Nasdaq:POOL
POOL CORP
A leading US-based distributor of swimming pools and accessories with a fortress-like balance sheet and consistent operational cash flow growth.
Key Metrics
Investment Thesis
Bull Case
Investors may favor POOL due to its consistent generation of strong operating cash flows relative to its size and the stability of its recurring accessory revenue streams. The company's low debt-to-equity ratio and high current assets provide a significant safety margin against economic headwinds in the home improvement sector. Management has demonstrated a track record of returning capital to shareholders through dividends and buybacks while maintaining a fortress balance sheet.
Bear Case
Concerns regarding valuation premiums may persist given the company's history of steady but not explosive revenue growth in a niche market. The heavy reliance on inventory management poses risks if consumer demand for pools softens further, leading to potential write-downs or increased holding costs. Significant cash outflows from financing activities and other liabilities suggest ongoing refinancing needs that could complicate capital structure flexibility.
About POOL CORP
Pool Corporation (POOL) operates as a distributor of swimming pools, pool accessories, and related products serving residential homeowners, property managers, and commercial entities in the United States. The company manages its own extensive distribution network and maintains a strong balance sheet while navigating industry-specific supply chain dynamics. Its financial profile reflects robust cash generation from operations offset by significant capital expenditures for infrastructure and revolver activity for liquidity management.
Analysis
Management Discussion
Recent financial performance shows revenue stabilizing near $5.3B after a multi-year decline, while net income remains resilient at over $400M due to operational leverage. Operating cash flow of $365.9M significantly exceeds the net profit margin, indicating high quality earnings and effective working capital management. However, substantial capital expenditures of $56.3M and significant revolver activity suggest ongoing investment in capacity and liquidity management to fund growth or weather volatility.
Industry Overview
The swimming pool industry is highly fragmented with a steady demand cycle driven by housing starts and homeowner renovation trends in North America. Competition is moderate but consolidated around major distributors who control the majority of the supply chain logistics. Market dynamics are currently influenced by material costs, labor availability for installation, and shifting consumer preferences toward outdoor living spaces.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $6.18B | $5.54B | $5.31B | $5.29B |
| Cost of Revenue | $4.25B | $3.88B | $3.74B | $3.72B |
| Gross Profit | $1.93B | $1.66B | $1.58B | $1.57B |
| Operating Expenses | $907.6M | $913.5M | $958.1M | $992.3M |
| Operating Income | $1.03B | $746.6M | $617.2M | $580.2M |
| G&A | $907.0M | $913.5M | $958.1M | $992.3M |
| Stock-Based Comp | $14.9M | $19.6M | $19.2M | $22.7M |
| Depreciation | $30.4M | $31.6M | $36.8M | $42.7M |
| Amortization | $7.8M | $7.8M | $7.8M | $8.0M |
| Other OpEx | $605.0K | $0 | $0 | $0 |
| Non-Operating Income | $-40.9M | $-58.4M | $-50.2M | $-46.8M |
| Pre-Tax Income | $984.9M | $688.1M | $567.0M | $533.4M |
| Income Tax | $236.8M | $165.1M | $132.8M | $127.1M |
| Continuing Ops | $748.1M | $523.1M | $434.1M | $406.3M |
| Discontinued Ops | $353.0K | $177.0K | $207.0K | $102.0K |
| Net Income | $748.5M | $523.2M | $434.3M | $406.4M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $748.5M | $523.2M | $434.3M | $406.4M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $2.02B | $1.82B | $1.73B | $1.97B |
| Inventory | $1.59B | $1.37B | $1.29B | $1.45B |
| Prepaid Expenses | $30.9M | $40.4M | $47.1M | $62.4M |
| Other Current Assets | $397.0M | $409.4M | $392.7M | $452.8M |
| Long-Term Assets | $1.55B | $1.61B | $1.64B | $1.66B |
| PP&E (Net) | $193.7M | $223.9M | $251.3M | $267.1M |
| Intangibles | $305.4M | $298.3M | $290.7M | $283.9M |
| Goodwill | $692.0M | $700.1M | $698.9M | $707.3M |
| Operating Leases | $269.6M | $305.7M | $314.9M | $327.4M |
| Other LT Assets | $84.4M | $83.4M | $81.8M | $69.0M |
| Total Assets | $3.57B | $3.43B | $3.37B | $3.63B |
| Current Liabilities | $675.7M | $770.8M | $844.2M | $880.3M |
| Accounts Payable | $406.7M | $508.7M | $525.2M | $652.6M |
| Current Leases | $75.5M | $89.2M | $98.3M | $105.3M |
| Other Current Liab | $25.0M | $38.2M | $49.5M | $13.0M |
| Long-Term Liabilities | $1.65B | $1.34B | $1.25B | $1.56B |
| Long-Term Debt | $1.36B | $1.02B | $900.9M | $1.19B |
| LT Operating Leases | $198.5M | $221.9M | $223.3M | $230.2M |
| Other LT Liab | $94.2M | $107.4M | $126.4M | $143.9M |
| Total Liabilities | $2.33B | $2.12B | $2.09B | $2.44B |
| Shareholders' Equity | $1.24B | $1.31B | $1.27B | $1.19B |
| Retained Earnings | $653.5M | $700.0M | $648.5M | $520.7M |
| AOCI | $5.9M | $6.6M | $-13.7M | $-6.5M |
| Total L&E | $3.57B | $3.43B | $3.37B | $3.63B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $748.5M | $523.2M | $434.3M | $406.4M |
| Non-Cash Adjustments | $-499.5M | $682.4M | $435.2M | $-62.0M |
| Working Capital Changes | $235.8M | $-317.4M | $-210.3M | $21.4M |
| Cash from Operations | $484.9M | $888.2M | $659.2M | $365.9M |
| Capital Expenditures | $43.6M | $60.1M | $59.5M | $56.3M |
| Cash from Investing | $-50.9M | $-71.6M | $-66.2M | $-67.8M |
| Share Buybacks | $471.2M | $306.4M | $306.3M | $346.3M |
| Dividends Paid | $150.6M | $167.5M | $179.6M | $184.9M |
| Cash from Financing | $-411.7M | $-798.1M | $-576.5M | $-273.4M |
| FX Effect | $-1.1M | $2.4M | $-5.1M | $2.4M |
| Net Change in Cash | $21.3M | $20.9M | $11.3M | $27.1M |
| Beginning Cash | $24.3M | $45.6M | $66.5M | $77.9M |
| Ending Cash | $45.6M | $66.5M | $77.9M | $105.0M |
Frequently Asked Questions
How does POOL CORP make money?
The company's revenue is primarily driven by the sale of above-ground and in-ground swimming pools, along with complementary accessories such as pumps, filters, and chemicals. Operations are further supported by the distribution of pool building materials including liners, shells, and installation equipment. The business model leverages a proprietary logistics network to serve a fragmented market of independent retailers and direct-to-consumer projects.
What are the main risks for POOL?
The company faces exposure to cyclical economic downturns that reduce discretionary spending on luxury items like swimming pools. Rising interest rates and inflationary pressures can increase the cost of inventory financing and reduce demand for large-ticket home improvement projects. Regulatory changes regarding pool safety standards or environmental restrictions on chemical products could impact product mix and margins.
What is POOL's competitive advantage?
Pool Corporation benefits from an extensive and highly efficient private fleet of distribution centers that minimize third-party logistics costs. The company maintains strong bargaining power with suppliers through its scale, allowing for favorable pricing on bulk inventory purchases like fiberglass shells and pumps. Its vertical integration into the distribution process creates a high barrier to entry for competitors who lack the capital to build similar infrastructure.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.