POOL - A Mixed 2Q—Balancing Disinflation & Gross Margin Headwinds (Customer Mix & Inbound Freight) with Early Signs of Volume Stability; NEUTRAL

Research evidence excerpt

POOL - A Mixed 2Q—Balancing Disinflation & Gross Margin Headwinds (Customer Mix & Inbound Freight) with Early Signs of Volume Stability; NEUTRAL

July 24, 2026

Steven Forbes, CFA, CPA steven.forbes@guggenheimpartners.com POOL - A Mixed 2Q—Balancing Disinflation & Gross

212 381 4188 Margin Headwinds (Customer Mix & Inbound Freight)

John Heinbockel

john.heinbockel@guggenheimpartners.com with Early Signs of Volume Stability; NEUTRAL

212 381 4135

Julio Marquez Key Message: As detailed within Exhibit 1, POOL's 2Q 2026 operating results were julio.marquez@guggenheimpartners.com mixed, in our view. On the one hand, not only were POOL's 2Q operating results relatively 212 823 6605

in-line with our expectations, but management reiterated it's full-year 2026 net sales

Jacob Nivasch & adjusted EPS guidance—despite slight contribution changes, including a) higher net

jacob.nivasch@guggenheimpartners.com sales, b) lower gross margin, and c) lower SG&A expenses, tied to a recent reduction-

212 338 8837 in-force. In addition, it appears that volumes are stabilizing at down 1%, year-over-

Max Horowitz year. On the other hand, emerging inbound freight headwinds and ongoing customer

max.horowitz@guggenheimpartners.com mix challenges (i.e., expanding penetration of larger customers, a result of industry

212 518 9974 consolidation) have contributed to an ~30 basis point reduction to full-year gross margin

guidance (to down ~30 basis points year-over-year from flat). When combined with

management's expectation for disinflation during 2H 2026—with 2H pricing expected

to moderate to +1.0-2.0% year-over-year from +3.0% during the 1H—and ongoing

end market challenges within POOL's irrigation & landscape supply segment (Horizon POOL NEUTRAL