Berkshire Hathaway Unwinds $650 Million Pool Corp Stake Amid Market Shift
The divestment occurs as Pool Corp reports resilient maintenance demand and solid first-quarter growth, despite new pool construction falling sharply from pandemic-era peaks.
Berkshire Hathaway has sold its entire 8.3% stake in Pool Corp, a wholesale distributor of swimming pool supplies, during the first quarter of 2026. The position, valued at approximately $650 million, was fully unwound, marking a significant departure for the conglomerate known for its long-term holding period. The exit comes as Pool Corp’s shares trade nearly 70% below their all-time highs, reflecting a challenging environment for new pool construction.
Pool Corp reported first-quarter 2026 net sales growth of 6% and operating income growth of 7%, with management citing resilient maintenance demand despite a sharp decline in new pool construction. New pool unit construction in 2025 totalled 58,000 units, a fraction of the pandemic-era peaks. However, the company’s business model relies heavily on the recurring needs of approximately 5.5 million in-ground pools across the United States, which require weekly chemical treatment and periodic equipment replacement.
President and CEO Peter Arvan pointed to broad-based growth across product categories during the earnings call. Chemicals grew by 8%, driven by strong demand for the company's private-label brands, while equipment grew by 7% and building materials were up 5%. Geographically, California grew 10% and Texas grew 7%, boosted by favourable weather and strong maintenance demand.
The company’s digital ordering platform, POOL360, now accounts for 13% of net sales, up from 12.5% a year ago. Pool Corp also runs the Pinch A Penny franchise network, which added seven new independently owned locations in the first quarter. Management confirmed full-year diluted earnings per share guidance of $10.87 to $11.17, representing 2-3% growth over the prior year.
Pool Corp has raised its annualised dividend from $0.56 per share in 2011 to $5 per share in 2026, indicating a compounded annual growth rate of 15.7% over the last 15 years. The annual dividend expense for the mid-cap stock is around $182 million, while it is forecast to report a free cash flow of $354 million this year. Given a payout ratio of 51%, the company retains room to grow its dividend while reinvesting in growth and acquisitions.
The Berkshire Hathaway decision to sell does not necessarily indicate that Pool Corp is a broken business, as the fundamentals remain intact. However, it reflects a shift in conviction, suggesting the expected return no longer meets the bar for the conglomerate. For investors, the core question remains whether the installed-base thesis holds and if management can continue to expand margins as new construction remains muted.
The first-quarter numbers suggest the answer leans yes, with maintenance demand proving resilient. Whether this operational stability is enough to win back Berkshire’s confidence remains to be seen, but the company continues to demonstrate steady performance in a sector where discretionary spending has cooled.
