) fourth-quarter 2012 loss of 17 cents per share was narrower
than the Zacks Consensus Estimate of a loss of 19 cents per share
as well as the year-ago level of a loss of 21 cents per share.
The improvement in the bottom line was mainly driven by
double-digit top-line growth.
Net sales in the reported quarter increased 13.5% year over year
to $306.8 million, ahead of the Zacks Consensus Estimate of
$286.0 million buoyed by solid sales from the Base business,
which improved 12% year over year.
Gross profit grew 10% year over year to $88.9 million but gross
margin fell 90 basis points (bps) to 29.0% due to competitive
pricing pressure and an adverse customer as well as product mix.
In 2012, adjusted earnings per share (EPS) were $1.85, up 23.0%
year over year, and surpassed the Zacks Consensus estimate of
$1.82 per share.
Net sales increased 9.0% year over year to $1.95 billion, ahead
of the Zacks Consensus Estimate of $1.92 billion driven by strong
Base business sales. Base business sales grew 7%, including 7%
growth on the swimming pool side of the business and 10% growth
on the irrigation side.
Results were benefited by market share gains and improvement in
consumer discretionary spending, offset somewhat by 1% decline
due to adverse currency translation. Among the three largest
markets of swimming pool side business, Florida and Arizona
performed well, both up 10.7%.
For 2013, management expects earnings per share growth in the
range of $2.13−$2.23 per share, representing a 15%−20% expansion
from adjusted 2012 EPS. Sales growth for 2013 is expected to be
in the mid-single digit.
We appreciate Pool's ability to grow earnings per share more than
20% over three consecutive years in a row. There are some
commendable attributes of the company like efficient cost
containment efforts, a steady turnaround of the irrigation side
of business, which was once struggling, and market share gains.
However, management expects earnings growth to slow down in the
ensuing years due to full capacity utilization. The company has
also been reeling under pressure on the margin front.
Pool currently holds a Zacks Rank #3 (Hold). Some companies from
leisure and recreational products that are worth a look include
Smith & Wesson Holding Corp.
Sturm, Ruger & Co. Inc.
) carrying Zacks Rank #1 (Strong Buy) and
) carrying Zacks Rank #2 (Buy).
BRUNSWICK CORP (BC): Free Stock Analysis
POOL CORP (POOL): Free Stock Analysis Report
STURM RUGER&CO (RGR): Free Stock Analysis
SMITH & WESSON (SWHC): Free Stock Analysis
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