

1h 9m 32s

That helps, Pete. And follow-up here. I think I asked something similar on the last call. Maybe just to revisit. We're one quarter down in twenty five. Just philosophically, how should we be thinking about '26, recognizing not providing guidance You're starting the year off arguably with an easy comp.

1h 9m 51s

But then on the other hand, we might not get a big lift in new pool in '25, which really means the base isn't going to be moving up all that much into next year. So I guess the question is, adding those dynamics up, how are you thinking about 2026 as it stands today?

1h 10m 8s

Especially in the context of your all go?

1h 10m 10s

Thanks.

1h 10m 12s

Yeah. I wish I had a great answer for you on 2026. Quite frankly, we're trying to figure out what's going to transpire in 2025, because there seems to be no shortage of surprises Overall, what gives me great confidence in the business and the industry is that most of our business comes from the maintenance and repair of a growing installed base. So the installed base next year is going to be bigger than it is this year. So there'll be more pools to service.

1h 10m 45s

The demand for newer products with automation connected pools, if you will, is going to continue to grow. There's still an extremely large number of pools that are in place that have that have old technology. So if I assume that the macro the macro improves a little bit, which is which is really kind of my assumption is that the macro will improve a little bit, then I think we should see some recovery in demand for new product. If for some reason, you know, the, the economy takes a a turn for some unknown reason at this point, then I think where you see the effect most notably would be in new construction. However, in terms of new construction, we're down so much from the peak. So we're down about 50% from the peak.

1h 11m 39s

In terms of how much more it can fall. I mean, we're basically slightly above GFC number right now. So I don't see that taking a step down significantly more because most of the pools being built today are for the more affluent buyer that aren't really affected as much by the interest rate sensitivity that I think took out many of the entry level pool buyers.

1h 12m 5s

That's helpful, Pete. I'll pass it on.

1h 12m 7s

Thank you.

1h 12m 9s

Thank you.

1h 12m 11s

Your next question comes from Troy Grooms from Stephens. Please go ahead.

1h 12m 16s

Hey, good morning, everyone. This is Ethan on for Trey. Thanks for taking the question. Maybe first off, higher level, the tariff impacts given where things stand today, you mentioned you feel confident. In your ability to pass through these increases, particularly on the equipment side given that the majority of those products are sold through R and R. And that has a nondiscretionary component. So, question being, to what extent do you believe tariffs could potentially drive any demand destruction via higher prices or or at the very least a trade down. And, you know, with that in mind, given that the new construction backdrop has been so difficult for several years now, if that were to happen, would it be more on the discretionary r and r side or the new build side? Thanks. [indiscernible] think that the price increases, as I mentioned before, I think they're going to pass through the market because, again, the vast majority of that product is sold for maintenance and repair, non discretionary, the pump stop working, the filter is leaking, the heater is leaking, I have to replace that. I can't operate the pool without it. So I think that's that's one way to think about it.

1h 13m 22s

And then in terms of an overall pool project, given the escalating cost of a pool and an in ground pool 80 to $100,000 depending on where you are now. And the type of pool that you build If you told me that the equipment and then the equipment pad is, let's call it $15,000 if you told me that it was going to be 3% higher, I don't know that that's gonna cause people to say, okay, 3% of the $15,000 is up, so I'm out. So I don't really think it's going to have a material demand destruction impact on the new pool construction. What I do think people look at is the overall market. So if tariffs were to continue or tariffs were to get worse and four zero one ks's and equity values continue to drop, I think that's far more meaningful to new pool construction than a 3% increase.

1h 14m 15s

No, yeah, that's that's fair. That's that's very helpful. And then last one, maybe one for Melanie. You know, any changes to the op operating expense cadence for the year? You previously mentioned that you're gonna do some investments into the retail centers, and there's gonna be some incentive comp to think about. And then maybe, you know, how you might flex the OpEx given various possibilities on where gross margin could end up for the year depending on what new build ends up doing. Thanks.

1h 14m 43s

Yeah. No real change on the cadence. So, timing of investments should be relatively consistent. We will, depending upon where the top line falls, you know, we will be managing the variable expenses as it relates to that. Particularly around our ads for incremental warehouses and drivers, particularly freight expense. And then, ultimately, at the lower end of the range, we wouldn't see the incremental ads for the incentive compensation that we talked about earlier.

1h 15m 15s

Alright. Makes sense. Thanks.

1h 15m 20s

Thank you. Your next question comes from Garik Shmois from Loop Capital. Please go ahead.

1h 15m 27s

Oh, hi. Thanks.

1h 15m 28s

Two quick clarification questions for me. Just the first one, just simplify the pricing outlook. Is it fair to assume that the April price increases are in your guidance, but the June 1, pending additional support is not yet. Just wanted to be clear on what exactly is in the guide and what's not.

1h 15m 49s

Yeah, so we do have both. So June 1, at this point in time, we've only heard from one vendor. And because we knew about that ahead of the call, that is included in the 1% that we provided.

1h 16m 1s

It is. Okay. Thanks for that. And then secondly, just on the sales piece coming back showing growth in March. It sounds like that's continued here in April. Is there anything kind of unusual that occurred that that drove the growth, any kind of one time items or markets? I think you cited maybe Florida or maybe the delay in Easter this year, maybe that helped.

1h 16m 31s

Here in April. But just wondering kind of anything unusual that helped support the growth and just the level of confidence that's sustainable?

1h 16m 40s

Yes. I think the Easter holiday was certainly a was certainly a part of it too. I also recall that last April from a weather perspective, wasn't great. So I think I think that's that's probably helpful out at least earlier earlier in the month, but that's, that's really it. There would be nothing else of any significant Okay. Thank you very much.

1h 17m 3s

Thanks.

1h 17m 4s

Thank you. Your next question comes from Colin Veron from Deutsche Bank. Please go ahead.

1h 17m 12s

Thank you for taking my questions. I guess I was just curious on your thoughts on why Texas is underperforming your other large markets just since the macro environment and interest rate environment is pretty nationwide. And just why you're comfortable in thinking that those headwinds might not bleed into your other large states? [indiscernible] question. I've spoken to a lot of builders in in Texas. And I think that there's still a so if I look at Texas weather and I look at the Southern part of Texas, the Southern Texas market, I would say that the weather in the first quarter of the year was pretty wet pretty miserable. What's interesting about Texas is the new construction market in Texas has been and if you look at the permit data, it shows that's been it's been very tough. But the maintenance business in Texas has been very good as a result of the weather. So I think that in talking to the dealers who are obviously much closer to it and they're looking at their lead flow and phone calls. If the dealers were telling me that hey, I just think this is this is we can't explain it.

1h 18m 22s

That's gonna be really bad. Then I would pass on that same information. But right now they're saying that phones are still ringing, First quarter was tough from a from a contract conversion perspective, whether it didn't help macro uncertainty didn't help But we also talked to dealers in all of the other markets and, you know, they seem to be they seem to be holding up better. So I can't point to anything specifically that would lead me to think it's going to bleed over into the other markets because they're frankly aside from the weather isn't anything unique about Texas.

1h 18m 56s

That's helpful.

1h 18m 57s

And I guess I just wanted to touch real quick on the private label growth. You called out in chemicals being up double digits. Can you just talk about the opportunity private label in this macro backdrop and the presentation of a top line and gross margin perspective?

1h 19m 9s

That that could have? Yeah, I think that there's still significant room to grow the private label products. I think our suite of products frankly has never been better. But again, these are products that are part of the brand associated with our with our dealers, if you will. I'm talking on the retail side. So those are longer cycle sales. We recognize that we know that. And we've been we've been working very diligently toward that and very pleased with the results. So I think that there's still significant runway on the private label sales. And I think that's it's margin accretive to us. And it also from a competitive perspective is great because they can only get those products from us. You combine that with the technology, the value proposition that dealer has is very, very good and puts them in a very, very competitive situation in their local market.

1h 20m 6s

Great, thank you. I appreciate the color and good luck with the rest of the year.

1h 20m 10s

Thanks.

1h 20m 12s

Thank you.

1h 20m 13s

This concludes our question and answer session. Would now like to turn the conference back over to Peter Harwin president and CEO, for any closing remarks.

1h 20m 23s

Thank you all for joining us today. We look forward to our next call, will be on July 24, when we release our second quarter twenty twenty five results. Have a wonderful day. Thank you.

1h 20m 36s

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Key Insights

POOL reported Q1 net sales of $1.1 billion, down 4% year-over-year (down 2% on a same selling day basis), with maintenance product sales performing well and private label chemical products showing double-digit growth; new pool construction and remodel activity remain pressured by macroeconomic uncertainty and high interest rates.
The company affirmed full-year 2025 EPS guidance of $11.10 to $11.60 (including a $0.10 ASU tax benefit), with expectations for flat to low single-digit sales growth, 2% pricing benefit (mainly in the second half), and gross margin guidance of 29.7% to 30% (flat year-over-year, excluding prior year’s non-recurring import tax benefit).
Tariff impacts are expected to be minimal (<1% of revenue for direct imports), but equipment vendors have implemented in-season price increases (3-4% in April, additional 4% in June), which POOL is passing through to customers; these increases are expected to contribute to the 2% annual pricing benefit.
Operating expenses increased only 2% in Q1 despite inflation and network expansion, demonstrating expense discipline; operating income was $78 million, operating margin was 7.2%, and diluted EPS was $1.42 (down from $2.40 prior year, which included non-recurring benefits).
Maintenance and repair remain the largest and most stable part of the business, while new pool construction is weakest in Texas but showing improvement in Florida, California, and Arizona; private label and technology initiatives (e.g., Pool360) continue to drive share gains and margin accretion, with ongoing network expansion and disciplined capital allocation supporting long-term growth.

Recent Transcripts

First quarter sales declined 4%, but full-year guidance and margin outlook were affirmed.

29.2%, flat YoY (adj.)

2024 results resilient; revenue down 4%, but margins and share held in tough market.

Income Statement

Revenue

	2020	2021	2022	2023	2024
Revenue	$3.9B	$5.3B	$6.2B	$5.5B	$5.3B
Cost of Revenue	$2.8B	$3.7B	$4.2B	$3.9B	$3.7B
Gross Profit	$1.1B	$1.6B	$1.9B	$1.7B	$1.6B
Gross Profit %	29%	31%	31%	30%	30%
R&D Expenses	$0	$0	$0	$0	$0

2020

2021

2022

2023

2024

Revenue

$3.9B

$5.3B

$6.2B

$5.5B

$5.3B

Cost of Revenue

$2.8B

$3.7B

$4.2B

$3.9B

$3.7B

Gross Profit

$1.1B

$1.6B

$1.9B

$1.7B

$1.6B

Gross Profit %

29%

31%

30%

R&D Expenses

Cash Flow

Net Income

	2020	2021	2022	2023	2024
Net Income	$367M	$651M	$748M	$523M	$434M
Dep. & Amort.	$29M	$30M	$39M	$40M	$45M
Def. Tax	-$2.5M	$4.7M	$15M	$10M	$16M
Stock Comp.	$15M	$15M	$15M	$20M	$19M
Chg. in WC	-$21M	-$392M	-$342M	$291M	$146M

2020

2021

2022

2023

2024

Net Income

$367M

$651M

$748M

$523M

$434M

Dep. & Amort.

$29M

$30M

$39M

$40M

$45M

Def. Tax

-$2.5M

$4.7M

$15M

$10M

$16M

Stock Comp.

$15M

$20M

$19M

Chg. in WC

-$21M

-$392M

-$342M

$291M

$146M

Balance Sheet

Cash

	2020	2021	2022	2023	2024
Cash	$34M	$24M	$46M	$67M	$78M
ST Investments	$223K	$0	$0	$0	$0
Cash & ST Inv.	$34M	$24M	$46M	$67M	$78M
Receivables	$289M	$377M	$351M	$343M	$315M
Inventory	$781M	$1.3B	$1.6B	$1.4B	$1.3B

2020

2021

2022

2023

2024

Cash

$34M

$24M

$46M

$67M

$78M

ST Investments

$223K

Cash & ST Inv.

$34M

$24M

$46M

$67M

$78M

Receivables

$289M

$377M

$351M

$343M

$315M

Inventory

$781M

$1.3B

$1.6B

$1.4B

$1.3B

Go Deeper

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice. · See all tickers.

Overview
Latest News
Earnings
Income Statement
Cash Flow
Balance Sheet
Related

Earnings

Report Date

Apr 24, 2025

Reported Revenue

1.1B

Miss -2.53%

Avg 1d Change

6.32%

Report Period

Q1 2025

Reported EPS

1.3

Miss -7.04%

Implied Move 1d

7.41%

Transcript

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Exiting the quarter, we saw improved momentum in March sales.

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Good morning. Thanks for the question. I wanted to start with the second quarter.

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Yes. I think that's a fair way to look at it, Ryan.

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Okay.

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And would you be seeing about two points of price in the second quarter? Is that price more second half?

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Okay.

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Okay.

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Okay. That's helpful. Thank you. I'll pass it on. Thanks, Ryan.

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Thank you.

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Your next question comes from Quinn Fredrickson from Baird. Please go ahead.

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Yeah. No. We we we might see some pressure in that scenario because of the the lower mix of those higher higher margin products. Alright. Thank you.

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Thank you. The next question comes from Susan Maklari from Goldman Sachs. Please go ahead.

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Thank you. Good morning, everyone.

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Morning.

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Yeah, okay. Thank you for the color. Good luck with everything.

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Thanks.

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Thank you. The next question comes from David MacGregor from Longbow Research. Please go ahead.

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Yes. Hello, everybody, and, my first question was really with regard to what happens if the macro should take a turn for the worse here.

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And, you know, where do you have the greatest opportunity to flex the model in order protect margins?

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Thanks Pete. Good luck. [indiscernible] Thanks. Thank you.

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The next question comes from Steven Walkman from Jefferies. Please go ahead.

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Hi, good morning, guys. Thanks for taking the question.

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It's it's great color. Appreciate it.

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Thank you. Your next question comes from Scott Snieperger from Oppenheimer. Please go ahead.

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Understood, thanks. And then as a follow-up, Pete, you, and it's been somewhat of a common theme, but on your confidence in new pool construction volumes going forward. Yes, I heard you on Texas.

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Thanks for that. And thanks, Melanie. Thank you.

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Your next question comes from Andrew Carter from Stifel. Please go ahead.

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Hey. Thank you very much. First question I wanted to ask.

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The high end is a guidance is achievable at a flat gross margin.

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Okay. Thank you.

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That's that's easy.

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Thanks. I'll pass it on.

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Thank you. Thank you.

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The next question comes from Sam Reid from Wells Fargo. Please go ahead.

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Especially in the context of your all go?

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Thanks.

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That's helpful, Pete. I'll pass it on.

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Thank you.

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Thank you.

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Your next question comes from Troy Grooms from Stephens. Please go ahead.

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Alright. Makes sense. Thanks.

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Thank you. Your next question comes from Garik Shmois from Loop Capital. Please go ahead.

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Oh, hi. Thanks.

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Yeah, so we do have both. So June 1, at this point in time, we've only heard from one vendor. And because we knew about that ahead of the call, that is included in the 1% that we provided.

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Here in April. But just wondering kind of anything unusual that helped support the growth and just the level of confidence that's sustainable?

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Thanks.

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Thank you. Your next question comes from Colin Veron from Deutsche Bank. Please go ahead.

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That's helpful.

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Great, thank you. I appreciate the color and good luck with the rest of the year.

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Thanks.

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Thank you.

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This concludes our question and answer session. Would now like to turn the conference back over to Peter Harwin president and CEO, for any closing remarks.

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Thank you all for joining us today. We look forward to our next call, will be on July 24, when we release our second quarter twenty twenty five results. Have a wonderful day. Thank you.

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The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Key Insights

POOL reported Q1 net sales of $1.1 billion, down 4% year-over-year (down 2% on a same selling day basis), with maintenance product sales performing well and private label chemical products showing double-digit growth; new pool construction and remodel activity remain pressured by macroeconomic uncertainty and high interest rates.
The company affirmed full-year 2025 EPS guidance of $11.10 to $11.60 (including a $0.10 ASU tax benefit), with expectations for flat to low single-digit sales growth, 2% pricing benefit (mainly in the second half), and gross margin guidance of 29.7% to 30% (flat year-over-year, excluding prior year’s non-recurring import tax benefit).
Tariff impacts are expected to be minimal (<1% of revenue for direct imports), but equipment vendors have implemented in-season price increases (3-4% in April, additional 4% in June), which POOL is passing through to customers; these increases are expected to contribute to the 2% annual pricing benefit.
Operating expenses increased only 2% in Q1 despite inflation and network expansion, demonstrating expense discipline; operating income was $78 million, operating margin was 7.2%, and diluted EPS was $1.42 (down from $2.40 prior year, which included non-recurring benefits).
Maintenance and repair remain the largest and most stable part of the business, while new pool construction is weakest in Texas but showing improvement in Florida, California, and Arizona; private label and technology initiatives (e.g., Pool360) continue to drive share gains and margin accretion, with ongoing network expansion and disciplined capital allocation supporting long-term growth.