Delivered 7% net sales growth in 2025 despite U.S. new pool construction approaching post-GFC lows, demonstrating the resilience of the 85% aftermarket-driven revenue model. Achieved record full-year gross margins of 48%, driven by a 700 basis point expansion over six years through productivity gains and a shift toward higher-margin technology products. Successfully mitigated 2025 tariff headwinds by reducing China-sourced U.S. cost of sales exposure from 10% to approximately 3% by year-end. Expande ...

Hayward (NYSE:HAYW) Q4 2025 Earnings call February 25, 2026 09:00 AM ET Company ParticipantsAndrew Carter - Associate VPEwan Jones - SVP and CFOJeffrey Hammond - Managing DirectorKevin Holleran - President and CEOKevin Maczka - VP of Investor Relations and FP&ANigel Coe - Managing DirectorTyler Bissette - Equity Research AssociateConference Call ParticipantsRob Wertheimer - Founding Partner and Machinery AnalystRyan Merkel - Specialty Distribution and Building Products and Technologies Research AnalystNone ...

Financial Data and Key Metrics Changes - The company's annual revenue for 2025 was $5.3 billion, remaining stable year-over-year, with fourth-quarter sales totaling $982 million, just 1% below the previous year's level [6][17] - Gross margin for 2025 reached 29.7%, an increase of 20 basis points from the prior year, while fourth-quarter gross margins improved to 30.1%, up 70 basis points year-over-year [7][18] - Diluted earnings per share (EPS) for 2025 was $10.85, compared to $11.30 in the previous year, reflecting a 3% decrease [23] Business Line Data and Key Metrics Changes - Maintenance items accounted for approximately 64% of pool product sales in 2025, while renovation and remodel projects made up 22%, and new pool construction contributed 14% [21] - Sales to independent retail customers decreased by 3% for the year and 4% in the fourth quarter, reflecting softer retail demand compared to the previous year [10] - Pinch A Penny franchise sales declined 2% for the full year and 9% in the fourth quarter, primarily due to last year's hurricane activity [10] Market Data and Key Metrics Changes - In Florida, sales declined 2% for the year and 9% in the fourth quarter, while Texas showed early signs of recovery with a 1% growth in the fourth quarter [8] - Europe experienced local currency growth for the first time in three years, including a 4% increase in the fourth quarter [9] - Overall, the company anticipates net sales growth in the low single-digit range for 2026, assuming new pool constructions remain close to 60,000 units [13][27] Company Strategy and Development Direction - The company is focused on delivering an unmatched customer experience, expanding exclusive brands, and leveraging technology and network investments to drive efficiency [14][15] - Strategic investments in technology and supply chain initiatives are expected to yield measurable benefits in 2026, enhancing profitability and customer experience [6][12] - The company plans to maintain a disciplined approach to capital allocation, focusing on high-return opportunities while continuing to invest in growth [14][31] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing challenges in the macro environment, including higher interest rates and inflation, but expressed confidence in the company's ability to navigate these conditions [26][33] - There is optimism regarding pent-up demand in the pool industry as consumer confidence returns, although the timing remains uncertain [4][27] - The company expects maintenance revenues to remain resilient, supported by the addition of new pools built in 2025 [26][27] Other Important Information - The company distributed $530 million in cash to shareholders in 2025, a 10% increase over the previous year, including $341 million in share repurchases [7] - Inventory at year-end was $1.45 billion, an increase of 13% from the previous year, as the company made strategic purchases in anticipation of cost increases [24] - The effective tax rate for the year was 23.8%, slightly higher than the previous year's rate [23] Q&A Session Summary Question: On SG&A and incentive compensation - Management confirmed that the incentive compensation structure is a sliding scale, and flat sales would not trigger a change in overall compensation from 2025 to 2026 [36] Question: On gross margin expectations - Management discussed various factors affecting gross margin, including customer mix, product mix, and pricing optimization efforts [38] Question: On first-quarter performance and chemical prices - Management indicated that first-quarter expectations are in line with low single-digit growth, and there is no significant concern regarding chemical price deflation [50]

PoolCorp (NasdaqGS:POOL) Q4 2025 Earnings call February 19, 2026 11:00 AM ET Company ParticipantsDavid MacGregor - CEO, President and Director of ResearchEthan Roberts - Research AssociateGarik Shmois - Managing DirectorMelanie Hart - CFOPete Arvan - CEORyan Merkel - Co-Group Head–IndustrialsConference Call ParticipantsDaniel Hultberg - Associate AnalystDavid Manthey - Senior Research AnalystSusan Maklari - Senior Equity Research AnalystOperatorGood day, and welcome to the Pool Corporation Fourth Quarter 20 ...

Financial Data and Key Metrics Changes - Net sales increased by 7% to $244 million, driven by a 5% increase in net price and a 2% increase in volume [4][7][15] - Adjusted EBITDA increased by 16% to $59 million, with adjusted EBITDA margin expanding by 170 basis points to 24.2% [4][7][15] - Gross profit margin increased by 150 basis points to 51.2% [4][7][15] - Net leverage reduced to 1.8x, the lowest level in nearly four years [5][19] Business Line Data and Key Metrics Changes - North American net sales increased by 7% to $208 million, with net price realization increasing by 7% and stable volume [16][17] - European and rest of the world net sales increased by 11% to $36 million, with an 8% increase in volume offsetting a 1% reduction in net price realization [17][18] Market Data and Key Metrics Changes - Strong demand trends were reported, particularly in North America and Canada, with Canada seeing over 20% growth [8][27] - The aftermarket model remains resilient, with approximately 85% of sales aligned with serving the aftermarket needs of the existing installed base [8][9] Company Strategy and Development Direction - The company is focused on expanding customer relationships, developing innovative products, and leveraging operational excellence capabilities [5][6] - Investments are being made in advanced engineering and product development, particularly with the introduction of the OmniX automation platform [11][12][34] - The company is also pursuing additional acquisition opportunities in residential and commercial pool sectors [21][47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the dynamic environment and raised full-year guidance for net sales and adjusted EBITDA [6][22][23] - The company anticipates solid cash flow generation and a conversion of greater than 100% of net income [23] - Management noted that the macroeconomic and tariff environment continues to evolve, but they remain positive about the long-term growth outlook for the pool industry [24][23] Other Important Information - The company is implementing AI tools to enhance customer service, with new AI agents resolving approximately 80% of inbound calls without human intervention [14][13] - The company has authorized a share repurchase program of up to $450 million over three years [21][22] Q&A Session Summary Question: Demand trends since July and upside in Q3 - Management noted strong sales out demand, particularly in September, and highlighted improved performance in Canada and Europe [26][27][28] Question: Early buy program and price increase reception - The early buy program is tracking well, with discounts offered to mitigate price increases due to inflation and tariffs [29][30] Question: Investments in new products and their impact on sales - The company is making targeted investments in new product development, particularly in technology and innovation, which is expected to drive future sales [33][34] Question: Impact of private label competition - Management believes that their loyal dealer base will continue to appreciate the value proposition of Hayward products despite competition from lower-priced alternatives [40][41] Question: Increase in cash flow guidance - The increase in cash flow guidance is attributed to improved EBITDA, project timing, and working capital management [43][44] Question: International market margin improvements - European margins improved due to stabilization of production capabilities and a cumulative tariff refund [74][75] Question: Tariff refunds and supply chain realignment - The company is actively pursuing tariff refunds and has made significant progress in reducing exposure to China [82][84]

Financial Data and Key Metrics Changes - Net sales increased by 7% to $244 million, driven by a 5% increase in net price and a 2% increase in volume [4][7][15] - Adjusted EBITDA increased by 16% to $59 million, with an adjusted EBITDA margin of 24.2%, up 170 basis points [4][7][15] - Gross profit margin expanded by 150 basis points to 51.2% [4][15] - Cash flow from operations year-to-date was $283 million, compared to $276 million in the previous year [20] Business Line Data and Key Metrics Changes - North American net sales increased by 7% to $208 million, with a 7% increase in net price realization and stable volume [16][17] - European and rest of the world net sales increased by 11% to $36 million, with an 8% increase in volume offsetting a 1% reduction in net price realization [17][18] - Adjusted segment income margins in Europe increased to 18.5% from 8.4% a year ago [18] Market Data and Key Metrics Changes - Strong demand trends were reported, particularly in Canada, which saw over 20% growth [28] - The U.S. market experienced improved out-the-door sales growth rates for Hayward products, especially in September [8][26] - The aftermarket model remains resilient, with approximately 85% of sales aligned with serving existing installed base needs [8][9] Company Strategy and Development Direction - The company is focusing on expanding customer relationships, developing innovative products, and leveraging operational excellence [5][6] - Strategic initiatives include tariff mitigation actions and investments in advanced engineering and product development [11][12] - The company is also pursuing additional acquisition opportunities in residential and commercial pool sectors [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the dynamic environment and raised full-year guidance for net sales and adjusted EBITDA [6][22] - The company expects net sales to increase approximately 4% to 5.5% for the full year, with adjusted EBITDA projected to increase by 5% to 7% [22][23] - Management noted that the macroeconomic and tariff environment continues to evolve, but they remain positive about long-term growth in the pool industry [24] Other Important Information - The company has reduced net leverage to 1.8 times, the lowest level in nearly four years, providing enhanced financial flexibility [5][19] - The board authorized a share repurchase program of up to $450 million over three years [21] Q&A Session Summary Question: How did the season progress since July, and where did you see the upside in the third quarter? - Management noted strong sales out demand, particularly in September, and highlighted improved performance in Canada and Europe [26][28] Question: How do you think about the early buy program relative to the market being flat? - Management indicated that the early buy program is tracking expectations and that they are managing price increases carefully to mitigate inflation impacts [30][31] Question: Can you discuss your investments in new products and how they are impacting sales? - Management emphasized targeted investments in engineering and new product development, particularly with the OmniX platform, which is expected to drive future growth [34][36] Question: What are your capital allocation priorities moving forward? - Management stated that they will focus on organic capex, M&A opportunities, and share repurchases, with an emphasis on automation and supply chain improvements [49][50] Question: How are you addressing the impact of tariffs and supply chain realignment? - Management reported significant progress in reducing exposure to China and successfully applying for tariff refunds, which positively impacted margins [82][84]

Financial Data and Key Metrics Changes - The company reported net sales of $1.5 billion for Q3 2025, reflecting a 1% year-over-year increase, with gross margin expanding by 50 basis points to 29.6% [4][22][23] - Diluted EPS increased by 4% to $3.40 from $3.27 in the same quarter last year [23] - Operating income improved by $2 million year-over-year, totaling $178 million for the quarter [23] Business Line Data and Key Metrics Changes - Maintenance product sales performed well, particularly in parts and private label chemical volumes [4][8] - Building materials sales increased by 4%, driven by private label offerings and customer experience enhancements [10] - Equipment sales, excluding cleaners, also rose by 4%, primarily due to price benefits and steady replacement volume [11] Market Data and Key Metrics Changes - Florida experienced 1% growth, while Texas remained flat, and California and Arizona each saw a 3% decline [8] - In Europe, net sales decreased by 1% in local currency but increased by 6% in U.S. dollars, with southern countries showing growth [9] - Chemical sales declined by 4% due to deflation, but overall demand for chemicals was considered stable [9][10] Company Strategy and Development Direction - The company shared a strategic roadmap focused on innovation and growth plans during its International Sales Conference [5] - Investments in technology, particularly the POOL360 platform, are seen as key differentiators and are driving customer adoption [14][16] - The company aims to expand its market share through strategic acquisitions and new sales center openings, with a target of 8 to 10 new centers for the year [15][24] Management's Comments on Operating Environment and Future Outlook - Management noted that uncertainty around tariffs and high borrowing rates are impacting consumer sentiment and discretionary spending [6] - Despite challenges, new pool construction sales have outperformed industry permit data, indicating share expansion [7] - The company expects full-year sales performance to be relatively flat to slightly up, with diluted EPS guidance confirmed at $10.81-$11.31 [15][27] Other Important Information - The company completed one acquisition during the quarter, adding two locations in key markets [15] - Inventory levels increased by 4% to $1.2 billion, attributed to product inflation and stocking for new locations [24] - Cash flows from operations year-to-date totaled $286 million, down from $487 million in the prior year due to higher tax payments and working capital investments [24] Q&A Session Summary Question: Early signs of stabilization in housing and consumer trends - Management noted that permit data is sporadic, but overall activity levels seem to have firmed up, with positive comments from builder and remodel customers [32] Question: Investments in innovation and technology - Management emphasized that technology investments are aimed at enhancing customer experience and productivity, with a focus on the POOL360 platform [34][39] Question: Customer risk and margin implications - Management acknowledged consolidation at the customer level but sees it as an opportunity to leverage their technology suite for better integration and efficiency [47] Question: Chemical sales weakness and inflation - Management clarified that there has been some deflation in the sanitizer category, but overall chemical sales remain stable [55][56] Question: Pricing expectations for the next year - Management indicated that pricing increases are expected to be in line with historical trends, with innovation helping to mitigate customer fatigue regarding price hikes [90][92] Question: Adoption rates for POOL360 - Management expressed confidence in the growth potential for POOL360 adoption, aiming for a target of 25% to 30% in the coming years [94][96]

Financial Data and Key Metrics Changes - The company reported net sales of $1.5 billion for Q3 2025, reflecting a 1% increase year-over-year, with gross margin expanding by 50 basis points to 29.6% [4][24] - Diluted earnings per share (EPS) increased by 4% to $3.40 from $3.27 in the same quarter last year [27] - Operating income improved by $2 million year-over-year, totaling $178 million for the quarter [26] Business Line Data and Key Metrics Changes - Maintenance product sales performed well, particularly in parts and private label chemical volumes [7] - Building materials sales increased by 4%, driven by private label offerings and improved customer experience [12] - Equipment sales, excluding cleaners, also rose by 4%, primarily due to price benefits and steady replacement volume [13] Market Data and Key Metrics Changes - Florida experienced 1% growth, while Texas remained flat, and California and Arizona saw declines of 3% each [8] - In Europe, net sales decreased by 1% in local currency but increased by 6% in U.S. dollars [10] - The company noted that permit data was down mid-single digits year-over-year, indicating variability across different regions [6] Company Strategy and Development Direction - The company is focused on innovation and investment in its POOL360 applications, which are gaining adoption among customers [5] - A strategic roadmap for the next year was shared with the management team, emphasizing innovative products and growth plans [5] - The company aims to leverage its technology suite to enhance customer experience and drive future growth [16][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the team's ability to adapt to macroeconomic challenges, including elevated borrowing rates and consumer sentiment [6][20] - The outlook for 2025 remains cautious, with expectations for full-year sales performance to be relatively flat to slightly up [19] - Management highlighted the importance of further interest rate cuts to stimulate demand for new pool construction [6] Other Important Information - The company completed one acquisition during the quarter, adding two locations in key markets, and opened one greenfield site, bringing the total to six new sales centers year-to-date [17][18] - The company confirmed its diluted EPS guidance for the year to a range of $10.81 to $11.31, reflecting $0.11 in realized ASU benefits year-to-date [19][31] Q&A Session Summary Question: What is driving the early signs of stabilization in the market? - Management noted that permit data is sporadic but overall activity levels seem to have firmed up, with positive comments from builder and remodel customers [36] Question: Can you elaborate on the investments in innovation and technology? - Management emphasized that investments in technology are aimed at enhancing customer experience and productivity, with tools like POOL360 being central to this strategy [39][40] Question: How does customer consolidation impact margins and what levers are available? - Management indicated that customer consolidation presents an opportunity to leverage their technology suite, which can help larger customers operate more efficiently [50] Question: What is the outlook for chemical pricing and deflation? - Management acknowledged slight deflation in the sanitizer category but stated that overall chemical sales remain stable, with no alarming trends [56][58] Question: What are the expectations for sales and EPS in the fourth quarter? - Management expects fourth-quarter sales to be flat to slightly up, with weather conditions playing a significant role in construction and remodel activities [79][82]

Core Insights - Pool Corporation reported a 1% increase in net sales for Q3 2025, reaching $1.5 billion, driven by sustained customer demand for maintenance products and improved sales in building materials [3][10] - Gross profit grew by $12.8 million, with gross margin increasing by 50 basis points to 29.6% compared to the same period in 2024, benefiting from price increases and supply chain management [4][10] - The company confirmed its annual earnings guidance range of $10.81 to $11.31 per diluted share, including a year-to-date tax benefit from ASU 2016-09 of $0.11 [10][14] Financial Performance - Net income for Q3 2025 increased to $127.0 million from $125.7 million in Q3 2024 [6] - Earnings per diluted share rose by 4% to $3.40 in Q3 2025, compared to $3.27 in the same period of 2024 [7][10] - For the nine months ended September 30, 2025, net sales remained flat at $4.3 billion compared to the same period in 2024, with a slight decrease in gross margin from 29.7% to 29.6% [8][9] Operating Expenses - Selling and administrative expenses increased by 5% compared to Q3 2024, attributed to higher employee-related costs and inflationary pressures [5] - Operating income for Q3 2025 increased by $1.6 million, maintaining an operating margin of 12.3% [5][10] Balance Sheet and Liquidity - As of September 30, 2025, total assets increased by 4% to $3.5 billion, with inventory rising by 4% to $1.2 billion [12][23] - Total debt outstanding increased by $138.2 million to $1.1 billion, primarily due to share repurchases [12] - Net cash provided by operations decreased to $285.7 million for the first nine months of 2025, down from $488.6 million in the same period of 2024 [13] Strategic Developments - The company opened four new locations in Q3 2025, enhancing its industry-leading position and customer experience through expanded private-label offerings [2] - Pool Corporation celebrated its 30th anniversary as a public company, highlighting its long-term strategic focus and commitment to customer value [2]

Financial Data and Key Metrics Changes - Net sales increased by 5% to approximately $300 million, driven by a 5% increase in net price realization, a 2% decrease in volume, and a 2% contribution from the Core King acquisition [7][18] - Gross profit margins reached a record 52.7%, with adjusted EBITDA margin increasing to 29.5%, marking the tenth consecutive quarter of year-over-year gross margin expansion [6][11] - Net leverage was significantly reduced to 2.1 times, the lowest level in over three years, providing enhanced financial flexibility [6][23] Business Line Data and Key Metrics Changes - North American net sales increased by 6% to $255 million, driven by a 6% net price realization and a 3% contribution from the Clor King acquisition [20] - In Europe and Rest of World, net sales increased by 3% to $44 million, with a 1% contribution from favorable net pricing and a 3% favorable foreign currency translation [22] Market Data and Key Metrics Changes - End demand improved in June, resulting in customer orders generally aligning with normal seasonal patterns for the quarter [8] - Nondiscretionary aftermarket maintenance demand remained resilient, while discretionary elements of the market faced pressure [8][27] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts while supporting margins and fulfilling commitments to shareholders and customers [6][12] - Investments are being made in advanced engineering and new product development to drive future growth, particularly in high-growth regions [11][25] - The company aims to increase its presence in the commercial pool business, which has seen significant growth post-acquisition of Clor King [10][87] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the dynamic environment and refined guidance for full-year 2025, expecting net sales to increase approximately 2% to 5% [7][26] - The company anticipates solid cash flow generation in 2025, with a conversion of greater than 100% of net income [27] Other Important Information - The company has authorized a share repurchase of up to $450 million over three years [25][94] - The tariff environment remains uncertain, with an estimated total annualized tariff impact of approximately $30 million [13][14] Q&A Session Summary Question: Outlook for gross margin in the second half - Management highlighted that the strong Q2 gross margin performance was driven by productivity improvements and product line rationalization, with expectations for continued margin protection despite potential percentage moderation [34][37] Question: New pool market outlook - Management expects modestly down pool data for the year but sees potential for improvement as interest rates and the housing market stabilize [39][42] Question: Guidance adjustments and volume outlook - The company adjusted its volume outlook to reflect stronger performance, with expectations for a negative 1% overall on volume [46][48] Question: SG&A increase and future expectations - The increase in SG&A is attributed to targeted investments in engineering and customer care, with a goal to leverage SG&A as a percentage of sales in the medium term [56][57] Question: Trends in sell-in versus sell-through - Management noted that Q2 saw a strong sell-through, with healthy order profiles and expectations for normal inventory levels as the season progresses [63][65] Question: Repair versus replace dynamics - There is a noticeable trend towards repairing equipment rather than replacing it, driven by economic pressures [66][68] Question: M&A pipeline and opportunities - The company has a healthy pipeline of M&A opportunities, focusing on both domestic and international bolt-on acquisitions [88][90]