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Pool Corp (POOL) Q4 Earnings Beat Estimates, Stock Down
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Pool Corporation (POOL - Free Report) reported solid fourth-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate as well as increasing year over year. While the bottom line beat the consensus estimate for the 11th straight quarter, the top line surpassed the same for the 10th consecutive time.
In spite of robust results, the company’s shares dropped 3.1% during trading hours on Feb 17. Negative investor sentiments were witnessed as the company cited concerns with respect to labor unavailability and wage inflation. Management stated the importance of skilled labor for pool construction and remodeling growth. However, their absence is negatively impacting the product availability for the coming season.
Earnings & Revenue Discussion
During fourth-quarter 2021, the company reported adjusted earnings of $2.30 per share, surpassing the Zacks Consensus Estimate of $1.97 by 16.8%. In the prior-year quarter, the company had reported adjusted earnings per share of $1.30.
Pool Corporation Price, Consensus and EPS Surprise
Quarterly net revenues of $1,035.6 million surpassed the consensus mark of $979 million and increased 23.4% year over year. The upside can be primarily attributed to solid performance by the Base business and Excluded segments. The company witnessed a solid demand for heaters, automation products and variable speed pumps. Also, strong growth in terms of maintenance, repair and construction activities added to the upside.
Segmental Performance
Pool Corp reports operations under two segments — The Base Business (constituting the majority of the business) and the Excluded (sale centers excluded from the Base business).
During the fourth quarter, revenues in the Base Business segment increased 22.3% year over year to $990.7 million. Operating income rose 66.4% year over year to $127.8 million. Operating margin expanded 340 basis points (bps) from the year-ago quarter’s level to 12.9%.
The Excluded segment reported net revenues of $44.9 million in the fourth quarter compared with $29.4 million reported in the prior-year quarter. During the quarter under review, the segment reported an operating loss of $2.5 million against an operating income of $127.9 million reported in the prior-year quarter. The segment’s operating margin came in at 0.2% against (8.4%) reported in the prior-year quarter.
Operating Highlights & Expenses
During the fourth quarter, the cost of sales came in at $713.2 million, up 18.8% from the prior-year quarter’s levels. During the quarter, gross profit (as a percentage of net sales) increased 260 bps year over year to 31.1% from 28.5% reported in the year-ago quarter. Selling and administrative expenses increased 18.7% year over year to $195.6 million.
During the fourth quarter, operating income soared 72% year over year to $127.9 million. The operating margin rose 390 bps to 15.7% from the prior-year quarter’s level.
Net income during the quarter totaled $107.6 million, up from $59.2 million reported in the year-ago quarter.
Balance Sheet
As of Dec 31, 2021, Pool Corp’s cash and cash equivalents amounted to $24.3 million compared with $34.1 million as of Dec 31, 2020. As of December end, total net receivables (including pledged receivables) rose 30% year over year. During the quarter, its net long-term debt amounted to $ 1,171.6 million, up 190% from the prior-year quarter’s level. Goodwill and other intangible assets came in at $1,001.2 million compared with $280.3 million in the prior-year quarter.
For the 12 months ended Dec 31, 2021, net cash provided by operating activities amounted to $313.5 million compared with $397.6 million reported in the prior-year period.
2021 Highlights
Net sales in 2021 came in at $5,295.6 million compared with $3,936.6 million in 2020.
Operating income in 2021 came in at $832.8 million compared with $464 million in 2020.
In 2021, adjusted earnings per share (EPS) came in at $15.18 compared with $8.42 in the previous year.
Other Updates
During the fourth quarter, the company announced the acquisition of Porpoise Pool & Patio. The latter’s business includes the wholesale distribution of swimming pool and outdoor-living products and chemical packaging operations. Backed by its distribution network coupled with operational synergies, the company anticipates Porpoise Pool & Patio business to contribute approximately 5% to POOLCORP’s total revenues in 2022.
2022 Guidance
For 2022, Pool Corp expects adjusted diluted EPS in the range of $17-$17.75. The Zacks Consensus Estimate for 2022 earnings is currently pegged at $16.57.
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The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 48.4% and 20.7%, respectively, from the year-ago period’s levels.
Cedar Fair flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 16.3%, on average. Shares of Cedar Fair have gained 25.1% in the past year.
The Zacks Consensus Estimate for FUN’s 2022 sales and EPS suggests growth of 26.9% and 576.2%, respectively, from the year-ago period’s levels.
Ralph Lauren flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 94.1%, on average. Shares of Ralph Lauren have increased 14.2% in the past year.
The Zacks Consensus Estimate for RL’s 2022 sales and EPS suggests growth of 40% and 381.2%, respectively, from the year-ago period’s levels.
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Pool Corp (POOL) Q4 Earnings Beat Estimates, Stock Down
Pool Corporation (POOL - Free Report) reported solid fourth-quarter 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate as well as increasing year over year. While the bottom line beat the consensus estimate for the 11th straight quarter, the top line surpassed the same for the 10th consecutive time.
In spite of robust results, the company’s shares dropped 3.1% during trading hours on Feb 17. Negative investor sentiments were witnessed as the company cited concerns with respect to labor unavailability and wage inflation. Management stated the importance of skilled labor for pool construction and remodeling growth. However, their absence is negatively impacting the product availability for the coming season.
Earnings & Revenue Discussion
During fourth-quarter 2021, the company reported adjusted earnings of $2.30 per share, surpassing the Zacks Consensus Estimate of $1.97 by 16.8%. In the prior-year quarter, the company had reported adjusted earnings per share of $1.30.
Pool Corporation Price, Consensus and EPS Surprise
Pool Corporation price-consensus-eps-surprise-chart | Pool Corporation Quote
Quarterly net revenues of $1,035.6 million surpassed the consensus mark of $979 million and increased 23.4% year over year. The upside can be primarily attributed to solid performance by the Base business and Excluded segments. The company witnessed a solid demand for heaters, automation products and variable speed pumps. Also, strong growth in terms of maintenance, repair and construction activities added to the upside.
Segmental Performance
Pool Corp reports operations under two segments — The Base Business (constituting the majority of the business) and the Excluded (sale centers excluded from the Base business).
During the fourth quarter, revenues in the Base Business segment increased 22.3% year over year to $990.7 million. Operating income rose 66.4% year over year to $127.8 million. Operating margin expanded 340 basis points (bps) from the year-ago quarter’s level to 12.9%.
The Excluded segment reported net revenues of $44.9 million in the fourth quarter compared with $29.4 million reported in the prior-year quarter. During the quarter under review, the segment reported an operating loss of $2.5 million against an operating income of $127.9 million reported in the prior-year quarter. The segment’s operating margin came in at 0.2% against (8.4%) reported in the prior-year quarter.
Operating Highlights & Expenses
During the fourth quarter, the cost of sales came in at $713.2 million, up 18.8% from the prior-year quarter’s levels. During the quarter, gross profit (as a percentage of net sales) increased 260 bps year over year to 31.1% from 28.5% reported in the year-ago quarter. Selling and administrative expenses increased 18.7% year over year to $195.6 million.
During the fourth quarter, operating income soared 72% year over year to $127.9 million. The operating margin rose 390 bps to 15.7% from the prior-year quarter’s level.
Net income during the quarter totaled $107.6 million, up from $59.2 million reported in the year-ago quarter.
Balance Sheet
As of Dec 31, 2021, Pool Corp’s cash and cash equivalents amounted to $24.3 million compared with $34.1 million as of Dec 31, 2020. As of December end, total net receivables (including pledged receivables) rose 30% year over year. During the quarter, its net long-term debt amounted to $ 1,171.6 million, up 190% from the prior-year quarter’s level. Goodwill and other intangible assets came in at $1,001.2 million compared with $280.3 million in the prior-year quarter.
For the 12 months ended Dec 31, 2021, net cash provided by operating activities amounted to $313.5 million compared with $397.6 million reported in the prior-year period.
2021 Highlights
Net sales in 2021 came in at $5,295.6 million compared with $3,936.6 million in 2020.
Operating income in 2021 came in at $832.8 million compared with $464 million in 2020.
In 2021, adjusted earnings per share (EPS) came in at $15.18 compared with $8.42 in the previous year.
Other Updates
During the fourth quarter, the company announced the acquisition of Porpoise Pool & Patio. The latter’s business includes the wholesale distribution of swimming pool and outdoor-living products and chemical packaging operations. Backed by its distribution network coupled with operational synergies, the company anticipates Porpoise Pool & Patio business to contribute approximately 5% to POOLCORP’s total revenues in 2022.
2022 Guidance
For 2022, Pool Corp expects adjusted diluted EPS in the range of $17-$17.75. The Zacks Consensus Estimate for 2022 earnings is currently pegged at $16.57.
Zacks Rank & Key Picks
Pool Corp currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some other top-ranked stocks from the Zacks Consumer Discretionary sector are Crocs, Inc. (CROX - Free Report) , Cedar Fair, L.P. (FUN - Free Report) and Ralph Lauren Corporation (RL - Free Report) .
Crocs flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 36%, on average. Shares of Crocs have increased by 2.8% in the past year.
The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 48.4% and 20.7%, respectively, from the year-ago period’s levels.
Cedar Fair flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 16.3%, on average. Shares of Cedar Fair have gained 25.1% in the past year.
The Zacks Consensus Estimate for FUN’s 2022 sales and EPS suggests growth of 26.9% and 576.2%, respectively, from the year-ago period’s levels.
Ralph Lauren flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 94.1%, on average. Shares of Ralph Lauren have increased 14.2% in the past year.
The Zacks Consensus Estimate for RL’s 2022 sales and EPS suggests growth of 40% and 381.2%, respectively, from the year-ago period’s levels.