POOL earnings analysis
What we found in POOL's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
POOL delivered modest Q2 growth, with revenue up 2% to $1.823 billion and adjusted EPS up 4% to $5.38, but GAAP EPS remained flat at $5.17 as freight, mix pressure and $8.3 million of CEO-transition costs weighed on profitability. Gross margin declined 30 basis points year over year to 29.7% and operating income fell 2% to $267.7 million, although both revenue and margins improved sharply sequentially from the seasonally softer Q1. Management maintained its $10.66-$10.96 GAAP EPS outlook, while balance-sheet leverage and working-capital metrics warrant monitoring.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Sales returned to modest year-over-year growth
- Q2 net sales rose 2% year over year to $1.823 billion, and increased 60% sequentially from $1.138 billion in Q1 2026. Inflationary product-cost increases contributed approximately 3% to Q2 sales growth, alongside steady maintenance demand and stronger building-material sales.
- Adjusted EPS increased despite flat GAAP EPS
- GAAP diluted EPS was unchanged year over year at $5.17, while adjusted EPS rose 4% to $5.38. Sequentially, GAAP EPS increased from $1.45 in Q1 2026 to $5.17 in Q2, reflecting the seasonal peak period.
- Equipment and building materials grew
- Equipment sales increased 3% in Q2 and represented approximately 29% of net sales, while building-material sales increased 4% and represented approximately 12% of sales. These categories offset declines in discretionary product sales.
- Seasonal sequential margin recovery
- Gross margin improved sequentially by 70 basis points from 29.0% in Q1 2026 to 29.7% in Q2 2026. Supply-chain initiatives partly offset elevated inbound freight costs and an unfavorable customer-mix shift.
- Inventory growth moderated materially
- Inventory fell $282.1 million sequentially to $1.379 billion at June 30 from $1.661 billion at March 31, as peak-season inventory was sold through. Year-over-year inventory growth moderated to 4%, versus 14% reported in Q1.
- Liquidity and repurchase capacity remain available
- The company had $359.9 million available under its Credit Facility at June 30 and remained compliant with covenants; its 1.78x average total leverage ratio was below the 3.25x maximum. It also retained $580.0 million of share-repurchase authorization as of July 23.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Freight and mix pressure margins
- Q2 gross margin declined 30 basis points year over year to 29.7%, while operating margin fell 60 basis points to 14.7%. Management expects 2026 gross margin to be approximately 30 basis points below 2025's 29.7%, citing higher inbound freight costs and product/customer mix.
- Higher debt is raising financing burden
- Total debt increased $110.8 million year over year to $1.341 billion at June 30, 2026, and interest and other non-operating expense increased $2.1 million in Q2. Average total leverage rose to 1.78x from 1.73x at March 31.
- Receivables and inventory efficiency weakened
- Total net receivables increased 11% year over year and DSO increased to 27.6 days from 25.8 days. Inventory turns declined to 2.6x from 2.8x, indicating slower working-capital efficiency despite the sequential inventory drawdown.
- First-half free cash flow remained negative
- Cash used in operating activities was $0.7 million in the first six months of 2026, and net cash used in investing activities was $36.0 million; implied free cash flow was negative $36.8 million. Capital expenditures are projected at 1.0%-1.5% of 2026 sales.
- No new risk-factor update; macro exposure persists
- Item 1A states there were no material changes to risk factors from the 2025 Form 10-K. However, management continues to identify weather, discretionary spending, housing, inflation, interest rates, tariffs and supplier relationships as key uncertainties; 95% of sales were generated in North America during the first six months of 2026.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $5.17
- Gross margin
- 29.7%
- Operating margin
- 14.7%
What they said about what is next.
Management maintained 2026 GAAP diluted-EPS guidance of $10.66-$10.96; adjusted diluted EPS excluding $8.3 million of CEO transition costs is projected at $10.87-$11.17. Management expects full-year sales growth at a low-single-digit percentage, but did not provide a quantitative revenue range; gross margin is projected approximately 30 basis points below 2025's 29.7%.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 28, 2026
- POOL reported Q1 2026 net sales of $1,138,014,000, up 6% YoY, and diluted EPS of $1.45, beating consensus. Operating income rose 7% to $82.6 million and operating margin expanded to 7.3%. Management reconfirmed…
- 10-K · February 26, 2026
- Pool Corporation positions itself as the world’s largest wholesale distributor of swimming pool supplies with 456 sales centers as of December 31, 2025 and a highly recurring revenue base (64% of 2025 sales from…
- 10-Q · October 29, 2025
- Pool reported Q3 2025 net sales of $1,451,131,000, up $18,252,000 (+1.3%) versus Q3 2024, with diluted EPS of $3.40 (versus $3.27 a year ago). Gross margin expanded to roughly 29.6% and operating income was essentially…
- 10-Q · July 30, 2025
- Pool reported Q2 net sales of $1,784,530 (thousand) (i.e. $1.7845B), up modestly from $1,769,784 in Q2 2024, with gross margin steady at 30.0% and operating margin 15.3%. GAAP diluted EPS was $5.17, up from $4.99 a year…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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