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POOL CORP (POOL)·Q2 2025 Earnings Summary

Executive Summary

  • Net sales rose 1% to $1.78B, with gross margin stable at 30.0% and operating margin at 15.3%; diluted EPS increased 4% to $5.17, driven by strong maintenance/private-label chemicals and disciplined OpEx control .
  • Results modestly beat Wall Street consensus: EPS $5.17 vs $5.11* and revenue $1.7845B vs $1.7815B*; EBITDA tracked near consensus ($284.8M* vs $286.1M*) despite mix headwinds. Values retrieved from S&P Global.
  • Management lowered FY25 EPS guidance to $10.80–$11.30 (from $11.10–$11.60), citing persistent weakness in new pool construction, price deflation in chemicals, and no expected rate cuts; full-year sales now “relatively flat,” gross margin “in line” with prior year .
  • Execution highlights: POOL360 penetration rose to 17% of net sales; commercial sales +5%; opened 450th branch; dividend declared at $1.25 per share, supporting capital return cadence .

What Went Well and What Went Wrong

What Went Well

  • “Positive sales growth … along with stable gross margins and steady operating margins versus the prior year,” reflecting strong value proposition and service execution .
  • Digital and private label traction: “POOL360 platform transactions now representing 17% of net sales … creating durable competitive advantages” and double-digit growth in private-label chemicals year-to-date .
  • Commercial strength: “Our commercial sales increased 5% in the second quarter,” driven by team build-out, designated warehouses, and end-to-end project capabilities .

What Went Wrong

  • Discretionary softness: “Macro uncertainty and … no signs of interest rate easing continued to pressure new pool construction and larger renovation projects,” prompting the FY EPS guidance cut .
  • Regional headwinds: Texas and California challenged; sales down 2% and 3% respectively, offset by growth in Florida and Arizona (+2% each) .
  • Chemical pricing deflation: “Pricing for the quarter benefited sales 2%-3% but continues to be offset by 1% related to chemical and commodity selling prices,” with chemicals (Tricor) below prior-year levels .

Financial Results

Key P&L Metrics (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$987.5 $1,071.5 $1,784.5
Diluted EPS ($)$0.98 $1.42 $5.17
Gross Margin %29.4% 29.2% 30.0%
Operating Income ($USD Millions)$60.7 $77.5 $272.7
Operating Margin %6.1% 7.2% 15.3%
Net Income ($USD Millions)$37.3 $53.5 $194.3

Q2 2025 Actual vs Wall Street Consensus (S&P Global)

MetricActualConsensusSurprise
Primary EPS ($)$5.17 $5.106*+$0.06*
Revenue ($USD Millions)$1,784.5 $1,781.5*+$3.0*
EBITDA ($USD Millions, S&P-defined)$284.8*$286.1*-$1.3*

Values retrieved from S&P Global. Note: Company-reported Adjusted EBITDA was $292.1M (non-GAAP), which differs from S&P’s EBITDA definition .

Category and Regional Performance (Q2 2025 YoY)

ItemQ2 2025 YoY
Florida sales growth+2%
Arizona sales growth+2%
Texas sales-2%
California sales-3%
Europe sales (LC / USD)+2% LC; +7% USD
Horizon net sales-2%
Chemical sales+1% (price deflation backdrop)
Building materials-1% (sequential improvement)
Equipment (ex-cleaners)+1%
Commercial sales+5%
Independent retail-3%
Pinch A Penny sales+1%

KPIs and Balance Sheet (Q2 2025)

KPIValue
POOL360 penetration (% of net sales)17%
Sales centers (as of Jun 30, 2025)451
Inventory ($USD Billions)$1.33B
Total Debt ($USD Billions)$1.23B (LT) + $0.02B (ST) ≈ $1.23B LT; ST $0.017B
Leverage ratio1.47x
Share repurchases YTD$160.6M
Dividend declared (Jul 30)$1.25 per share

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Diluted EPSFY 2025$11.10–$11.60 $10.80–$11.30 Lowered
Sales outlookFY 2025Flat to low-single-digit (initial) Relatively flat Lowered bias
Gross marginFY 202529.7%–30.0% (offset non-recurring 2024 import tax) In line with prior year full year Maintained
SG&A growthFY 2025~3% previously 2%–3% full-year; improvement vs 3% Improved
Interest expenseFY 2025$40–$45M $46–$47M (incl. buybacks) Raised
Tax rate (ex-ASU)FY 2025~25% ~25% (no change) Maintained
Weighted avg sharesFY 2025~37.8M assumption Unchanged (buybacks ongoing) Maintained
DividendQ3 2025 pay date Aug 28N/A$1.25 per share Declared

Earnings Call Themes & Trends

TopicQ4 2024 (prior)Q1 2025 (prior)Q2 2025 (current)Trend
AI/technology & POOL360Expanded digital ecosystem; stronger private-label digital marketing POOL360 orders ~13% of sales; continued adoption POOL360 now 17% of sales; durable advantage Upward adoption
Supply chain/pricingPricing optimization, purchase incentives aided GM despite mix In-season vendor increases; 1–2% pricing benefit net of -1% chemicals/commodities Pricing +2–3% benefit; chemicals/commodities -1%; minor margin benefit expected H2 Mild tailwind
Tariffs/macro2024 import-tax reversal (non-recurring) boosted GM/EPS Tariff-driven vendor price hikes; minimal direct import exposure (<1% revenue) No June wave; modest price pass-through; macro uncertainty persists Uncertain macro
Product performanceMaintenance stable; discretionary softer Chemicals volume up; building materials -5% QoQ Chemicals +1%; building materials -1%; equipment ex-cleaners +1% Sequentially improving
Regional trendsStable maintenance; network expansion AZ +2%, CA flat, FL -1%, TX -11% (weather); Europe -4% LC FL +2%, AZ +2%; TX -2%, CA -3%; Europe +2% LC, +7% USD Mixed; Europe improving
Regulatory/legalN/AN/ATax bill offers slight cash flow benefit via accelerated depreciation Slight positive
R&D/executionN/ANetwork and private label investments; commercial capabilities Commercial +5%; continued showroom/brand investment Positive execution

Management Commentary

  • “We were very pleased to see positive sales growth … stable gross margins and steady operating margins versus the prior year.” – Peter D. Arvan, CEO .
  • “POOL360 platform transactions now representing 17% of net sales … creating durable competitive advantages that are hard to replicate.” – Peter D. Arvan .
  • “Sales for the full year now are expected to be relatively flat with last year … Gross margin rate is also expected to be in line with the prior year full year.” – Melanie M. Hart, CFO .
  • “Having completed our largest quarter of the year, we have updated our expected diluted EPS range to $10.80–$11.30.” – Melanie M. Hart .

Q&A Highlights

  • Guidance rationale: CEO cited lack of interest rate cuts and weak permit data for new construction as reasons for lowering FY EPS, while maintenance remains resilient .
  • Pricing and competition: Competitive pricing pressure normalized after Q1; in-season vendor price increases passed through, with limited demand pull-forward from tariffs .
  • Gross margin bridge: Expect modest H2 benefit from late-quarter price increases and less negative product mix; private label and supply chain initiatives supportive .
  • Regional/Europe: Europe improving (southern countries strong; France slightly down); U.S. Sunbelt (FL/AZ) resilient; TX/CA still challenged for new builds .
  • Capital allocation: Increased buybacks ($104M in Q2); leverage 1.47x at low end of target; amended/extended term loan for capacity and better terms .

Estimates Context

  • Q2 2025: EPS $5.17 vs $5.106*, revenue $1,784.5M vs $1,781.5M*, EBITDA $284.8M* vs $286.1M*. Values retrieved from S&P Global.
  • Trajectory vs prior quarters: Q1 2025 EPS $1.32 actual vs $1.48*; Q4 2024 EPS $0.97 actual vs $0.91* (S&P Normalized) – mixed quarterly pattern around consensus. Values retrieved from S&P Global.
  • FY lens: FY25 EPS normalized consensus ~$10.85* vs guidance $10.80–$11.30; FY25 revenue consensus ~$5.306B*. Guidance implies tighter range around consensus amid “relatively flat” sales and GM in line with prior year . Values retrieved from S&P Global.

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Maintenance/private-label momentum underpins earnings stability; Q2 GM held at 30.0% and OpInc rose slightly YoY despite discretionary softness .
  • Guidance reset to $10.80–$11.30 reflects cautious H2 outlook on new construction; watch rate path and housing turnover as potential catalysts .
  • Digital moat expanding: POOL360 at 17% of sales improves stickiness and margin profile; continued adoption likely to support mix over time .
  • Regional bifurcation persists: FL/AZ resilient; TX/CA lag for new builds; Europe trending better—positioning matters for near-term sales mix .
  • Pricing tailwinds vs deflation headwinds: In-season vendor increases provide modest benefit; chemicals/commodities deflation offsets part of pricing—net effect modestly positive .
  • Capital returns intact: $1.25 quarterly dividend declared and accelerated buybacks ($104M in Q2; $160.6M YTD) with leverage at 1.47x support shareholder yield .
  • Near-term setup: Expect “relatively flat” sales and GM in line with prior year; watch mix (building materials, customer concentration) and H2 pricing realization for margin trajectory .
Sources: Q2 2025 press release and 8-K (financials, guidance, KPIs) **[945841_0000945841-25-000123_pool-q22025xer.htm:0]** **[945841_0000945841-25-000123_pool-q22025xer.htm:1]** **[945841_0000945841-25-000123_pool-q22025xer.htm:2]** **[945841_0000945841-25-000123_pool-q22025xer.htm:3]** **[945841_0000945841-25-000123_pool-q22025xer.htm:4]** **[945841_0000945841-25-000123_pool-q22025xer.htm:5]** **[945841_0000945841-25-000123_pool-q22025xer.htm:6]**; Q2 2025 call transcript (themes, regional, pricing, POOL360, Q&A) **[0000945841_2224753_1]** **[0000945841_2224753_2]** **[0000945841_2224753_3]** **[0000945841_2224753_4]** **[0000945841_2224753_5]** **[0000945841_2224753_6]** **[0000945841_2224753_9]** **[0000945841_2224753_10]** **[0000945841_2224753_11]** **[0000945841_2224753_13]** **[0000945841_2224753_14]**; Q1 2025 press release and call (prior guidance, trends) **[945841_0928f693067646029579916b7cc0c90e_4]** **[945841_0928f693067646029579916b7cc0c90e_1]** **[945841_0928f693067646029579916b7cc0c90e_9]** **[945841_POOL_3423110_7]** **[945841_POOL_3423110_3]**; Q4 2024 press release (base context) **[945841_a92a9cd27b7144df91d9cf8e57cd85c2_1]** **[945841_a92a9cd27b7144df91d9cf8e57cd85c2_5]**; Dividend PR (Jul 30) **[945841_6f52b6d79377420a9cf030c910f78f21_0]**.