POOL CORP

Previous wording

You should read the following discussion in conjunction with the accompanying interim Consolidated Financial Statements and notes, the Consolidated Financial Statements and accompanying notes in our 2025 Annual Report on Form 10-K and Management’s Discussion and Analysis in our 2025 Annual Report on Form 10-K.

Current wording

You should read the following discussion in conjunction with the accompanying interim Consolidated Financial Statements and notes, the Consolidated Financial Statements and notes in our 2025 Annual Report on Form 10-K and Management’s Discussion and Analysis in our 2025 Annual Report on Form 10-K.

Previous wording

No assurance can be given that the expected results in any forward-looking statement will be achieved, and actual results may differ materially due to one or more 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 our 2025 Annual Report on Form 10-K, as updated by our subsequent filings with the U.S. Securities and Exchange Commission. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Current wording

No assurance can be given that our expected results in any forward-looking statement will be achieved, and our actual results may differ materially due to one or more 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 our 2025 Annual Report on Form 10-K, as updated by our subsequent filings with the U.S. Securities and Exchange Commission. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Previous wording

First quarter ended March 31, 2026 compared to the first quarter ended March 31, 2025

Current wording

Second quarter ended June 30, 2026 compared to the second quarter ended June 30, 2025

Previous wording

Earnings per diluted share increased 3% to $1.45 compared to $1.42 in the same period of 2025. We recorded a $0.8 million, or $0.02 per diluted share, tax benefit from Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share-Based Payment Accounting, in 2026 compared to a $3.8 million, or $0.10 per diluted share, tax benefit in 2025. Adjusting for the impact from ASU 2016-09 in both periods, earnings per diluted share increased 8% to $1.43 compared to $1.32 in 2025. See “Results of Operations” below for definitions of our non-GAAP measures and reconciliations of our non-GAAP measures to GAAP measures.

Current wording

See “Results of Operations” below for definitions of our non-GAAP measures and reconciliations of our non-GAAP measures to GAAP measures.

Previous wording

As of March 31, 2026, total net receivables, including pledged receivables, increased 13% compared to March 31, 2025, primarily due to higher sales in March 2026. Our days sales outstanding (DSO), as calculated on a trailing four quarters basis, was 26.9 days at March 31, 2026 and 25.9 days at March 31, 2025. Our allowance for doubtful accounts balance was $8.2 million at March 31, 2026 and $8.5 million at March 31, 2025.

Current wording

As of June 30, 2026, total net receivables, including pledged receivables, increased 11% compared to June 30, 2025, primarily due to higher sales in June 2026. Our days sales outstanding (DSO), as calculated on a trailing four quarters basis, was 27.6 days at June 30, 2026 and 25.8 days at June 30, 2025. Our allowance for doubtful accounts balance was $8.5 million at June 30, 2026 and $8.3 million at June 30, 2025.

Previous wording

Our inventory balance was $1.7 billion at March 31, 2026, an increase of $200.1 million, or 14%, from March 31, 2025, reflecting higher purchases to support service levels and a broader product range to better serve our customers ahead of the swimming pool season. Our inventory balance also reflects inflationary increases and the addition of inventory from new and acquired sales centers over the past twelve months. Our inventory reserve was $25.0 million at March 31, 2026 and $27.1 million at March 31, 2025. Our inventory turns, as calculated on a trailing four quarters basis, was 2.6 times at March 31, 2026 and 2.8 times at March 31, 2025.

Current wording

Our inventory balance was $1.4 billion at June 30, 2026, an increase of $48.5 million, or 4%, from June 30, 2025. The 4% year-over-year increase in inventory is down from the 14% increase reported in the first quarter of 2026, as we sell through our peak-season stocking levels. Our inventory levels reflect the impact of inflation and the addition of new and acquired sales centers over the past twelve months. Our inventory reserve was $24.1 million at June 30, 2026 and $27.7 million at June 30, 2025. Our inventory turns, as calculated on a trailing four quarters basis, was 2.6 times at June 30, 2026 and 2.8 times at June 30, 2025.

Previous wording

Total debt outstanding increased $222.6 million to $1.2 billion at March 31, 2026, which helped to fund open market share repurchases of $349.0 million over the past twelve months.

Current wording

Total debt outstanding increased $110.8 million to $1.3 billion at June 30, 2026, which helped to fund $266.7 million of open market share repurchases over the past twelve months.

Previous wording

We project gross margin for the full year of 2026 to be similar to our 2025 gross margin of 29.7%. We expect our gross margin to benefit from effective supply chain management, advantageous pricing strategies and increased private label sales. Our actual gross margin will depend on changes in product and customer mix and on amounts and timing of sales and inflationary price increases.

Current wording

We project gross margin for the full year of 2026 to be approximately 30 basis points below our 2025 gross margin of 29.7%. We expect our gross margin to be negatively impacted by higher inbound freight cost in the current year, partially offset by benefits from effective supply chain management, advantageous pricing strategies and increased private label sales. The prior year comparison is also impacted by margin benefit from mid-season price increases in the prior year. Our actual gross margin will depend on changes in product and customer mix and on amounts and timing of sales and inflationary price increases.

Previous wording

We expect to leverage our existing infrastructure and strategically manage discretionary spending while continuing to invest in our sales center network and consumer-facing technology initiatives. We project that our operating expenses for 2026 will increase around 3% compared to 2025.

Current wording

We expect to leverage our existing infrastructure and strategically manage discretionary spending while providing for a modest recovery in incentive compensation compared to the prior year. We project operating expenses for 2026 will increase approximately 3% compared to 2025, or 2% to 3% without the $8.3 million of CEO transition costs.

Previous wording

In 2026, we expect our effective tax rate will approximate 25.0% without the impact of ASU 2016-09. Due to ASU 2016-09, we expect our effective tax rate will fluctuate from quarter to quarter, particularly in periods when employees elect to exercise their vested stock options or when restrictions on share-based awards lapse. We recorded a $0.8 million, or $0.02 per diluted share, tax benefit from ASU 2016-09 for the three months ended March 31, 2026.

Current wording

In 2026, we expect our effective tax rate will approximate 25.0% without the impact of Accounting Standards Update ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. Under ASU 2016-09, we expect our effective tax rate will fluctuate from quarter to quarter, particularly in periods when employees elect to exercise their vested stock options or when restrictions on share-based awards lapse. We recorded a $0.7 million, or $0.02 per diluted share, tax benefit from ASU 2016-09 for the six months ended June 30, 2026.

Previous wording

We project 2026 diluted EPS in the range of $10.87 to $11.17, including the impact of year-to-date tax benefits of $0.02. We may recognize additional tax benefits related to stock option exercises in 2026 from grants that expire in future years. We have not included any expected tax benefits in our full year guidance beyond what we have recognized as of March 31, 2026.

Current wording

For 2026, we project diluted EPS in the range of $10.66 to $10.96, or $10.87 to $11.17, excluding the impact of CEO transition costs and including the impact of year-to-date tax GAAP benefits of $0.02. We may recognize additional tax benefits related to stock option exercises in 2026 from grants that expire in future years. We have not included any expected tax benefits in our full year guidance beyond what we have recognized as of June 30, 2026.

Previous wording

As of March 31, 2026, we conducted operations through 455 sales centers in North America, Europe and Australia. For the three months ended March 31, 2026, approximately 95% of our net sales were from our operations in North America.

Current wording

As of June 30, 2026, we conducted operations through 455 sales centers in North America, Europe and Australia. For the three and six months ended June 30, 2026, approximately 95% of our net sales were from our operations in North America.

Previous wording

We have included the results of operations from acquisitions in 2025 in our consolidated results since the acquisition dates.

Current wording

We have included the results of operations from acquisitions in 2025, as further discussed in Note 3, in our consolidated results since the acquisition dates.

Previous wording

We have not provided separate base business income statements within this Form 10-Q as our base business results for the three months ended March 31, 2026 closely approximated consolidated results. Excluded sales centers contributed less than 1% to the change in our reported net sales.

Current wording

We have not provided separate base business income statements within this Form 10-Q as our base business results for the three and six months ended June 30, 2026 closely approximated consolidated results. Excluded sales centers contributed less than 1% to the change in our reported net sales.

Previous wording

The table below summarizes the changes in our sales center count during the first three months of 2026:

Current wording

The table below summarizes the changes in our sales center count during the first six months of 2026:

Previous wording

In the first quarter of 2026, sales of equipment for maintenance, renovation and new construction activities, including swimming pool heaters, pumps, lights, filters and automation devices, increased 7% versus the same period last year, and collectively represented approximately 34% of net sales for the period. Sales of building materials, which are primarily used in new pool construction and remodeling, increased 5% compared to the same period in 2025 and represented approximately 13% of net sales in the first quarter of 2026.

Current wording

In the second quarter of 2026, sales of equipment for maintenance, renovation and new construction activities, including swimming pool heaters, pumps, lights, filters and automation devices, increased 3% versus the same period last year, and collectively represented approximately 29% of net sales for the period. Sales of building materials, which are primarily used in new pool construction and remodeling, increased 4% compared to the same period in 2025 and represented approximately 12% of net sales in the second quarter of 2026.

Previous wording

Interest and other non-operating expenses, net for the first quarter of 2026 increased $1.2 million compared to the first quarter of 2025, primarily due to an increase in average outstanding debt between periods. Our weighted average effective interest rate decreased to 4.2% in the first quarter of 2026 compared to 4.5% in the first quarter of 2025 on average outstanding debt of $1.2 billion and $962.4 million for the respective periods.

Current wording

Interest and other non-operating expenses, net for the second quarter of 2026 increased $2.1 million compared to the second quarter of 2025, primarily due to an increase in average outstanding debt between periods. Our weighted average effective interest rate decreased to 4.2% in the second quarter of 2026 compared to 4.6% in the second quarter of 2025 on average outstanding debt of $1.3 billion and $1.1 billion for the respective periods.

Previous wording

Our effective income tax rate was 24.2% for the three months ended March 31, 2026 compared to 19.4% for the three months ended March 31, 2025. We recorded a $0.8 million tax benefit from ASU 2016-09 in the quarter ended March 31, 2026 compared to a tax benefit of $3.8 million in the same period last year. Without the benefit from ASU 2016-09 in both periods, our effective tax rate was 25.3% in the first quarter of 2026 and 25.2% in the first quarter of 2025.

Current wording

Our effective income tax rate was 25.4% for the six months ended June 30, 2026 compared to 24.2% for the six months ended June 30, 2025. We recorded a $0.7 million, or $0.02 per diluted share, tax benefit from ASU 2016-09 in the six months ended June 30, 2026 compared to a $3.9 million, or $0.10 per diluted share, tax benefit in the same period of 2025.

Previous wording

The non-GAAP measure described below should be considered in the context of all of our other disclosures in this Form 10-Q.

Current wording

The non-GAAP measures described below should be considered in the context of all of our other disclosures in this Form 10-Q.

Previous wording

We believe this measure should be considered in addition to, not as a substitute for, diluted EPS presented in accordance with GAAP, and in the context of our other disclosures in this Form 10-Q. Other companies may calculate this non-GAAP financial measure differently than we do, which may limit its usefulness as a comparative measure.

Current wording

We have included adjusted operating expenses, adjusted operating income, adjusted net income and adjusted diluted EPS, which are non-GAAP financial measures, in this Form 10-Q as supplemental disclosures because we believe these measures are useful to management, investors and others in assessing our year-over-year operating performance. We believe these measures should be considered in addition to, not as a substitute for, operating expenses, operating income, net income and diluted EPS presented in accordance with GAAP and in the context of our other disclosures in this Form 10-Q. Other companies may calculate these non-GAAP financial measures differently than we do, which may limit their usefulness as comparative measures.

Previous wording

Management has discussed the development, selection and disclosure of our critical accounting estimates with the Audit Committee of our Board. For a description of our critical accounting estimates, please see the “Critical Accounting Estimates” section included in Part II, Item 7 in our 2025 Annual Report on Form 10-K. We have not changed any of these policies from those previously disclosed in that report.

Current wording

Management has discussed the development, selection and disclosure of our critical accounting estimates with the Audit Committee of our Board. For a description of our critical accounting estimates, please see the “Critical Accounting Estimates”

Previous wording

Net cash used in investing activities for the first three months of 2026 decreased $5.8 million compared to the first three months of 2025, primarily due to a $4.7 million decrease in net capital expenditures.

Current wording

Net cash used in investing activities for the first six months of 2026 increased $7.6 million compared to the first six months of 2025, primarily due to a $9.2 million increase in net capital expenditures.

Previous wording

Net cash used in financing activities was $58.5 million for the first three months of 2026 compared to $20.6 million for the first three months of 2025, primarily due to a decrease of $26.6 million in net debt proceeds between periods and an $8.1 million increase in share repurchases in the first three months of 2026 versus the same period in 2025.

Current wording

Net cash used in financing activities was $37.8 million for the first six months of 2026 compared to net cash provided by financing activities of $33.1 million for the first six months of 2025, primarily due to a decrease of $138.5 million in net debt proceeds between periods, partially offset by a $74.2 million decrease in share repurchases in the first six months of 2026 versus the same period in 2025.

Previous wording

At March 31, 2026, there was $346.8 million of revolving borrowings outstanding, a $500.0 million term loan outstanding, $14.4 million of standby letters of credit outstanding and $438.8 million available for borrowing under the Credit Facility. The weighted average effective interest rate for the Credit Facility as of March 31, 2026 was approximately 3.8%, excluding commitment fees and including the impact of our interest rate swaps.

Current wording

At June 30, 2026, there was $424.4 million of revolving borrowings outstanding, a $500.0 million term loan outstanding, $15.7 million of standby letters of credit outstanding and $359.9 million available for borrowing under the Credit Facility. The weighted average effective interest rate for the Credit Facility as of June 30, 2026 was approximately 3.9%, excluding commitment fees and including the impact of our interest rate swaps.

Previous wording

Our two-year Receivables Facility offers us a lower-cost form of financing. Under this facility, we can borrow up to $375.0 million between April through May and from $210.0 million to $350.0 million during the remaining months of the year. We pay interest on borrowings under the Receivables Facility at a variable rate based on one-month Term SOFR, plus an applicable margin. The Receivables Facility matures on October 30, 2026.

Current wording

Our two-year Receivables Facility offers us a lower-cost form of financing. Under this facility, we can borrow up to $375.0 million between April through May and from $210.0 million to $350.0 million during the remaining months of the year. We pay interest on borrowings under the Receivables Facility at a variable rate based on one-month Term SOFR, plus an applicable margin. The Receivables Facility matures on October 30, 2026. We classify the entire outstanding balance as Long-term debt, net on our Consolidated Balance Sheets as we intend and have the ability to refinance the obligations on a long-term basis.

Previous wording

At March 31, 2026, there was $300.0 million outstanding under the Receivables Facility at a weighted average effective interest rate of 4.6%, excluding commitment fees.

Current wording

At June 30, 2026, there was $315.5 million outstanding under the Receivables Facility at a weighted average effective interest rate of 4.6%, excluding commitment fees.

Previous wording

Maximum Average Total Leverage Ratio. On the last day of each fiscal quarter, our average total leverage ratio must be less than 3.25 to 1.00. Average Total Leverage Ratio is the ratio of the sum of (i) Total Non-Revolving Funded Indebtedness as of such date, (ii) the trailing twelve months (TTM) Average Total Revolving Funded Indebtedness and (iii) the TTM Average Accounts Securitization Proceeds divided by TTM EBITDA (as those terms are defined in the Credit Facility). As of March 31, 2026, our average total leverage ratio equaled 1.73 (compared to 1.67 as of December 31, 2025) and the TTM average total indebtedness amount used in this calculation was $1.1 billion.

Current wording

Maximum Average Total Leverage Ratio. On the last day of each fiscal quarter, our average total leverage ratio must be less than 3.25 to 1.00. Average Total Leverage Ratio is the ratio of the sum of (i) Total Non-Revolving Funded Indebtedness as of such date, (ii) the trailing twelve months (TTM) Average Total Revolving Funded Indebtedness and (iii) the TTM Average Accounts Securitization Proceeds divided by TTM EBITDA (as those terms are defined in the Credit Facility). As of June 30, 2026, our average total leverage ratio equaled 1.78 (compared to 1.73 as of March 31, 2026) and the TTM average total indebtedness amount used in this calculation was $1.2 billion.

Previous wording

Minimum Fixed Charge Coverage Ratio. On the last day of each fiscal quarter, our fixed charge ratio must be greater than or equal to 2.25 to 1.00. Fixed Charge Ratio is the ratio of the TTM EBITDAR divided by TTM Interest Expense paid or payable in cash plus TTM Rental Expense (as those terms are defined in the Credit Facility). As of March 31, 2026, our fixed charge ratio equaled 4.73 (compared to 4.78 as of December 31, 2025) and TTM Rental Expense was $114.0 million.

Current wording

Minimum Fixed Charge Coverage Ratio. On the last day of each fiscal quarter, our fixed charge ratio must be greater than or equal to 2.25 to 1.00. Fixed Charge Ratio is the ratio of the TTM EBITDAR divided by TTM Interest Expense paid or payable in cash plus TTM Rental Expense (as those terms are defined in the Credit Facility). As of June 30, 2026, our fixed charge ratio equaled 4.67 (compared to 4.73 as of March 31, 2026) and TTM Rental Expense was $115.4 million.

Previous wording

As of April 23, 2026, we were authorized to purchase up to $271.0 million of our common stock under our current Board-approved share repurchase program. We expect to continue to repurchase shares on the open market from time to time subject to market conditions. We plan to fund these repurchases with cash provided by operations and borrowings under the above-described credit facilities.

Current wording

As of July 23, 2026, we were authorized to purchase up to $580.0 million of our common stock under our current Board-approved share repurchase program. We expect to continue to repurchase shares on the open market from time to time subject to market conditions. We plan to fund these repurchases with cash provided by operations and borrowings under the above-described credit facilities.