Pool Corporation (POOL -1.36%) reported second quarter 2025 results on July 24, 2025, delivering $1.8 billion in net sales (up 1% year-over-year), stable 30% gross margin, and $5.17 diluted EPS (GAAP), up 4% year-over-year, while lowering full-year diluted EPS (GAAP) guidance to $10.80–$11.30.

Management called out sustained maintenance demand, private label chemical growth, and digital adoption, but cited persistent headwinds in new construction and continued macro uncertainty, underscoring evolving dynamics for long-term investors.

Pool’s digital platform and private label drive durable gains

Transactions on the Pool 360 platform rose to 17% of net sales, up from 14.5% a year ago, signaling accelerating customer adoption of this digital channel. Private label chemical sales posted year-over-year growth. Their integration with proprietary testing platforms has strengthened competitive differentiation.

"Our continued investment in digital innovation is paying off with Pool 360 platform transactions now representing 17% of net sales, up from 14.5% last year, reflecting enthusiastic customer adoption and creating durable competitive advantages that are hard to replicate."
-- Peter Arvan, President and CEO

High customer uptake of Pool 360 and expansion of private label offerings drive competitive advantages and margin benefits.

Despite high-single-digit declines in new pool construction permits industrywide year-over-year, construction-related sales modestly improved sequentially and outpaced permit data, with Texas and California remaining weak but Florida and Arizona each achieving 2% sales growth year-over-year.

Building material sales declined 1%, compared to a 5% decline in the previous quarter, signaling stabilization relative to ongoing softness in discretionary consumer spending.

"As you all know, permit data indicates that new pool construction is down high single digit but it's still too early to call the year. It is worth noting that the second-quarter trends improved from the first quarter but still represent a headwind on a year-over-year basis."
-- Peter Arvan, President and CEO

Management’s ability to consistently outperform underlying market trends during cyclical downturns reinforces the effectiveness of localized strategies and underpins the long-term thesis despite short-term volatility.

Expense discipline and capital returns bolster shareholder value

Selling, general, and administrative (SG&A) expenses were held at 14.7% of revenue, while share repurchases totaled $104 million -- $36 million higher than the prior year -- leaving $516 million of authorization outstanding. The company’s leverage ratio remains at 1.47, and inventory days on hand improved by 1.5 days year-over-year.

"Through our earnings release date, we have now opened eight new locations since the same time last year, contributing around 11% to the expense increase with our disciplined operations offsetting other cost increase drivers. […] During the quarter, we were able to maintain expenses as a percentage of revenue of 14.7%. […] Year-to-date, we have exceeded prior year repurchases by $76 million and have $516 million remaining under our share repurchase authorization."
-- Melanie Hart, SVP and CFO

Strong cost control, prudent expansion, and stepped-up capital returns demonstrate financial discipline and management’s commitment to shareholder value even in muted topline environments.

Looking Ahead

Management projects full-year 2025 diluted EPS (GAAP) of $10.80–$11.30, including a $0.10 ASU tax benefit, reflecting expectations for flat full-year sales and gross margin rate comparable to last year, with SG&A set to increase 2%–3% year-over-year.

No meaningful inflection in discretionary demand or construction is anticipated absent interest rate cuts or an external catalyst. Strategic actions remain focused on digital platform adoption, private label expansion, and regional growth initiatives, establishing a foundation for accelerated growth when macro conditions improve.