Pool’s fourth quarter results were met with a negative market reaction, as revenue remained flat year over year and fell short of Wall Street expectations. Management attributed the quarter’s performance to persistent weakness in new pool construction, with CEO Peter Arvan noting that industry-wide new pool builds continued to decline, while maintenance spending held up. In particular, difficult year-over-year comparisons in regions like Florida, which benefited from hurricane-related repairs last year, contributed to the flat sales. Arvan highlighted that, despite these headwinds, the company’s pricing discipline and supply chain initiatives supported improved gross margins.
Is now the time to buy POOL? Find out in our full research report (it’s free for active Edge members).
Pool (POOL) Q4 CY2025 Highlights:
- Revenue: $982.2 million vs analyst estimates of $998.8 million (flat year on year, 1.7% miss)
- EPS (GAAP): $0.85 vs analyst expectations of $0.97 (12.1% miss)
- Adjusted EBITDA: $72.15 million vs analyst estimates of $77.89 million (7.3% margin, 7.4% miss)
- EPS (GAAP) guidance for the upcoming financial year 2026 is $11 at the midpoint, missing analyst estimates by 5.6%
- Operating Margin: 5.3%, in line with the same quarter last year
- Market Capitalization: $8.00 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Pool’s Q4 Earnings Call
- David Manthey (Baird): Asked about how incentive compensation will scale with different revenue outcomes. CFO Melanie Hart clarified that compensation is on a sliding scale, increasing only if revenue grows.
- Ryan Merkel (William Blair): Inquired about SG&A growth in light of new facility openings and employee rewards. Hart indicated expense growth should be slightly below sales growth, with a focus on capacity absorption and efficiency.
- David S. MacGregor (Longbow Research): Questioned efforts to improve profitability of underperforming branches. CEO Peter Arvan detailed ongoing operational improvements and suggested selective consolidation could occur if market conditions warrant.
- Susan Maklari (Goldman Sachs): Asked about the impact of inventory build on gross margins and the sustainability of pricing benefits. Hart and Arvan responded that inventory investments should provide early-year margin benefit but will taper off mid-year.
- Garik Shmois (Loop Capital): Queried expectations for new sales centers and Horizon business performance. Arvan signaled a more cautious approach to new openings and continued focus on execution, particularly in Horizon’s maintenance segment.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will monitor (1) any improvements in discretionary spending and new pool construction activity, (2) evidence that digital and supply chain investments are translating into sustained gross margin gains, and (3) progress in expanding exclusive brands and private label sales. Regional demand shifts and the pace of recovery in key markets like Florida and Texas will also be important signposts.
Pool currently trades at $215.84, down from $255.33 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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