Pool Corp (POOL) Reports Q3 2023 Earnings, Narrows Annual Guidance
Pool Corp (NASDAQ:POOL) reports Q3 2023 net sales of $1.5 billion, marking the second highest third quarter in company history.
The company narrows its annual earnings guidance range to $13.15 - $13.65 per diluted share.
Operating income stands at $194.4 million with an operating margin of 13.2%.
Despite a 9% decrease in sales from Q3 2022, the company expands its sales center network, indicating confidence in future growth.
Pool Corp (NASDAQ:POOL) released its Q3 2023 earnings report on October 19, 2023. Despite challenging macroeconomic factors impacting pool construction-related activities, the company reported net sales of $1.5 billion, marking the second highest third quarter in the company's history. The company also narrowed its annual earnings guidance range to $13.15 - $13.65 per diluted share.
Financial Highlights
Pool Corp (NASDAQ:POOL) reported a 9% decrease in net sales from Q3 2022, down to $1.5 billion. Gross profit decreased 15% to $428.7 million from $503.7 million in the same period of 2022. Operating income decreased 26% to $194.4 million from a record third quarter high of $263.9 million in 2022. Net income decreased 27% to $137.8 million in the third quarter of 2023 compared to $190.1 million in the third quarter of 2022.
Company Performance and Future Outlook
Despite the decrease in sales, the company expanded its sales center network through two greenfields this quarter, bringing the total count to fourteen new locations this year. This indicates the company's confidence in the opportunities ahead and the future of the outdoor living industry. The company's CEO, Peter D. Arvan, commented,
We have much to be proud of this quarter. Our team displayed skillful execution and dedication, delivering sales of $1.5 billion, down 9% from a record high in the third quarter of 2022. We look forward to closing out the year together and positioning ourselves for future growth through advancing our market-leading position."
Balance Sheet and Liquidity
As of September 30, 2023, total net receivables decreased 16% compared to September 30, 2022, primarily due to lower sales in 2023. Inventory levels of $1.3 billion decreased by 18% compared to September 30, 2022. Total debt outstanding was $1.0 billion at September 30, 2023, down from $1.5 billion from September 30, 2022. Net cash provided by operations improved to $750.0 million in the first nine months of 2023 compared to $307.5 million in the first nine months of 2022.
Conclusion
Despite the challenging macroeconomic environment, Pool Corp (NASDAQ:POOL) has managed to maintain steady demand for non-discretionary products and expand its sales center network. The company's narrowed annual earnings guidance range reflects its confidence in its strategic growth plans and its ability to navigate industry challenges.
This article first appeared on GuruFocus.
