Q3 FY2026
Filed Oct 22, 2026POOL CORPORATION REPORTS THIRD QUARTER RESULTS; CONFIRMS ANNUAL EARNINGS GUIDANCE RANGE
Third-quarter net sales increased 4% to $1.5 billion and adjusted diluted EPS increased $0.01, while gross margin contracted 60 basis points and operating income and net income each decreased 3%. The company confirmed its full-year diluted EPS and adjusted diluted EPS guidance ranges.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, three months ended September 30GAAP | $1.50B | – | increased 4% |
| Cost of sales, three months ended September 30GAAP | $1.07B | – | – |
| Gross profit, three months ended September 30GAAP | $436.3M | – | increased 2% |
| Gross margin, three months ended September 30GAAP | 29.0% | – | decreased 60 basis points |
| Selling and administrative expenses, three months ended September 30GAAP | $264.1M | – | increased 5% |
| Operating income, three months ended September 30GAAP | $172.2M | – | decreased 3% |
| Operating margin, three months ended September 30GAAP | 11.4% | – | – |
| Interest and other non-operating expenses, net, three months ended September 30GAAP | $11.76M | – | – |
| Income before income taxes and equity in earnings, three months ended September 30GAAP | $160.4M | – | – |
| Provision for income taxes, three months ended September 30GAAP | $37.45M | – | – |
| Equity in earnings of unconsolidated investments, net, three months ended September 30GAAP | $58K | – | – |
| Net income, three months ended September 30GAAP | $123.0M | – | decreased 3% |
| Basic EPS, three months ended September 30GAAP | $3.41 | – | consistent with the third quarter of 2025 |
| Diluted EPS, three months ended September 30GAAP | $3.40 | – | consistent with the third quarter of 2025 |
| Adjusted diluted EPS, three months ended September 30non-GAAP | $3.40 | – | increased $0.01 |
| Adjusted EBITDA, three months ended September 30non-GAAP | $190.5M | – | – |
| Net sales, nine months ended September 30GAAP | $4.47B | – | increased 4% |
| Gross profit, nine months ended September 30GAAP | $1.31B | – | – |
| Gross margin, nine months ended September 30GAAP | 29.3% | – | declined 30 basis points |
| Operating expenses, nine months ended September 30GAAP | $784.5M | – | increased 5% |
| Adjusted operating expenses, nine months ended September 30non-GAAP | $776.2M | – | increased 4% |
| Operating income, nine months ended September 30GAAP | $522.5M | – | – |
| Adjusted operating income, nine months ended September 30non-GAAP | $530.7M | – | in line with the same period of 2025 |
| Net income, nine months ended September 30GAAP | $364.4M | – | decreased 3% |
| Adjusted net income, nine months ended September 30non-GAAP | $371.2M | – | – |
| Diluted EPS, nine months ended September 30GAAP | $10.02 | – | increased 1% |
| Adjusted diluted EPS, nine months ended September 30non-GAAP | $10.21 | – | increased 4% |
| Adjusted EBITDA, nine months ended September 30non-GAAP | $586.7M | – | – |
| Net cash provided by operating activities, nine months ended September 30GAAP | $419.8M | – | increased 47% |
| Purchases of property and equipment, net of sale proceeds, nine months ended September 30GAAP | −$49.77M | – | – |
| Cash and cash equivalents at September 30GAAP | $105.7M | – | $(22,826) (18)% |
| Product inventories, net, at September 30GAAP | $1.19B | – | $(38,632) (3)% |
| Long-term debt, net, at September 30GAAP | $1.15B | – | $96,809 9% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
2026 Guidance Range outlook
- NoteDiluted EPS: $10.66 to $10.96
- NoteAfter-tax CEO transition costs: 0.21 to 0.21
- NoteAdjusted diluted EPS: $10.87 to $11.17
- NoteIncludes $0.02 of year-to-date ASU 2016-09 tax benefits.
Capital returns
- Year to date, returned $338.1 million to shareholders through $140.1 million in dividends and $198.0 million in share repurchases.
- In the third quarter alone returned $158.7 million to shareholders through share repurchases and dividends.
- Payments of cash dividends were $(140,105) (In thousands) for the nine months ended September 30, 2026.
- Repurchases of common stock were $(198,046) (In thousands) for the nine months ended September 30, 2026.
- Quarterly dividend increased 4% to $1.30 per share from $1.25 per share in the third quarter of 2025.
What drove it
- Third-quarter net sales growth primarily reflected 3% growth from price, coupled with stronger maintenance activity and building materials growth.
- Net sales growth accelerated from 2% growth in the second quarter.
- Excluded sales centers contributed less than 1% to the change in reported net sales.
- The company operated 454 sales centers as of September 30, 2026, compared with 456 at December 31, 2025, after two new locations and four consolidated locations.
Concerns
- Third-quarter gross margin decreased 60 basis points to 29.0% from 29.6%, primarily driven by higher inbound freight costs and customer mix, as well as the comparison against the prior-year benefit from mid-season price increases.
- Selling and administrative expenses increased 5% in the third quarter, reflecting higher performance-based compensation, employee insurance increases and outside fees related to strategic initiatives.
- Nine-month operating expenses included $8.3 million of CEO transition costs.
- Total debt outstanding increased $104.9 million to $1.2 billion at September 30, 2026.
- The release identifies weather, economic conditions, consumer discretionary spending, the housing market, inflation, interest rates, tariffs and ASU 2016-09 tax benefits or deficiencies among risks.
What to watch
- Full-year diluted EPS guidance of $10.66 to $10.96 per diluted share.
- Full-year adjusted diluted EPS guidance of $10.87 to $11.17 per share, including $0.02 of year-to-date ASU 2016-09 tax benefits.
- Maintenance activity and building materials growth.
- Inbound freight costs, customer mix and gross-margin performance.
- Operating expense growth and the effect of CEO transition costs.
- Inventory, which decreased 3% while third-quarter net sales increased 4% year over year.
Balance sheet and cash flow
- Inventory decreased 3% at September 30, 2026 compared to September 30, 2025.
- Total debt outstanding increased $104.9 million to $1.2 billion at September 30, 2026.
- Net cash provided by operating activities was $419.8 million in the first nine months of 2026 compared to $285.7 million in the first nine months of 2025.
- Purchases of property and equipment, net of sale proceeds, were $49.8 million in the first nine months of 2026.
- Net debt repayments were $33.1 million year to date.
- Net cash used in investing activities was $(47,444) (In thousands) for the nine months ended September 30, 2026.
- Net cash used in financing activities was $(369,518) (In thousands) for the nine months ended September 30, 2026.
- Cash and cash equivalents at end of period were $105,657 (In thousands).
Analysis
Pool Corporation delivered 4% third-quarter net sales growth to $1.5 billion, accelerating from 2% growth in the second quarter. The release attributes the gain primarily to 3% growth from price, stronger maintenance activity and building materials growth. Excluded sales centers contributed less than 1% to the change in reported sales, indicating that the reported sales result closely reflected the base business.
Profit growth did not match sales growth. Gross profit increased 2% to $436.3 million, while gross margin declined 60 basis points to 29.0% from 29.6%. Management identified higher inbound freight costs, customer mix and comparison with the prior-year benefit from mid-season price increases as the causes. Selling and administrative expenses rose 5% to $264.1 million, leading operating income to decrease 3% to $172.2 million and net income to decrease 3% to $123.0 million. GAAP diluted EPS was unchanged at $3.40 and adjusted diluted EPS increased $0.01 to $3.40.
For the first nine months, net sales increased 4% to $4.5 billion and GAAP diluted EPS increased 1% to $10.02. Adjusted diluted EPS increased 4% to $10.21. The nine-month period included $8.3 million of CEO transition costs in operating expenses, and adjusted operating income was $530.7 million, described as in line with the same period of 2025. The smaller year-to-date ASU 2016-09 tax benefit, $0.7 million or $0.02 per diluted share in 2026 compared with $4.2 million or $0.11 per diluted share in 2025, is also relevant to the GAAP-to-adjusted comparison.
Cash generation strengthened materially, with nine-month operating cash flow increasing 47% to $419.8 million. The company returned $338.1 million to shareholders year to date through dividends and repurchases, invested $49.8 million in the business and made $33.1 million in net debt repayments. Inventory decreased 3% year over year, while total debt outstanding increased $104.9 million to $1.2 billion. The quarterly dividend increased 4% to $1.30 per share.
Management confirmed full-year diluted EPS guidance of $10.66 to $10.96 and adjusted diluted EPS guidance of $10.87 to $11.17, each including $0.02 of year-to-date ASU 2016-09 tax benefits in the adjusted range disclosure. The filing provides no revenue, gross-margin, operating-expense or tax-rate outlook. The key reported items for the remainder of 2026 are the continuation of maintenance and building-materials demand, price contribution, freight and customer-mix pressure on gross margin, and expense discipline.
Management, verbatim
Building on our performance through the first half of the year, we delivered solid results in the third quarter of 2026 as we moved through the end of the peak selling season. Our dedicated teams produced top-line growth by delivering to our customers when they needed it the most.
John B. Watwood, president and CEO
Based on our performance to date and outlook for the remainder of the year, we are confirming our full-year adjusted diluted EPS guidance range of $10.87 to $11.17.
John B. Watwood, president and CEO
Not in the filing
stated, not guessed- Prior outlook was not provided; comparison of actual results with prior guidance is unavailable.
- No reportable segment revenue or segment operating metrics were provided.
- No free cash flow metric was reported.
- No forward revenue guidance was provided.
- No forward gross-margin guidance was provided.
- No forward operating-expense guidance was provided.
- No forward tax-rate guidance was provided.
- No quarter-over-quarter comparisons for the reported financial metrics were provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.