Pool destocking drove the consolidated sales decline
2026-Q2 net sales declined 17.0% year over year to $932.6M, including a 20.6% volume decline partly offset by 3.3% pricing. Management attributed the decline primarily to Pool-channel inventory destocking; Pool sales fell 42.3% to $246.6M, and management expects channel destocking to reduce 2026 net sales by approximately $250M, with the timing and pace of normalization uncertain.
Margins improved at the gross-profit level but operating margin declined
Gross margin increased to 42.4% in 2026-Q2 from 40.7% a year earlier, helped by pricing, productivity, the absence of prior-year asset impairments/write-offs, and $34.9M of IEEPA tariff refunds. However, operating margin decreased to 17.9% from 19.4% because SG&A rose to 22.0% of sales, including $34.6M of restructuring costs and $17.5M of transformation costs.
Flow outperformed while Pool profitability contracted sharply
Flow sales increased 5.1% to $263.7M and its segment-income margin expanded 470 basis points to 26.5%, supported by the Hydra-Stop acquisition, pricing and productivity. Water Solutions sales decreased 5.1% to $422.0M but its segment-income margin rose 560 basis points to 30.0%; in contrast, Pool segment income fell 62.3% to $57.6M and its margin dropped 1,230 basis points to 23.4%.