(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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DEEP DIVE. As symbols of social fragmentation go, it’s hard to beat the backyard swimming pool. Pool Corp, a distributor, on Thursday reported record first-quarter sales https://ir.poolcorp.com/Pool-Corporation-Reports-Record-First-Quarter-Results-and-Increases-2021-Earnings-Guidance-4-22-2021 of $1.1 billion, a third above what analysts polled by Refinitiv had expected. The $17 billion company’s shares have almost doubled since before the pandemic.
That such businesses are doing well in an era marked by time spent at home and fear of contagion is no surprise. Hayward, a U.S. maker of pool equipment, listed in March with a bubbly enterprise value of 5 times estimated sales. There’s pent-up demand too – Americans built 94,000 pools in 2020, well up on 2019 but still below the long-term average of 113,000 a year, according to data in Hayward’s initial public offering prospectus https://www.sec.gov/Archives/edgar/data/0001834622/000110465921035889/tm2037032-17_424b4.htm.
Private pools are booming partly because savings have piled up https://fred.stlouisfed.org/series/PSAVERT for the wealthy and home prices https://www.zillow.com/home-values have risen, increasing overall inequality. Building a watery playground is a way to spend those gains, but also a way to keep the swimming masses at a distance. Pool Corp’s success is a thrill for investors, but a troubling sign of the post-pandemic zeitgeist. (By John Foley)
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