Oct 22, 2026 earnings call — Q3 results and strategy update
POOL reaffirmed 2026 adjusted EPS guidance at $10.87 to $11.17 and reported Q3 adjusted EPS of $3.40.
Revenue $1.5B (est $1.5B) · EPS $3.40 (est $3.36)
Key quotes
"We are introducing new processes, training, and tools because in our industry, business is 1 locally."
"We are also concentrating our focus on private label expansion on chemicals and building materials, where differentiated products offer opportunities for greater growth and margin benefit over time."
"We are driving higher standards of service per employees across all of our sales centers."
Analyst Q&A 13
2027 plan and priorities
Q (Susan Maklari · Goldman Sachs): Analyst asked which areas management will focus on coming into the off-season and what that could mean for growth and margins into spring 2027. She also asked whether competition has changed as the macro weakened.
A: Management said they will keep the recent changes and investments and continue pricing work, simplify incentive plans, and move faster on some initiatives out of season. They noted freight is a concern beyond their control but they have many things they can control and are excited about the foundation for 2027.
"We will continue on our pricing journey and some of the investments there to set us up for a good 2027 season." — John Watwood (CEO)
quantifying margin levers
Q (David Manthey · Baird): Analyst asked if the company will provide quantitative detail on the items on slide 9 (sales, price, operations, M&A) and give target ranges before next May. He also asked if fourth quarter reporting will include numbers.
A: Management said yes they are building a bottoms-up plan and will provide more granular breakdown when they report fourth quarter. They plan to show the elements of the strategic initiatives and put confidence around each action in that Q4 disclosure.
"So as we come into next year and we announce our fourth quarter, then we will break this down a little more granularly about where we see the as you said, the elements of the entire plan." — John Watwood (CEO)
gross margin and inventory plans
Q (Ryan Merkel · William Blair): Analyst wanted finer point on fourth-quarter gross margin given mix and freight headwinds and asked about inventory targets and days heading into 2027.
A: Management said freight rates as a percentage of sales should be consistent with third quarter and they expect fourth-quarter margin to be higher than third quarter but lower than last year. On inventory, they are still working with vendors to understand early buy activity and will decide based on those discussions.
"And so we would expect a similar higher rate in the fourth quarter than what we finished the third quarter." — Melanie Housey Hart (CFO)
timing of pricing vs freight
Q (Daniel · Oppenheimer): Analyst asked how quickly pricing will offset freight and what internal actions can offset gross-margin headwinds into next year. He also asked about discretionary sales trends and sustainability.
A: Management said most pricing is set at the start of the season, with some midseason increases for building materials; the majority of remaining pricing actions are expected at the beginning of next season. They said building materials has had five quarters of increases, they outperform permit data, and expect fourth-quarter discretionary sales to come in better than permit data despite permits being lower year to date.
"As we look ahead for pricing, the majority of the kind of remainder of our pricing actions, we would expect to take place at the beginning of next season." — Melanie Housey Hart (CFO)
share of large customers and competitors
Q (Jefferies): Analyst asked what share of business comes from large customers and how that trend might continue, and whether smaller competitors are showing stress or shutdowns.
A: Management said large customers represent about mid-single digits of sales and are growing; they believe profitability can be achieved there and they are working to be more efficient. On smaller competitors, management avoided speculation, saying they have no insight or market chatter about shutdowns and would not share rumors.
"I will say in the context of what we are discussing here, we are still about mid-single digits overall." — John Watwood (CEO)
pricing outlook and Q4 SG&A cadence
Q (Trey Grooms · Stephens): Analyst asked about supplier price expectations for next year and timing to recoup freight, and he sought clarity on Q4 gross margin and SG&A trends.
A: Management said they do not yet have a complete picture on supplier pricing and expect more clarity in the next 30 to 45 days; they targeted price increases to recoup some freight and deliberately absorbed some costs. They said Q4 gross margin should be slightly better than Q3 but may be lower year over year, and Q4 SG&A growth should be below the 5% seen in Q3 though some incentive comp and strategic investments will continue.
"So, and we also had a good fourth quarter, so we could expect that if you are looking at the year over year the comparison could get worse." — Melanie Housey Hart (CFO)
technology investments impact
Q (Longbow): Analyst asked whether there is any shift from 'do it for me' to DIY at Pinch A Penny and about progress and potential impact of technology investments for 2027 margins.
A: Management said they do not see a material shift to DIY and service remains strong, so the 3% increase is more about pitch performance and customer experience. On technology, they said they have been evaluating internal and customer-facing tech, brought in third parties, are getting outputs and plans, and expect technology and integrations to drive efficiencies and top-line growth with more details to come.
"We are getting the outputs of those now. We are putting the plans together." — John Watwood (CEO)
SG&A headwinds and strategy fees
Q (Collin Verron · Deutsche Bank): Analyst asked how much employee insurance and outside fees impacted Q3 SG&A and how long they will linger, and whether outside fees are for sales/pricing initiatives or M&A/divestitures. He also asked if self-help levers can drive margin expansion or if sales growth must accelerate.
A: Management said work streams are active across all priority areas and they are making strong progress on the initiatives to set up next season. They also said they expect many self-help initiatives to help next year but acknowledged the market likely won't give anything for free, so they are positioning to take what they can internally while remaining cautious about external conditions.
"I would say that the our focus in the quarter has been on really all of the priorities." — Melanie Housey Hart (CFO)
October sales growth detail and algorithm update
Q (Richard Reid · Wells Fargo): Analyst asked whether October's 2% sales growth reflected lower pricing or negative volumes and whether the company will update its long-term algorithm at Analyst Day or Q4 call.
A: Management said fourth-quarter comparisons will be harder because pricing was stronger last year and they saw no negative volume trends in October. They also confirmed they will provide a deeper discussion on the long-term algorithm and expect to update on that in future disclosures.
"From a pricing standpoint, you know, we would expect the comparison to be more difficult in the fourth quarter because we did have better pricing in the fourth quarter of last year." — Melanie Housey Hart (CFO)
impact of building materials price increase and incentives
Q (Shaun Calnan · BofA): Analyst asked how much benefit came from the building materials price increase and whether surcharges were passed on; he also asked if higher incentive comp is permanent or one-time.
A: Management said building materials represented about 11% of sales for the quarter and the midquarter price increase added incremental benefit; other pricing actions are expected early next season and they did implement a freight surcharge on delivered products. They said some incentives were one-time specialized payments, and they plan to simplify and align long-term incentive plans so they pay for themselves as the company grows.
"I did call out that it is about 11% of sales for the quarter, so it is just a portion of the sales." — Melanie Housey Hart (CFO)
regional sales recovery and site consolidation
Q (Garik Shmois · D.A. Davidson): Analyst asked what drove the sales recovery in Q3 across geographies and seasonal markets, and how management balances sales center density versus consolidation into 2027.
A: Management said Q3 benefits came from structural changes that improved customer focus, removing friction, better execution of supplier programs, and stronger national accounts work. On locations, they said they follow market movement and will be flexible—growing where the market goes, using the large network to stage product or be service-focused, and taking consolidation opportunities when efficient.
"You go where the market goes." — John Watwood (CEO)
special incentives and national accounts role
Q (Steven Forbes · Guggenheim): Analyst asked whether special incentive payments were retention-focused and how much local flexibility is needed to reinstall a sales excellence culture for small and medium customers. He also asked how the new VP of National Commercial Accounts will change field support and investments.
A: Management said the special incentives were not retention based but rewarded field employees working long hours and executing; they want to simplify incentives going forward. They said national accounts requires central coordination to support field execution across supply chain, IT and marketing, providing consistency for multisite customers while empowering the field to win locally.
"So on the first 1, no, it was not it was not retention based." — John Watwood (CEO)
M&A vs buybacks and chemicals outlook
Q (Jeffrey Hammond · KeyBanc): Analyst asked whether the company would lean more into buybacks given stronger free cash flow and a stock pullback, and asked for color on chemical pricing after a competitor bankruptcy.
A: Management said the company has a healthier M&A pipeline than months ago and buybacks remain part of the capital allocation with authorization available; buyback activity follows the cash-flow cycle with more buybacks in Q3 and Q4. On chemicals, management said it has been a bright spot driven by strong volume, price deflation is moderating, and investments made last year have paid off so far.
"So I am excited about our prospects." — John Watwood (CEO)