Pool's first quarter results came in below Wall Street expectations, with a notable year-over-year decline in both revenue and profitability. Management attributed these results to persistent macroeconomic headwinds, including soft demand for new pool construction and remodeling, as well as unfavorable weather in key markets like Texas. CEO Peter Arvan noted that while maintenance product sales remained resilient due to their nondiscretionary nature, “the uncertainty of the macroeconomic environment and persistently high interest rates are causing a wait-and-see pattern in demand for large discretionary purchases.” Management acknowledged that increased price competition and a late Easter also impacted performance.
Is now the time to buy POOL? Find out in our full research report (it’s free).
Pool (POOL) Q1 CY2025 Highlights:
- Revenue: $1.07 billion vs analyst estimates of $1.1 billion (4.4% year-on-year decline, 2.5% miss)
- EPS (GAAP): $1.42 vs analyst expectations of $1.48 (4.1% miss)
- Adjusted EBITDA: $95.44 million vs analyst estimates of $100.8 million (8.9% margin, 5.3% miss)
- EPS (GAAP) guidance for the full year is $11.35 at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 7.2%, down from 9.7% in the same quarter last year
- Market Capitalization: $10.71 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 Pool’s Q1 Earnings Call
- Ryan Merkel (William Blair) asked about expectations for second quarter top-line growth and the timing of price increases. CEO Peter Arvan confirmed that low single-digit growth is expected, and CFO Melanie Hart clarified that most price increase benefits will be realized in the second half.
- Quinn Fredericksen (Baird) inquired about average selling prices (ASPs) and the mix of discretionary versus maintenance equipment sales. Arvan stated that ASPs are stable or slightly up due to mix, with little evidence of trade-down behavior among high-end buyers.
- Susan McClary (Goldman Sachs) questioned the potential for price elasticity and the impact on equipment demand. Arvan explained that most equipment purchases are nondiscretionary, so demand is relatively inelastic to moderate price hikes.
- Scott Schneeberger (Oppenheimer) pressed for clarity on the timing and impact of tariff-driven vendor price increases. Hart explained that both the April and June increases are included in current guidance, with effects expected to be more pronounced in the second half.
- Colin Varon (Deutsche Bank) asked about the growth potential for private label chemicals and their effect on margins. Arvan indicated significant runway remains for private label, describing them as “margin accretive” and a key competitive differentiator.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will monitor (1) the pace of discretionary demand recovery in new construction and remodels, especially in Texas and other key markets; (2) the company’s ability to pass through and retain tariff-driven price increases without sacrificing share or margin; and (3) sustained growth in private label and technology-driven sales, such as Pool 360 and chemical lines. Execution in these areas will be central to Pool’s performance this year.
Pool currently trades at $286.45, down from $309.31 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
The Best Stocks for High-Quality Investors
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
