Pool (POOL -0.41%), the world's largest wholesale distributor of swimming pool and related backyard products, reported its earnings for the second quarter of fiscal 2025 on July 24, 2025. The most notable takeaway from the release was a modest beat on both revenue and earnings per share (EPS), with GAAP EPS and revenue exceeding analyst estimates. Revenue totaled $1.79 billion, and adjusted EPS was $5.17. These figures surpassed analyst expectations of $1.78 billion for revenue and $5.09 for EPS. Despite these positive beats, growth remained measured, especially in discretionary segments. Gross and operating margins held steady at 30.0% and 15.3%, respectively. Management trimmed its full-year 2025 earnings outlook based on second-quarter performance and expectations for the rest of the year.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| Adjusted EPS | $5.17 | $5.09 | $4.98 | 3.8% |
| Revenue | $1.78 billion | $1.78 billion | $1.77 billion | 0.6% |
| Gross Margin | 30% | 30% | No change | |
| Operating Margin | 15.3% | 15.3% | No change | |
| Net Income | $194.3 million | $192.4 million | 1% |
Source: Pool. Note: Analyst consensus estimates for the quarter provided by FactSet.
About Pool and Its Recent Focus
Pool is the largest wholesale distributor in the global pool and backyard products market. Its core business revolves around selling chemicals, equipment, parts, and building materials to pool professionals and retailers. With 451 sales centers across North America, Europe, and Australia as of June 30, 2025, Pool leverages its extensive network for efficient product distribution and market reach.
The company’s focus has recently centered on extending its sales center footprint, enhancing its private-label offerings, and integrating more technology-driven products. Roughly 65% of annual revenue in 2024 came from the recurring maintenance and repair market, a highly stable segment that helps shield the company from broader economic swings. Strategic growth through acquisitions, proprietary product development, and digital tools are all crucial success factors, while expansion in discretionary categories such as new construction and remodels remains sensitive to changing economic conditions.
Quarter Highlights: Data and Developments
The second quarter saw revenues come in just above expectations, with GAAP revenue of $1.8 billion slightly exceeding analyst estimates, thanks to steady business in pool maintenance products, which include recurring essentials like chemicals and parts. Private-label chemicals, which carry higher margins, continued their pattern of double-digit growth. The strength of these recurring maintenance categories helped counteract soft demand in discretionary segments such as new pool construction and upgrades. The company noted continued growth in maintenance product categories, particularly chemicals (including private-label). These stable revenues help offset more volatile areas of the business.
While discretionary sales—including building materials and equipment for new pools or major upgrades—showed some incremental improvement, they remain below pre-pandemic norms. There was year-over-year improvement in sales of discretionary products, such as building materials. but the bulk of new pool construction is still lagging historical patterns. Notably, Florida markets held up well, while Texas continued to underperform, with management citing weaker demand and weather disruptions earlier in the year. Competitive dynamics also intensified, with pricing pressure in certain geographies as rivals vied for market share among cautious consumers.
The company maintained a gross margin of 30%, a level consistent with the prior year. Operating margin was unchanged at 15.3%. Selling and administrative expenses grew just 1%, demonstrating ongoing cost control amid wage and investment pressures. Operating income rose by $1.2 million, a marginal gain. Net income registered at $194.3 million, a slight increase from $192.4 million in Q2 2024.
Expansion efforts continued, with Pool opening four net new sales centers in the first half of 2025, bringing its total to 451 as of June 30, 2025. This development broadens Pool's reach and enhances its ability to achieve scale advantages in procurement and logistics. The product portfolio focus was on technological advancements, with automation and energy efficiency features gaining traction -- a direct response to evolving consumer preferences.
Cash flow from operations (GAAP) for the first half of 2025 fell $1.5 million, compared to a positive $172.1 million in the same period last year. This reversal reflected a $68.5 million deferred tax payment and a $29.4 million inventory build during the first half of 2025. The inventory level, at $1.3 billion, was up 3% as of June 30, 2025. Management highlighted that the company continues to prioritize shareholder returns, with $156.4 million in share repurchases and $92.2 million in dividends returned to shareholders during the first half of 2025.
Pool’s board raised the quarterly dividend 4% to $1.25 per share. This continues a trend of recent shareholder returns, in part funded through a combination of debt ($113.4 million increase to $1.2 billion as of June 30, 2025) and disciplined capital management.
Looking Ahead: Guidance and Watchpoints
In its earnings release, management updated its annual diluted EPS guidance to a new range of $10.80 to $11.30, including a $0.10 tax benefit related to accounting for equity compensation. Pool Corporation's annual diluted EPS guidance was revised from the previous $11.10 to $11.60 range to $10.80 to $11.30. But the company flagged that macroeconomic uncertainty -- especially regarding consumer confidence and interest rates -- remains a risk for new construction and remodel segments.
Management identified the growing proportion of sales to larger, lower-margin customers as a factor, along with the continued slow recovery in high-margin discretionary categories. As for capital allocation, management indicated that share repurchases and dividends would continue.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
