Bear of the Day: Pool Corp (POOL)

Pool Corporation’s POOL) stock has been falling mainly because demand for new pool construction has weakened, attributed to a sluggish housing market.

Pressuring investor sentiment, Pool Corp's earnings guidance has disappointed amid high inventory levels.

Recent earnings misses, lowered analysts' price targets, and broader softness in the consumer discretionary and industrial sectors have added to the decline.

The world’s largest wholesale distributor of swimming pool supplies, equipment, and related products has seen its stock fall another 11% in 2026, and is now sitting on a grizzly decline of -50% in the last two years.

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Key Points of Pool Corp’s Stock Decline

1. Sluggish Housing Market & Declines in New Pool Construction

New pool installations have fallen sharply from pandemic highs, cutting into the most cyclical part of Pool Corp’s business.

High interest rates continue to suppress homebuilding and renovation activity, reducing demand for new pools and related equipment.

2. Elevated Inventory Levels

Pool Corp's inventory remains high, coming in at $1.45 billion at the end of last year (13% increase), signaling slower sell-through and tying up capital.

High inventory buildup during a demand slowdown often pressures margins and investor confidence.

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3. Revenue & Earnings Declines

Although Pool Corp’s annual revenue is expected to rebound 2% in FY26 to $5.41 billion, the company’s top line has been in a steady decline since reporting record revenue of $6.18 billion in 2022.

Net income has also dropped significantly, from $748 million in 2022 to $412 million on a trailing twelve-month basis (TTM). Correlating with such and adding to concerns, Pool Corp reported Q4 EPS of 0.84 in February, versus expectations of $0.99 and dropping from $0.97 per share a year ago.

Also triggering a sharp post-earnings selloff is that Pool Corp’s FY26 EPS guidance range of $10.85-$11.15 came in well below Wall Street's consensus of $11.60.

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Declining EPS Revisions

While a noticeable decline in FY26 EPS revisions was expected, it’s noteworthy that Pool Corp’s FY27 EPS estimates have trended lower over the last 30 days as well and have now fallen nearly 5% in the last two months, from $12.72 to $12.09.

POOL is starting to trade at a much more reasonable 18X forward earnings multiple, but the decline in EPS revisions is still concerning for a stock investors are paying $200 a share for and has remained vulnerable to a weakening operating environment.

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Bottom Line

Pool Corp still benefits from a large base of recurring maintenance revenue, which accounts for about two-thirds of its business and is more stable than new installations. However, in the near term, Pool Corp’s stock may remain under pressure until housing activity improves and inventory normalizes, which will hopefully reaccelerate its earnings.

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This article originally published on Zacks Investment Research (zacks.com).

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