Executive Summary

Q3 2025 delivered modest growth and margin expansion: net sales up 1% to $1.45B, gross margin up 50 bps to 29.6%, and diluted EPS up 4% to $3.40 .
EPS was a slight beat vs Wall Street consensus, while revenue was a slight miss: EPS $3.40 vs $3.385*, revenue $1,451.1M vs $1,453.4M*; adjusted EPS $3.39 reflects a $0.01 tax benefit in Q3 . Values retrieved from S&P Global.
Management confirmed full-year diluted EPS guidance of $10.81–$11.31, and expects full-year sales to be flat to slightly up; gross margin similar to last year on an ongoing basis (ex prior-year non-recurring import tax benefit) .
Stock-relevant drivers: 50 bps gross margin expansion from pricing, private label, and supply chain discipline; chemical deflation (-4% sanitizer/trichlor) and constrained discretionary demand remain headwinds; POOL360 adoption reached an all-time high 17% of Q3 sales, supporting mix and efficiency .

What Went Well and What Went Wrong

What Went Well

Margin execution: gross margin expanded 50 bps to 29.6% on favorable pricing, private-label strength, and supply chain initiatives; operating income rose ~$2M YoY to ~$178M .
Category stabilization/strength: building materials and equipment each grew ~4% YoY; commercial sales +2%; Horizon +3% .
Digital adoption: POOL360 transactions reached 17% of Q3 sales; management emphasized technology suite and supply-chain AI use as sustaining margin advantages (“I would look for the gains…to be sustaining.”) .

What Went Wrong

Chemical deflation: total chemical sales declined 4% YoY, driven by sanitizer/trichlor pricing pressure, despite stable underlying demand; DIY retail remained cautious on discretionary purchases .
Discretionary demand and macro: elevated borrowing rates and tariff uncertainty continue to weigh on new pool construction and remodel; permits down mid-single digits YTD through August, with geographic variability .
Cash generation softer YTD: net cash from operations was $285.7M vs $488.6M last year, with headwinds from inventory investments and a deferred $68.5M federal tax payment .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Net Sales ($USD Millions)	$1,432.9	$1,071.5	$1,784.5	$1,451.1
Gross Margin %	29.1%	29.2%	30.0%	29.6%
Operating Income ($USD Millions)	$176.4	$77.5	$272.7	$178.0
Operating Margin %	12.3%	7.2%	15.3%	12.3%
Net Income ($USD Millions)	$125.7	$53.5	$194.3	$127.0
Diluted EPS ($)	$3.27	$1.42	$5.17	$3.40
Adjusted Diluted EPS ($)	$3.26	$1.32	$5.17	$3.39

Q3 2025 vs Estimates (S&P Global):

Metric	Consensus	Actual
EPS ($)	3.385*	3.40
Revenue ($USD Millions)	1,453.4*	1,451.1
EPS – # of Estimates	12*	—
Revenue – # of Estimates	14*	—

Values retrieved from S&P Global.

Segment/Product/Region Detail (Q3 2025 YoY):

Category/Region	Q3 2025 YoY
Chemicals (total)	-4%
Sanitizer/trichlor pricing	Mid-high single-digit decline QoQ; down YoY
Building Materials	+4%
Equipment (ex-cleaners)	+4%
Commercial	+2%
Horizon (landscape/outdoor)	+3%
Independent Retail	-3%
Pinch A Penny franchise sales	-1%
Florida	+1%
Texas	Flat
California	-3%
Arizona	-3%
Europe	-1% LC; +6% USD
POOL360 sales mix	17% of Q3 sales (all-time high)

KPIs and Balance Sheet (as of Q3 2025):

KPI	Q3 2024	Q3 2025
Product Inventories, net ($USD Millions)	$1,180.5	$1,223.8
Long-term Debt, net ($USD Millions)	$879.1	$1,049.1
Total Debt Outstanding – change	—	+$138.2M YoY (share repurchases funded)
Cash from Operations (YTD, $USD Millions)	$488.6	$285.7
Adjusted EBITDA (Q3, $USD Millions)	$191.5	$194.7
Dividend per share (Q3 declaration)	$1.20 (prior Q3)	$1.25 (declared Oct 29, 2025)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Diluted EPS	FY 2025	$10.80–$11.30 (Q2 update)	$10.81–$11.31 (Q3 confirm; includes $0.11 ASU benefit YTD)	Maintained (range slightly refined)
Sales Growth	FY 2025	Not quantified in Q2 PR	Flat to slightly up	New qualitative color
Gross Margin	FY 2025	Not quantified; Q2 gross margin sustained	Similar to prior year on ongoing basis; Q4 YoY gross margin improvement expected (ex prior-year non-recurring benefit)	Maintained/clarified
Operating Expenses	FY 2025	—	~3% YoY increase expected	New/maintained vs last quarter commentary
Interest Expense / Tax Rate / Share Count	FY 2025	No significant changes vs last quarter (posted in slides)	No significant changes; Q3 ETR 23.5% (Q4 rate expected to align with Q1/Q2)	Maintained
Dividend	Q4 payable	—	$1.25 per share payable Nov 26, 2025 (record Nov 12)	Announced

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Discretionary demand & macro (rates/tariffs)	Q1: Private-label chemical volumes up; discretionary projects pressured . Q2: Improving trends on discretionary spending; permits variable .	Rates/tariffs weigh on demand; permits down mid-single digits YTD; stabilization signs noted .	Stabilizing, still subdued
Pricing & margin	Q2: Gross margin sustained at 30.0% on value proposition/supply chain .	50 bps GM expansion to 29.6% via pricing, private label, supply chain discipline .	Positive margin momentum
Chemicals/trichlor	Q1: Chemical volumes +1%, private label double-digit .	Total chemicals -4%; sanitizer/trichlor deflation; demand broadly stable .	Deflation persists
Digital/POOL360 adoption	Q1/Q2: Continued digital platform integration .	POOL360 at 17% of sales; target adoption higher; technology suite and AI aiding supply chain .	Accelerating adoption
Geographic mix	Q2: Mixed US; Europe mixed, southern strength .	FL +1%, TX flat, CA/AZ -3%; Europe -1% LC/+6% USD .	Mixed; FX tailwind in Europe
Capital allocation	Q2: Share repurchases YTD $156.4M .	YTD repurchases $164M through Q3, $184M through call; $493M remaining authorization .	Ongoing buybacks

Management Commentary

“We continue to drive growth with top-line sales up 1% and gross margin expansion of 50 basis points… encouraging signs of stabilization in both new pool construction and remodel.” — Peter D. Arvan, President & CEO .
“Our gross margin in third quarter was 29.6%, representing a 50 basis point improvement… driven by favorable pricing, successful supply chain initiatives, and an increase in sales of our expanded private label offerings.” — Melanie M. Hart, CFO .
“POOL360… represented an all-time high of 17% of our total sales for the third quarter… growth shows the output of our technology investment… strengthening our margins and enhancing our long-term competitive advantage.” — Peter D. Arvan .
“We have become more and more sophisticated with supply chain… embraced the AI tools… I would look for the gains… to be sustaining.” — Peter D. Arvan .

Q&A Highlights

Stabilization and rates: Management sees firmer activity and positive builder/remodeler commentary; further rate cuts likely needed to unlock entry-level pool demand; HELOC rate declines should be supportive over time .
Chemicals pricing: Sanitizer/trichlor deflation remains modest; broader chemicals stable; PVC still declining QoQ; demand not sharply moving; import regulation could impact .
Pricing programs: Equipment vendors’ early buy programs similar to pre-COVID norms; broader supplier pricing cadence normal, with innovation helping offset customer fatigue .
SG&A and technology spend: Q3 OpEx +5% (accelerated tech investments); full-year OpEx ~+3% YoY; tech spend not large for company size, ongoing as part of operations .
Q4 drivers: Sales expected flat to slightly up; Q4 margin up slightly from Q3; weather is key variable; last year’s Q4 had ~1% top-line hurricane-related benefit not expected to repeat .

Estimates Context

Q3 2025: EPS beat and revenue slight miss vs consensus. EPS $3.40 vs $3.385*; revenue $1,451.1M vs $1,453.4M*. Adjusted diluted EPS $3.39 reflects $0.01 ASU 2016-09 tax benefit . Values retrieved from S&P Global.
FY 2025: Consensus EPS ~$10.95* sits within guidance ($10.81–$11.31), implying limited need for major estimate changes unless margin execution or Q4 weather diverges. Values retrieved from S&P Global.
Potential revisions: Modest upward bias to gross margin assumptions and private-label mix; cautious view on chemicals pricing and discretionary categories given persistent deflation and macro commentary .

Key Takeaways for Investors

Quality beat on EPS, driven by pricing, private-label, and supply-chain discipline; revenue essentially in line with a small miss amid chemical deflation and mixed discretionary demand .
Gross margin expanded 50 bps to 29.6%, with management signaling structural supply-chain gains (including AI) and sustained pricing optimization — supportive of medium-term margin trajectory .
Digital adoption (POOL360 at 17% of Q3 sales) is becoming a measurable lever for mix, stickiness, and efficiency; management targets materially higher adoption over time .
Guidance reaffirmed ($10.81–$11.31 EPS) with sales flat to slightly up and full-year gross margin similar to last year on an ongoing basis; Q4 weather sensitivity remains the near-term swing factor .
Chemicals (sanitizer/trichlor) deflation and constrained DIY discretionary demand persist; expect continued focus on private-label growth and innovation to offset pricing fatigue .
Capital allocation remains active: YTD buybacks $164M through Q3 ($184M through call), dividend increased to $1.25 per share payable Nov 26; leverage at ~1.58x, low end of target range .
Watch regional mix: FL solid, TX stabilizing, CA/AZ pressured; Europe mixed (-1% LC/+6% USD), with FX tailwinds in USD results .

Additional Q3 2025 Materials

8-K Item 2.02 and full press release with financial statements and non-GAAP reconciliations .
Earnings call transcript and prepared remarks (themes: stabilization, pricing/margins, technology/POOL360, supply-chain AI) .
Other relevant Q3 press releases: Q3 dividend declaration ($1.25 per share; payable Nov 26, record Nov 12) ; 30th anniversary Nasdaq closing bell (branding/culture) .

Notes: Adjusted EPS and adjusted EBITDA figures are disclosed and reconciled in the release addendum . ASU 2016-09 provided a $0.01 diluted EPS benefit in Q3 and $0.11 year-to-date .

POOL CORP (POOL)·Q3 2025 Earnings Summary