Pool Corp.
's (
POOL
) first quarter 2012 adjusted earnings per share of 6 cents
bettered the Zacks Consensus Estimate of a penny per share as well
as year-ago quarter's loss of a penny per share. The outperformance
was mainly driven by solid top-line growth. Net sales in the
reported quarter jumped 15.7% year over year to $361.9 million.
Favorable weather helped drive both revenue and earnings despite
the seasonal weakness of the first quarter.
Inside the Headline Numbers
Overall Base business sales of Pool improved 13% year over year.
Blue business sales increased 13.6% in the quarter, while Green
business sales were up 2.2%. Record warm temperatures across the
Northeast and Midwest assisted sales in the first quarter.
Gross profit grew 14% year over year to $104.6 million and gross
margin fell 30 basis points (bps) to 28.9%, attributable to tough
year-over-year comparisons.
Financials
Cash and cash equivalents increased substantially year over year
to $20.7 million. Net receivables grew 16% from the prior-year
period to $201.8 million.
The inventory level upped 5% year over year to $462.8 million at
the end of the first quarter. Total long-term debt was $299.0
million versus $180.2 million in the year-ago quarter.
Pool bought back 24,274 shares at an average price of $35.98 in
the quarter.
Guidance
For full-year 2012, management increased its earnings per share
guidance to the range of $1.75-$1.85 from $1.69-$1.79.
Our Take
The company reported better-than-expected results. Management
realizes the opportunity to grow earnings per share over 20% per
year over the next five years. The year 2012 is also shaping up
well as evident from its increased guidance. Management commented
that the market will gradually improve beyond 2012. We are also
supportive of management's view and believe that the company is
experiencing an uptrend, even the improvement in its Green
business, which was once struggling. Additionally, the company's
upcoming second quarter is also seasonally strong.
Pool, which competes with the likes of
Johnson Outdoors Inc.
(
JOUT
) and
Golfsmith International Holdings Inc.
(
GOLF
), holds a Zacks #2 Rank (short-term Buy recommendation).
GOLFSMITH INTL (
GOLF
): Free Stock Analysis Report
JOHNSON OUTDOOR (
JOUT
): Free Stock Analysis Report
POOL CORP (
POOL
): Free Stock Analysis Report
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