Pool (NASDAQ:POOL) executives told investors the company navigated a challenging 2025 backdrop marked by shifting demand patterns, continued weakness in new pool construction, and pressure on discretionary spending, while leaning on resilient maintenance activity, pricing discipline, and ongoing investments in technology and distribution.
2025 backdrop: fewer new pools, resilient maintenance
President and CEO Peter Arvan said the industry continued to contend with a decline in general construction activity, including new pool builds. The company estimated that just under 60,000 new pools were built in the U.S. in 2025, a mid-single-digit decline from the prior year, roughly half of pandemic-peak levels and 40% below 2022.
Financial results: flat annual sales, stronger gross margin
For 2025, Pool reported revenue of $5.3 billion, which management characterized as steady year-over-year. Fourth-quarter sales were $982 million, down 1% from the prior-year period, which management noted benefited from hurricane-related repair activity in Florida in late 2024.
Arvan said gross margin performance strengthened, with full-year gross margin reaching 29.7%, up 20 basis points from the prior year when adjusted for one-time items. Fourth-quarter gross margin was 30.1%, up 70 basis points year-over-year.
CFO Melanie Hart said fourth-quarter gross margin improvement reflected pricing, supply chain benefits, expanded private label activity, and a favorable product mix, noting that prior-year hurricane-related demand increased equipment sales, which typically carry lower margins.
Hart said operating expenses in the fourth quarter increased by $14 million, or 6%, driven largely by incremental technology investments to support the rollout of POOL360 Unlocked, along with new sales center openings, sales transformation efforts, and higher self-insured medical costs. Fourth-quarter operating income was $52 million versus $61 million a year earlier, and diluted EPS was $0.85 compared with $0.98 in the prior-year quarter.
For the full year, Hart said operating income was $580 million versus $617 million in 2024. Diluted EPS was $10.85 compared with $11.30 a year earlier; adjusted diluted EPS was $10.73 versus $11.07 last year, with management discussing impacts from accounting standard (ASU) benefits and prior-year import tax benefits.
Category and regional trends
Management highlighted varying trends by region and product category. Arvan said Florida sales declined 2% for the year and 9% in the fourth quarter due to comparisons against last year’s post-storm activity, though he noted Florida’s fourth-quarter sales were still up 2% on a two-year basis. Texas sales declined 3% for the year but rose 1% in the fourth quarter, which Arvan described as an early sign of improvement. California declined 3% for the year and 4% in the fourth quarter, while Arizona was flat for the year and down slightly in the fourth quarter.
In Europe, Arvan said the company posted local-currency growth for the first time in three years, including a 4% increase in the fourth quarter.
By product category, Arvan said:
- Chemicals were down 1% for the year and down 3% in the fourth quarter, with price pressure and tough hurricane-related comparisons.
- Building materials were flat for the year and up 4% in the fourth quarter.
- Equipment (excluding cleaners) was flat year-over-year and down 3% in the fourth quarter.
- Commercial pool products rose 3% for the year.
Hart also provided estimated mix for 2025 pool product sales: maintenance items at roughly 64%, renovation/remodel at 22%, and new pool construction at 14%, which she said were consistent with 2024 estimates.
Technology, footprint, and capital returns
Executives emphasized continued investment in digital and distribution capabilities. Arvan said digital sales reached 13.5% of fourth-quarter revenue (up from 12.5% a year earlier) and peaked at a record 17% during the pool season; full-year digital penetration was 15%, which he called an all-time high.
Pool ended 2025 with 456 sales centers after opening 8 new locations and acquiring 3. Arvan also highlighted growth in the Pinch A Penny franchise network to just over 300 locations after adding 10 new stores during the year. He noted franchise sales comparisons were pressured in the fourth quarter because most stores are in Florida and the prior-year period benefited from hurricane-driven activity.
On capital returns, Arvan said the company returned $530 million to shareholders in 2025, including $341 million in share repurchases and a 4% increase in the quarterly dividend.
Hart said year-end inventory was $1.45 billion, up 13% from the prior year, reflecting strategic early-buy purchases ahead of anticipated vendor cost increases. Total debt ended the year at $1.2 billion, with a leverage ratio of 1.67, which she said was consistent with the company’s 1.5x to 2.0x target range.
2026 outlook: low single-digit sales growth, EPS guidance
Looking ahead, Arvan said Pool expects low single-digit net sales growth in 2026, assuming new pool construction remains around 60,000 units. Hart said the company expects 1% to 2% pricing benefit from vendor cost increases and corresponding pass-throughs. Management projected 2026 gross margin to be consistent with 2025, with contributions from supply chain and private label initiatives offset by customer mix shifts.
Pool guided to 2026 diluted EPS of $10.85 to $11.15, with Hart noting the guidance assumes no ASU tax benefit. She said the earnings improvement at the midpoint would be approximately 2% to 3%.
During Q&A, executives discussed expense dynamics, including incentive compensation. Hart said incentive compensation is a sliding scale and that if sales were flat, overall incentive compensation would not increase versus 2025. Both Hart and Arvan said the company would adjust costs if the market lags.
Management also said early-year customer sentiment around new pool construction was “more encouraging than not” based on discussions during show season, while acknowledging that optimism early in the year does not always translate into executed contracts during peak season.
The company said it plans to open 5 to 8 new sales centers in 2026 and intends to continue share repurchases opportunistically, while reinvesting roughly 1% to 1.5% of net sales back into the business and allocating $25 million to $50 million toward acquisitions, subject to market conditions and approvals.
About Pool (NASDAQ:POOL)
Pool Corporation is a leading wholesale distributor of swimming pool supplies, equipment, and related outdoor living products. Headquartered in Covington, Louisiana, the company serves a diverse customer base that includes service professionals, independent retailers, high-volume builders, and national retail chains. Pool Corporation’s extensive branch network enables it to maintain strong local customer relationships while leveraging its scale to source products efficiently from manufacturers around the world.
The company’s product portfolio spans pool and spa chemicals, water treatment equipment, pumps, filters, heaters, automation and control systems, liners, safety covers, and cleaning accessories.
