Considering a purchase during Pool Corp.'s dip?
**Pool Corporation's Resilient Growth Amid Market Volatility**
Pool Corporation, the world's largest wholesale distributor of swimming pool equipment and supplies, is navigating the market volatility with a strategic approach that promises long-term growth. Despite a dip in the stock market, analysts maintain a "Buy" rating with a 12-month price target of $348.25, signalling potential recovery.
In the first quarter of 2025, Pool Corp's net sales stood at $1.1 billion, a testament to its resilience. Approximately 65% of its revenue comes from maintenance, repair, and replacement products, providing a stable revenue stream that is less volatile than construction activities.
Pool Corp's business model is further bolstered by its recurring sales, which are expected to increase with the introduction of digital tools. These tools, such as the Regal and E-Z Clor mobile apps, aim to create stickier sales channels, build customer loyalty, and drive sales of higher-margin in-house products.
The company's digital investments extend to the Pool360 platform, which has seen increased sales, particularly for private-label chemicals. These digital initiatives are expected to drive growth in repair and maintenance sales, a sector that Pool Corp anticipates will remain steady due to the aging installed base of in-ground pools.
Pool Corp's financial performance in 2024 saw a revenue decrease of 4.16% to $5.31 billion, alongside a net income drop of 16.98% to $432.08 million. However, the company maintained a solid 11.6% operating margin and generated $659.2 million in operating cash flow in 2024.
In the face of challenges, Pool Corp has demonstrated resilience. Since its inception as a public company, it has spent 46% of its cash on share buybacks ($2.7 billion) and 21% on dividends. In April, Pool Corp increased its quarterly dividend by 4% to $1.25 per share.
The company's scale, brand strength, and digital infrastructure provide a durable competitive edge, despite risks associated with reliance on the U.S. housing market and competition from DIY retailers. Pool Corp distributes more than 200,000 products to approximately 125,000 wholesale customers, and has over 450 locations in North America, Europe, and Australia.
In 2022, Pool Corporation's net sales reached a record high of $6.2 billion, and its diluted earnings per share (EPS) also reached an all-time high of $18.70. The company's growth is underpinned by its ability to cater to both essential repairs and aesthetic upgrades, as well as its focus on non-discretionary spending, which is required to keep pools safe, clean, and functional.
As Pool Corp prepares to release its Q2 2025 earnings on July 24, expectations are set for $5.19 EPS and $1.79 billion in revenue. The company anticipates full-year diluted EPS between $11.10 and $11.60 in 2025, compared to $11.30 in 2024. Pool Corp's strategic innovations, recurring revenue model, and strong financial management practices position it as a resilient player in its industry, making it an attractive long-term investment opportunity.
Pool Corp's strategic investments in digital tools and platforms, such as the Regal and E-Z Clor mobile apps, aim to attract recurring sales and increase customer loyalty, potentially boosting its financial performance in the future. The company's resilience is evident in its financial management practices, as demonstrated by its 46% spending on share buybacks and 21% on dividends. Despite market volatility, Pool Corp remains an attractive long-term investment opportunity, backed by its solid financial standing, strong brand, and diverse business model that encompasses both essential repairs and aesthetic upgrades.
