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Pool Corp (POOL) Q1 Earnings Top Estimates, Gives Upbeat View

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Pool Corporation (POOL - Free Report) reported solid first-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate and increasing year over year. While the bottom line beat the consensus estimate for the 12th straight quarter, the top line surpassed the same for the 11th consecutive time. The results were mainly driven by solid demand coupled with healthy contractor backlogs and capacity-creation initiatives.

Earnings & Revenue Discussion

During first-quarter 2022, the company reported adjusted earnings of $4.41 per share, surpassing the Zacks Consensus Estimate of $3.06 by 44.1%. In the prior-year quarter, the company had reported adjusted earnings per share of $2.42.

Quarterly net revenues of $1,412.7 million surpassed the consensus mark of $1,252 million and increased 33.2% year over year. The upside can be primarily attributed to solid performance by the Base business. Strong demand for outdoor living products and solid growth in maintenance, repair and construction activities added to the upside.

Pool Corporation Price, Consensus and EPS Surprise

 

Pool Corporation Price, Consensus and EPS Surprise

Pool Corporation price-consensus-eps-surprise-chart | Pool Corporation Quote

 

Segmental Performance

Pool Corp reports operations under two segments — The Base Business (constituting most of the business) and the Excluded (sale centers excluded from the Base business).

During the first quarter, revenues in the Base Business segment increased 25.6% year over year to $1,328.1 million. Operating income rose 69.8% year over year to $219.4 million. Operating margin expanded 430 basis points (bps) from the year-ago quarter’s level to 16.5%.

The Excluded segment reported net revenues of $84.5 million in the first quarter compared with $3 million reported in the prior-year quarter. During the quarter under review, the segment reported an operating income of $16.4 million against an operating loss of $0.1 million reported in the prior-year quarter. The segment’s operating margin came in at 19.4% against (4.2%) reported in the prior-year quarter.

Operating Highlights & Expenses

During the first quarter, the cost of sales came in at $965.5 million, up 27.1% from the prior-year quarter’s levels. During the quarter, gross profit (as a percentage of net sales) increased 330 bps year over year to 31.7% from 28.4% reported in the year-ago quarter. Selling and administrative expenses increased 22.9% year over year to $211.5 million.

During the first quarter, operating income soared 82.7% year over year to $235.7 million. The operating margin rose 450 bps to 16.7% from the prior-year quarter’s level.

Net income during the quarter totaled $179.3 million, up from $98.7 million reported in the year-ago quarter.

Balance Sheet

As of Mar 31, 2022, Pool Corp’s cash and cash equivalents amounted to $35.4 million compared with $27.1 million as of Mar 31, 2021. As of March-end, total net receivables (including pledged receivables) rose 39% year over year. During the quarter, its net long-term debt amounted to $1,483.8 million compared with $420.8 million reported in the prior-year quarter. Goodwill during the quarter came in at $688.4 million compared with $267.9 million reported in the prior-year quarter.

During the quarter, net cash provided by operating activities amounted to $(208.1) million against $77.1 million reported in the prior-year period.

2022 Guidance

For 2022, Pool Corp expects earnings per share (EPS) in the range of $18.34-$19.09, up from the prior estimate of $17.19-$17.94. The Zacks Consensus Estimate for 2022 earnings is currently pegged at $17.55.

Zacks Rank & Other 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 in the Zacks Consumer Discretionary sector are Funko, Inc. (FNKO - Free Report) , Bluegreen Vacations Holding Corporation (BVH - Free Report) and Clarus Corporation (CLAR - Free Report) .

Funko sports a Zacks Rank #1 at present. FNKO has a trailing four-quarter earnings surprise of 96.2%, on average. Shares of the company have declined 14.8% in the past year.

The Zacks Consensus Estimate for Funko’s current financial year sales and EPS suggests growth of 22.6% and 26.8%, respectively, from the year-ago period’s reported levels.

Bluegreen Vacations sports a Zacks Rank #1 at present. BVH has a trailing four-quarter earnings surprise of 425.1%, on average. The stock has increased 41.9% in the past year.

The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 8.3% and 20.8%, respectively, from the year-ago period’s reported levels.

Clarus carries a Zacks Rank #2. CLAR has a trailing four-quarter earnings surprise of 12.3%, on average. The stock has increased 17.7% in the past year.

The Zacks Consensus Estimate for CLAR’s current financial year sales and EPS indicates growth of 25.3% and 23.1%, respectively, from the year-ago period’s reported levels.