Peter D. Arvan
President and Chief Executive Officer at Pool
Thank you, Melanie, and good morning to everyone on the call. This morning, we proudly reported another record quarter with net sales coming in at $2.1 billion, an increase of 15% marking our first ever $2 plus billion quarter and beating last year's very strong second quarter where we saw sales increase by 40%. These results prove exceptional given the challenges that we faced this past quarter in weather, the supply chain and recognizing that the second quarter is where growth capacity industry-wide is most limited. There were many factors that came into play this quarter that when taken in totality, demonstrate the strength of the Company and the resilience of the industry.
First off, I would say that demand for new pools is solid and not surprisingly, the backlog on new pool construction is somewhat smaller than this time last year. Our builders are reporting leads have slowed a bit, but that they have plenty of work on new construction and renovation projects on the ever-expanding installed base of pools. Second, following two years of very favorable weather in the second quarter, we experienced a cooler and wetter start this year in our seasonal markets that delayed many projects impacting the demand and timing of sales of many products from packaged pools and equipment to chemicals. As we would have expected, when the weather improved later in the quarter, sales for these products increased to fulfill the strong demand.
Third, supply chain constraints have improved in many areas, but persist in several products that contain computer chips like variable speed pumps and automation. Our trichlor inventories have improved tremendously, but the availability of granular cal hypo used to shock swimming pools is very tight affecting sales for that product. Fourth, we have seen a continuation of the demand for connected and smart technology products like automation, salt chlorination, variable speed pumps, robotic cleaners and customizations, which positively impact revenue on repair and replacement, as well as new construction and remodel, and we expect that will continue.
Fifth, without a doubt, our inventory management program has helped us keep pace with the strong demand and fluctuating lead times as the installed base of pools grows and favorable market dynamics continue. At the same time, we have seen a decline in the demand of some categories that were supercharged by the pandemic, such as above-ground pools and heaters as mentioned on previous calls. Fortunately, the decline represents a very small percentage of our total sales. Lastly, the inflation that has worked its way into the industry is passing through the channel, which is reflected in our revenue and gross profit performance. We believe that most of the inflation that we are seeing is driven by structural cost increases by our suppliers, making these new price levels permanent in nature.
To summarize, we would characterize the current situation and near-term outlook as positive with mix and price more than offsetting some declines in unit volumes that are driven by supply chain constrained items and weather-related delays for both construction and pool maintenance products. As I mentioned, the reported backlog may be returning back to more normal levels, but the installed base, which is where we derive over 80% of our revenue continues to grow ensuring that demand for our products, including maintenance and repair and remodel items remain strong.
Acquisitions, most notably, Porpoise Pool & Patio as projected are performing extremely well, adding 5% to our revenue during the quarter. Excluding revenue from new franchise locations, our acquired Pinch operations grew by 14% in the quarter. Pinch is a very proven and unique value -- Pinch has a very proven and unique value proposition, which allows the individual owners to operate best-in-class stores, while the business continues to attract new franchisees.
Looking at the base business in our four largest markets, California saw sales increase 9% in the quarter. This is on top of the 33% growth that we saw last year in the same quarter. Texas saw revenues grow by 17%, while Arizona saw sales grow by 20%. Our Florida business continues to benefit from a very robust economy and grew by 23%. Overall, our year-round markets grew by 16% and our seasonal markets by 5% as they were impacted by the weather pattern that I mentioned above. Continuing to base business product sales results, we were very pleased with what we saw during the quarter.
Equipment, which grew by 35% in the second quarter of 2021, grew by an additional 7% in the second quarter of 2022. As mentioned, supply chain disruptions and shortages of key components continue to impact this area, and it is worth noting that last year, in the same quarter, we were still working through the Texas freeze impact. Additionally, keep in mind the seasonal markets experienced unfavorable weather this year, which is very different than the favorable weather and early start that positively impacted their results in the previous two years.
Chemical sales increased by 25% in the quarter, a better inventory position on trichlor helped, but we were hampered by the shortage in cal hypo this year. Not surprisingly, with this year's weather pattern, volumes, particularly in the retail sizes were softer in the quarter when compared to last year. As mentioned, retail sales improved as the weather turned more favorable as the quarter progressed. Building materials sales increased by 22%, which is on top of the 33% growth in this category that we saw in the second quarter of 2021. Our ability to grow this category is strong. We are adding and refreshing NPT centers and capabilities to bring the most complete product offering in this category closer to our customers and help them showcase this product to the millions of pool owners and thousands of new or prospective pool owners across North America.
Our capabilities in this area are unmatched as we offer the most complete line of products, expert advice and training and the best customer experience in the industry. Additionally, our digital catalog and augmented reality tool called the NPT Backyard App helped bring the showroom to the homeowners' own backyard virtually. Retail sales, which -- retail sales excluding Pinch A Penny grew by 7% in the quarter, clearly feeling the effects of the weather in our seasonal markets. For comparative purposes, we grew retail sales 20% in the same period last year. It is noteworthy that the results on a year-to-date basis are up 13%.
Looking at the results on a regional basis, we see a clear bifurcation that is weather-driven with the year-round markets posting results similar to Pinch A Penny, which is highly concentrated in Florida and Texas. Commercial pool product sales are up 23%, and that is on top of the 45% growth that we saw in the same period of 2021. With leisure travel bouncing back and strong demand in this category, we are encouraged with this trend and no one is better positioned to serve this than POOLCORP. We have deep expertise and an expansive inventory earned in the [Phonetic] critical time-sensitive nature of this business.
Now let me add some color on our European business results. After a tremendous 2021, Europe is facing a difficult 2022, driven by very unfavorable weather, uncertainty on the continent because of the war in Ukraine and a slowing economy that is grappling with surging energy and food costs, we saw sales decline 18% in the quarter. On a constant currency basis, it was negative 8%. For perspective, this compares with the same quarter in 2021, where we saw sales surge 42%. Our European team is very seasoned and is managing the business appropriately, and we remain very committed to our European strategy over the long haul.
Turning to Horizon, once again, we are very pleased with the results. Base business sales grew by 14% and total sales, including acquisitions, increased by 15%. Once again, I'd like to point out that this compares with 2021, which in the same period, we saw sales increase by 31%. Jeff Clay and his team continue to execute our strategic plan with very strong results. We remain very committed to the industry and highly confident in our team's ability to grow and take additional share. At this juncture, let me add some commentary on gross margin, expenses and operating income.
Starting off with gross margins. I'm very pleased to show that overall gross margin percent increased 150 basis points to 32.4%. This marks the first time that we have ever exceeded 32%, so yet another milestone for the POOLCORP team. For our base business, gross margin percent increased 100 basis points to 31.9%. Many factors combined to drive the increase. Pricing management, our supply chain activities, product and customer mix, all helped drive the increase in gross margin percent. Additionally, we are in the early stages of vertically integrating certain chemical lines with Porpoise Pool & Patio, which is helping drive the increase.
Conversely, we faced headwinds in some of our vendor incentive programs as growth tiers are impacted by the timing of our purchases. Furthermore, the rapid pace of vendor price increases has subsided. Again, none of this is a surprise and we have planned and executed accordingly. As you can see, our gross margin improvement is driven by a multitude of levers that when combined more than offset the headwinds that we face. Looking at operating expenses, we are very pleased to see that our capacity creation activities continue to drive rebuilds. Our operating expenses as a percentage of sales in our base business fell 40 basis points, while overall operating expenses increased 20 basis points, reflecting the acquisition of Porpoise in our results.
Considering the tremendous inflation that we have seen almost across the board from wages and salaries to fuel leases and transportation, we are very happy with how the team has remained focused and executed at the highest levels. POOL360 sales grew by 9% in the quarter, making up 12% of total sales. I would also like to point out that we have released our next generation of POOL360, which contains a long list of customer-driven enhancements that we believe will result in higher adoption rates of this capacity creating tool.
Wrapping up the income statement, we posted operating income of $419 million and operating margin of 20.4% respectively. These results reflect a 24% increase in operating income and a 150 basis point improvement in operating margin. We are extremely proud of these spectacular results, all made possible by the combined efforts of our extraordinary team here at POOLCORP, our dedicated and loyal vendor partners and our tremendously creative and hardworking customers, all of whom worked together to help more people enjoy outdoor living. We could not be more thankful for this teamwork.
POOLCORP is a unique well-managed Company in a resilient industry. Technology to modernize the millions of pools that make up the installed base and build pools of the future continues to be developed and released by our supplier partners and adoption of such is in the early stages at best. Our own technology to make the entire supply chain from the manufacturers to the customers more productive and bring us closer together giving everyone back valuable time continues to get better. The future is bright and more connected than ever. We are balanced in our approach and have always been very strategic with capital allocation and investments looking out at the changing landscape and positioning the Company to have a value proposition that is second to none and create additional capacity for growth.
Our latest investment in Porpoise Pool & Patio is only just starting to realize its true potential now that we have integrated and are one team. We will continue to expand the footprint, extract the synergies and leverage the industry-leading technology to improve our value proposition to the thousands of independent specialty retail stores that we serve giving them world-class capabilities. This is a very powerful combination that we know accelerates our growth and the ability to gain share even in an uncertain business environment because each business is made better by the combination.
We have always been an organic growth-oriented Company with the ability to select, acquire and integrate accretive businesses where we see value. Additionally, no one is better or has a more prudent track record with greenfields than POOLCORP. We have successfully opened in 31 locations in the last four years and will open an additional 10 to 12 this year. We are a performance-based Company that attracts, retains and develops industry-leading talent, creating vibrant career paths for our employees. We have a deep, loyal -- or we have deep loyal customer relationships and strong vendor partnerships that when combined with our team produce great financial results that are durable.
Unlike most other building product distributors, POOLCORP enjoys a unique advantage of essentially maintaining a lifelong relationship with every pool that is built and remains in service. We provide the construction material and the maintenance supplies and the remodeling products required during the entire existence of each pool, whether it is a DIY-maintained pool or one that is serviced by one of our professional customers. It is an annuity industry and business model that grows upon itself as more pools are built or products are demanded forever. With all of this in mind and half of the year behind us, we are raising our full-year guidance to $18.38 per share to $19.13 per share.
I will now turn the call over to Melanie for her financial commentary and balance sheet update.
