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Pool Corp (POOL) Stock Gains 5% on Q3 Earnings & Sales Beat

Shares of swimming pool and lifestyle product maker, Pool CorporationPOOL 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

Pool Corporation Price, Consensus and EPS Surprise | Pool Corporation Quote

Zacks Rank & Peer Releases

Pool carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Among other stocks in the same sector, Carnival Corporation CCL reported solid third-quarter fiscal 2017 results in the last month, with the bottom and the top line beating the Zacks Consensus Estimate.

While Polaris Industries Inc. PII is expected to post third-quarter earnings on Oct 24, Brunswick Corporation BC will be releasing its quarterly numbers on Oct 26. The Zacks Consensus Estimate for the quarter's EPS is pegged at $1.22 for Polaris and $1.01 for Burnswick.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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