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]

Financial Data and Key Metrics Changes - The company reported net sales of $1.8 billion for the second quarter, reflecting a 1% increase year-over-year, indicating solid execution in strategic areas despite macroeconomic challenges [7][19][27] - Gross margin remained stable at 30%, consistent with the same period last year, showcasing effective management in a challenging environment [16][24] - Diluted earnings per share increased to $5.17, up 4% from $4.99 in the second quarter of the previous year [26] Business Line Data and Key Metrics Changes - Maintenance products showed strong performance, particularly in private label chemical products, contributing positively to sales [7][13] - Sales related to new construction and renovation activities improved during the quarter, creating less drag on overall sales compared to previous quarters [8][10] - Equipment sales, including cleaners, increased by 1%, reflecting stable replacement volumes despite a decrease in new construction units [14] Market Data and Key Metrics Changes - Florida and Arizona experienced solid sales growth of 2%, driven by population growth and favorable weather, outperforming national averages [9][10] - Texas and California faced challenges with new pool construction, with sales down 23%, attributed to macroeconomic headwinds and reduced consumer confidence [10][11] - European net sales increased by 2% in local currency and 7% in U.S. dollars, with growth particularly noted in southern European countries [11][12] Company Strategy and Development Direction - The company continues to focus on digital innovation, with the POOL360 platform transactions now representing 17% of net sales, indicating strong customer adoption [17] - Strategic openings in markets with higher pool densities are aimed at expanding market share and enhancing long-term success [18] - The company anticipates modest sales growth in the second half of the year, with full-year performance expected to be relatively flat [19][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of the industry, supported by demographic trends and the desirability of at-home leisure [19][32] - The company remains cautious about new pool construction due to macroeconomic conditions and the absence of interest rate cuts, which are critical for housing turnover [52][62] - Management highlighted the resilience of the maintenance and repair business, which continues to perform well despite economic uncertainties [37][52] Other Important Information - The company opened two new locations during the quarter, contributing to its growth strategy [18][29] - Inventory levels increased by 3% year-over-year, reflecting new product offerings and supply chain actions [27][28] - Share repurchases totaled $104 million during the quarter, indicating a commitment to returning value to shareholders [29] Q&A Session Summary Question: Full year outlook considering tariffs and pricing dynamics - Management noted that the maintenance and repair business remains resilient, and larger renovation projects are being phased to make them more manageable for consumers [38][39] Question: Impact of interest rates on new pool construction - Management indicated that without interest rate cuts, new pool construction is unlikely to rebound significantly this year, affecting overall demand [52][62] Question: Gross margin outlook and competitive pricing - Management confirmed that competitive activity has normalized, and gross margins are expected to remain stable despite some pricing pressures [54][56] Question: Inventory management and product shortages - Management reassured that inventory levels are well-managed and there are no significant product shortages affecting operations [87][82] Question: Chemical pricing dynamics - Management acknowledged ongoing pricing pressures in chemicals but noted that the competitive landscape has not worsened significantly [95][96]

Group 1 - Pool Corp. holds a dominant market share in a fragmented and growing market, providing a strong investment case [2] - Approximately two-thirds of Pool Corp.'s sales are derived from the maintenance and repair of existing swimming pools, including chemicals and equipment [4] - The company exhibits relatively high profit margins and consistently high return on invested capital (ROIC), indicating effective investment strategies [5] Group 2 - Pool Corp.'s margins and ROIC experienced a decline in 2022 due to a correction following the pandemic-induced spending boom [7] - Despite a slowdown in new pool construction, the growing installed base of pools is expected to drive revenue from maintenance and repair services [8] - The company is anticipated to return to its long-term growth trajectory once the new pool construction market stabilizes [8]

Financial Data and Key Metrics Changes - The company reported net sales of $1.1 billion for the first quarter, a decrease of 4% year-over-year, but a decline of only 2% on a same selling day basis, indicating an improving trend towards the end of the quarter [13][14] - Gross margins were reported at 29.2%, down from 30.2% in the first quarter of 2024, but reflecting year-over-year improvement when adjusted for a prior year tax benefit [15][39] - Operating income decreased to $77.5 million, with diluted earnings per share at $1.42, down from $2.04 in the prior year [18][43] Business Line Data and Key Metrics Changes - Maintenance product sales performed well, with chemicals showing volume and revenue growth, including double-digit growth in private label chemical products [14][36] - New construction and remodel activities continued to be affected by tight discretionary spending, but the drag on top-line sales was less severe than in previous quarters [14][37] - Equipment sales, excluding cleaners, declined by 4% during the quarter, while commercial business sales increased by 7% [25][26] Market Data and Key Metrics Changes - Sales increased by 2% in Arizona, remained flat in California, declined by 1% in Florida, and decreased by 11% in Texas, with challenging weather impacting sales in Texas and Florida [19][20] - In Europe, net sales declined by 4% in local currency and 6% in US dollars, with positive trends noted in Spain and Portugal [20][21] - Horizon's net sales also declined by 4%, impacted by commodity pricing deflation, particularly in PVC [22] Company Strategy and Development Direction - The company aims to achieve above-market growth through strategic initiatives focused on customer experience, private label products, and expanding its footprint [6][31] - The company is expanding its wholesale distribution network, having opened two new locations in the first quarter, bringing the total to nearly 450 [28] - The Pinch A Penny franchise network is expanding, with new stores opening to capture the do-it-yourself market [29] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment continues to weigh on new pool construction, with high interest rates causing a wait-and-see pattern in demand for large discretionary purchases [7][52] - There is cautious optimism regarding improving trends in sales, particularly in Florida and California, with expectations for some growth in new pool construction in the second half of the year [69][70] - The company confirmed its full-year EPS guidance range of $11.10 to $11.60, including an estimated benefit from ASU [30][60] Other Important Information - The company has a strong balance sheet, with total debt reported at $1 billion and a leverage ratio of 1.47, at the lower end of its target [47] - Cash flow from operating activities was reported at $27 million, with significant cash outflows related to inventory purchases and deferred tax payments [48] - The company plans to continue share repurchases, having completed $56 million in repurchases during the quarter [49] Q&A Session Summary Question: Expectations for second quarter top line growth - Management expects low single-digit top line growth in the second quarter, consistent with full-year guidance [64][65] Question: Price expectations for the second quarter - Price increases are expected to be more pronounced in the second half of the year, with some impact in the second quarter [66][67] Question: New pool ASP and remodel expectations - The higher-end consumer market remains strong, with no significant trade-downs observed, although remodel projects are being spaced out over time [80][82][85] Question: Impact of macroeconomic conditions on margins - If macro conditions worsen, discretionary spending on new pool construction will be most affected, but maintenance and repair business remains strong [109][110] Question: Positioning of Pinch A Penny in a softening market - No significant shift to DIY from do-it-for-me has been observed, with both channels performing well [114][116] Question: Competitive pricing environment - Competitive pricing remains a challenge, but the company focuses on long-term value and customer experience rather than unsustainable pricing wars [122][125]