) shares were up 1.09% in after-hour trading on Apr 17 despite
missing first-quarter 2014 earnings. The swimming pool and
lifestyle product maker reported earnings of 9 cents per share,
which missed the Zacks Consensus Estimate by a penny but
surpassed the year-ago quarter figure of 7 cents, driven
primarily by higher sales.
Net sales in the reported quarter increased 10.0% year over year
to $406.3 million, ahead of the Zacks Consensus Estimate of
$397.0 million. The upside reflects an 11.0% year-over-year
increase in base business sales. Roughly 2% of the company's
sales growth reflected a change in the timing of customer early
buy purchases, which effectively shifted sales into the first
quarter of 2014 that has previously occurred in the second
Behind the Headline Numbers
Despite a 10.0% year-over-year increase in cost of sales, gross
profit was up 9.0% due to higher sales. However, gross margin
declined 20 basis points to 28.1% in the quarter, due to the
shift in customer early buy purchases. Operating income during
the quarter was $8.6 million, up 25% from the year-ago quarter.
However, selling and administrative expenses increased 8.0% year
over year to $105.5 million due to higher base business expenses.
Guidance for 2014
For 2014, the company affirmed its expectation for earnings per
share in the range of $2.35-$2.45, representing 15.0-20.0%
year-over-year growth. The Zacks Consensus Estimate of $2.40 lies
within the company guided range.
Driven by gradual recovery in consumer discretionary spending
since 2010, the company expects sales to increase in the
mid-to-high single-digit range in 2014. Gross profit is also
expected to increase year over year.
Pool Corp. is well on its path to recovery. Despite the seasonal
nature of its business, the company posted improved results
driven by the ongoing recovery in discretionary product sales.
The revenue beat reflects improving product demand in the U.S.
swimming pool construction with the housing market recovery.
Pool currently has a Zacks Rank #3 (Hold). Among other stocks in
the same industry,
Marine Products Corp.
) is scheduled to report its first-quarter earnings on Apr 23
West Marine Inc.
) is scheduled to report on Apr 24. Another leisure and
recreation product company,
Sturm, Ruger & Co. Inc.
) is expected to announce its earnings on May 5.
MARINE PRODUCTS (MPX): Free Stock Analysis
POOL CORP (POOL): Free Stock Analysis Report
STURM RUGER&CO (RGR): Free Stock Analysis
WEST MARINE INC (WMAR): Get Free Report
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