Pool Corp (POOL) Lags Q2 Earnings Despite Strong Sales Growth
Zacks Investment Research | Jul 20, 2017 11:10PM ET
The swimming pool and lifestyle product maker, Pool Corporation (NASDAQ:POOL) , posted mixed second-quarter 2017 results, wherein the top line surpassed the Zacks Consensus Estimate while the bottom line lagged the same.
Notably, share price of the company plunged 9.4% in yesterday’s trading session following the release.
Quarter Discussion
Pool’s second-quarter earnings of $2.21 per share missed the Zacks Consensus Estimate of $2.24 by 1.3%. However, the figure rose 11.6% on a year-over-year basis.
Net sales came in at $988.2 million, marking an increase of 8% year over year. Sales growth in certain product categories reflects the ongoing recovery in the remodel and replacement sectors of its business as well as its consistent market share gains.
Continued growth in consumer discretionary spending also acted as a tailwind to the company’s top line. As a result, sales outpaced the Zacks Consensus Estimate of $982.7 million by 0.6%.
Behind the Headline Numbers
Pool reports operations under two segments – the Base Business segment (constituting majority portion of the business) and the Excluded segment (sale centers excluded from base business).
The Base business segment witnessed sales growth of 7% year over year on the back of increases in swimming pool repair and remodel activities, including major pool refurbishment and replacement of key pool equipment.
Meanwhile, the company’s gross margin in the second quarter was 29.3%, down 20 basis points (bps) year over year due to changes in customer and product mix. However, gross profit increased 7% year over year to a record $289.7 million, with base business gross profit increasing 6%.
Additionally, selling and administrative expenses (operating expenses) increased approximately 6% year over year to $135.5 million in the reported quarter, with base business operating expenses increasing 5%. The upside was primarily driven by seasonally higher growth-driven labor and freight expenses as well as higher employee-related insurance costs.
While the operating margin increased 10 bps year over year to 15.6%, operating income jumped $154.2 million, up 8% from the year-ago quarter.
Pool Corporation Price, Consensus and EPS Surprise
Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.