Pool Corp (POOL) Lags Q2 Earnings Estimates, Trims '23 View
Pool Corporation POOL reported second-quarter 2023 results, with earnings and revenues missing the Zacks Consensus Estimate. Also, the top and the bottom line declined from the prior-year quarter's figure.
During the quarter, the company’s operations were affected by weather-related constraints, slower-than-anticipated maintenance activity and high interest rates. The company anticipates the macroeconomic challenges to persist in the short term. Following the announcement, shares of the company dropped 1.3% during trading hours on Jul 20.
Earnings & Revenues Discussion
During the second quarter of 2023, the company reported adjusted earnings per share (EPS) of $5.89, missing the Zacks Consensus Estimate of $6.01. In the prior-year quarter, the company reported an adjusted EPS of $7.59.
Pool Corporation Price, Consensus and EPS Surprise
Pool Corporation price-consensus-eps-surprise-chart | Pool Corporation Quote
Quarterly net revenues of $1,857.4 million missed the consensus mark of $1,867 million. The top line declined 9.7% year over year. The downside can be attributed to declines in new pool construction and deferred discretionary replacement activities.
Operating Highlights & Expenses
During the second quarter, the cost of sales came in at $1,289.6 million, down 7.2% from the prior-year quarter’s level. Our estimate for the cost of sales was $1,244.4 million.
During the quarter, gross profits (as a percentage of net sales) declined 180 basis points (bps) year over year to 30.6% from 32.4% reported in the year-ago quarter. Our estimate for the metric was 32.3%.
During the second quarter, operating income declined 21.9% year over year to $327 million. Our estimate for operating income was $339.4 million. The operating margin came in at 17.6%, down 280 bps from the prior-year quarter’s level.
Selling and administrative expenses declined 2.9% year over year to $240.8 million. Our estimate for the metric was $254.7 million.
Net income during the quarter totaled $232.3 million compared with $307.3 million reported in the year-ago quarter. Our estimate for net income was $242.1 million.
Balance Sheet
As of Jun 30, 2023, the company’s cash and cash equivalents amounted to $53.2 million compared with $26.5 million as of Mar 31, 2023. During the quarter, its net long-term debt amounted to $1,148.4 million compared with $1,332.7 million reported in the previous quarter. Goodwill during the quarter came in at $699.9 million compared with $693 million reported in the prior-year quarter.
For the first six months (ended Jun 30, 2023), net cash provided by operating activities amounted to $376.8 million compared with $28.7million reported in the prior-year period.
2023 Guidance
For 2023, Pool Corp expects adjusted EPS in the range of $13.14-$14.14 compared with the prior estimate of $$14.62-$16.12. The midpoint of the guidance range reflects a 21% CAGR from 2019 levels. The Zacks Consensus Estimate for 2023 earnings is currently pegged at $14.99.
Zacks Rank & Key Picks
Pool Corp has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Trip.com Group Limited TCOM flaunts a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have increased 35.2% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS suggest an increase of 101.6% and 531%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited OSW carries a Zacks Rank #2 (Buy). OSW has a trailing four-quarter earnings surprise of 65.8%, on average. Shares of OSW have increased 64.1% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 33.9% and 89.3%, respectively, from the year-ago period’s levels.
Royal Caribbean Cruises Ltd. RCL carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 26.4%, on average. Shares of RCL have surged 182.9% in the past year.
The Zacks Consensus Estimate for Royal Caribbean Cruises’ 2023 sales and EPS indicates a rise of 48.8% and 163.1%, respectively, from the year-ago period’s levels.
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