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Pool Corp Q3 Earnings & Revenues Surpass Estimates, Stock Up

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Pool Corporation (POOL - Free Report) reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both metrics surpassed the consensus estimate for the second straight quarter. The top and the bottom line declined from the prior-year quarter's actuals.

Following the results, the company’s shares increased 7.6% during trading hours on Thursday. The company’s performance in third-quarter 2024 benefited from steady demand in the maintenance segment, while the more discretionary areas of the business continued to face challenges. In third-quarter 2024, the company advanced its Pool360 technology rollouts and expanded digital marketing efforts, resulting in strong growth in private-label chemical sales, increased Pool360 usage and sustained gross margins.

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POOL’s Q3 Earnings & Revenue Discussion

In the third quarter, the company reported adjusted earnings per share (EPS) of $3.26, beating the Zacks Consensus Estimate of $3.15. In the prior-year quarter, the company reported an adjusted EPS of $3.50.

Quarterly net revenues of $1,432.9 million beat the consensus mark of $1,404 million. The top line declined 2.8% year over year. The decline can be primarily attributed to dismal sales of pool construction and discretionary products.

Pool Corporation Price, Consensus and EPS Surprise

Pool Corporation Price, Consensus and EPS Surprise

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

POOL's Operating Highlights & Expenses

In the third quarter, the cost of sales came in at $1.02 billion compared with $1.05 billion reported in the prior-year quarter.

In the quarter, gross profits (as a percentage of net sales) came in at 29.1%, flat year over year. Our estimate for the metric was 30.1%.

In the third quarter, operating income declined 9.3% year over year to $176.4 million. Our estimate for the metric was $183.4 million. The operating margin came in at 12.3%, down 90 bps from the prior-year quarter’s level. Our estimate for operating margin was 13%.

Selling and administrative expenses increased 2.5% year over year to $240.1 million. In the third quarter, the company’s expenses rose, primarily due to inflationary pressures, network expansion and investments in technology initiatives. Our estimate for the metric was $240.1 million.

Net income during the quarter totaled $125.7 million compared with $137.8 million reported in the year-ago quarter. Our estimate for net income was $126.1 million.

POOL's Balance Sheet

As of Sept. 30, 2024, the company’s cash and cash equivalents amounted to $91.3 million compared with $85.2 million as of Sept. 30, 2023. In the quarter, its net long-term debt amounted to $879.1 million compared with $996.1 million reported in the year-ago quarter.

For the nine months ended Sept. 30, 2024, net cash provided by operating activities amounted to $488.6 million compared with $750 million reported in the prior-year period.

POOL's 2024 Guidance

For 2024, Pool Corp expects adjusted EPS in the range of $11.06-$11.46.

POOL’s Zacks Rank

The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Consumer Discretionary Releases

Carnival Corporation & plc (CCL - Free Report) reported impressive third-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was backed by sustained demand strength and increased booking volumes. During the quarter, the company reported strong booking momentum for 2025, with volumes remaining robust at higher prices compared with the prior year.

The company raised its 2024 adjusted EBITDA guidance due to strong demand and cost-saving opportunities. Management expects net yields, at constant currency, to increase around 10.4% compared with 2023 levels, exceeding the prior guidance provided in June.

Vail Resorts, Inc. (MTN - Free Report) reported mixed fourth-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. Revenues declined on a year-over-year basis and the adjusted loss widened from the prior-year quarter’s levels.

During the quarter, its reported EBITDA declined year over year due to the underperformance of the winter business in Australia. Snowfall at Australia’s resorts fell 28% from the prior year’s levels and was 44% below the 10-year average, leading to an 18% drop in skier visitation. Although North America’s summer mountain business did not meet expectations, it achieved 15% revenue growth with fewer weather and construction-related disruptions.

Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both the metrics increased on a year-over-year basis.

The company's performance was backed by notable improvements in revenue per available room, attributed to higher occupancy rates and average daily rates. Furthermore, in the quarter, Hilton opened 531 new hotels. It achieved net room growth of 33,600. As of Sept. 30, 2024, Hilton's development pipeline comprised nearly 3,525 hotels, with almost 492,400 rooms across 120 countries and territories, including 28 countries and regions with no running hotels. For 2024, the company expects net unit growth in the range of 7-7.5%.

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