Q1 2026 Pool Corp Earnings Call

April 23, 2026

All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the Starkey followed by zero. After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two please note this event.

Operator: Welcome to the PoolCorp Q1 2026 Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Melanie Hart, Senior Vice President and Chief Financial Officer. Please go ahead.

Is being recorded I would now like to turn the conference over to Melanie Hart Senior Vice President and Chief Financial Officer. Please go ahead.

Welcome to our first quarter 2026 earnings conference call during today's call our discussion comments and responses to questions may include forward looking statements, including management's outlook for 2026 and future periods.

Melanie Hart: Welcome to our Q1 2026 earnings conference call. During today's call, our discussion, comments, and responses to questions may include forward-looking statements, including management's outlook for 2026 and future periods. Actual results may differ materially from those discussed today. Information regarding the factors and variables that could cause actual results to differ from projected results are discussed in our 10-K. In addition, we may make references to non-GAAP financial measures in our comments. A description and reconciliation of any non-GAAP financial measures included in our press release will be posted to our corporate website in the investor relations section. Additionally, we have provided a presentation summarizing key points from our press release and today's call, which can also be found on our investor relations website. We will begin today's call with comments from Peter Arvan, our President and CEO. Pete?

Actual results may differ materially from those discussed today.

Information regarding the factors and variables that could cause actual results to differ from projected results are discussed in our 10-K.

In addition, we may make references to non-GAAP financial measures in our comments.

Description and reconciliation of any non-GAAP financial measures included in our press release will be posted to our corporate website in the Investor Relations section.

Speaker #1: Good day and welcome to the POOL CORP First Quarter 2026 conference call . All participants will be in listen only mode . Should you need assistance , please signal a conference specialist by pressing the star key followed by zero .

Operator: Good day, and welcome to the Pool Corp Q1 2026 Conference Call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the Star key followed by Zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star, then One on your telephone keypad. To withdraw your question, please press Star, then Two. Please note this event is being recorded. I would now like to turn the conference over to Melanie Hart, Senior Vice President and Chief Financial Officer. Please go ahead.

Additionally, we have provided a presentation summarizing key point from our press release and today's call, which can also be found on our Investor Relations website.

Speaker #1: After today's presentation , there will be an opportunity to ask questions , to ask a question , you may press star then one on your telephone keypad .

We'll begin today's call with comments from Peter our van our President and CEO Pete.

Speaker #1: To withdraw your question , please press star , then two . Please note this event is being recorded . I would now like to turn the conference over to Melanie Hart Senior Vice President and Chief Financial Officer .

Good morning, everyone and thank you for joining us.

As we begin the 2026 season the industry continues to work through a period of stabilization.

Peter Arvan: Good morning, everyone, and thank you for joining us. As we begin the 2026 season, the industry continues to work through a period of stabilization. Consumer discretionary demand remains measured while the installed base continues to drive steady maintenance activity. Q1 is our smallest and most weather sensitive quarter, and our focus entering it was on executing cleanly through the shoulder period to position us for the core season ahead. Our team delivered a solid start with sales growth of 6%, operating income growth of 7%, and 10 basis points of operating margin expansion, exceeding our expectations for the quarter. Execution was steady across our geographic footprint, with strong maintenance volumes and improving trends in several discretionary categories. A solid start like this reinforces rather than changes our full year view.

Speaker #1: Please go ahead

Consumer discretionary demand remains measured while the installed base continues to drive steady maintenance activity Q1 is our smallest and most weather sensitive quarter and our focus entering it was on executing cleanly through the shoulder period to position us for the core season ahead.

Speaker #2: Welcome to our first quarter 2020 earnings conference call During today's call , our discussion , comments and responses to questions may include forward looking statements , including management's outlook for 2026 and future periods .

Melanie M. Hart: Welcome to our Q1 2026 earnings conference call. During today's call, our discussion, comments, and responses to questions may include forward-looking statements, including management's outlook for 2026 and future periods. Actual results may differ materially from those discussed today. Information regarding the factors and variables that could cause actual results to differ from projected results are discussed in our 10-K. In addition, we may make references to non-GAAP financial measures in our comments. A description and reconciliation of any non-GAAP financial measures included in our press release will be posted to our corporate website in the investor relations section. Additionally, we have provided a presentation summarizing key points from our press release in today's call, which can also be found on our investor relations website. We will begin today's call with comments from Peter Arvan, our President and CEO. Pete?

Melanie M. Hart: Welcome to our Q1 2026 Earnings Conference Call. During today's call, our discussion, comments, and responses to questions may include forward-looking statements, including management's outlook for 2026 and future periods. Actual results may differ materially from those discussed today. Information regarding the factors and variables that could cause actual results to differ from projected results are discussed in our 10-K. In addition, we may make references to non-GAAP financial measures in our comments. A description and reconciliation of any non-GAAP financial measures included in our press release will be posted to our corporate website in the investor relations section. Additionally, we have provided a presentation summarizing key points from our press release in today's call, which can also be found on our investor relations website. We will begin today's call with comments from Peter Arvan, our President and CEO. Pete?

Speaker #2: Actual results may differ materially from those discussed today Information regarding the factors and variables that could cause actual results to differ from projected results are discussed in our 10-K In addition , we may make references to non-GAAP financial measures in our comments .

Our team delivered a solid start with sales growth of 6%.

Operating income growth of 7%.

10 basis points of operating margin expansion exceeding our expectations for the quarter.

Execution was steady across our geographic footprint with strong maintenance volumes and improving trends in several discretionary categories.

Speaker #2: A description and reconciliation of any non-GAAP financial measures included in our press release will be posted to our corporate website in the Investor Relations section Additionally , we have provided a presentation summarizing key points from our press release and today's call , which can also be found on our Investor Relations website We will begin today's call with comments from Peter Arvan .

A solid start like this reinforces rather than changes our full year view, we are confirming our full year diluted earnings per share range of <unk>, 87% to $11 17, which includes the <unk> ASU benefit realized in the first quarter.

Peter Arvan: We are confirming our full-year diluted earnings per share range of $10.87 to $11.17, which includes the $0.02 of ASU benefit realized in Q1. Reviewing sales by geography, California grew 10% and Texas 7%, supported by constructive weather and strong maintenance demand. Arizona grew 1% and Florida declined 1%, reflecting steady maintenance activities offset by weather and some softness on the irrigation side in Florida. Across the markets, our teams adapted quickly to local conditions and our differentiated product portfolio, proprietary brands, technology platforms, and supplier partnerships built and refined over many years continue to widen the structural advantage that define our position in this industry. These are not advantages that can simply be replicated by adding locations. In our other key businesses, Horizon net sales declined 2%, consistent with the broader discretionary environment we've seen persist.

Reviewing sales by geography, California grew 10% in Texas, 7% supported by constructive weather and strong maintenance demand.

Speaker #2: Our president and CEO , Pete .

Speaker #3: Good morning , everyone , and thank you for joining us As we begin the 2026 season , the industry continues to work through a period of stabilization Consumer discretionary demand remains measured while the installed base continues to drive steady maintenance activity Q1 is our smallest and most weather sensitive quarter , and our focus entering it was on executing cleanly through the shoulder period to position us for the core season ahead Our team delivered a solid start with sales growth of 6% .

Peter Arvan: Good morning, everyone, and thank you for joining us. As we begin the 2026 season, the industry continues to work through a period of stabilization. Consumer discretionary demand remains measured while the installed base continues to drive steady maintenance activity. Q1 is our smallest and most weather sensitive quarter, and our focus entering it was on executing cleanly through the shoulder period to position us for the core season ahead. Our team delivered a solid start with sales growth of 6%, operating income growth of 7%, and a 10 basis points of operating margin expansion, exceeding our expectations for the quarter. Execution was steady across our geographic footprint with strong maintenance volumes and improving trends in several discretionary categories. A solid start like this reinforces rather than changes our full year view.

Peter Arvan: Good morning, everyone, and thank you for joining us. As we begin the 2026 season, the industry continues to work through a period of stabilization. Consumer discretionary demand remains measured, while the installed base continues to drive steady maintenance activity. Q1 is our smallest and most weather sensitive quarter, and our focus entering it was on executing cleanly through the shoulder period to position us for the core season ahead. Our team delivered a solid start with sales growth of 6%, operating income growth of 7%, and a 10 basis points of operating margin expansion, exceeding our expectations for the quarter. Execution was steady across our geographic footprint with strong maintenance volumes and improving trends in several discretionary categories. A solid start like this reinforces rather than changes our full-year view.

Arizona grew 1% in Florida declined, 1%, reflecting steady maintenance activities offset by weather and some softness on the irrigation side in Florida.

Across the markets our teams adapt quickly to local conditions and our differentiated product portfolio proprietary brands technology platforms and supplier partnerships built and refined over many years continued to widen the structural advantage that define our position in this industry.

Speaker #3: Operating income growth of 7% , and a ten basis point of operating margin expansion , exceeding our expectations for the quarter Execution was steady across our geographic footprint with strong maintenance volumes and improving trends in several discretionary categories .

These are not advantages that can simply be recommended gated by adding locations.

In our other key businesses horizon net sales declined 2% consistent with the broader discretionary environment, we've seen persist in Europe sales grew 5% in local currency building on the improved trends, which we exited in 2025.

Speaker #3: A solid start like this reinforces , rather than changes , our full year view . We are confirming our full year diluted earnings per share range of 1087 to 1117 , which includes the $0.02 of ASU benefit realized in the first quarter .

Peter Arvan: In Europe, sales grew 5% in local currency, building on the improved trends which we exited in 2025. By product category, we saw broad-based growth. Chemicals grew 8% on strong volume with standout contributions from our proprietary and private label lines, which carry structurally higher margins and are gaining traction across the enterprise. Building material grew 5%, continuing to build on our national pool trend offering. This, we believe, builds upon our growing share in this category, given the backdrop of muted new construction market. Equipment grew 7% on price and solid volume, and commercial was flat for the quarter, largely due to project timing, but exited the quarter with slight growth. Turning to our two strategic aftermarket channels, independent retail, and the Pinch A Penny franchise network. Sales to independent retail customers grew 3%, a solid setup as they prepare for the core season.

By product category, we saw broad based growth chemicals grew 8% on strong volume with standout contributions from our proprietary and private label lines, which carry structurally higher margins and are gaining traction across the enterprise.

Peter Arvan: We are confirming our full year diluted earnings per share range of 10.87 to 11.17, which includes the two cents of ASU benefit realized in Q1. Reviewing sales by geography, California grew 10% and Texas 7%, supported by constructive weather and strong maintenance demand. Arizona grew 1% and Florida declined 1%, reflecting steady maintenance activities offset by weather and some softness on the irrigation side in Florida. Across the markets, our teams adapt quickly to local conditions and our differentiated product portfolio, proprietary brands, technology platforms, and supplier partnerships built and refined over many years continue to widen the structural advantage that define our position in this industry. These are not advantages that can simply be replicated by adding locations. In our other key businesses, Horizon net sales declined 2%, consistent with the broader discretionary environment we've seen persist.

Speaker #3: Reviewing sales by geography , California grew 10% and Texas 7% , supported by constructive weather and strong maintenance demand Arizona grew 1% and Florida declined 1% , reflecting steady maintenance activities , offset by weather and some softness on the irrigation side .

Building materials grew 5% continuing to build on our national pool trend offering.

This we believe builds upon our growing share in this category given the backdrop of muted new construction market.

Equipment grew 7% on price and solid volume and commercial was flat for the quarter largely due to project timing, but exited the quarter with slight growth.

Speaker #3: In Florida Across the markets , our teams adapted quickly to local conditions and our differentiated product portfolio . Proprietary brands , technology platforms and supplier partnerships built and refined over many years continued to widen the structural advantage that define our position in this industry .

Turning to our two strategic aftermarket channels independent retail and the pinch of any franchise network sales to independent retail customers grew 3% a solid setup as they prepare for the core season, and Pinchpenny franchisee sales to their end customers grew 4% and our franchisees opened seven new independent.

Speaker #3: These are not advantages that can simply be replicated by adding locations in our other key businesses . Horizon net sales declined 2% , consistent with the broader discretionary environment we've seen persist in Europe , sales grew 5% in local currency Building on the improved trends which we exited in 2025 by product category , we saw broad based growth Chemicals grew 8% on strong volume , with standout contributions from our proprietary and private label lines , which carry structurally higher margins and are gaining traction across the enterprise .

Peter Arvan: Pinch A Penny franchisee sales to their end customers grew 4%, and our franchisees opened 7 new independently owned franchise locations in the quarter. On the digital side, POOL360 increased to 13% of net sales in Q1, up from 12.5% a year ago. Our teams continued to make steady progress engaging customers through enhanced offerings and most recently, POOL360 Unlocked. Between our digital investments and our distribution network, we are well positioned to continue deepening customer engagement across both professional and DIY end markets. Consistent with what we have discussed last quarter, we remain disciplined on our sales center expansion or capacity expansion and are focusing on driving more value from our existing footprint. We consolidate 1 sales center into its existing market in the quarter, bringing our total to 455 sales centers.

Owned franchise locations in the quarter.

Peter Arvan: In Europe, sales grew 5% in local currency, building on the improved trends which we exited in 2025. By product category, we saw broad-based growth. Chemicals grew 8% on strong volume with standout contributions from our proprietary and private label lines, which carry structurally higher margins and are gaining traction across the enterprise. Building material grew 5%, continuing to build on our national pool trend offering. This, we believe, builds upon our growing share in this category given the backdrop of muted new construction market. Equipment grew 7% on price and solid volume, and commercial was flat for the quarter, largely due to project timing, but exited the quarter with slight growth. Turning to our two strategic aftermarket channels, independent retail, and the Pinch A Penny franchise network. Sales to independent retail customers grew 3%, a solid setup as we prepare for the core season.

On the digital side full 360 increased to 13% of net sales in the first quarter up from 12, 5% a year ago.

Our teams continue to make steady progress engaging customers through enhanced offerings and most recently, our most recently <unk> hundred 60 unlocked between our digital investments and our distribution network. We are well positioned to continue deepening customer engagement across both professional and DIY and markets.

Speaker #3: Building material grew 5% , continuing to build on our national pool trend , offering . This we believe , builds upon our growing share in this category .

Consistent with what we have discussed last quarter, we remain disciplined on our sales center expansion, our capacity expansion and are focusing on driving more value from our existing footprint. We consolidate one sales center into its existing market in the quarter, bringing our total to 455 sales centers.

Speaker #3: Given the backdrop of muted new construction, market equipment grew 7% on price and solid volume, and commercial was flat for the quarter, largely due to project timing.

Speaker #3: But exited the quarter with slight growth Turning to our two strategic aftermarket channels Independent Retail and the pinch of Penny franchise network sales to independent retail customers grew 3% .

We still expect to open five new sales centers for the full year. This is a measured productivity first posture the right stance given the current environment. We have made several investments in our network, our technology and our people over the past several years and our focus now is on leveraging those investments rather than adding to them.

Peter Arvan: We still expect to open 5 new sales centers for the full year. This is a measured productivity first posture, the right stance given the current environment. We have made several investments in our network, our technology, and our people over the past several years, and our focus now is on leveraging those investments rather than adding to them. You should expect our expense growth rate to moderate as we grow into the capacity that we have already built. As we look at the rest of the year, the macro backdrop has not changed materially from what we described entering 2026. New pool units for 2025 came in at 58,000. While we expect 2026 will be close to that level, it is important to remember that the center of gravity of our business is the 5.5 million in-ground pools already installed.

Speaker #3: A solid setup as they prepare for the core season and pinch a penny. Franchisee sales to their end customers grew 4%, and our franchisees opened seven new independently owned franchise locations in the quarter.

Peter Arvan: Pinch A Penny franchisee sales to their end customers grew 4%, and our franchisees opened 7 new independently owned franchise locations in the quarter. On the digital side, Pool360 increased to 13% of net sales in Q1, up from 12.5% a year ago. Our teams continued to make steady progress engaging customers through enhanced offerings, and most recently, Pool360 Unlocked. Between our digital investments and our distribution network, we are well positioned to continue deepening customer engagement across both professional and DIY end markets. Consistent with what we have discussed last quarter, we remain disciplined on our sales center expansion or capacity expansion and are focusing on driving more value from our existing footprint. We consolidate one sales center into its existing market in the quarter, bringing our total to 455 sales centers. We still expect to open 5 new sales centers for the full year.

Should expect our expense growth rate to moderate as we grow into the capacity that we have already built.

Speaker #3: On the digital side , 360 increased to 13% of net sales in the first quarter , up from 12.5% a year ago . Our teams continued to make steady progress , engaging customers through enhanced offerings and most recently , or most recently , pool 360 unlocked .

As we look at the rest of the year the macro backdrop has not changed materially from what we described entering 2026.

<unk> units for 2025 came in at 58000, while we expect 2026 will be close to that level. It is important to remember that the center of gravity of our business is the $5 5 million in ground pools already installed.

Speaker #3: Between our digital investments and our distribution network , we are well positioned to continue deepening customer engagement across both professional and DIY end markets .

We serve that installed base with a combination of product innovation customer experience and go to market capabilities that no one else in the industry can match.

Speaker #3: Consistent with what we have discussed last quarter , we remain disciplined on our sales center expansion or capacity expansion , and are focusing on driving more value from our existing footprint .

Peter Arvan: We serve that installed base with a combination of product innovation, customer experience, and go-to-market capabilities that no one else in the industry can match. Our growth thesis does not require a recovery in new pool units. It is anchored in maintenance, remodel, and share capture across product categories for the existing installed base. Our teams remain focused on executing the plan we had set out entering the year, maximizing share across product categories, and investing deliberately in technology, private label, and partnerships that extend our reach. Over nearly four decades, we've built something that goes well beyond distribution. An integrated platform of supplier relationships, proprietary products, technology, franchise networks, and field expertise that no one can replicate. We have deliberately invested in that platform so that we perform in the environment we are in today, and so that we are in a fundamentally stronger position whenever the cycle turns.

Our growth thesis does not require a recovery in new pool units is anchored in maintenance remodel and share capture across product categories for the existing installed base.

Speaker #3: We consolidated one sales center into its existing market in the quarter , bringing our total to 455 sales centers . We still expect to open five new sales centers for the full year .

Our teams remain focused on executing the plan, we have set out entering the year maximizing share across product categories.

Speaker #3: This is a measured productivity first posture . The right stance given the current environment . We have made several investments in our network .

Peter Arvan: This is a measured productivity-first posture, the right stance given the current environment. We have made several investments in our network, our technology, and our people over the past several years. Our focus now is on leveraging those investments rather than adding to them. You should expect our expense growth rate to moderate as we grow into the capacity that we have already built. As we look at the rest of the year, the macro backdrop has not changed materially from what we described entering 2026. New pool units for 2025 came in at 58,000. While we expect 2026 will be close to that level, it is important to remember that the center of gravity of our business is the 5.5 million in-ground pools already installed.

And investing deliberately and technology private label and partnerships that extend our reach.

Speaker #3: Our technology and our people over the past several years, and our focus now is on leveraging those investments rather than adding to them.

Over nearly four decades, we built something that goes well beyond distribution.

Speaker #3: You should expect our expense growth rate to moderate as we grow into the capacity that we have already built As we look at the rest of the year , the macro backdrop has not changed materially from what we described Entering 2026 .

An integrated platform of supplier relationships proprietary products technology franchise networks and field expertise that no one can replicate.

We have deliberately invested in that platform. So that we perform in the environment. We're in today and so that we are in a fundamentally stronger position whenever the cycle turns the.

Speaker #3: New pool units for 2025 came in at 58,000 , while we expect 2026 will be close to that level , it is important to remember that the center of gravity of our business is the 5.5 million in-ground pools already installed .

The depth the reach and the relationships that we have built our unmatched and we're getting stronger not standing still.

Peter Arvan: The depth, the reach, and the relationships that we have built are unmatched, and we are getting stronger, not standing still. We look forward to sharing more about our strategic priorities and capital allocation discipline at our investor day on 12 May. I want to thank our team, our vendor partners, and our customers for the work and the trust that underpins what we do. Our people are the reason we start each season ready to win, and their efforts in Q1 set us up for the season ahead. I will now turn the call over to Melanie M. Hart, our Senior Vice President and Chief Financial Officer, for her commentary. Melanie?

We look forward to sharing more about our strategic priorities and capital allocation discipline at our Investor day on May 12.

Speaker #3: We serve that installed base with a combination of product innovation , customer experience , and go to market capabilities that no one else in the industry can match .

Peter Arvan: We serve that installed base with a combination of product innovation, customer experience, and go-to-market capabilities that no one else in the industry can match. Our growth thesis does not require a recovery in new pool units. It is anchored in maintenance, remodel, and share capture across product categories for the existing installed base. Our teams remain focused on executing the plan we had set out entering the year, maximizing share across product categories, and investing deliberately in technology, private label, and partnerships that extend our reach. Over nearly four decades, we've built something that goes well beyond distribution, an integrated platform of supplier relationships, proprietary products, technology, franchise networks, and field expertise that no one can replicate. We have deliberately invested in that platform so that we perform in the environment we are in today, and so that we are in a fundamentally stronger position whenever the cycle turns.

I want to thank our team our vendor partners and our customers for the work and the trust that underpins what we do our.

Speaker #3: Our growth thesis does not require a recovery in new pool units . It is anchored in maintenance , remodel and share capture across product categories for the existing installed base .

Our people are the reason we start each season ready to win and their efforts in Q1 set us up for the season ahead.

I'll now turn the call over to Melanie Hart, our senior Vice President and Chief Financial Officer for her commentary Melanie.

Speaker #3: Our teams remain focused on executing the plan . We set out . Entering the year , maximizing share across product categories and investing deliberately in technology , private label and partnerships that reach over nearly four decades .

Thank you Pete and good morning, everyone. We are happy to share a solid first quarter with net sales, increasing 6% compared to the prior year period, the 6% increase reflects approximately 3% from pricing, 2% from volume and our maintenance and discretionary categories and 1% from customer early buys and four.

Melanie Hart: Thank you, Pete, and good morning, everyone. We are happy to share a solid Q1, with net sales increasing 6% compared to the prior year period. The 6% increase reflects approximately 3% from pricing, 2% from volume in our maintenance and discretionary categories, and 1% from customer early buys and foreign currency translation. Pricing contributed approximately 3% to sales growth in the Q1. This reflects an estimated 1% to 2% full-year price realization from current year increases, supplemented by an approximately 1% incremental benefit from mid-season pricing actions that were implemented at the end of April of the prior year. We expect this pricing contribution to normalize in subsequent quarters when fully reflected in our year-over-year comparison.

Speaker #3: We've built something that goes well beyond distribution and integrated platform of supplier relationships , proprietary products , technology , franchise networks , and field expertise that no one can replicate .

And currency translation.

Pricing contributed approximately 3% to sales growth in the first quarter. This reflects an estimated 1% to 2% full year price realization from current year increases supplemented by an approximately 1% incremental benefit from mid season pricing actions that were implemented at the end of April of the prior year.

Speaker #3: We have deliberately invested in that platform so that we perform and the environment we are in today , and so that we are in a fundamentally stronger position whenever the cycle turns .

Speaker #3: The depth, the reach, and the relationships that we have built are unmatched, and we are getting stronger. Not standing still.

Peter Arvan: The depth, the reach, and the relationships that we have built are unmatched, and we are getting stronger, not standing still. We look forward to sharing more about our strategic priorities and capital allocation discipline at our investor day on 12 May. I want to thank our team, our vendor partners, and our customers for the work and the trust that underpins what we do. Our people are the reason we start each season ready to win, and their efforts in Q1 set us up for the season ahead. I will now turn the call over to Melanie Hart, our Senior Vice President and Chief Financial Officer, for her commentary. Melanie?

Speaker #3: We look forward to sharing more about our strategic priorities and capital allocation discipline at our Investor Day on May 12th . I want to thank our team , our vendor partners , and our customers for the work and the trust that underpins what we do Our people are the reason we start each season ready to win , and their efforts in Q1 set us up for the season ahead .

We expect this pricing contribution to normalize in subsequent quarters when fully reflected in our year over year comparison.

Within our chemical product lines, we have observed some moderation in pricing from levels seen at the beginning of the quarter, but at this time, we're not realizing a significant impact on consolidated net sales, we will continue to monitor market conditions.

Melanie Hart: Within our chemical product lines, we have observed some moderation in pricing from levels seen at the beginning of Q1, but at this time, we are not realizing a significant impact on consolidated net sales. We will continue to monitor market conditions. Volume growth was a meaningful contributor to our top-line performance, with our maintenance and discretionary product categories delivering a combined 2% increase, driven by improved demand across equipment, parts, and chemical volumes. The positive momentum we experienced in building materials during the back half of 2025 carried into Q1, providing support to overall sales growth. Building material sales for Q1 increased 5%, and we are encouraged that our results continue to track ahead of permit data. Permit data remains lower than prior year levels through the end of Q1.

Speaker #3: I will now turn the call over to Melanie Hart , our Senior Vice President and Chief Financial Officer for her commentary . Melanie .

Volume growth was a meaningful contributor to our top line performance with our maintenance and discretionary product categories, delivering a combined 2% increase driven by improved demand across equipment and chemical volumes.

Speaker #2: Thank you , Pete , and good morning , everyone . We are happy to share a solid first quarter with net sales increasing 6% compared to the prior year period .

Melanie M. Hart: Thank you, Pete, and good morning, everyone. We are happy to share a solid Q1, with net sales increasing 6% compared to the prior year period. The 6% increase reflects approximately 3% from pricing, 2% from volume in our maintenance and discretionary categories, and 1% from customer early buys and foreign currency translation. Pricing contributed approximately 3% to sales growth in the Q1. This reflects an estimated 1% to 2% full year price realization from current year increases, supplemented by an approximately 1% incremental benefit from mid-season pricing actions that were implemented at the end of April of the prior year. We expect this pricing contribution to normalize in subsequent quarters when fully reflected in our year-over-year comparison.

Speaker #2: The 6% increase reflects approximately 3% from pricing , 2% from volume in our and discretionary categories , and 1% from customer early buys and foreign currency translation pricing contributed approximately 3% to sales growth in the first quarter .

The positive momentum we experienced in building materials during the back half of 2025 carried into the first quarter, providing support to overall sales growth building materials sales for the quarter increased 5% and we are encouraged that our results continue to track ahead of permit data <unk>.

Speaker #2: This reflects an estimated 1 to 2% full year price realization from current year increases , supplemented by an approximately 1% incremental benefit from mid-season pricing actions that were implemented at the end of April of the prior year .

Permit data remains lower than prior year levels through the end of the first quarter.

Finally, the benefits we saw from early buys and foreign currency translation provided an approximately 1% tailwind to reported sales in the first quarter, we do not anticipate currency to be a material contributor to full year results as the favorable translation impact is expected to diminish in the seasonally stronger second and third.

Melanie Hart: Finally, the benefits we saw from early buys and foreign currency translation provided an approximately 1% tailwind to reported sales in Q1. We do not anticipate currency to be a material contributor to full year results, as the favorable translation impact is expected to diminish in the seasonally stronger Q2 and Q3 as the sales base increases. Gross margin for the quarter was 29%, a decrease of approximately 20 basis points compared to the prior year period. Primary drivers of the year-over-year change during the quarter were product mix, inbound freight associated with stocking levels for the season, and increased early buy activity. Product mix was the most significant driver of the year-over-year variance. Equipment sales grew 7% in the quarter, and given the lower relative margins of this category, the strong volume performance diluted consolidated gross margin. We view this growth as strategically positive.

Speaker #2: We expect this pricing contribution to normalize in subsequent quarters when fully reflected in our year over year comparison within our chemical product lines , we have observed some moderation in pricing from levels seen at the beginning of the quarter , but at this time , we are not realizing a significant impact on consolidated net sales .

Melanie M. Hart: Within our chemical product lines, we have observed some moderation in pricing from levels seen at the beginning of the quarter, but at this time, we are not realizing a significant impact on consolidated net sales. We will continue to monitor market conditions. Volume growth was a meaningful contributor to our top-line performance, with our maintenance and discretionary product categories delivering a combined 2% increase driven by improved demand across equipment, parts, and chemical volumes. The positive momentum we experienced in building materials during H2 2025 carried into Q1, providing support to overall sales growth. Building material sales for the quarter increased 5%, and we are encouraged that our results continue to track ahead of permit data. Permit data remains lower than prior year levels through the end of Q1.

Orders as the sales base increases.

Gross margin for the quarter was 29% a decrease of approximately 20 basis points compared to the prior year period.

Speaker #2: We will continue to monitor market conditions . Volume growth was a meaningful contributor to our top line performance with our maintenance and discretionary product categories delivering a combined 2% increase , driven by improved demand across equipment , parts and chemical volumes The positive momentum we experienced in building materials during the back half of 2025 carried into the first quarter , providing support to overall sales growth Building materials sales for the quarter increased 5% and we are encouraged that our results continue to track ahead of permit data .

Primary drivers of the year over year change during the quarter were product mix inbound freight associated with stocking levels through the season and increased early buy activity.

Mix was the most significant driver of the year over year variance.

<unk> sales grew 7% in the quarter and given the lower relative margins as this category the strong volume performance diluted consolidated gross margin.

We view this growth as strategically positive.

Customer early buy activity also increased in the quarter.

As typical with early buy programs. These sales reflect modest discounts from regular season pricing and therefore carry somewhat lower margins than our in season business.

Melanie Hart: Customer early buy activity also increased in the quarter. As is typical with early buy programs, these sales reflect modest discounts from regular season pricing, and therefore carry somewhat lower margins than our in-season business. The increase in early buy volume is consistent with our go-to-market strategy and positions us well for the selling season ahead. Customer mix and chemical margins were also modestly below prior year levels, though neither represented a material individual driver of the variance. Partially offsetting these headwinds, we continue to realize benefits from our pricing initiatives and ongoing supply chain actions. Q1 gross margins are in line with our historical seasonal patterns and should not be viewed as sequential from Q4 levels. Operating expenses for Q1 were $247 million, or a 5% increase over the same quarter in prior year.

Speaker #2: Permit data remains lower than prior year levels through the end of the first quarter Finally , the benefits we saw from early buys and foreign currency translation provided an approximately 1% tailwind to reported sales in the first quarter .

Melanie M. Hart: Finally, the benefits we saw from early buys and foreign currency translation provided an approximately 1% tailwind to reported sales in Q1. We do not anticipate currency to be a material contributor to full year results, as the favorable translation impact is expected to diminish in the seasonally stronger Q2 and Q3 as the sales base increases. Gross margin for the quarter was 29%, a decrease of approximately 20 basis points compared to the prior year period. Primary drivers of the year-over-year change during the quarter were product mix, inbound freight associated with stocking levels for the season, and increased early buy activity. Product mix was the most significant driver of the year-over-year variance. Equipment sales grew 7% in the quarter, and given the lower relative margins of this category, the strong volume performance diluted consolidated gross margin. We view this growth as strategically positive.

The increase in early buy volume is consistent with our go to market strategy and positions us well for the selling season ahead.

Speaker #2: not anticipate currency to be a material contributor to full year results , as the favorable translation impact is diminish in the seasonally stronger second and third quarters as the sales base increases .

Customer mix and chemical margins were also modestly below prior year levels.

Neither represented a material individual driver of the variance.

Partially offsetting these headwinds we continue to realize benefits from our pricing initiatives and ongoing supply chain actions.

Speaker #2: Gross margin for the quarter was 29% , a decrease of approximately 20 basis points compared to the prior year period . Primary drivers of the year over year change during the quarter were product mix , inbound freight associated with stocking levels for the season , and increased early buy activity .

First quarter gross margins are in line with our historical seasonal patterns and should not be viewed as sequential from fourth quarter levels.

Operating expenses for the first quarter were $247 million or a 5% increase over the same quarter in prior year. The increase was driven by the addition of fixed Greenfields opened after March of last year technology cost and overall inflationary increases.

Speaker #2: Product mix was the most significant driver of the year over year variance Equipment sales grew 7% in the quarter , and given the lower relative margins of this category , the strong volume performance diluted consolidated gross margin .

Melanie Hart: The increase was driven by the addition of six greenfields opened after March of last year, technology costs, and overall inflationary increases. As discussed on our year-end call, our 2026 operating plan is focused on unlocking efficiency across the 50+ greenfield locations opened over the past five years, combined with process improvements resulting from our ongoing investments in POOL360 and its expanded capabilities. Q1 results are tracking in line with that plan. Operating income of $83 million increased $5 million, or 7%, compared to the prior year. We realized a 10 basis point operating margin improvement. Interest expense of $12 million reflects the incremental borrowings associated with share repurchase activity during the quarter. Diluted earnings per share of $1.45 increased $0.03 compared to the prior year. Prior year included a $0.10 ASU benefit versus $0.02 in the current quarter.

As discussed on our year end call. Our 2026 operating plan is focused on unlocking efficiency across the 50, plus greenfield locations opened over the past five years.

Speaker #2: We view this growth as strategically positive customer early buy activity also increased in the quarter , as is typical with early . By programs , these sales reflect modest discounts from regular season pricing and therefore carry somewhat lower margins than our in-season business .

Melanie M. Hart: Customer early buy activity also increased in the quarter. As is typical with early buy programs, these sales reflect modest discounts from regular season pricing, and therefore carry somewhat lower margins than our in-season business. The increase in early buy volume is consistent with our go-to-market strategy and positions us well for the selling season ahead. Customer mix and chemical margins were also modestly below prior year levels, though neither represented a material individual driver of the variance. Partially offsetting these headwinds, we continue to realize benefits from our pricing initiatives and ongoing supply chain actions. Q1 gross margins are in line with our historical seasonal patterns and should not be viewed as sequential from Q4 levels. Operating expenses for Q1 were $247 million, or a 5% increase over the same quarter in prior year.

Find with process improvements, resulting from our ongoing investments in full 360 and has expanded capabilities.

First quarter results are tracking in line with that plan.

Operating income of $83 million increased $5 million or 7% compared to the prior year, we realized a 10 basis point operating margin improvement.

Speaker #2: The increase in early buy volume is consistent with our go to market strategy and positions us well for the selling season ahead Customer mix and chemical margins were also modestly below prior year levels , though neither represented a material individual driver of the variance .

Interest expense of $12 million reflects the incremental borrowings associated with share repurchase activity during the quarter.

Diluted earnings per share of $1 45 increased <unk> <unk> compared to the prior year. Prior year included a tencent ASU benefit versus <unk> in the current quarter, excluding the impact of ASU in both periods diluted EPS increased <unk> 11, or 8% for the first quarter, reflecting our ability to generate earnings growth.

Speaker #2: Partially offsetting these headwinds, we continue to realize benefits from our pricing initiatives and ongoing supply chain actions. First quarter gross margins are in line with our historical seasonal patterns and should not be viewed as sequential from fourth quarter levels. Operating expenses for the first quarter were $247 million, a 5% increase over the same quarter in the prior year.

Melanie Hart: Excluding the impact of ASU in both periods, diluted EPS increased $0.11 or 8% for Q1, reflecting our ability to generate earnings growth with top-line expansion. Moving to our balance sheet and capital allocation. Consistent with our normal seasonal pattern, we executed our vendor early buy programs to ensure appropriate inventory coverage heading into the season. Inventory at March quarter-end was $1.7 billion, 14% higher than Q1 last year, and an increase of approximately $200 million from year-end as product was received and positioned across our network. Our current inventory includes stocking for new locations and acquisitions added to the network, new product introductions resulting in a broader product range, and cost inflation relative to the same period last year, with some opportunistic purchases made ahead of current season price increases.

With top line expansion.

Moving to our balance sheet and capital allocation.

Speaker #2: The increase was driven by the addition of six . Greenfields opened after March of last year . Technology cost and overall inflationary increases .

Melanie M. Hart: The increase was driven by the addition of six greenfields opened after March of last year, technology cost, and overall inflationary increases. As discussed on our year-end call, our 2026 operating plan is focused on unlocking efficiency across the 50-plus greenfield locations opened over the past five years, combined with process improvements resulting from our ongoing investments in Pool360 and its expanded capabilities. Q1 results are tracking in line with that plan. Operating income of $83 million increased $5 million, or 7%, compared to the prior year. We realized a 10 basis point operating margin improvement. Interest expense of $12 million reflects the incremental borrowings associated with share repurchase activity during the quarter. Diluted earnings per share of $1.45 increased $0.03 compared to the prior year. Prior year included a $0.10 ASU benefit versus $0.02 in the current quarter.

Consistent with our normal seasonal pattern, we executed our vendor early buy programs to ensure appropriate inventory coverage heading into the season inventory at March quarter end was $1 7 billion, 14% higher than first quarter last year and an increase of approximately $200 million from year end as product was received and pause.

Speaker #2: As discussed on our year-end call, our 2026 operating plan is focused on unlocking efficiency across the 50-plus greenfield locations opened over the past five years.

Speaker #2: Combined with process improvements resulting from our ongoing investments in Full 360 and its expanded capabilities. First quarter results are tracking in line with that plan.

<unk> across our network.

Our current inventory includes stocking for new locations and acquisitions added to the network new product introductions, resulting in a broader product range and cost inflation relative to the same period last year with some opportunistic purchases made ahead of currencies and price increases.

Speaker #2: Operating income of 83 million increased 5 million , or 7% , compared to the prior year . We realized a ten basis point operating margin improvement Interest expense of 12 million reflects the incremental borrowings associated with share repurchase activity during the quarter .

Inventory investment is concentrated in our fastest moving product lines and we would expect a normal seasonal reduction in inventory levels as we move through the peak selling season.

Speaker #2: Diluted earnings per share of $1.45 increased $0.03 compared to the prior year . Prior year included a ten cent ASU benefit versus $0.02 in the current quarter .

Melanie Hart: Inventory investment is concentrated in our fastest-moving product lines, and we would expect a normal seasonal reduction in inventory levels as we move through the peak selling season. We ended Q1 with total debt of approximately $1.2 billion and a leverage ratio of 1.7 times, which is within our stated range. As is typical, debt levels will increase through H1 of the year as seasonal inventory builds and early buy payments come due before declining in H2 of the year as receivables are collected. Net cash provided by operations was $25.7 million for Q1, compared to $27.2 million in the prior year period, with the year-over-year change primarily driven by higher inventory purchases in support of the upcoming selling season.

We ended the first quarter with total debt of approximately $1 2 billion and our leverage ratio of one seven times, which is within our stated range.

Speaker #2: Excluding the impact of ASU in both periods , diluted EPS increased $0.11 , or 8% for the first quarter , reflecting our ability to generate earnings growth with top line expansion moving to our balance sheet and capital allocation consistent with our normal seasonal pattern , we executed our vendor early by programs to ensure appropriate inventory coverage heading into the season inventory at quarter end was 1.7 billion , 14% higher than first quarter last year , and an increase of approximately 200 million from year end .

Melanie M. Hart: Excluding the impact of ASU in both periods, diluted EPS increased $0.11, or 8%, for Q1, reflecting our ability to generate earnings growth with top-line expansion. Moving to our balance sheet and capital allocation. Consistent with our normal seasonal pattern, we executed our vendor early buy programs to ensure appropriate inventory coverage heading into the season. Inventory at March quarter end was $1.7 billion, 14% higher than Q1 last year, and an increase of approximately $200 million from year end as product was received and positioned across our network. Our current inventory includes stocking for new locations and acquisitions added to the network, new product introductions resulting in a broader product range, and cost inflation relative to the same period last year, with some opportunistic purchases made ahead of current season price increases.

As is typical debt levels will increase through the first half of the year as seasonal inventory builds and early by payments come due before declining in the back half of the year as receivables are collected.

Net cash provided by operations was $25 7 million for the first quarter compared to $27 2 million in the prior year period with a year over year change, primarily driven by higher inventory purchases in support of the upcoming selling season.

Speaker #2: As product was received and positioned across our network, our current inventory includes stocking for new locations and acquisitions added to the network, new product introductions, resulting in a broader product range and cost inflation relative to the same period last year.

During the quarter, we repurchased approximately $64 million in shares an increase of $8 million over the prior year period with $271 million remaining under our current repurchase authorization.

Melanie Hart: During the quarter, we repurchased approximately $64 million in shares, an increase of $8 million over the prior year period, with $271 million remaining under our current repurchase authorization. We will continue to execute share repurchases in an opportunistic and disciplined manner consistent with our capital allocation framework. Even with our Q1 trends tracking ahead of our expectations, full year guidance remains unchanged. We continue to expect a 1% to 2% pricing benefit for the full year of 2026 from vendor cost increases and related price pass-throughs. Combined with growth from the installed base of pools and the absence of any meaningful recovery in discretionary spending, we expect top-line performance to be a low single-digit growth on a same selling day basis.

We will continue to execute share repurchases in an opportunistic and disciplined manner consistent with our capital allocation framework.

Speaker #2: With some opportunistic purchases made ahead of current season price increases, inventory investment is concentrated in our fastest moving product lines, and we would expect a normal seasonal reduction in inventory levels as we move through the peak selling season.

Even with our first quarter trends tracking ahead of our expectations.

Melanie M. Hart: Inventory investment is concentrated in our fastest-moving product lines, and we would expect a normal seasonal reduction in inventory levels as we move through the peak selling season. We ended Q1 with total debt of approximately $1.2 billion and a leverage ratio of 1.7x, which is within our stated range. As is typical, debt levels will increase through H1 as seasonal inventory builds and early buy payments come due before declining in H2 as receivables are collected. Net cash provided by operations was $25.7 million for Q1, compared to $27.2 million in the prior year period, with the year-over-year change primarily driven by higher inventory purchases in support of the upcoming selling season.

Year guidance remains unchanged, we continue to expect a 1% to 2% pricing benefit for the full year of 2026 from vendor cost increases and related price pass throughs.

Speaker #2: We ended the first quarter with total debt of approximately 1.2 billion and a leverage ratio of 1.7 times , which is within our stated range .

<unk> growth from the installed base of pools, and the absence of any meaningful recovery in discretionary spending we expect topline performance to be a low single digit growth on a same selling day basis.

Speaker #2: As is typical , debt levels will increase through the first half of the year as seasonal inventory builds and early buy payments come due before declining in the back half of the year .

Gross margin for 2026 is expected to remain consistent with 2025 supported by continued supply chain efficiencies pricing strategies and higher private label sales offsetting the prior year margin benefit from mid season price increases.

Speaker #2: As receivables are collected . Net cash provided by operations was 25.7 million for the first quarter , compared to 27.2 million in the prior year period , with the year over year change primarily driven by higher inventory purchases in support of the upcoming selling season .

Melanie Hart: Gross margin for 2026 is expected to remain consistent with 2025, supported by continued supply chain efficiencies, pricing strategies, and higher private label sales offsetting the prior year margin benefit from mid-season price increases. As indicated at year-end, Q1 reflected the highest year-over-year expense comparison. We expect expense growth to moderate on a quarter-over-quarter basis throughout 2026 as we focus on capacity absorption and lack prior year new sales center openings. Incremental incentive-based compensation, if earned, will be recorded in proportion to estimated operating income growth, and the cost associated with new sales center openings in 2026 are expected to be weighted toward the back half of the year. With the share repurchases during the quarter, our projected interest expense is now a range of $49 million to $51 million.

As indicated at year end first quarter reflected the highest year over year expense comparison, we expect expense growth to moderate on a quarter over quarter basis throughout 2026, as we focus on capacity absorption and lapped prior year, New sales center openings.

Speaker #2: During the quarter, we repurchased approximately $64 million in shares, an increase of $8 million over the prior year period. With $271 million remaining under our current repurchase authorization, we will continue to execute share repurchases in an opportunistic and disciplined manner consistent with our capital allocation framework.

Melanie M. Hart: During the quarter, we repurchased approximately $64 million in shares, an increase of $8 million over the prior year period, with $271 million remaining under our current repurchase authorization. We will continue to execute share repurchases in an opportunistic and disciplined manner consistent with our capital allocation framework. Even with our Q1 trends tracking ahead of our expectations, full year guidance remains unchanged. We continue to expect a 1% to 2% pricing benefit for the full year of 2026 from vendor cost increases and related price pass-throughs. Combined with growth from the installed base of pools and the absence of any meaningful recovery in discretionary spending, we expect top-line performance to be a low single-digit growth on a same selling day basis.

Incremental incentive based compensation if earned will be recorded in proportion to estimated operating income growth and the cost associated with new sales center openings in 2026.

Speaker #2: Even with our first quarter trends tracking ahead of our expectations, full year guidance remains unchanged. We continue to expect a 1% to 2% pricing benefit for the full year of 2026, from vendor cost increases and related price pass through.

<unk> to be weighted towards the back half of the year.

With the share repurchases during the quarter. Our projected interest expense is now a range of $49 million to $51 million. We would expect second quarter to have the highest interest expense of the year. Following the payment of early buys.

Speaker #2: Combined with growth from the installed base of pools and the absence of any meaningful recovery in discretionary spending , we expect top line performance to be a low single digit growth on the same selling day basis .

Melanie Hart: We would expect Q2 to have the highest interest expense of the year following the payment of early buys. Our estimated full year tax rate remains approximately 25%, with the Q2 rate to be approximately 25.5%. Our guidance does not include ASU benefits beyond the $0.02 recognized year to date as we continue to expect the full year impact to be less than prior year. We are expecting approximately 36.6 million weighted average shares outstanding for the rest of the quarters and the full year, updated for our Q1 share repurchase activity. Guidance remains unchanged with our diluted EPS range of $10.87 to $11.17, including the $0.02 ASU tax benefit recognized in the Q1. The midpoint reflects a 2% to 3% growth over prior year.

Our estimated full year tax rate remains approximately 25% with the second quarter rate to be approximately 25, 5%.

Our guidance does not include ASU benefit beyond the <unk> recognized year to date as we continue to expect the full year impact to be less than prior year.

Speaker #2: Gross margin for 2026 is expected to remain consistent with 2025 , supported by continued supply chain efficiencies . Pricing strategies , and higher private label sales offsetting the prior year margin benefit from mid-season price increases .

Melanie M. Hart: Gross margin for 2026 is expected to remain consistent with 2025, supported by continued supply chain efficiencies, pricing strategies, and higher private label sales offsetting the prior year margin benefit from mid-season price increases. As indicated at year-end, Q1 reflected the highest year-over-year expense comparison. We expect expense growth to moderate on a quarter-over-quarter basis throughout 2026 as we focus on capacity absorption and lack prior year new sales center openings. Incremental incentive-based compensation, if earned, will be recorded in proportion to estimated operating income growth, and the cost associated with new sales center openings in 2026 are expected to be weighted toward the back half of the year. With the share repurchases during the quarter, our projected interest expense is now a range of $49 million to $51 million.

We are expecting approximately $36 6 million weighted average shares outstanding for the rest of the quarter and the full year updated for our first quarter share repurchase activity.

Speaker #2: As indicated at year end , first quarter reflected the highest year over year expense comparison . We expect expense growth to moderate on a quarter over quarter basis throughout 2026 , as we focus on capacity absorption and lap prior year new sales center openings , incremental incentive based compensation if earned , will be recorded in proportion to estimated operating income growth and the cost associated with new sales center openings in 2026 are expected to be weighted toward the back half of the year , with the share repurchases during the quarter , our projected interest expense is now arranged at 49 million to 51 million .

Guidance remains unchanged with our diluted EPS range of $10 87 to $11 17 events, including the <unk> ASU tax benefit recognized in the first quarter.

The midpoint reflects a 2% to 3% growth over prior year.

<unk> first quarter results demonstrate the earnings power of our model even in a market that has not yet seen a full recovery in discretionary activity.

Melanie Hart: Full Q1 results demonstrate the earnings power of our model, even in a market that has not yet seen a full recovery in discretionary activity. Pricing discipline, supply chain execution, and the growing contributions of POOL360 are working as intended, and our network continues to expand in a way that strengthens our competitive position for the long term. We enter the peak season with confidence in our team, our inventory position, and our ability to deliver. I will now turn the call over to the operator to begin our question and answer session.

Pricing discipline supply chain execution and the growing contributions at <unk> are working as intended and our network continues to expand in a way that strengthens our competitive position for the long term we.

Speaker #2: We would expect second quarter to have the highest interest expense of the year , following the payment of early buys , our estimated full year tax rate remains approximately 25% , with the second quarter rate to be approximately 25.5% .

Melanie M. Hart: We would expect Q2 to have the highest interest expense of the year following the payment of early buys. Our estimated full year tax rate remains approximately 25%, with the Q2 rate to be approximately 25.5%.

We enter the peak season with confidence in our team our inventory position and our ability to deliver.

I will now turn the call over to the operator to begin our question and answer session.

We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad. If you were using a speaker phone. Please pick up the handset before pressing the keys is that any time. Your question has been addressed and you would like to withdraw. Your question. Please press Star then two please limit yourself to asking only one question and one follow.

Speaker #2: Our guidance does not include ASU benefits beyond the $0.02 recognized year to date . As we continue to expect the full year impact to be less than prior year , we are expecting approximately 36.6 million weighted average shares outstanding for the rest of the quarter , and the full year updated for our first quarter share repurchase activity .

Peter Arvan: Our guidance does not include ASU benefits beyond the $0.02 recognized year-to-date, as we continue to expect the full-year impact to be less than prior year. We are expecting approximately 36.6 million weighted average shares outstanding for the rest of the quarter and the full year, updated for our Q1 share repurchase activity. Guidance remains unchanged with that diluted EPS range of $10.87 to $11.17, including the $0.02 ASU tax benefit recognized in the Q1. The midpoint reflects a 2% to 3% growth over prior year. Pool Corp Q1 results demonstrate the earnings power of our model, even in a market that has not yet seen a full recovery in discretionary activity.

Melanie M. Hart: Our guidance does not include ASU benefits beyond the $0.02 recognized year-to-date, as we continue to expect the full-year impact to be less than prior year. We are expecting approximately 36.6 million weighted average shares outstanding for the rest of the quarter and the full year, updated for our Q1 share repurchase activity. Guidance remains unchanged with that diluted EPS range of $10.87 to $11.17, including the $0.02 ASU tax benefit recognized in the Q1. The midpoint reflects a 2% to 3% growth over prior year. Pool Corp Q1 results demonstrate the earnings power of our model, even in a market that has not yet seen a full recovery in discretionary activity.

Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up the handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Please limit yourself to asking only one question and one follow-up. At this time, we'll pause momentarily to assemble our roster. The first question comes from Susan Maklari with Goldman Sachs. Please go ahead.

At this time, we will pause momentarily to assemble our roster.

Speaker #2: Guidance remains unchanged with our diluted EPS range of $10.87 to $11.17, including the $0.02 ASU tax benefit recognized in the first quarter.

The first question comes from Susan Mcclary with Goldman Sachs. Please go ahead.

Speaker #2: The midpoint reflects a 2 to 3% growth over prior year . POOL CORP first quarter results demonstrates the earnings power of our model , even in a market that has not yet seen a full recovery in discretionary activity , pricing discipline , supply chain execution , and the growing contributions of full 360 are working as intended , and our network continues to expand in a way that strengthens our competitive position for the long term .

Thank you good morning, everyone.

Good morning.

Good morning. My first question is on your ability to realize the return on investments that you talked about coming into this year as the pool season starts to come together can you talk about your competitive positioning what's you're hearing from the sales centers and your customers in there and just how youre thinking about that.

Peter Arvan: Good morning.

Susan Maklari: Good morning, Pete. My first question is on your ability to realize the return on investments that you talked about coming into this year. As the pool season starts to come together, can you talk about your competitive positioning, what you're hearing from the sales centers and your customers in there, and just how you're thinking about that overall positioning as we move into the spring/summer?

Peter Arvan: Pricing discipline, supply chain execution, and the growing contributions of Pool360 are working as intended, and our network continues to expand in a way that strengthens our competitive position for the long term. We enter the peak season with confidence in our team, our inventory position, and our ability to deliver. I will now turn the call over to the operator to begin our question and answer session.

Melanie M. Hart: Pricing discipline, supply chain execution, and the growing contributions of Pool360 are working as intended, and our network continues to expand in a way that strengthens our competitive position for the long term. We enter the peak season with confidence in our team, our inventory position, and our ability to deliver. I will now turn the call over to the operator to begin our question and answer session.

Speaker #2: We entered the peak season with confidence in our team , our inventory position , and our ability to deliver . I will now turn the call over to the operator to begin our question and answer session .

Overall positioning as we move into the spring summer.

Sure.

When we think about getting ready for the season, we think about making sure that we have all of the sales centers ready for the for the surge of business that happens during the during the second and third quarter that means that having the right inventory in the right location, having a staff that is that is fully trained and frankly.

Peter Arvan: Sure. When we think about getting ready for the season, we think about making sure that we have all of the sales centers ready for the surge of business that happens during Q2 and Q3. That means that having the right inventory in the right location, having a staff that is fully trained and frankly excited about the season, having all of our new products ready to be introduced to customers, working really hard on early buys to make sure that we have the product out in the field at our customers' locations ready to sell. Making sure that we have explained all of the new product offerings that are available to our customers so that they can help grow their business, and that our marketing programs are finely tuned to kick off the demand creation efforts that we do that are very unique in the industry.

Speaker #1: We will now begin the question and answer session to ask a question , you may press star . Then one on your telephone keypad .

Rachel Smith: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up the handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. Please limit yourself to asking only one question and one follow-up. At this time, we'll pause momentarily to assemble our roster. The first question comes from Susan Maklari with Goldman Sachs. Please go ahead.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up the handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. Please limit yourself to asking only one question and one follow-up. At this time, we'll pause momentarily to assemble our roster. The first question comes from Susan Maklari with Goldman Sachs. Please go ahead.

Speaker #1: If you are using a speakerphone , please pick up the handset before pressing the keys . If at any time your question has been addressed and you would like to withdraw your question , please press star .

Speaker #1: Then two please limit yourself to asking only one question and one follow up . At this time , we'll pause momentarily to assemble our roster The first question comes from Susan McClary with Goldman Sachs .

Excited about the season, having all of our new products ready to be introduced to customers working really hard on.

Early buys to make sure that we have the product out in the field at our customers' locations.

Ready to sell and making sure that we have explained all of the new product offerings that are available to our customers. So that they can.

Speaker #1: Please go ahead .

Speaker #4: Thank you . Good morning , everyone .

Susan Maklari: Thank you. Good morning, everyone.

Speaker #3: Good morning .

Peter Arvan: Morning.

Help grow their business and that our marketing programs are finely tuned to kickoff the demand creation efforts that we do they are very unique in the industry and then it's a matter of making sure that in the sales centers that our teams are ready for the surge of business and that we've taken advantage of the <unk>.

Speaker #4: Good morning Pete . My first question is on your ability to realize the return on investments that you talked about coming into this year as the pool season starts to come together .

Speaker #4: Can you talk about your competitive positioning? What you're hearing from the sales centers and your customers in there, and just how you're thinking about that overall positioning as we move into the spring, summer?

Peter Arvan: It's a matter of making sure that in the sales centers, that our teams are ready for the surge of business, and that we've taken advantage of the investments that we've made in capacity creation so that we get better every year. We have a performance-based culture, and every year, there is a drive to make sure that whatever we did last year, that we do better this year, whether it is our productivity levels in the sales centers, whether it is our efficiency in serving customers and how quickly we get them in and out the door. All of those things are part of the overall customer experience that we focus on.

Investments that we've made in capacity creation, so that we get better at.

Every year, we have a performance based culture and every year.

Speaker #3: Sure . You know , when we think about getting ready for the season , we think about making sure that we have all of the sales centers ready for the for the surge of business that happens during the during the second and third quarter , that means that having the right inventory in the right location , having a staff that is that is fully trained .

There is a drive to make sure that whatever we did last year that we do better this year, whether it is our productivity levels and the sales centers.

Whether it is our our efficiency in serving customers and how quickly we get them in and out the door.

Speaker #3: And frankly excited about the season , having all of our new products ready to be introduced to customers working really hard on on early buys to make sure that we have the product out in the field at our customers locations ready to sell , making sure that we have explained all of the new product offerings that are available to our customers so that they can help grow their business , and that our marketing programs are finely tuned to , to kick off the demand creation efforts that that we do that are very unique in the industry .

All of those things are part of the overall customer experience that we focus on and especially with the newer locations that we opened up in the last couple of years.

The newer ones are the ones that we pay the most attention to to make sure that they are ready to start without without missing a beat.

Peter Arvan: Especially with the newer locations that we opened up in the last couple of years, the newer ones are the ones that we pay the most attention to make sure that they're ready to start without missing a beat.

Okay. That's helpful and then I guess, given the geopolitical environment and the moves that we're hearing in consumer sentiment. What are you hearing from your customers on the ground has there been any change in how they're thinking about their backlogs or consumers' willingness and what are you seeing on those discretionary.

Susan Maklari: Okay. That's helpful. I guess, given the geopolitical environment and the moves that we're hearing in consumer sentiment, what are you hearing from your customers on the ground? Has there been any change in how they're thinking about their backlogs or consumers' willingness, and what are you seeing on those discretionary side of the business?

Speaker #3: And then it's a matter of making sure that , you know , in the sales centers that our teams are ready for the surge of business and that we've taken advantage of the investments that we've made in capacity creation so that we get better every year .

Peter Arvan: It's a matter of making sure that in the sales centers, that our teams are ready for the surge of business, and that we've taken advantage of the investments that we've made in capacity creation so that we get better every year. We have a performance-based culture. Every year, there is a drive to make sure that whatever we did last year, that we do better this year, whether it is our productivity levels in the sales centers, whether it is our efficiency in serving customers, and how quickly we get them in and out the door. All of those things are part of the overall customer experience that we focus on.

<unk> of the business.

Think that we continue to watch the health of the consumer we watch housing turnover.

Peter Arvan: I think that we continue to watch the health of the consumer. We watch housing turnover. Frankly, the age of the install base all matter. It's early in the year to look at permit data and try and draw any conclusion for where we'll end up, because Q1 is just so small relative to that. Q1 is really kind of selling season, and now the builders are trying to lock down contracts. I can tell you that I've heard everything from very optimistic, and I'm sold out, to other areas where they're still trying to pursue contracts to make sure that they can lock up the season. On balance, I would say, relatively unchanged with some green shoots, I would say.

Frankly, the age of the installed base all matter.

Speaker #3: We have a performance based culture , and every year the there is a drive to make sure that whatever we did last year that we do better this year , whether it is our productivity levels in the sales centers , whether it is our our efficiency in in serving customers and how quickly we get them in and out the door .

And what it's early in the year to look at look at permit data and try and draw any conclusion for where we will end up because first quarter is just so small relative to that so there's a lot of first quarter is really kind of selling season and now the builders were trying to lockdown contracts. So I can tell you that I have heard.

Heard everything from very optimistic and I am sold out too.

Speaker #3: All of those things are part of the overall customer experience that we focus on . And especially with the newer locations that we opened up in the last couple of years , you know , the newer ones are the ones that we pay the most attention to , to make sure that that they're ready to start without a , without missing a beat

Other areas, where there is still they are still trying to pursue contracts to make sure that they can lock up the season. So on balance I would say relatively relatively unchanged with some with some green shoots I would say.

Speaker #4: Okay . That's helpful . And then I guess , you know , given the geopolitical environment and the moves that we're hearing in consumer sentiment , what are you hearing from your customers on the ground ?

Okay, Alright, that's encouraging thank you and good luck with the quarter.

Thanks.

Susan Maklari: Okay. All right. That's encouraging. Thank you. Good luck with the quarter.

The next question comes from David Manthey with Baird. Please go ahead.

Peter Arvan: Thanks.

Speaker #4: Has there been any change in how they're thinking about their backlogs or consumers' willingness? And what are you seeing on those discretionary sides of the business?

Okay. Thank you and good morning.

Operator: The next question comes from David Manthey with Baird. Please go ahead.

Pete as you mentioned are realized in the first quarter is seasonally volatile, but we saw a couple of.

David Manthey: Yeah. Thank you. Good morning. Pete, as you mentioned, I realize the first quarter is seasonally volatile, but we saw a couple of decent size changes in some of the supplementary information you provided. Chemicals staged quite a turnaround here. Florida, I guess it had been growing a little bit, now it's down 1%, and California and Texas are booming. I'm just wondering if you can talk about those to the extent there's any signal there versus noise in Q1.

Decent sized changes in some of the supplementary information you provided so chemicals stage quite a turnaround here.

Speaker #3: You know , I think that we continue to watch the health of the consumer . We watch housing turnover . You know , frankly , the age of the installed base , all matter what it's early in the year to look at , to look at permit data and try and draw any conclusion for where we'll end up .

Peter Arvan: I think that we continue to watch the health of the consumer. We watch housing turnover, frankly, the age of the install base, all matter. It's early in the year to look at permit data and try and draw any conclusion for where we'll end up because Q1 is just so small relative to that. Q1 is really kind of selling season, and now the builders are trying to lock down contracts. I can tell you that I've heard everything from very optimistic and I'm sold out to other areas where they're still trying to pursue contracts to make sure that they can lock up the season. On balance, I would say, relatively unchanged with some green shoots, I would say.

Florida.

I guess it had been growing a little bit now its down 1%.

California, and Texas are booming I'm just wondering if you can talk about those to the extent, there's any any signal there versus noise in the first quarter.

Speaker #3: Because first quarter is just so small relative to that . So there's a lot of , you know , first quarter is really kind of selling season .

Yes.

Careful about drawing huge conclusions.

Speaker #3: And now the builders are trying to lock down contracts . So I can tell you that I've heard everything from very optimistic . And I'm sold out to , you know , other areas where , you know , they're still they're still trying to pursue contracts to make sure that they they can lock up the season .

Peter Arvan: Yeah. I'd be careful about drawing huge conclusions on Q1, but I'll give you just a couple of things to think through. In terms of chemicals, Q1 is actually one of the quarters, so when you're trying to sell a program to a dealer, dealers typically don't convert during the season. They convert after the season, and then they would load their inventory into the stores for the upcoming season. As you know, with our private label chemicals, our Regal and E-Z Clor lines, which we believe are best in class, especially when paired with the technology tools, the water testing apps that we have, and water testing strips, everything for the integrated systems, I think we saw good traction from the dealers, and specifically on the retail side, that has helped our traction that we're seeing on the chemical side.

First quarter, but I'll give you just a couple of things to think through in terms of chemicals first quarter is actually.

One of the one of the quarters that so when you are when you are trying to sell a program to a dealer dealers typically don't convert during the season. They convert after the season and then they would load their inventory into the stores or.

Speaker #3: So on balance , I would say , you know , relatively , relatively unchanged with some with some green shoots , I would say , okay .

For the upcoming season, so as you know with our private label chemicals, our Regal and easy floor lines, which we believe are best in class, especially when paired with the technology tools and the water testing apps.

Susan Maklari: Okay. All right. That's encouraging. Thank you. Good luck with the quarter.

Speaker #4: All right. That's encouraging. Thank you, and good luck with the quarter.

Speaker #3: Thanks .

Peter Arvan: Thanks.

Speaker #1: The next question comes from David Manthey with Baird . Please go ahead .

Rachel Smith: The next question comes from David Manthey with Baird. Please go ahead.

Operator: The next question comes from David Manthey with Baird. Please go ahead.

Speaker #5: Thank you . Good morning . Pete . As you mentioned , I realized the first quarter is seasonally volatile . But we saw a couple of decent sized changes in some of the supplementary information you provided .

And that we have and water testing strips everything for the integrated systems I think we saw good traction from the dealers and specifically on the on the retail side.

That has helped our helped our traction that we're seeing.

Speaker #5: So chemicals staged quite a turnaround here . Florida , I guess it had been growing a little bit . Now it's down 1% .

On the chemical side and frankly, the teams are out hunting that business because I think we've got a we've got a great value proposition when I look at California.

Peter Arvan: Frankly, the teams are out hunting that business because I think we've got a great value proposition. When I look at California and Texas, California, I think, benefited a little bit from weather. California was pretty hot earlier in Q1, which is atypical. That weather pattern helped, and I think the same was true for a bit of Texas. Again, it's so small and relative to the grand scheme of things that I don't know that I would draw a whole lot of conclusions from that. I can tell you the team did a very good job of explaining the value proposition and winning share at the dealers in Q1, and I think that's just a result of conveying a very strong message of the best value proposition in the industry.

Speaker #5: And California and Texas are booming. I'm just wondering if you can talk about those, to the extent there's any signal there versus noise in the first quarter.

In Texas.

California, I think benefited a little bit from whether California was pretty hot.

Speaker #3: Yeah , I'd be careful about drawing a huge conclusions on first quarter , but I'll give you just a couple of things to to think through in terms of chemicals .

Peter Arvan: Yeah. I'd be careful about drawing huge conclusions on Q1, but I'll give you just a couple of things to think through. In terms of chemicals, Q1 is actually one of the quarters. When you're trying to sell a program to a dealer, dealers typically don't convert during the season. They convert after the season, and then they would load their inventory into the stores for the upcoming season. As you know, with our private label chemicals, our Regal and E-Z Clor lines, which we believe are best in class, especially when paired with the technology tools and the water testing apps that we have and water testing strips, everything for the integrated systems. I think we saw good traction from the dealers, and specifically on the retail side, that has helped our traction that we're seeing on the chemical side.

And in earlier in the first quarter, which is which is atypical so that weather pattern health and I think the same was true for for a bit of Texas, but again, it's so small and relative to the Grand scheme of things, but I don't know.

Speaker #3: First quarter is actually one of the , one of the quarters that . So when you're , when you're trying to sell a program to a dealer , dealers typically don't convert during the season .

That I would draw a whole lot of a lot of things.

Speaker #3: They convert after the season . And then they would load their inventory into the stores for , for the upcoming season . So as you know , with our private label chemicals , our legal and easycore lines , which we believe are are best in class , you know , especially when paired with the technology tools and the water testing apps that we have and water testing strips everything for the integrated systems .

Conclusions from that but I can tell you the team did a very good job of.

Explaining the value proposition and winning share.

Ask the dealers in the first quarter and.

I think thats, just a result of.

Conveying a very strong message of the best value proposition in the industry.

And second you've talked about growth in opex expected to slow through the remainder of the year and Melanie mentioned that.

Speaker #3: I think we saw good traction from the dealers and specifically on the on the retail side , that has helped our helped our traction that we're seeing , you know , on the chemical side .

David Manthey: Yeah. Second, you've talked about growth in OpEx expected to slow through the remainder of the year, and Melanie mentioned that. Could you tell us, does that still kind of anticipate that full year OpEx will be in that 60% to 80% range relative to gross margin or sales dollar growth? I know that's a target, but based on your guidance ranges and how you're looking at the business, is that still the target for 2026?

Could you tell us does that still cut.

Speaker #3: And frankly , the teams are out , you know , hunting that business because I think we've got a we've got a great value proposition .

Kind of anticipate that full year opex will be in that 60% to 80% range relative to gross margin our sales dollar growth.

Peter Arvan: Frankly, the teams are out hunting that business because I think we've got a great value proposition. When I look at California and Texas, California, I think, benefited a little bit from weather. California was pretty hot earlier in Q1, which is atypical. That weather pattern helped, and I think the same was true for a bit of Texas. Again, it's so small and relative to the grand scheme of things that I don't know that I would draw a whole lot of conclusions from that. I can tell you the team did a very good job of explaining the value proposition and winning share at the dealers in Q1. I think that's just a result of conveying a very strong message of the best value proposition in the industry.

Speaker #3: You know , when I look at California and , and Texas , you know , California , I think benefited a little bit from whether , you know , California was was pretty hot in , in earlier in the first quarter , which is , which is atypical .

I know, it's a target but based on your guidance range or is and how youre looking at the business is that still the target for 2026.

So that is the long term target, but you should remember for 2026, we do also have that incentive comp reload, so where we do expect to get some leverage for the year.

Speaker #3: So that weather pattern helped . And I think the same was true for , for of Texas . But again , it's so small and relative to the grand scheme of things that I don't know that I would draw a whole lot of a whole lot of conclusions from that .

Melanie Hart: That is the long-term target. You should remember, for 2026, we do also have that incentive comp reload. Where we do expect to get some leverage for the year, some of that natural leverage will be offset by that rebuild on the compensation side. It'll be a little bit lower than our normal long-term algorithm.

Some of that natural leverage will be offset by that rebuilds on the compensation side, so it'll be a little bit lower than our normal long term algorithm.

Speaker #3: But I can tell you , the team did a very good job of explaining the the value proposition and winning share at the dealers in the first quarter .

And that comp. We said was I think you talked about $15 million is that still the case.

David Manthey: That comp reset was, I think you talked about $15 million. Is that still the case?

Yes at the at the low single digit growth.

Speaker #3: And I think that's just a result of of conveying a very strong message of the best value proposition in the industry

Got it.

We're counting on Dave, though is as the absorption as the new sales centers that we opened last year and the year core as they continue to gain traction in the absorption rate on that on that cost improves and when you couple that with slowing.

Melanie Hart: Yes. At the low single-digit growth.

David Manthey: Got it.

Peter Arvan: What we're counting on, Dave, though, is the absorption, as the new sales centers that we've opened last year and the year before, as they continue to gain traction, then the absorption rate on that cost improves. When you couple that with slowing of adding new investments to the business, because I think we're adequately invested in most areas right now. I think the results for H2 are encouraging.

Speaker #5: Yeah . And second , you've talked about growth in opex expected to slow through the remainder of the year . And Melanie mentioned that .

David Manthey: Yeah, second, you've talked about growth in OpEx expected to slow through the remainder of the year, and Melanie mentioned that. Could you tell us, does that still kind of anticipate that full year OpEx will be in that 60% to 80% range relative to gross margin or sales dollar growth? I know that's a target, but based on your guidance ranges and how you're looking at the business, is that still the target for 2026?

Adding new investments to the business because I think we've I think we're adequately invested in most areas right now.

Speaker #5: Could you tell us does that still kind of anticipate that full year opex will be in that 60 to 80% range relative to gross margin or sales dollar growth ?

I think the results for the back half of the year are encouraging.

Speaker #5: Is that I know that's a target , but based on your your guidance ranges and how you're looking at the business , is that still the target for 2026 ?

Perfect. Thank you.

The next question comes from Ryan Merkel with William Blair. Please go ahead.

David Manthey: Perfect. Thank you.

Operator: The next question comes from Ryan Merkel with William Blair. Please go ahead.

Hey, everyone. Thanks for the question.

Speaker #2: So that is the , the long term target . But you should remember for 2026 , we do also have that incentive comp reload .

Melanie M. Hart: That is the long-term target. You should remember for 2026, we do also have that incentive comp reload. Where we do expect to get some leverage for the year, some of that natural leverage will be offset by that rebuild on the compensation side. It'll be a little bit lower than our normal long-term algorithm.

Wanted to start with gross margin.

Peter Melanie can you quantify the impact to gross margin from customer pre buy and then also the higher equipment next and the reason I ask is I think last quarter, you guided gross margins slightly up year over year in the first quarter. So curious what was different versus what you thought.

Ryan Merkel: Hey, everyone. Thanks for the question. Wanted to start with gross margin. Peter, Melanie, can you quantify the impact to gross margin from the customer pre-buy and then also the higher equipment mix? The reason I ask is, I think last quarter you guided gross margin slightly up year over year in Q1. Curious what was different versus what you thought.

Speaker #2: So where we do expect to get some leverage for the year , you know , some of that natural leverage will be offset by that rebuild on the compensation side .

Speaker #2: So it'll be a little bit lower than our normal long term algorithm .

Speaker #5: And that comp was I think you talked about $15 million . Is that still the case ?

David Manthey: That comp reset was, I think you talked about $15 million. Is that still the case?

Yeah. So we're not going to provide a kind of detailed quantification of that but if you think about what we have talked in kind of relative margins.

Speaker #2: Yes . At the at the low single digit growth .

Melanie M. Hart: Yes. At the low single-digit growth.

Melanie Hart: Yeah. We're not going to provide a kind of detailed quantification of that. If you think about what we have talked about in kind of relative margins, we generally will talk about kind of building materials having the best margin, and then after that would be chemicals, and then after that would be equipment. With the equipment being the higher portion of the Q1 sales and really kind of outgrowing our expectations, that's really where we saw some dilution of the consolidated margins.

Speaker #6: Got it .

David Manthey: Got it.

Speaker #3: What what we're counting on Dave though , is , is the absorption , you know , as the new sales centers that we've opened last year and the year before , as they continue to gain traction , then the absorption rate on that , on that cost improves .

Peter Arvan: What we're counting on, Dave, though, is the absorption as the new sales centers that we've opened last year and the year before, as they continue to gain traction, then the absorption rate on that cost improves. When you couple that with slowing of adding new investments to the business, because I think we're adequately invested in most areas right now. I think the results for the back half of the year are encouraging.

So we generally will talk about kind of building materials, having the best margin.

And then after that would be chemicals, and then after that would be equipment. So with the equipment being the higher portion of the first quarter sales and really kind of outgrowing our expectation.

Speaker #3: And when you couple that with slowing of adding , adding new investments to the business , because I think we've , I think we're adequately invested in most areas right now .

It's really where we saw some dilution of the consolidated margins.

Got it so in my own words, it sounds like the equipment growth surprised you in <unk> versus what you thought.

Speaker #3: I think the results for the back half of the year are encouraging .

Ryan Merkel: Got it. In my own words, it sounds like the equipment growth surprised you in Q1 versus what you thought.

It was a it was a very pleasant surprise.

Speaker #5: Perfect . Thank you .

David Manthey: Perfect. Thank you.

Okay got it alright, thats good to hear.

Speaker #1: The next question comes from Ryan Merkel . William Blair , please go ahead .

Rachel Smith: The next question comes from Ryan Merkel with William Blair. Please go ahead.

Operator: The next question comes from Ryan Merkel with William Blair. Please go ahead.

Melanie Hart: It was a very pleasant surprise.

And then second question is can you just comment on what Youre seeing so far in April and how does that compare to March and I'm. Just curious if march had a weather boost and trying to figure out if that's continuing into the second quarter.

Ryan Merkel: Okay. Got it. All right. That's good to hear. Second question is, can you just comment on what you're seeing so far in April, and how does that compare to March? I'm just curious if March had a weather boost, and I'm trying to figure out if that's continuing into Q2.

Speaker #7: Hey , everyone . Thanks for the question . I wanted to start with gross margin . Peter . Melanie , can you quantify the impact to gross margin from the customer ?

Ryan Merkel: Hey, everyone. Thanks for the question. I wanted to start with gross margin. Peter, Melanie, can you quantify the impact to gross margin from the customer pre-buy and then also the higher equipment mix? The reason I ask is I think last quarter you guided gross margin slightly up year-over-year in Q1. Curious what was different versus what you thought.

Speaker #7: Pre-buy, and then also the higher equipment mix. And the reason I ask is, I think last quarter you guided gross margin slightly up year over year in the first. So, curious what was different versus what you thought.

Yes, I think.

Sure.

Most of the way through most of the way through April and I would I guess I would characterize April as as expected.

Peter Arvan: Yeah, I think we're, I don't know, most of the way through April, and I guess I would characterize April as expected. For what we have contemplated within our guidance and with the plan, April is going as expected.

So it's for what we what we have contemplated within our guidance and with the plan.

Speaker #2: Yeah . So , you know , we're not going to provide a kind of detailed quantification of that . But if you think about , you know , what we have talked in kind of relative margins .

Melanie M. Hart: Yeah. We're not going to provide a kind of detailed quantification of that. If you think about what we have talked in kind of relative margins, so we generally will talk about kind of building materials having the best margin, and then after that would be chemicals, and then after that would be equipment. With the equipment being the higher portion of the Q1 sales and really kind of outgrowing our expectations, that's really where we saw some dilution of the consolidated margins.

<unk> is going as expected.

Okay. Thanks, that's it on.

Speaker #2: So we generally will talk about kind of building materials , having the best margin . And then after that would be chemicals . And then after that would be equipment .

Okay.

The next question comes from David Macgregor with Longbow Research. Please go ahead.

Ryan Merkel: Okay. Thanks. Pass it on.

Operator: The next question comes from David MacGregor with Longbow Research. Please go ahead.

Speaker #2: So with the equipment being the higher portion of the first quarter sales and really kind of outgrowing our expectation , that's really where we saw some dilution of the consolidated margins .

Hey, good morning, Thanks for taking my question.

I guess I wanted to just ask about pricing and inflation and demand elasticity and I guess in the past.

David MacGregor: Yeah, good morning. Thanks for taking my question. I guess I wanted to just ask about pricing, inflation, and demand elasticity. I guess in the past, where within the mix have you seen this sort of first appear, and do you feel your private label offering has sufficient breadth to maybe offset by capturing the downmarket shift, and would that downshift be margin accretive?

We're within the mix have you seen this sort of first appear in do you feel your private label offering is sufficient for us to maybe offset by capturing the down market shift.

Speaker #7: Got it . So in my own words , it sounds like the equipment growth surprised you in one Q versus what you thought

Ryan Merkel: Got it. In my own words, it sounds like the equipment growth surprised you in Q1 versus what you thought.

Speaker #2: It was . It was a very pleasant surprise .

Melanie M. Hart: It was a very pleasant surprise.

Would that downshift be margin accretive.

Speaker #7: Okay . Got it . All right . That's good to hear . And then second question is , can you just comment on what you're seeing so far in April ?

Ryan Merkel: Okay. Got it. All right. That's good to hear. Second question is, can you just comment on what you're seeing so far in April, and how does that compare to March? I'm just curious if March had a weather boost and trying to figure out if that's continuing into Q2.

Yes, I'll take that one David.

It's the way I would I wouldn't want anybody to position our private label as <unk>.

Peter Arvan: Yeah, I'll take that one, David. I guess I wouldn't want anybody to position our private label as a downprice offering. We look at our private label and have intentionally focused on making sure that it is a very high-quality product. So we're not actually selling it saying, "Hey, we're trying to have a cheaper offering." We're trying to have an offering that has tremendous value and is very high quality. I think, when it comes to the inflation, where we have seen it, and I've commented on this before, obviously inflation drives. It's most prevalent in discretionary when you get into the cost of a new pool. Then when you get into, on the maintenance side, there's some parts of maintenance that we would call semi-discretionary. A pump and a filter, non-discretionary.

Speaker #7: And how does that compare to March? I'm just curious if March had a weather boost, and I'm trying to figure out if that's continuing into the second quarter.

As a down price.

Price offering we look at our private label and have intentionally focused on making sure that it is very high quality product. So we're not actually selling it and saying Hey, we're trying to make we're trying not to.

Speaker #3: Yeah , I think , you know , we're we're I don't know , most of the way through most of the way through April .

Speaker #3: And I would , I guess I would characterize April as , as expected . So it's for what we , what we have contemplated within our guidance and with the plan .

Cheaper offering we're trying to have an offering that has tremendous value and as is very high quality.

<unk>.

When it comes to the inflation, where we have seen it and I've commented on this before obviously inflation drives the.

Speaker #3: I mean , April is going as expected .

Speaker #7: Okay. Thanks. Pass it on.

Ryan Merkel: Okay. Thanks. Pass it on.

Speaker #6: Thank you .

Peter Arvan: Thank you.

Speaker #1: The next question comes from David McGregor with Longbow Research . Please go ahead .

Rachel Smith: The next question comes from David MacGregor with Longbow Research. Please go ahead.

Operator: The next question comes from David MacGregor with Longbow Research. Please go ahead.

It's most prevalent in discretionary when you get into the cost of a new pool and then when you get into on the maintenance side. There is some parts of maintenance that are that we would call semi discretionary.

Speaker #8: Hey . Good morning . Thanks for taking my question . I guess I wanted to just ask about pricing and inflation and and demand elasticity .

Pump in a filter non discretionary if those those need to be replaced or repair they have to be replaced or repaired, but you get into.

Speaker #8: And I guess in the past . Where within the mix have you seen this sort of first appear ? And do you feel your private label offering is sufficient breadth to maybe offset by capturing the down market shift and , and would that downshift be margin accretive ?

Peter Arvan: If those need to be replaced or repaired, they have to be replaced or repaired. You get into heaters and/or lights, something like that. If somebody doesn't want to fix that, if there's one that needs to be replaced, you don't actually have to have that to continue to safely operate the pool. In some areas, that's where we have seen some decline in demand, but I would tell you that's already in and baked in. We're not seeing that either change materially from what we've seen over the last couple of years.

Heaters and or lights.

Like that.

If somebody doesn't want to fix that if there is one that is the <unk>.

Speaker #3: Yeah , I'll take that . David . I guess the way I would , I wouldn't want anybody to position our private label as , as a , as a down price , down price offering , you know , we look at our private label and have intentionally focused on making sure that it is that it is very high quality product .

Needs to be replaced.

Peter Arvan: Yeah, I'll take that one, David. I wouldn't want anybody to position our private label as a down-price offering. We look at our private label and have intentionally focused on making sure that it is a very high-quality product. We're not actually selling it saying, "Hey, we're trying to have a cheaper offering." We're trying to have an offering that has tremendous value and is very high quality. I think, when it comes to the inflation, where we have seen it, and I've commented on this before, obviously inflation is most prevalent in discretionary when you get into the cost of a new pool. Then when you get into, on the maintenance side, there's some parts of maintenance that we would call semi-discretionary. A pump and a filter, non-discretionary. If those need to be replaced or repaired, they have to be replaced or repaired.

You don't actually have to have that to continue to safely operate the pool. So in some areas, that's where we have seen.

Some decline in demand, but it would tell you that that's already.

Baked in so we're not seeing that either changed materially from what we've seen over the last couple of years.

Speaker #3: So we're not actually selling it saying , hey , we're trying to make , you know , we're trying to have a cheaper offering .

Okay, Okay got it.

Speaker #3: We're trying to have an offering that has tremendous value and is is very high quality . I think , you know , when it comes to the inflation , where we have seen it , and I've commented on this before , obviously inflation drives the it's most prevalent in discretionary .

Thanks for the clarification on the private label I guess second question is just on equipment sales, which obviously look encouraging I guess at this point, which you saw this quarter.

David MacGregor: Okay. Got it. Thanks for the clarification on the private label. I guess second question is just on equipment sales, which obviously look encouraging, I guess, at this point, what you saw this quarter. Any sense of how much deferred investment there may be in the market there? Just, I guess, given the rate of catch-up following prior downturns, what could that contribute to growth over the next year or two?

Sense of how much deferred investments there maybe in the market is there and then just I guess given the rate of catch up following prior downturns.

What could that contribute to growth over the next year or two.

Speaker #3: When you get into the cost of a of a new pool . And then when you get into on the maintenance side , there's some parts of , of maintenance that are that we would call semi discretionary , you know , a pump and a filter .

Can you clarify your question just want to make sure I answer the right question on your comment on deferred.

Well I'm, just getting a sense of that equipment sales.

Peter Arvan: Can you clarify your question? I just want to make sure I answer the right question on your comment on deferred. What do you...

Speaker #3: Nondiscretionary if those , those need to be replaced or repaired , they have to be replaced or repaired . But you get into , you know , you know , heaters and or lights , something like that .

<unk> been some deferral with the downturn and so now it looks like we're starting to see people spending money on equipment again, so I'm just trying to get.

David MacGregor: Well, I'm getting the sense that equipment sales, there's been some deferral with the downturn, and so now it looks like we're starting to see people spending money on equipment again. I'm just trying to get a sense of how much-

Peter Arvan: You get into heaters and/or lights, something like that. If somebody doesn't want to fix that, if there's one that needs to be replaced, you don't actually have to have that to continue to safely operate the pool. In some areas, that's where we have seen some decline in demand, but I would tell you that that's already in and baked in, so we're not seeing that either change materially from what we've seen over the last couple of years.

Pending move either.

Speaker #3: If somebody doesn't want to fix that , if there's one that , that is , that needs to be replaced , you don't actually have to have that to continue to safely operate the pool .

Yes, I think there is a couple of pieces of equipment transition to longer life items. So when you when the industry move from single speed pumps to variable speed pumps by their very nature variable speed pumps last longer.

Peter Arvan: Yeah.

David MacGregor: Deferred spending may have occurred there.

Peter Arvan: Yeah, I think there is. As a couple pieces of equipment transition to longer life items. Like, when the industry moved from single speed pumps to variable speed pumps, by their very nature, variable speed pumps last longer, and sometimes up to 2 times longer than a single speed pump. If you go back to 2018 when that regulation went into effect, and you extend out the life of a variable speed versus single speed, those variable speed pumps that were installed very early on in the transition, that would have gone well past the normal life of a single speed pump. Those will now start coming into the replacement cycle. We believe that. The same thing as it relates to incandescent lights, which were much shorter life than the LEDs that replaced them.

Speaker #3: So in some areas , that's where we have seen some decline in in demand . But I would tell you that that's that's already in .

Sometimes up to two times longer than a single speed pumps. So if you go back to 2018 when that regulation went into effect and you just do the you extend out the life of a variable speed versus single speed those <unk>.

Speaker #3: And baked in . So we're not seeing that either . Change materially from what we've seen over the last couple of years .

Speaker #8: Okay, okay. Got it. And thanks for the clarification on the private label. I guess my second question is just on equipment sales, which obviously look encouraging. I guess, at this point, based on what you saw this quarter, do you have any sense of how much deferred investment there may be in the market there?

Variable speed pumps that were installed very early on in the transition.

David MacGregor: Okay. Got it. Thanks for the clarification on the private label. I guess second question is just on equipment sales, which obviously look encouraging, I guess, at this point, which you saw this quarter. Any sense of how much deferred investment there may be in the market there? Just, I guess given the rate of catch-up following prior downturns, what could that contribute to growth over the next year or two?

That would have gone well past the normal life of a single speed pump those will now start coming into the replacement cycle, we believe that and the same thing as it relates to incandescent lights, which.

Speaker #8: And , and just , I guess , given the rate of catch up following prior downturns , what could that contribute to growth over the next year or two ?

We're much shorter life than the Leds that will replace them and those two as we work through that cycle Youll start to see more replacement for that so that's all encouraging for us for the future.

Peter Arvan: Can you clarify your question? I just want to make sure I answer the right question on your comment on deferred. What do you-

Speaker #3: Could you clarify your comment on deferred? I just want to make sure I'm answering the right question.

Peter Arvan: Those two, as we work through that cycle, you'll start to see more replacement for that. That's all encouraging for us for the future.

Speaker #8: Well , I'm just I'm getting the sense that equipment sales . There's been some deferral with the downturn and . And so now it looks like we're starting to see people spending money on equipment again .

Okay, great. Thanks Pete.

Yes.

The next question comes from Scott Schneeberger with Oppenheimer. Please go ahead.

David MacGregor: Great. Thanks, Pete.

Peter Arvan: Yep.

Operator: The next question comes from Scott Schneeberger with Oppenheimer. Please go ahead.

Thanks, very much I'm going to focus a bit on pricing I guess Melanie for you.

Speaker #8: And so I'm just trying to get a sense of how much deferred spending may have occurred there.

Peter Arvan: Yeah.

David MacGregor: Deferred spending may have occurred there.

Speaker #3: Yeah . I think there's as a couple of pieces of equipment transition to longer life items . So like when you , when the industry moved from single speed pumps to variable speed pumps , by their very nature , variable speed pumps last longer , sometimes up to two times longer than a single speed pump .

Peter Arvan: Yeah, I think as a couple pieces of equipment transition to longer life items. Like, when the industry moved from single-speed pumps to variable-speed pumps, by their very nature, variable-speed pumps last longer, and sometimes up to 2 times longer than a single-speed pump. If you go back to 2018 when that regulation went into effect, and you extend out the life of a variable speed versus single speed, those variable speed pumps that were installed very early on in the transition that would have gone well past the normal life of a single-speed pump, those will now start coming into the replacement cycle. We believe that. The same thing as it relates to incandescent lights, which were much shorter life than the LEDs that replaced them. Those two, as we work through that cycle, you'll start to see more replacement for that.

Scott Schneeberger: Thanks very much. I'm going to focus a bit on pricing. I guess, Melanie, for you discussed that we're going to be lapping the tariff pricing that started in April last year. I'm just curious how we should think about that. Did that ramp much in Q2? Will we see that as a comp in Q2, or not really until we get to H2? Just curious how we should think about the cadence and the impact of that since it's a full point in the guidance calculation. Thanks.

You discussed that were going to be lapping the tariff pricing that that started in April last year I'm. Just curious how we should think about that did that ramp much in the second quarter will we see that as as a comp in the second quarter and not really until we get to the back half.

Speaker #3: So if you go back to 2018 , when that regulation went into effect and you just do the you extend out the the life of a variable speed versus single speed , those those variable speed pumps that were installed very early on in the transition that would have gone well past the normal life of a single speed pump .

Curious, how we should think about the cadence and the impact of that since it's a full point in the in.

In the guidance calculation.

Yes that was.

When you look at full year pricing.

Speaker #3: Those will now start coming into the replacement cycle . We believe that . And the same thing as it relates to , you know , like incandescent lights , which were much shorter life than the LEDs that replaced them .

At the one to two which is based on the current year increases and so in the first quarter, we had that incremental one that was really the tariff price increases that we saw last year.

Melanie Hart: Yeah. When you look at full year pricing, we are at the 1% to 2%, which is based on the current year increases. In Q1, we had that incremental 1%, that was really the tariff price increases that we saw last year. In Q2 of last year, we did have some benefit from those price increases, so we will be lapping that. At this point, for the remainder of the year, we would expect pricing to be more in that 1% to 2%, just reflecting the current year cost increases.

Speaker #3: And those two , you know , as we work through that cycle , you'll start to see more replacement for that . So that's all encouraging for us , for the for the future .

In second quarter of last year, we did have some benefit from those price increases that we will be lapping that so at this point for the remainder of the year, we would expect pricing to be more in that one to two just reflecting the current year cost increases.

Peter Arvan: That's all encouraging for us for the future.

Speaker #8: Okay , great . Thanks , Pete .

David MacGregor: Okay, great. Thanks, Pete.

Speaker #6: Yep .

Peter Arvan: Yep.

Speaker #1: The question comes from Scott Schneeberger with Oppenheimer . Please go ahead .

Rachel Smith: The next question comes from Scott Schneeberger with Oppenheimer. Please go ahead.

Operator: The next question comes from Scott Schneeberger with Oppenheimer. Please go ahead.

Thanks, and then with this.

Speaker #9: Thanks very much . I'm going to focus a bit on on on pricing . I guess , Melanie , for you . You know , you discussed that we're going to be lapping the the tariff pricing that that started in April last year .

Scott Schneeberger: Thanks very much. I'm gonna focus a bit on pricing. I guess, Melanie, for you discussed that we're gonna be lapping the tariff pricing that started in April last year. I'm just curious how we should think about that. Did that?

We saw a move in the first quarter and chemical and I think one of you mentioned that there was.

Scott Schneeberger: Thanks. With this really solid move in Q1 in chemical, and I think one of you mentioned that there was some good private label, which is higher margin activity there. Could we see upside this year? Just a little bit behind the strength there, the possibility for persistence in it, and also the margin element of the private label with the chemical impact. Thanks.

Some good private label, which is higher margin activity there could we see upside this year.

Just a little bit behind the strength, there and the possibility for <unk>.

Speaker #9: I'm just curious how we should think about that . Did that ramp up much in the second quarter ? Will we see that as , as as a comp in the second quarter or not really until we get to the the back half .

Persistence in it and also the margin element of the of the private label with the chemical impact. Thanks.

Speaker #9: Just just curious how we should think about the cadence and the impact of that , since it's a full point in the , in the guidance calculation .

Yes.

We're very encouraged by chemicals in the first quarter, because thats the non discretionary part of the business.

Peter Arvan: Yeah. We're very encouraged by chemicals in Q1 because that's the non-discretionary part of the business. It really goes in two channels, right? It goes to the pro channel, which that's your day in, day out foot traffic into the branches, which is very encouraging. That's driven by the value proposition that we have. That's the 40-year relationships, that's the expertise in the branch, that's the footprint, that's the customer experience they get there, the tech platform, and frankly, the quality of the private label product that we're selling. The other side of that is going to be the independent retail, taking that product on and putting it on their shelves, and that being their go-to brand for the season. We're encouraged by the results in Q1.

Speaker #9: Thanks .

It really goes into channels ready to go through the pro channel, which which is that's your day day in day out foot traffic into the branches, which is which is very encouraging and thats.

Speaker #2: Yeah . So it's when you look at full year pricing , we are at the 1 to 2 , which is based on the current year increases .

Speaker #2: And so in the first quarter , we had that incremental one . That was really the tariff price increases that we saw last year in second quarter of last year , we did have some benefit from those price increases .

That's driven by the value proposition that we have that's the 40 year relationships at the expertise in the branch.

Thats the footprint, that's the customer experience they get there the tech platform and frankly, the quality of the of the private label product that were selling and then the other side of that is going to be the.

Speaker #2: So we will be lapping that . So at this point for the remainder of the year , we would expect pricing to be more in that 1 to 2 .

Speaker #2: Just reflecting the current year cost increases.

The independent retail.

<unk> net product on and putting it on their shelves and that being their go to brand for the season. So we're encouraged by encouraged by the results in the first quarter.

Speaker #9: Thanks . And then with this , this really solid move in the first quarter in chemical . And I think one of you mentioned that there was some good private label , which is higher margin activity .

And we think that as the season progresses that will be that will be just good tailwind for us.

Speaker #9: There . Could we see upside this year just a little bit behind the strength there ? And the possibility for persistence in it .

Peter Arvan: We think that as the season progresses, that will be just good tailwind for us.

Great. Thanks.

The next question comes from Garik <unk> with loop capital. Please go ahead.

Speaker #9: And also the margin element of the of the private label with the chemical impact . Thanks .

Scott Schneeberger: Great. Thanks.

Operator: The next question comes from Garik Shmois with Loop Capital. Please go ahead.

Oh, hi, Thank you just on the expectation that you have for operating expense growth to moderate.

Speaker #6: Yeah . We're , we're very encouraged .

Speaker #3: By chemicals in the first quarter because that's the , you know , the nondiscretionary part of the business . And it really goes into channels , right ?

Garik Shmois: Oh, hi. Thank you. Just on the expectation that you have for operating expense growth to moderate. You mentioned improved operating leverage on recent greenfields. I'm wondering if there's anything else besides that in the calculation. Are you expecting certain cost actions in addition to better operating leverage?

You mentioned improved operating leverage on recent Greenfield from wondering if theres anything else.

<unk>.

Speaker #3: It goes to the pro channel , which , which is , you know , that's your day to day in , day out foot traffic into the branches , which is , which is very encouraging .

The calculation, where you expecting certain cost actions in addition to better operating leverage.

Yes. So we are focused on ensuring that the the greenfields that we've put into place that we're continuing to get those up the fleet average.

Speaker #3: And that's , you know , that's driven by the value proposition that we have . That's the 40 year relationships . That's the expertise and the branch , you know , that's the footprint , that's the customer experience they get there .

Melanie Hart: Yeah. We are focused on ensuring that the greenfields that we've put into place, that we're continuing to get those up to fleet average. There's a concentrated effort on that, which does drive operating leverage at those locations. Along with that, we are constantly kind of evaluating, from both a seasonal standpoint and a market standpoint, ensuring that we're operating effectively within our capacity creation efforts. We've talked about utilizing the benefits of POOL360. Looking at, as we continue to increase our sales through POOL360 at each location, that gives us the opportunity to evaluate our operating model in those locations.

As a concentrated effort on that which does drive operating leverage at those locations.

Speaker #3: The tech platform , and frankly , the quality of the , of the , of the private label product that we're selling . And then the other side of that is going to be the , you know , the independent retail taking that product on and putting it on their shelves and that being their go to brand for the season .

And then along with that.

Our constantly kind of evaluating.

Both the seasonal standpoint, and a market standpoint.

Ensuring that we're operating effectively within our capacity creation efforts.

We've talked about utilizing the benefit the full 360. So you know looking at as we continue to increase our sales through full 360 at each location.

Speaker #3: So we're encouraged by , you know , encouraged by the results in the first quarter . And we think that as the season progresses , that will be that will be just a good tailwind for us

That gives us the opportunity to evaluate the operating model in those locations.

Speaker #9: Great . Thanks

Okay. Thank you a follow up question is just on chemical prices.

Speaker #1: The next question comes from Garik Shmois with Loop Capital . Please go ahead .

Comment during the prepared remarks.

Garik Shmois: Okay. Thank you. A follow-up question just on chemical prices. There's a comment, I think in the prepared remarks, they moderated in the quarter, but you're not seeing an impact to sales. Just wondering if you can assess if there's going to be a risk that it becomes a bigger headwind in future quarters at all.

Moderated in the quarter, but youre not seeing the impact of sales just wondering if you can.

Speaker #10: Oh , hi . Thank you . Just for the expectation that you have for operating expense growth to moderate . You mentioned improved operating leverage on recent greenfields .

There's going to be a risk that it becomes a bigger headwind in future quarters at all.

Speaker #10: I'm wondering if there's anything else besides that in the calculation . Are you expecting certain cost actions in addition to to better operating leverage ?

Yeah, I don't know from where we sit right now.

Our view is.

Peter Arvan: Yeah, I don't know. From where we sit right now, our view is that chemical prices are fairly stable. I mean, that could change, but from where we sit right now, I don't see that in any meaningful way. I mean, it could happen market to market. A competitor could do something in a market, but I don't see anything structural where there's a setup for that to change.

That's kind of the prices are fairly stable so I don't.

Speaker #2: Yeah . So , you know , we are focused on ensuring that the , the greenfields that we've put into place that we're continuing to get those up to fleet average .

That could change, but from where we sit right now.

Yet in any meaningful way I mean, it could happen market the markets somebody.

Speaker #2: So there's our concentrated effort on that , which does drive operating leverage at those locations . And then along with that , you know , we are constantly kind of evaluating , you know , from both a seasonal standpoint and a market standpoint .

<unk> could do something in a market, but I don't see anything structural there.

Where there is a set up for that to change.

Okay. Thank you very much.

Speaker #2: You know , ensuring that we're operating effectively within our capacity creation efforts . So , you know , we've talked about utilizing the benefits of full 360 .

The next question comes from Sam Reed with Wells Fargo. Please go ahead.

Garik Shmois: Okay. Thank you very much.

Awesome. Thanks, so much just wanted to quickly dive into the inventory comment around new product introductions.

Operator: The next question comes from Sam Reid with Wells Fargo. Please go ahead.

Speaker #2: So , you know , looking at as we continue to increase our sales through pull 360 at each location , you know , that gives us the opportunity to evaluate our operating model in those locations .

Sam Reid: Awesome. Thanks so much. Just wanted to quickly dive into the inventory comment around new product introductions. Specific examples, but also are you doing any more, say, around white label China import product? I just want to better understand some of the nuances there on the inventory line.

Specific examples but also are you doing any more say around like white label, China import product I, just want to better understand some of the nuances there on the inventory line.

Speaker #10: Okay . Thank you . Follow up question is just on chemical prices , there's a comment in the prepared remarks that they moderated in the quarter , but you're not seeing an impact to sales .

Yes.

Our job is to distributors to make sure that we have the best.

Speaker #10: Just wondering if you can . Assess if there's going to be a risk that it becomes a bigger headwind in future quarters at all .

Peter Arvan: Yeah. Our job as a distributor is to make sure that we have the best product offering for our customers, no matter where it comes from. I wouldn't say that if you look at our private label products, much of that product is domestically produced, and there's some of it that comes in from import, and that's frankly always been the case. Our view on new products is not new products lower costs for the sake of lower costs. What we look for is new products that have new technology that help us expand the market. We look for highest quality features and benefits that our customers and their customers would want to drive demand.

All the best.

Offering for our customers.

No matter, where it comes from so I wouldn't say that there is if you look at our private label products.

Speaker #6: Yeah , I .

Speaker #3: Don't know . From where we sit right now , our our view is that prices are , are fairly stable . So I don't I mean , that that could change , but from where we sit right now , I don't see that in any meaningful way .

The <unk>.

Much of that product is domestically produced in there some of it that comes in from important.

Frankly always been the case, but our view on new products is not new products.

Lower costs for the sake of lower cost what we look for is new products.

Speaker #3: I mean , it could happen market to market somebody , you know , a competitor could do something in a market . But I don't see anything structural that that where there's a setup for that to change .

New technology that help us expand the market. So we look for our highest quality features and benefits that our customers their customers would want would.

Speaker #10: Okay . Thank you very much

Speaker #1: The next question comes from Sam Reed with Wells Fargo. Please go ahead.

Who would want to drive demand so.

In no way shape or form do we go out and look for Hey, I just want to find the cheapest pump the cheapest filter.

Speaker #11: Awesome . Thanks so much . Just wanted to quickly dive into the inventory , comment around new product introductions , specific examples , but also , are you doing any more , say around like white label China import product ?

Peter Arvan: In no way, shape, or form do we go out and look for, "Hey, I just want to find the cheapest pump, the cheapest filter." If that was our goal, our product mix would be very different than it is today. We focus on having the best product, highest quality professional grade products that will help our customers grow their business.

If that was if that was our goal our product mix will be very different than it is today, we focus on having the best product highest quality professional professional grade products that will help our customers grow their business.

Speaker #11: I just want to better understand some of the nuances there on the inventory line.

All helpful. Pete and maybe just a quick one on the pre buy activity during the quarter. I mean, you did break out the <unk>.

Speaker #3: Yeah . You know , our , our job as a distributor is to make sure that we have the best , the , the best product offering for our customers , no matter where it comes from .

Sam Reid: All helpful, Pete. Maybe just a quick one on the pre-buy activity during the quarter. You did break out the pre-buy contribution in your bridge. I'm just curious, though, roughly, what is the gross margin for a customer that pre-buys a product versus, say, a non-pre-bought product? Would just love maybe that split on your gross margin line, just so we could better understand the impact to gross margins in that Q1 from pre-buys.

Pre buy contribution in your bridge I'm, just curious though roughly.

What is the gross margin for a customer that pre buys a product.

Speaker #3: So I wouldn't say that there is a , if you look at our private label products , the much of that product is domestically produced and there are some of it that comes in from import .

Versus say, a non pre bought product and we're just lump maybe that split on your gross margin line. Just so we can better understand the impact to gross margins in that first quarter from pre buys.

Speaker #3: And that's that's frankly always been the case . But our view on , on new products is not new products , lower cost for the sake of lower cost .

Yes, we typically don't break that out I mean, because there is no. One answer is it varies it varies by customer it varies by the products.

Speaker #3: What we look for is new products that have new technology that help us expand the market . So we look for highest quality features and benefits that our customers and their customers would want .

Peter Arvan: Yeah. We typically don't break that out. Because there is no one answer. It varies by customer, it varies by the products that they buy. The overall mix. Unfortunately, I can't give you an answer that says, "Hey, it's this many basis points for that type of customer versus a customer that buys normally," because it depends on when they buy, how much they buy, what they buy, and how large of a customer they are for us.

It varies by the products that they buy.

So the overall mix. So unfortunately I can't give you I can't give you an answer that says hey, it's this many bps for for that type of customer versus a customer that buys normally because it depends on when they buy how much they buy what they buy.

Speaker #3: Would want to drive demand . So I mean , in no way , shape or form do we go out and look for , hey , I just want to find the cheapest pump , the cheapest filter , you know , if that was if that was our goal , our product mix would be very different than it is today .

And how large of a customer they are for us.

Speaker #3: We focus on on having the best product , highest quality professional , you know , professional grade products that will help our customers grow their business .

Absolutely all helpful. Pete Thanks, so much.

Okay. Thanks.

The next question comes from Colin <unk> with Deutsche Bank. Please go ahead.

Sam Reid: Absolutely. All helpful, Pete. Thanks so much.

Peter Arvan: Yep, thanks.

Speaker #11: All helpful . Pete . And maybe just a quick one on the Pre-buy activity during the quarter . I mean , you did break out the Pre-buy contribution in your bridge .

Operator: The next question comes from Collin Verron with Deutsche Bank. Please go ahead.

Good morning. Thank you for taking my question I just wanted to follow up on the equipment and the replacement cycle can you just put some numbers around what the useful life of the equipment is now.

Collin Verron: Good morning. Thank you for taking my question. I just wanted to follow up on the equipment and the replacement cycle. Can you just put some numbers around what the useful life of the equipment is now? Just given that useful life, do you see a replacement cycle in the next couple of years just because we're coming up to 5 or 6 years post-COVID when there was a lot of demand?

Speaker #11: I'm just curious though , roughly , what is the gross margin for a customer that buys a product versus , say , a non pre-bought product ?

Just given that useful life do you see a replacement cycle in the next couple of years, just because we're coming up to.

Five or six years post COVID-19 when there was a lot of demand.

Speaker #11: We just love maybe that split on your gross margin line just so we could better understand the impact to gross margins in that first quarter from pre .

Yeah, Let me let me characterize it like this is the life of expected life of equipment.

Speaker #3: Yeah , we typically don't break that out . I mean , because there is no one answer . It varies right ? It varies by customer .

Peter Arvan: Yeah. Let me characterize it like this. The expected life of equipment varies tremendously based on what the product is and the operating conditions that it's used. Whether it's in a seasonal market or whether it's in a year-round market, and whether the product is properly maintained or not, and with weather events. In general, part of the value proposition of a variable speed pump is that it runs instead of at full rate under full load all the time. It runs at a lower load, which extends the life. It could extend the life by 30%, 40%, 50%. It really depends on many other factors. In general, it has extended the lifespan of pumps. Doesn't really have much of an impact on filters or anything like that. Heaters, it's really a function of water quality more than anything else.

Aires tremendously.

Based on what the product is in the operating conditions that it's used whether it's in a seasonal market or whether it's in a year round market and whether the product is properly maintained or not and with with weather events in general in general part of the value proposition of a variable speed pump is that it runs.

Speaker #3: It varies by the products . You know , that varies by the products that they buy . And so the , so the overall mix .

Speaker #3: So unfortunately , I can't give you , I can't give you an answer that says , hey , it's this many bips , you know , for , for that type of customer versus a customer that buys normally because it depends on when they buy , how much they buy and what they buy .

Instead of at full rate under full load all the time it runs at a lower at a lower load.

Speaker #3: And how large of a customer they are for us.

Which extends the life.

It could extend the life by 30%, 40%, 50% it really depends on many many other factors but in general.

Speaker #11: Absolutely . All helpful . Pete , thanks so much .

Speaker #3: Thanks .

Speaker #1: The next question comes from Collin Veron with Deutsche Bank . Please go ahead .

It has extended the life span of.

Speaker #12: Good morning . Thank you for taking my question . I just wanted to follow up on the equipment and the replacement cycle . Can you just put some numbers around what the useful life of the equipment is now ?

It doesn't really have much of an impact on on filters or anything like that heaters.

Really a function of water quality more than more than anything else. If you maintain great water chemistry that can extend the life you can have a brand new product with lousy water chemistry and destroy it very quickly so but in general we look at two categories for life expectancy changes that work.

Speaker #12: And just given that useful life , do you see a replacement cycle in the next couple of years ? Just because we're coming up to 5 or 6 years post Covid , when there was a lot of demand ?

Peter Arvan: If you maintain great water chemistry, that can extend the life. You could have a brand-new product with lousy water chemistry and destroy it very quickly. In general, we look at two categories for life expectancy changes that were by design, if you will. One is the variable speed pump. Certainly lasts longer than the single speed pump in the range of what I just discussed. If you look at LED light bulbs for the pool, those certainly on an apples-to-apples basis, are going to outlast an incandescent. Since the time that both of those products were introduced, we see that there should be opportunity for that replacement market coming up.

Speaker #3: Yeah , let me , let me characterize it like this . The life of expected life of equipment varies tremendously based on what the product is and the operating conditions that it's used , whether it's in a seasonal market or whether it's in a year round market and whether the product is is properly maintained or not .

And by design. If you will one is the variable speed pump certainly last longer than the single speed bump in the range of what I just discussed and then if you look at led light bulbs.

For the pool.

Those certainly on an apples to apples basis are going to outlast in incandescence. So.

Speaker #3: And with with weather events in general , in general , you know , part of the value proposition of a variable speed pump is that it runs instead of at full rate under full load all the time .

Since the time that both of those products were introduced we see that.

Should be opportunity for for that replacement market coming up.

Yeah.

Speaker #3: It runs at a lower at a lower load , which extends the life , you know , it could extend the life by 30% , 40% , 50% .

The next question comes from Jeff Hammond with Keybanc capital markets. Please go ahead.

Speaker #3: It really depends on many , many other factors . But in general , it has extended the life span of of pumps , doesn't really have much of an impact on , you know , on filters or anything like that .

Operator: The next question comes from Jeffrey Hammond with KeyBanc Capital Markets. Please go ahead.

Hi, good morning.

Good morning.

Just wanted to come back on inventories, 14% growth I think you mentioned that the broader product range and service levels, but just you know.

Jeffrey Hammond: Hi. Good morning.

Peter Arvan: Morning.

Jeffrey Hammond: Hey, just want to come back on inventories, 14% growth. I think you mentioned that the broader product range and service levels. Just maybe how would you characterize inventories where you want them to be? Just back on that, broadening the product range, can you give us some examples about the new tech or expanding the market type products that you mentioned in the prior comments?

Speaker #3: Heaters , you know , it's really a function of water quality more than more than anything else . If you maintain great water chemistry , that can extend the life , you could have a brand new product with lousy water chemistry and destroy it very quickly .

Or maybe how would you characterize inventories where you want them to be and then just back on that.

Broadening the product range can you talk give us some examples about.

Speaker #3: So , but in general , you know , we look at two categories for life expectancy changes that were by design , if you will .

The new tech or expanding the market.

Type products that you mentioned in the prior comments.

Speaker #3: One is, the variable speed pump certainly lasts longer than the single speed pump in the range of what I just discussed.

Yes, so in terms of the inventory.

If I look at the certainly the level of inventory is up if I look at the profile. The profile is what I would characterize is extremely healthy we're actually very astute buyers when it comes to.

Peter Arvan: Yeah. In terms of the inventory, certainly the level of inventory is up. If I look at the profile, the profile is what I would characterize as extremely healthy. We're actually very astute buyers when it comes to buying inventory. If I look at the dollars and where those are, they're not sitting in a significant amount in a bunch of new products that don't have any sales history. They're sitting in very high moving items. From an inventory perspective, I spend very little time worrying about the inventory levels because I think the team does an amazing job controlling inventory, and we generally do what we say every time. When I think about new products, I'll give you an example. On our private label line, we have a regular chlorine tablet which has been around forever in the pool industry.

Speaker #3: And then if you look at LED light bulbs for the pool , you know , those certainly on an apples to apples basis are going to outlast an incandescent .

<unk>.

Buying inventory so if I look at the dollars and where those are they're not sitting in a significant amount and a bunch of new products that don't have any sales history. They are sitting in very high moving.

Speaker #3: So, since the time that both of those products were introduced, we see that there should be opportunity for that replacement market coming up.

Hi, moving items.

I really from an inventory perspective, I spend very little time worrying about the inventory levels, because I think the team knows that doesn't amazing job controlling inventory and we generally.

Speaker #1: The next question comes from Jeff Hammond with KeyBanc Capital Markets. Please go ahead.

Speaker #13: Hi . Good morning .

Do what we say every time when I think about new products I'll give you. An example, so on our private label line.

Speaker #3: Morning .

Speaker #13: Hey , just want to come back on inventories . You know , 14% growth . I think you mentioned that the product broader product range and service levels , but just , you know , maybe how would you characterize inventories where you want them to be ?

We have a regular chlorine tablet, which has been around forever and the pool industry and now we also have a proprietary product which is an extreme.

Speaker #13: And then just back on that broadening the product range ? Can you talk ? Give us some examples about , you know , the , the new tech or expanding the market , you know , type products that you mentioned in the prior comment ?

The extreme tab as additives in the tablet that distinguish it from a standard tablet it has more additives in it that they.

Peter Arvan: Now we also have a proprietary product, which is an Xtreme Tabs. The Xtreme Tabs has additives in the tablet that distinguish it from a standard tablet. It has more additives in it that produce a better quality pool. It has stain inhibitors. It has algicides in it. It has clarifiers and other products that distinctly differentiate that product, and our customers and their customers see a big benefit from that. That tab or that product is growing nicely. Another example would be something in our filter cartridges. We have a proprietary bandless antimicrobial cartridge filter, which is much faster to service and has a very low micron filtration rate, which again, helps produce a clearer pool. That's especially important when you think about LED lights, which are getting brighter and brighter.

Produce a better quality pool. It has stain inhibitors. It has it is al decides it ended in a clarifier than other products that distinctly differentiate that product and our customers and their customers see a see a big benefit from that so that tab for that product is growing nicely.

Speaker #3: Yeah . So in terms of the inventory , if I look at the , the , certainly the level of inventory is up .

Speaker #3: If I look at the profile , the profile is what I would characterize as extremely healthy . We're actually very astute buyers when it comes to buying inventory .

Another example would be our something like something in our filter cartridges. So we have a.

Speaker #3: So if I look at the dollars and where those are , they're not sitting in a significant amount and a bunch of new products that don't have any sales history , they're sitting in , you know , very high moving , very high moving items .

A proprietary band Bliss anti microbial cartridge filter, which is much faster much faster service and has a very low very low micra.

Speaker #3: So , you know , I really from an inventory perspective , I spend very little time worrying about the inventory levels because I think the team has done an amazing job controlling inventory .

<unk> infiltration rates, which again helps produce helps.

Helps produce.

Clearer pool, and that's especially important when you think about led lights, which are getting brighter and brighter so anytime.

Speaker #3: And we generally do what we say every time . When I think about new products . I'll give you an example . So in our private label line , you know , a , we have a regular chlorine tablet , which has been around forever in the pool industry .

Somebody upgrades their life of water quality isn't really good youll start to see those suspended articles so great filtration to complement lights matters a lot.

Peter Arvan: Anytime somebody upgrades their lights, if the water quality isn't really good, you'll start to see those suspended particles. Great filtration to complement lights matters a lot, and we're right there for the customers to provide those products.

Were right there for the customers to provide those products.

Speaker #3: And now we also have a proprietary product , which is an extreme tab . The extreme tab has additives in , in the tablet that , that distinguish it from a standard tablet .

Okay. Thanks, those are great examples.

Just on pricing I think you mentioned you expect it to moderate I'm just wondering if you're hearing of any.

Jeffrey Hammond: Okay, thanks. Those are great examples. Just on pricing, I think you mentioned you expect it to moderate. I'm just wondering if you're hearing of any potential follow-on price increases, whether it's freight inflation from higher gas or oil-based products. I think we heard about some pricing actions in salt chlorinators, Section 232 kind of tariff update. Any chatter of any follow-ons coming?

Speaker #3: It has more additives in it that that produce a better quality pool . It has stain inhibitors , it has it has algicides in it .

Potential follow on price increases rather it's.

No.

Speaker #3: It has clarifiers and other products that distinctly differentiate that product. And our customers and their customers see a big benefit from that.

Freight inflation from from higher gas or oil based products I think we heard about some pricing actions in salt coordinators section 232 kind of tariff update any any chatter of any final ones coming.

Speaker #3: So that tab or that product is growing nicely . Another example would be our some something our filter cartridges . So we have a , a proprietary banned list , antimicrobial cartridge filter , which is much faster , much faster to service and has a , has a very low , very low micron filtration rate , which again helps produce , helps produce a clearer pool .

Yes, there has been some chatter I would tell you when we look across our product category from where we kind of said this time last year.

Peter Arvan: Yeah, there has been some chatter. I would tell you, when we look across our product category from where we kind of stood this time last year. Last year when we talked about the impact from the tariffs, we did have an incremental 1% that we added to pricing for the forecast for the year. At this point, some of it's noise. We've gotten some notices from vendors, but I would say it's not as widespread. As we were at about 30% of our cost of products this time last year, where we had announced price increases per se, and we're just not at that level at this point. We don't have as much of an impact expected. We're still kind of waiting to hear if other vendors have reactions to what's going on in the market.

Last year, when we talked about the impact from the tariffs.

Did have an incremental 1% that we added to pricing for the forecast for the year.

At this point.

Speaker #3: And that's especially important when you think about LED lights, which are getting brighter and brighter. So any time somebody upgrades their lights, if the water quality isn't really good, you'll start to see those suspended particles.

Some of it's noise, we've gotten some notices from vendors, but I would say, it's not as widespread.

And we were at about 30% of our cost of products. This time last year, where we had announced price increases per se and we're just not at that level at this point.

Speaker #3: So, you know, great filtration to complement lights matters a lot. And we're right there for the customers to provide those products.

So.

We don't have a as much of an impact expected. So we're still kind of waiting to hear from other vendors have have reactions to what's going on in the market.

Speaker #13: Okay , thanks . Those are great examples . Just on on pricing , I think you mentioned , you know , you expect it to moderate .

Speaker #13: I'm just wondering if you're hearing of any , you know , potential follow on price increases , whether it's , you know , freight inflation from , from higher gas or oil based products .

Okay. Thank you.

The next question comes from Steve Forbes with Guggenheim. Please go ahead.

Jeffrey Hammond: Okay, thank you.

Operator: The next question comes from Steven Forbes with Guggenheim. Please go ahead.

Hey, guys. Good morning. This is Jake NEVA Shaw on for Steve just one for me I wanted to dig into pull $3 60, a little bit. So it's nice to see that penetration levels continue to increase as seen from this quarter from the prior year period, and just curious what the expectation is.

Speaker #13: I think we heard about some pricing actions in salt Chlorinators section 232 . Kind of tariff update . Any any chatter of of of any follow ons coming .

Jake Nevosh: Hey, guys. Good morning. This is Jake Nevosh on for Steve. Just one for me. I wanted to dig into POOL360 a little bit. It's nice to see that penetration levels continue to increase as seen from this quarter from the prior year period. Just curious what the expectation is for the year for this platform, I guess, from a penetration standpoint. I guess as a follow-up, curious about what the customer retention looks like utilizing this platform. Where are you seeing when perhaps some of the newer branches, perhaps they're utilizing that a little bit more than some of the older vintages, or is it the dynamic not really related to that? Just any sort of update here would be great.

Jake Nivasch: Hey, guys. Good morning. This is Jake Nevosh on for Steve. Just one for me. I wanted to dig into POOL360 a little bit. It's nice to see that penetration levels continue to increase as seen from this quarter from the prior year period. Just curious what the expectation is for the year for this platform, I guess, from a penetration standpoint. I guess as a follow-up, curious about what the customer retention looks like utilizing this platform. Where are you seeing when perhaps some of the newer branches, perhaps they're utilizing that a little bit more than some of the older vintages, or is it the dynamic not really related to that? Just any sort of update here would be great.

Speaker #2: Yeah . There has been some chatter . I would tell you when we look . Across our product category from where we kind of stood , stood this time last year , you know , last year when we talked about the impact from the tariffs , you know , we did have an incremental 1% that we added to pricing for the forecast for the year .

For the year for this platform I guess from a penetration standpoint, and I guess as a follow up.

Curious about what the customer retention looks like utilizing this platform you know where are you seeing.

Perhaps some of the newer branches, perhaps they're using utilizing that a little bit more than some of the older vintages or is it you know the dynamic not really related to that just.

Speaker #2: At this point , some of it's noise . You know , we've gotten some notices from vendors . But I would say it's not as widespread as , you know , we were at about 30% of our cost of products this time last year where we had announced price increases per se .

Any sort of a buffer.

Update here would be great.

Yes, we're actually very encouraged by a full 360, we think it is a structural differentiator for.

Speaker #2: And we're just not at that level at this point . So , you know , we don't have a as much of an impact expected .

Peter Arvan: Yeah. We're actually very encouraged by POOL360. We think it is a structural differentiator for PoolCorp, both in customer experience and certainly from a cost to serve perspective, which is why we've had so much focus on it. What's interesting is that there are some regional differences in the adoption rate. We have some branches that have very high utilization, some well over 30% in the tool, and we have some that are lower. Some of that is just somewhat what would seem to be regional differences. Some of it is just opportunity on our part. We continue to focus on improving the quality of the tool. Every day, people wake up and say, "How do we make it better? How do we make it better? How do we make it better? What new features do we have to add? How do we communicate those?

Both in customer experience and certainly from a from a cost to serve perspective, which is why.

Speaker #2: So we're still kind of waiting to hear from, you know, if other vendors have reactions to what's going on in the market.

We've had so much focus on it.

It's interesting is is that there are some regional differences in the adoption rate. There is some we have some pricing.

Speaker #14: Okay . Thank you

Speaker #1: The next question comes from Steve Forbes with Guggenheim. Please go ahead.

Very high very high utilization, some well over 30% in the tool and we have some that are lower so some of that is just some some which seem to be regional differences and some of it is just opportunity on our part. So we continue to we continue to focus on improving the quality of the tool everyday.

Speaker #15: Hey , guys . Good morning . This is Jake on for Steve . Just one for me . I wanted to dig into pool 360 a little bit .

Speaker #15: So , you know , it's nice to see that penetration levels continue to increase . You know , as seen from this quarter from the prior year period .

Speaker #15: And , you know , just curious what the expectation is , you know , for the year for this platform , I guess from a penetration standpoint .

People wake up and say, how do we make it better how do we make it better how do we make it better what new features to be able to add how do we communicate those how do we train the customers on our branch teams on those features so there's a there's a range. So I don't think we're anywhere near as a company near entitlement.

Speaker #15: And , you know , I guess as a , as a follow up , you know , I curious about what the customer retention looks like utilizing this platform , you know , where you seeing , you know , when perhaps some of the newer branches , perhaps they're using , you know , utilizing that a little bit more than the , you know , some of the older vintages or is it , you know , the dynamic ?

Peter Arvan: How do we train the customers and our branch teams on those features?" There's a range. I don't think we're anywhere near as a company near entitlement of our penetration. As last year we ended for the total year at 17%. As I mentioned, we have some branches that are well over 30. For me, I don't see any reason why the company couldn't ultimately exceed 25% target and maybe higher in the future. It all depends. It's important that we remain flexible with our customers, though, and not try and force them into using it. We do business with our customers the way they want to do business with us. Some of them embrace the digital tools. Some people like the face-to-face.

Our penetration.

Speaker #15: Not really related to that , just , you know , any , any sort of , you know , update here would be great .

Last year, we ended for the total year at 17%.

And as I mentioned, we have some branches that are well over 30, so for me.

Speaker #3: Yeah , we're actually very encouraged by pool . 360 we think it is a structural differentiator for , for POOL CORP both in in customer experience and certainly from a , from a cost to serve perspective , which is why we've had so much focus on it .

I don't see any reason why the company couldn't ultimately exceed 25%.

Target.

And maybe higher in the future it all depends so.

It is important that we remain flexible with our customers that I would not try and force them into using it we do business with our customers the way they want to do business with us some of them embrace of digital tools some people like the face to face.

Speaker #3: What's interesting is , is that there are some regional differences in the adoption rate . There are some we have some branches that have very high , very high utilization .

Speaker #3: Some , you know , well over 30% in the tool . And we have some that are lower . So some of that is just some some which seem to be regional differences .

Got it thank you very much.

The next question comes from Shaun Calnan with Bank of America. Please go ahead.

Jake Nevosh: Got it. Thank you very much.

Jake Nivasch: Got it. Thank you very much.

Speaker #3: And some of it is just opportunity on our part. So we continue to, we continue to focus on improving the quality of the tool. Every day people wake up and say, how do we make it better?

Operator: The next question comes from Shaun Calnan with Bank of America. Please go ahead.

Hi, guys. Thank you for taking my questions. Just first can you talk about what you think drove the better early buy this year do you think customers are more worried about.

Shaun Calnan: Hi, guys. Thank you for taking my questions. Just first, can you talk about what you think drove the better early buy this year? Do you think customers are more worried about potential price increases, or do you think this is like a view that they're more optimistic on 2026?

Speaker #3: How do we make it better? How do we make it better? What new features do we have to add? How do we communicate those?

Potential price increases or do you think this is like a view that they are more optimistic on 2026.

Speaker #3: And how do we train the customers on our branch teams on those features ? So there's a , there's a range . So I don't think we're anywhere near as a company near entitlement of , of our penetration as last year we ended for the total year at 17% .

Yeah, I don't know that I don't know that it was.

Fear of price increase I think it.

Peter Arvan: Yeah, I don't know that it was a fear of price increase. I think it's a couple things. I think that early on in the year, there is always a fair amount of optimism because customers don't know what they don't know, and by nature, our customers tend to be fairly optimistic. That's a portion of it. I think to scale it, when you look at some of these early buys, I don't know that there's any risk for any of the customers with an early buy. It's not like they're buying a year's worth of inventory. They're buying some inventory to start the season. I don't know that anybody is betting the farm on what they buy. I would say it's a function of our sales efforts, the quality of our products, and how well we serve the customer more than anything.

I think it's a couple of things I think that.

Speaker #3: And as I mentioned, we have some branches that are well over 30. So, for me, you know, I don't see any reason why the company couldn't ultimately exceed the 25% target.

Early on in the year there is.

Always a fair amount of optimism because customers don't know what they don't know and by nature of our customers tend to be fairly optimistic. So that's a portion of it I think.

Speaker #3: And , and maybe higher in the future . It all depends . So it's important that we remain flexible with our customers though , and not try and force them into using it .

Just scale it when you look at some of these early buys I don't know that theres any risk for any of the customers with an early buy it's not like they're buying a year's worth of inventory so they're buying they're buying some inventory to start the season. So I don't know that anybody is betting the farm on what they buy.

Speaker #3: We do business with our customers the way they want to do business with us . Some of them embrace the digital tools . people like the face to face

I would say, it's a function of our sales efforts the quality of our products and.

Speaker #15: Got it . Thank you very much .

Speaker #1: The next question comes from Sean Calnan with Bank of America . Please go ahead

And how well we serve the customer more than anything.

Speaker #16: Hi , guys . Thank you for taking my questions . Just first , can you talk about what you think drove the better early buy this year ?

Okay got it and just as a follow up you had mentioned being able to get some discounted equipment last quarter did you pass that discount along tier customers and was there any.

Shaun Calnan: Okay, got it. Just as a follow-up, you had mentioned being able to get some discounted equipment last quarter. Did you pass that discount along to your customers? Was there any change in the structure of your early buy discounts?

Speaker #16: Do you think customers are more worried about potential price increases , or do you think this is a view that they're more optimistic on 2026 ?

Change in the structure of your early buy discounts.

I assume you're referring to early buys in early buys are just part of the normal course normal course of business and I think we had a question earlier about pricing on early buys and again the answer is it just depends on the customer of the product mix or buying how much they're buying.

Speaker #3: Yeah , I don't know that . I don't know that it was a fear of price increase . I think it's I think it's a couple of things .

Peter Arvan: I assume you're referring to early buys, and early buys are just part of the normal course of business, and I think we had a question earlier about pricing on early buys. Again, the answer is it just depends on the customer or the product mix they're buying, how much they're buying, and things like that. There is no formulaic that says this means that as it relates to the price increases.

Speaker #3: I think that, you know, early on in the year, there is always a fair amount of optimism because customers don't know what they don't know.

And.

And things like that if there is no formulaic that says this means that as it relates to the price increases.

Speaker #3: And by nature , our customers tend to be fairly optimistic . So that's a portion of it . I think , you know , to scale it when you look at some of these early buys , I don't know that there's any risk for any of the customers with an early buy .

Okay. Thank you.

This concludes our question and answer session I would like to turn the conference back over to Peter Arvin, President and CEO for closing remarks.

Speaker #3: It's not like they're buying a year's worth of inventory . So they're buying , they're buying some inventory to start the season . So I don't know that anybody is betting the farm on on what they buy .

Shaun Calnan: Okay. Thank you.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Peter Arvan, President and CEO, for closing remarks.

Yes. Thank you all for attending today's call. We look forward to you joining us are joining our investor day webcast on May 12, when our executive leadership team covers strategic initiatives and our long term financial outlook in more detail and on July 23, when we announce our second quarter 2026.

Speaker #3: So I would say it's a function of, you know, our sales efforts, the quality of our products, and how well we serve the customer more than anything.

Peter Arvan: Yes. Thank you all for attending today's call. We look forward to you joining us or joining our Investor Day webcast on 12 May, when our executive leadership team covers strategic initiatives and our long-term financial outlook in more detail. On 23 July, when we announce our Q2 2026 results. Have a wonderful day.

Speaker #16: Okay . Got it . And just as a follow up , you had mentioned being able to get some discounted equipment last quarter , did you pass that discount along to your customers ?

Results have a wonderful day.

Speaker #16: And was there any change in the structure of your early by discounts ?

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker #3: I assume you're referring to early buys, and, you know, early buys are just part of the normal course—normal course of business.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker #3: And I think we had a question earlier about , you know , pricing on early buys . And again , the answer is it just depends on on the customer and the product mix they're buying how much they're buying and , and things like that .

Speaker #3: If there is no formulaic that says this means that as it relates to the price increases .

Speaker #16: Okay , thank you

Speaker #1: This concludes our question and answer session . I would like to turn the conference back over to Peter Arvan president and CEO , for closing remarks

Speaker #3: Yes. Thank you all for attending today's call. We look forward to you joining us or joining our Investor Day webcast on May 12.

Speaker #3: When our executive leadership team covers strategic initiatives and our long term financial outlook in more detail . And on July 23rd , when we announce our second quarter 2026 results , have a wonderful day

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