April 23rd, 2026

The call presented a constructive start to the 2026 season with solid top-line growth (6%), operating income expansion (7%), EPS growth and confirmation of full-year guidance. Key strategic initiatives—private label, POOL360, selective sales center expansion and share repurchases—are delivering and management emphasized disciplined capital allocation. Headwinds include a modest gross margin compression (~20 bps) driven by mix and early-buy activity, a sizable seasonal inventory build (+14%), and measured consumer discretionary demand with isolated regional softness (Horizon -2%, Florida -1%). On balance, the operational and strategic positives (broad-based product growth, digital penetration, geographic strength, EPS up excl. ASU) outweigh the manageable near-term financial and working capital pressures.

Company Guidance

Guidance for 2026 was reiterated unchanged: full‑year diluted EPS of $10.87 to $11.17 (which includes the $0.02 ASU benefit recognized in Q1; no further ASU benefit assumed), with the midpoint implying roughly 2%–3% EPS growth versus prior year and same‑selling‑day top‑line expected to be low single‑digit growth; management expects a 1%–2% full‑year pricing benefit (Q1 pricing contributed ~3% to sales), gross margin to be roughly consistent with 2025, and expense growth to moderate through the year as greenfield absorption improves. Q1 metrics included net sales +6%, gross margin 29% (down ~20 bps), operating income $83M (+7%) with a 10‑bp operating margin expansion, operating expenses $247M (+5%), diluted EPS $1.45 (+$0.03; +$0.11 excl. ASU), POOL360 at 13% of sales, inventory $1.7B (+14% YoY, ~$200M above year‑end), total debt ~$1.2B (leverage 1.7x), net cash from ops $25.7M, share repurchases ~$64M in Q1 with $271M remaining, projected interest expense $49M–$51M (Q2 highest), and an estimated full‑year tax rate ~25% (Q2 ~25.5%); the company still expects to open 5 net new sales centers in 2026 (455 total) and continue disciplined capital allocation.