• Full Year Revenue: $5.3 billion, down 4% from 2023.
• Gross Margin: 29.7% for the year, slightly lower due to weaker product mix.
• Operating Income: $617 million with an operating margin of 11.6%.
• Operating Cash Flow: $659 million.
• Diluted EPS: $11.30 per share, including a $0.23 ASU tax benefit.
• Fourth Quarter Revenue: $988 million, down 2% year-over-year.
• Fourth Quarter Gross Margin: 29.4%, a 10 bps improvement from the previous year.
• Fourth Quarter Operating Income: $60.7 million with an operating margin of 6.1%.
• Fourth Quarter Diluted EPS: $0.98 per share, including a $0.01 ASU tax benefit.
• Florida Sales Growth: 12% growth in the fourth quarter.
• Horizon Net Sales Decline: 6% for the full year and 4% for the fourth quarter.
• Europe Sales Decline: 9% for the full year and 5% in the fourth quarter.
• Chemical Sales Growth: 2% for the year and 8% in the fourth quarter.
• Building Materials Sales Decline: 10% for the full year and 8% in the fourth quarter.
• Equipment Sales: Flat for the year, up 6% in the fourth quarter.
• Commercial Pool Product Sales Growth: 9% for both the full year and fourth quarter.
• Pinch A Penny Retail Sales Growth: 4% for the year and 15% in the fourth quarter.
• POOL360 Orders: Increased to 12.5% in the fourth quarter from 11% last year.
• New Locations: 10 new sales centers and 2 acquired, totaling almost 450 sales centers.
• Pinch A Penny Network: Added 11 new stores, totaling 295 stores.
• Inventory Reduction: $76 million reduction in inventory.
• Total Debt Reduction: $103 million, ending at $950 million.
• Shareholder Returns: $483 million returned through dividends and share repurchases.

• Warning! GuruFocus has detected 3 Warning Sign with POOL.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Pool Corp (NASDAQ:POOL) reported full-year revenue of $5.3 billion, slightly above their latest guidance, showcasing strong team execution.
• The company achieved a gross margin of 29.7% for 2024, indicating effective management despite a weaker product mix.
• POOL360 ecosystem and tools have shown significant traction, contributing to increased private label chemical sales.
• The company opened 10 new sales centers and added two through acquisitions, expanding their footprint to almost 450 sales centers.
• Commercial pool product sales grew by 9% for both the full year and the fourth quarter, highlighting successful investments in capabilities and market share growth.

Negative Points

• New pool construction declined by approximately 15% in 2024, with a 50% drop from the pandemic-driven peak, impacting overall sales.
• Fourth quarter sales were down 2% year-over-year, reflecting ongoing challenges in construction and renovation activities.
• Operating income for the fourth quarter decreased to $60.7 million from $79 million in the prior year, with a reduced operating margin of 6.1%.
• The company faces continued macroeconomic pressures, including high interest rates and inflation, which are expected to impact 2025 sales trends.
• Sales in Europe declined by 9% for the full year, indicating regional challenges and a need for improvement in international markets.

Q & A Highlights

Q: Can you discuss the impact of the POOL360 initiatives on your sales outlook for 2025? A: Peter Arvan, President and CEO, explained that POOL360 is gaining traction and plays a significant role in the maintenance portion of their business. The tools within POOL360, such as the private label chemicals, are expected to drive sales regardless of the construction and renovation environment. The ecosystem makes maintenance companies more efficient and encourages the use of proprietary products, which supports sales growth.

Q: How is the Pinch A Penny business performing given the current macroeconomic pressures? A: Peter Arvan noted that there hasn't been a significant shift from professional service companies to DIY. Pinch A Penny's growth is attributed to providing a great customer experience, being well-stocked, and having the right technology. The focus remains on delivering an excellent customer experience to drive growth.

Q: Why is the outlook for new pool construction units flat despite high interest rates and declining pool permits? A: Peter Arvan mentioned that dealer activity reports are positive, and while the first half of the year might be weaker, the second half is expected to be stronger. The sentiment from dealers suggests that the situation won't worsen, and they anticipate improvement in the latter part of the year.

Q: What are the expectations for gross margin in 2025, considering product mix and competitive pressures? A: Melanie Hart, CFO, stated that the focus will be on supply chain improvements, increased private label sales, and pricing strategies to offset competitive pressures and product mix challenges. These efforts are expected to maintain or improve gross margins.

Q: How is the company addressing competitive pressures and customer mix changes? A: Melanie Hart explained that private equity has entered the market, leading to growth in national accounts and consolidations. Pool Corp is focusing on serving these larger customers effectively, which is expected to improve market share and competitive positioning.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.