Pool's stock climbs on second-quarter top- and bottom-line beat

By James Rogers

'The demand for maintenance products supported a solid quarter given the trend for lower consumer spending on high-dollar discretionary items,' Pool CEO says

Pool Corp. shares rose 4.9% Thursday after the swimming-pool equipment company reported better-than-expected second-quarter revenue and earnings.

The company, which gave a profit warning last month, beat analysts' lowered expectations. Pool Corp. reported net income of $192.4 million, or $4.99 a share, down from $232.3 million, or $5.91 a share, in the same period last year. On an adjusted basis, earnings were $4.98 a share. Analysts surveyed by FactSet were looking for earnings of $4.91.

Pool Corp.'s (POOL) second-quarter sales were $1.8 billion, down from $1.9 billion in the prior year's quarter and above the FactSet consensus of $1.74 billion. "The demand for maintenance products supported a solid quarter given the trend for lower consumer spending on high-dollar discretionary items," Pool Corp. CEO Peter D. Arvan said in a statement. "Our second-quarter net sales of $1.8 billion, down 5% from the second quarter of 2023, showed an improving trend from the decrease of 7% that we saw in the first quarter of 2024."

Related: Swimming pool stocks slammed by profit warning from Pool Corp.

Arvan added that slightly better-than-expected sales in the last week of June improved the company's sales for the first half of the year to a 6% decline, compared with the decline of around 6.5% highlighted in last month's profit warning.

Pool Corp.'s second-quarter gross margin of 30% reflects the structural improvements the company is making to expand margin, according to Arvan, who noted the lower contribution from sales of building-materials products during the second quarter.

The Covington, La.-based company also confirmed its full-year earnings guidance of $11.05 to $11.45 a share. Analysts surveyed by FactSet are looking for full-year earnings of $11.02 a share.

Related: People aren't spending on swimming pools right now, an industry-leading company warns

Pool Corp. shares are down 13.9% in 2024, compared with the S&P 500's SPX gain of 13.8%.

-James Rogers

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07-25-24 0948ET

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