- Revenue Stability: Annual revenue held steady at $5.3 billion year-over-year, supported by resilient maintenance demand and 2% net pricing benefits.
- Gross Margin Growth: Achieved 29.7% gross margin in 2025, a 20 basis point increase from the prior year, with Q4 gross margin at 30.1%.
- Digital Sales Expansion: Digital sales accounted for 15% of total revenue in 2025, an all-time high, driven by POOL360 and AI enhancements.
- Store Network Growth: Opened 8 new locations and acquired 3, totaling 456 sales centers by year-end, with plans for 5–8 new centers in 2026.
- EPS Guidance: 2026 diluted EPS projected at $10.85–$11.15, reflecting disciplined capital allocation and $5M–$15M in incentive compensation costs.
Operational Highlights
The company maintained its market position despite a mid-single-digit decline in new pool construction, driven by its differentiated offering and commitment to service. Maintenance spending proved resilient, with maintenance items accounting for roughly 64% of the company's pool product sales. The company continued to invest in technology, launching POOL360 and unlocking new artificial intelligence features, which contributed to digital sales reaching 15% of total revenue in 2025, an all-time high.
Guidance and Outlook
For 2026, the company expects net sales to grow in the low single-digit range, assuming new pool construction stays close to the 60,000 units seen in 2025. The company's guidance for 2026 is a diluted EPS range of $10.85 to $11.15, with gross margin projected to be consistent with 2025. Analysts estimate next year's revenue growth at 4.4%, slightly higher than the company's guidance. The actual EPS for the fourth quarter came out at $0.856, relative to estimates at $0.99.
Valuation Metrics
To understand what's priced into Pool Corp's stock, we can look at its valuation metrics. The company's Price-to-Earnings (P/E) Ratio is 19.76, indicating a relatively high valuation compared to its earnings. The Price-to-Book (P/B) Ratio is 6.78, suggesting that the stock may be overvalued relative to its book value. The EV/EBITDA ratio is 13.61, which is a more comprehensive metric that takes into account the company's debt and cash. As Peter Arvan mentioned, "the team made judicious investments in inventory and was surgical about allocating capital," which may contribute to the company's future growth prospects.
Return on Investment and Capital Allocation
The company is focused on execution and realizing the commitments made in the pro formas for existing facilities. The team has sharpened its expectations on return on investment for new locations, which is expected to drive future growth. Pool Corp's capital allocation strategy includes reinvesting 1% to 1.5% of net sales back into the business and allocating $25 million to $50 million toward acquisitions. The company also intends to continue repurchasing shares on an opportunistic basis, with a dividend yield of 2.27%. With a Return on Equity (ROE) of 31.86% and a Return on Invested Capital (ROIC) of 15.43%, the company has demonstrated its ability to generate strong returns for shareholders.