Highlights
- Produced net sales of $1.1 billion, showing stability with year-over-year same-selling day trends comparable to the improved Q4 2024
- Continued execution of strategic initiatives contributed positively to Q1 2025 performance with volume growth in chemicals
- Confirms annual earnings guidance range of $11.10 - $11.60 per diluted share, including the Q1 2025 ASU 2016-09 tax benefit of $0.10
"Execution of our long-term strategic initiatives and organic growth investments contributed positively to our performance this quarter, and our team generated over $1.0 billion in net sales, highlighting the strength and resiliency of our business. During the quarter, we continued to expand our sales center network by adding two greenfield locations, optimizing our supply chain capabilities and further expanding our suite of premium product offerings. Combined with further integration of our digital platform, these initiatives position us to capture available demand that allows us to outperform the market while providing a best-in-class customer experience,” commented Peter D. Arvan, president and CEO.
First quarter ended March 31, 2025 compared to the first quarter ended March 31, 2024
Net sales decreased 4% in the first quarter of 2025. On a same-selling day basis, sales declined 2% in the first quarter of 2025, consistent with the 2% decrease we saw in the fourth quarter of 2024, which was an improved sequential trend from earlier in 2024. Maintenance-related product sales supported overall sales, as chemical volumes grew 1% with double-digit growth in our private-label chemical products. While discretionary projects remained pressured, we saw an improvement in overall sales in March following challenging weather patterns in January and February.
Gross profit decreased 8% in the first quarter of 2025 from the same period of 2024. Gross margin decreased 100 basis points to 29.2% compared to 30.2%. In the first quarter of 2024, our gross profit benefited by 4% and our gross margin by 110 basis points from the non-recurring reversal of $12.6 million for estimated import taxes. Without the 110 basis points included in our prior quarter gross margin, our first quarter of 2025 gross margin was 10 basis points higher than last year.
Selling and administrative expenses (operating expenses) in the first quarter of 2025 were held to a 2% increase compared to the first quarter of 2024. Operating expenses increased from inflationary impacts and sales center network expansion but were partially offset by our management of variable costs. As a percentage of net sales, operating expenses increased to 21.9% in the first quarter of 2025 compared to 20.5% in the same period of 2024.
Operating income in the first quarter of 2025 decreased 29%. Operating margin was 7.2% in the first quarter of 2025 compared to 9.7% in the first quarter of 2024, including the 110 basis points attributable to the import tax reversal discussed above.
We recorded a $3.8 million tax benefit from Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, in the quarter ended March 31, 2025, compared to a tax benefit of $7.4 million realized in the same period of 2024. This resulted in a $0.10 per diluted share tax benefit in the first quarter of 2025, a $0.02 increase from the $0.08 we estimated in our February 20, 2025 release, compared to the $0.19 per diluted share tax benefit realized in the same period of 2024.
Net income decreased to $53.5 million in the first quarter of 2025 compared to $78.9 million in the first quarter of 2024. Earnings per diluted share decreased 30% to $1.42 in the first quarter of 2025 compared to $2.04 in the same period of 2024, which included a $0.24 benefit from the import tax reversal discussed above. Without the impact from ASU 2016-09 in both periods, earnings per diluted share decreased 29% to $1.32 compared to $1.85 in the first quarter of 2024. Further, without the impact from ASU 2016-09 and the import tax reversal, earnings per diluted share decreased 18%, or $0.29, from the first quarter of 2024 to the same period in 2025.
Balance Sheet and Liquidity
Our inventory balance was $1.5 billion at March 31, 2025, a reduction of $36.3 million, or 2%, from March 31, 2024 as we have rightsized our inventory ahead of the peak season. Total debt outstanding increased $45.9 million to $1.0 billion at March 31, 2025.
Net cash provided by operations was $27.2 million in the first three months of 2025 compared to $145.4 million in the first three months of 2024. Of the $118.2 million decline, $68.5 million related to federal tax payments deferred from 2024 to the first quarter of 2025, while the remaining difference is attributable to changes in working capital, including a $69.8 million headwind from the changes in inventory and accounts payable due to higher purchases in the first quarter of 2025, and lower net income in 2025.
Outlook
"We confirm our full-year 2025 earnings guidance range of $11.10 to $11.60 per diluted share, which includes the impact of year-to-date tax benefits of $0.10. As we approach the swimming pool season, we remain focused on strengthening our industry-leading position through disciplined execution, continued innovation of our customer-centric POOL360 digital ecosystem, growing our sales center network and a relentless commitment to helping our customers grow their businesses,” said Arvan.
Non-GAAP Financial Measures
This press release contains certain non-GAAP measures (adjusted EBITDA and adjusted diluted EPS). See the addendum to this release for definitions of our non-GAAP measures and reconciliations of our non-GAAP measures to GAAP measures.
About Pool Corporation
POOLCORP is the world's largest wholesale distributor of swimming pool and related backyard products. As of March 31, 2025, POOLCORP operated 449 sales centers in North America, Europe and Australia, through which it distributes more than 200,000 products to roughly 125,000 wholesale customers. For more information, please visit www.poolcorp.com.
Forward-Looking Statements
This news release includes "forward-looking” statements that involve risks and uncertainties that are generally identifiable through the use of words such as "believe,” "expect,” "anticipate,” "intend,” "plan,” "estimate,” "project,” "should,” "will,” "may,” "outlook,” and other words and similar expressions and include projections of earnings. The forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date of this release, and we undertake no obligation to update or revise such statements to reflect new circumstances or unanticipated events as they occur. Actual results may differ materially due to a variety of factors, including the sensitivity of our business to weather conditions; changes in economic conditions, consumer discretionary spending, the housing market, inflation or interest rates; our ability to maintain favorable relationships with suppliers and manufacturers; competition from other leisure product alternatives or mass merchants; our ability to continue to execute our growth strategies; changes in the regulatory environment; new or additional taxes, duties or tariffs; excess tax benefits or deficiencies recognized under ASU 2016-09 and other risks detailed in POOLCORP's 2024 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports and filings filed with the Securities and Exchange Commission (SEC) as updated by POOLCORP's subsequent filings with the SEC.
Kristin S. Byars
Director, Investor Relations and Finance
985.801.5153
kristin.byars@poolcorp.com
| POOL CORPORATION Consolidated Statements of Income (Unaudited) (In thousands, except per share data) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net sales | $ | 1,071,526 | $ | 1,120,810 | ||||
| Cost of sales | 759,157 | 782,250 | ||||||
| Gross profit | 312,369 | 338,560 | ||||||
| Percent | 29.2% | 30.2% | ||||||
| Selling and administrative expenses | 234,831 | 229,840 | ||||||
| Operating income | 77,538 | 108,720 | ||||||
| Percent | 7.2% | 9.7% | ||||||
| Interest and other non-operating expenses, net | 11,164 | 13,419 | ||||||
| Income before income taxes and equity in earnings | 66,374 | 95,301 | ||||||
| Provision for income taxes | 12,883 | 16,473 | ||||||
| Equity in earnings of unconsolidated investments, net | 54 | 57 | ||||||
| Net income | $ | 53,545 | $ | 78,885 | ||||
| Earnings per share attributable to common stockholders: (1) | ||||||||
| Basic | $ | 1.42 | $ | 2.05 | ||||
| Diluted | $ | 1.42 | $ | 2.04 | ||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 37,460 | 38,205 | ||||||
| Diluted | 37,630 | 38,467 | ||||||
| Cash dividends declared per common share | $ | 1.20 | $ | 1.10 | ||||
| (1) | Earnings per share under the two-class method is calculated using net income attributable to common stockholders (net income reduced by earnings allocated to participating securities), which was $53.3 million and $78.5 million for the three months ended March 31, 2025 and March 31, 2024, respectively. Participating securities excluded from weighted average common shares outstanding were 184,000 and 205,000 for the three months ended March 31, 2025 and March 31, 2024, respectively. | |||||||
| POOL CORPORATION Condensed Consolidated Balance Sheets (Unaudited) (In thousands) | |||||||||||||
| March 31, | March 31, | Change | |||||||||||
| 2025 | 2024 | $ | % | ||||||||||
| Assets | |||||||||||||
| Current assets: | |||||||||||||
| Cash and cash equivalents | $ | 71,644 | $ | 67,974 | $ | 3,670 | 5 | % | |||||
| Receivables, net (1) | 146,209 | 150,240 | (4,031 | ) | (3) | ||||||||
| Receivables pledged under receivables facility | 350,867 | 376,935 | (26,068 | ) | (7) | ||||||||
| Product inventories, net (2) | 1,460,680 | 1,496,947 | (36,267 | ) | (2) | ||||||||
| Prepaid expenses and other current assets | 48,177 | 44,521 | 3,656 | 8 | |||||||||
| Total current assets | 2,077,577 | 2,136,617 | (59,040 | ) | (3) | ||||||||
| Property and equipment, net | 251,011 | 230,423 | 20,588 | 9 | |||||||||
| Goodwill | 699,250 | 699,424 | (174 | ) | - | ||||||||
| Other intangible assets, net | 288,770 | 296,494 | (7,724 | ) | (3) | ||||||||
| Equity interest investments | 1,511 | 1,350 | 161 | 12 | |||||||||
| Operating lease assets | 315,097 | 308,593 | 6,504 | 2 | |||||||||
| Other assets | 79,233 | 85,926 | (6,693 | ) | (8) | ||||||||
| Total assets | $ | 3,712,449 | $ | 3,758,827 | $ | (46,378 | ) | (1) | % | ||||
| Liabilities and stockholders' equity | |||||||||||||
| Current liabilities: | |||||||||||||
| Accounts payable | $ | 890,167 | $ | 907,806 | $ | (17,639 | ) | (2) | % | ||||
| Accrued expenses and other current liabilities | 109,893 | 99,557 | 10,336 | 10 | |||||||||
| Short-term borrowings and current portion of long-term debt | 57,059 | 36,655 | 20,404 | 56 | |||||||||
| Current operating lease liabilities | 100,697 | 92,162 | 8,535 | 9 | |||||||||
| Total current liabilities | 1,157,816 | 1,136,180 | 21,636 | 2 | |||||||||
| Deferred income taxes | 81,147 | 68,904 | 12,243 | 18 | |||||||||
| Long-term debt, net | 968,031 | 942,522 | 25,509 | 3 | |||||||||
| Other long-term liabilities | 45,473 | 42,807 | 2,666 | 6 | |||||||||
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