Core Insights - Pool Corporation reported a modest beat on revenue and earnings per share (EPS) for Q2 2025, with revenue at $1.79 billion and adjusted EPS at $5.17, surpassing analyst expectations of $1.78 billion and $5.09 respectively [1][2] - The company trimmed its full-year 2025 earnings outlook based on second-quarter performance and expectations for the remainder of the year [1][12] Financial Performance - Adjusted EPS for Q2 2025 was $5.17, a 3.8% increase from $4.98 in Q2 2024 [2] - Revenue totaled $1.79 billion, reflecting a year-over-year increase of 0.6% from $1.77 billion in Q2 2024 [2] - Gross margin remained stable at 30%, while operating margin was unchanged at 15.3% [2][7] - Net income for Q2 2025 was $194.3 million, a slight increase from $192.4 million in Q2 2024 [2][7] Business Operations - Pool operates 451 sales centers across North America, Europe, and Australia, focusing on chemicals, equipment, parts, and building materials for pool professionals and retailers [3] - Approximately 65% of annual revenue in 2024 came from the recurring maintenance and repair market, providing stability against economic fluctuations [4] - The company is expanding its sales center footprint and enhancing private-label offerings, with a focus on technology-driven products [4][8] Market Dynamics - The second quarter saw steady business in pool maintenance products, particularly private-label chemicals, which experienced double-digit growth [5] - Discretionary sales, including new pool construction and upgrades, showed incremental improvement but remained below pre-pandemic levels [6] - Competitive dynamics intensified, leading to pricing pressure in certain regions as competitors sought market share [6] Cash Flow and Shareholder Returns - Cash flow from operations for the first half of 2025 fell to $170.6 million, down from $172.1 million in the same period last year, influenced by a deferred tax payment and inventory build [10] - The company prioritized shareholder returns, repurchasing $156.4 million in shares and paying $92.2 million in dividends during the first half of 2025 [10][11] - The quarterly dividend was raised by 4% to $1.25 per share, supported by disciplined capital management [11] Future Outlook - Management updated its annual diluted EPS guidance to a range of $10.80 to $11.30, reflecting macroeconomic uncertainties impacting consumer confidence and interest rates [12] - The company noted a growing proportion of sales to larger, lower-margin customers, which could affect profitability [13]

Investment Rating - The report assigns a Neutral rating on Leslie's Inc. (LESL) with a 12-month price target of $3 based on EV/EBITDA multiples of 8.0x/9.0x/10.0x for downside/base/upside cases [40]. Core Insights - Memorial Day weekend demand for pools was in line with the previous year, and similar sales are expected for the summer, with chemical sales likely to remain stable but discretionary sales anticipated to decline [1][3]. - Google search trends indicate an increase in interest for pool-related topics in key states, suggesting a potential uptick in demand, although Leslie's Pool Supplies experienced a decline in search interest [19][24]. - Approximately 75% of surveyed retailers do not view Leslie's or Walmart as strong competitors in the pool supply market [3][16]. Summary by Sections Survey Results - A survey of 27 independent specialty pool retailers indicated that demand during Memorial Day 2025 was consistent with 2024, with no expectations for increased demand for chemicals or discretionary items [2][3]. - Retailers expressed that prices for pool supplies are not expected to be lower than the previous year [10]. Google Search Trends - Google search interest for "pool" in April and May 2025 remained stable compared to 2024, with increases noted against 2023 and pre-pandemic levels [24]. - Searches for Leslie's Pool Supplies showed a decline in interest compared to previous years, indicating potential challenges for the company [24][31]. Market Competitiveness - The majority of retailers surveyed do not consider Leslie's or Walmart as significant competitors, with 22% affirming Leslie's as a competitor and 5% for Walmart [3][16]. - Retailers are cautious about the competitive landscape, with many not expecting significant changes in market dynamics [3].