How Do They Make Money?

Pool Corp 2024 Annual Report

Pool Corp is the world's largest wholesale distributor of swimming pool supplies, equipment and related leisure products AND one of the leading distributors for irrigation and landscape products in the US

So they're distributors. They don't really manufacture anything. They call out how this provides value in the second line of their annual report...

Business model – Pool Corp buys swimming-pool equipment, chemicals, parts, building materials, and irrigation/landscape supplies from hundreds of manufacturers and resells them to ~125 000 professional customers (pool builders, service companies, retailers, landscape contractors, etc.) through 448 sales-center “cash-and-carry” distribution hubs in North America, Europe and Australia.

Economic engine – Margin is earned on the spread between bulk purchases and rapid, high-service distribution. Revenue is driven mainly by the installed base of pools:

• ≈ 65 % of 2024 sales came from non-discretionary maintenance & minor repair products (chemicals, replacement parts, etc.)

• ≈ 20 % from remodel/upgrade work on existing pools

• ≈ 15 % from new-pool construction ​

REALLY love that non-discretionary portion. This seems like a good flywheel.

The business is seasonal, "In 2024, we generated approximately 60% of our net sales and 73% of our operating income in the second and third quarters of the year."

Unfortunately, they don't break out any business segments in the annual report, so I can't see exactly which ones are growing the most or have the highest margin :(