What Happened?
Shares of swimming pool distributor Pool (NASDAQ: POOL) fell 13% in the afternoon session after it reported fourth-quarter 2025 earnings and revenue that missed analyst expectations and provided a weaker-than-anticipated forecast for 2026. Net sales for the quarter were flat year on year at $982.2 million, falling short of estimates. The company's profit also declined, with earnings per share (EPS) of $0.85, down from $0.98 in the same period the previous year and below forecasts. Looking ahead, the company guided for 2026 EPS with a midpoint of $11.00. This forecast also missed what analysts were expecting, signaling concerns about future profitability and modest growth.
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What Is The Market Telling Us
Pool’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. Moves this big are rare for Pool and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 4.8% on the news that comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.
Pool is down 3.6% since the beginning of the year, and at $221.49 per share, it is trading 39.2% below its 52-week high of $364.31 from March 2025. Investors who bought $1,000 worth of Pool’s shares 5 years ago would now be looking at an investment worth $679.30.
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