Pool Corporation

What they do

Pool Corp purchases swimming pool supplies, equipment and related leisure products from manufacturers and distributes them to pool builders, pool service companies, retail stores, commercial pool operators and landscape contractors. It also distributes irrigation and landscape maintenance products and hardscapes, tile and stone products in the U.S. Distribution runs through five networks: SCP Distributors, Superior Pool Products, Horizon Distributors, National Pool Trends (renamed from National Pool Tile in November 2025) and Sun Wholesale Supply.

Revenue drivers

• Recurring maintenance and minor repair — In 2025, approximately 64% of sales came from recurring maintenance and minor repair of existing pool installations, driven by non-discretionary demand for chemicals, parts and equipment upkeep.
• Pool remodeling, renovations and upgrades — Approximately 22% of 2025 sales were generated from pool remodeling, renovations and upgrades, which are more discretionary and tied to homeowner spending.
• New pool construction — Approximately 14% of 2025 sales stemmed from new pool construction, the most cyclical portion of the mix and the most exposed to housing and interest rate conditions.
• Irrigation, landscape and building materials — Horizon Distributors sells irrigation and landscape maintenance products, and the company cited continued momentum in building materials in its second quarter 2026 results, though no separate revenue split was disclosed.

Recent performance

Second quarter 2026 net sales rose 2% to $1.8 billion on inflation benefits, steady maintenance activity and improved building materials sales. Gross profit increased 1% to $540.8 million, but gross margin fell 30 basis points to 29.7% on elevated inbound freight costs and customer mix, partly offset by supply chain initiatives. Operating income declined 2% to $267.7 million, including $8.3 million of CEO transition costs; adjusted operating income rose 1% to $275.9 million. Diluted EPS was $5.17 in both periods, while adjusted diluted EPS rose 4% to $5.38. For the six months ended June 30, 2026, net sales rose 4% to $3.0 billion and diluted EPS rose 1% to $6.61.

Strategy

Management states four priorities: sales excellence, pricing and supply chain discipline, operational execution, and disciplined M&A. The company continues to add new and acquired sales centers, citing that activity as a factor in higher inventory and receivables, and it operates 455 sales centers as of the second quarter 2026 release. It is investing in supply chain initiatives, which partly offset freight and mix headwinds to gross margin in the second quarter. Leadership transitioned to John Watwood as president and CEO, with related transition costs of $8.3 million in the quarter.

Risks

• Weather sensitivity — The company identifies sensitivity of its business to weather conditions as a factor that can cause actual results to differ materially from expectations.
• Discretionary spending and housing — Changes in economic conditions, consumer discretionary spending, the housing market, inflation or interest rates could pressure the roughly 22% of sales from remodeling and 14% from new construction.
• Freight and margin pressure — Second quarter 2026 gross margin fell 30 basis points to 29.7% primarily on elevated inbound freight costs and changes in customer mix.
• Supplier and competitive dependence — The company cites its ability to maintain favorable relationships with suppliers and manufacturers and competition from other leisure product alternatives or mass merchants as risk factors.

Outlook

Management confirmed its prior annual earnings guidance range of $10.87 to $11.17 per diluted share, excluding CEO transition costs. On a US GAAP basis, the guidance range is $10.66 to $10.96 per diluted share, which includes $0.02 of year-to-date ASU 2016-09 tax benefits and $0.21 of CEO transition costs. The company described the discretionary spending environment as muted in the second quarter.