Pool Corp (POOL) Stock Gains 5% On Q3 Earnings & Sales Beat
Zacks Investment Research | Oct 19, 2017 10:41PM ET
Shares of swimming pool and lifestyle product maker, Pool Corporation (NASDAQ:POOL) were up over 5% in yesterday’s trading session, after the company reported better-than-expected third-quarter 2017 results.
Quarter Discussion
Pool’s third-quarter earnings of $1.16 per share surpassed the Zacks Consensus Estimate of $1.14 by 1.8%. Moreover, the figure rose 13% on a year-over-year basis backed by higher sales.
Net sales came in at $743.4 million, marking an increase of 8% year over year. Continued increases in swimming pool repair and remodel activities including major pool refurbishment and replacement of key pool equipment, led to the improvement in sales. As a result, sales outpaced the Zacks Consensus Estimate of $728 million by over 2%.
The recent weather events negatively impacted the quarter’s earnings and sales by roughly 2 cents and $4 million, respectively.
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 6% year over year, given the resiliency and favorable characteristics inherent to its business and consistent market share gains.
Gross profit increased 9% year over year to a record of $216.6 million, with base business gross profit increasing 7%. Also, the company’s gross margin in the third quarter was 29.1%, up 20 basis points (bps) year over year, given product mix and benefits from sourcing initiatives.
Additionally, selling and administrative expenses (operating expenses) increased roughly 7% year over year to $134.7 million in the reported quarter, with base business operating expenses increasing 5%.
While operating income improved 10% from the year-ago quarter to $81.9 million, operating margin increased 30 bps year over year to 11%.
Earnings Guidance for 2017
For 2017, Pool anticipates earnings in the band of $4.01 to $4.11 per share, down from the earlier guided range of $4.12–$4.32. The Zacks Consensus Estimate for the same is pegged at $4.06.
Pool Corporation Price, Consensus and EPS Surprise
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