Pool Corp. (POOL) Revises 2024 Guidance

Pool Corporation (Nasdaq: POOL) today provided an update on the swimming pool season and revised its 2024 earnings guidance. The second quarter and full year expected results outlined below are based on preliminary data and analysis and are subject to change based on the completion of the company’s quarter-end close processes.

“As we near completion of the second quarter, which passes over the traditional peak of the swimming pool season from late May to early June, we are providing an update on current trends and their expected impact on our results. The most recent pool permit data suggests persistently weak demand for new pool construction, and with the peak selling season almost complete, we now believe that new pool construction activity could be down 15% to 20% for the year with remodel activity down as much as 15%. With more than 60% of our business derived from recurring revenues and generally not impacted by macroeconomic conditions, we are heavily focused on managing controllable expenses and generating free cash flow while providing best-in-class service to all of our customers. We remain committed to our ongoing improvements in operational initiatives, increasing productivity and growing share through organic growth of our expansive sales center network and offerings,” commented Peter D. Arvan, president and CEO.

For the year-to-date period, our sales are trending down approximately 6.5% from the comparable period in 2023. The discretionary components of our business, which are the most affected by general economic conditions, have been challenged by cautious consumer spending on big ticket items like swimming pools and outdoor living projects resulting in sales of building materials declining 11% for the year compared to the same period in 2023. However, we are encouraged as maintenance-related product sales have remained stable, evidenced by volume growth in chemicals, and equipment sales (excluding cleaners) being down only 2% for the year, an improvement from the 3% decline realized in the first quarter of 2024.

Given the significance of the second quarter to our full year results, we have revised our expectations, as further described below, for the second quarter and the 2024 fiscal year as we do not expect to see meaningful positive change in discretionary categories through the remainder of 2024.

• We now believe that new pool units could be down 15% to 20% in 2024, and remodeling activity for 2024 may be down as much as 15% compared to our previous estimate of flat to down 10% compared to 2023.
• With the seasonal weighting of our business, we expect that the lower level of sales will impact second quarter results more significantly, resulting in expected earnings per diluted share in the range of $4.85 to $4.95.
• For the full year, we lowered our projected diluted EPS range to $11.04 to $11.44 per share from $13.19 to $14.19, both including our $0.19 first quarter 2024 tax benefit.
• Our second quarter range and revised annual range do not include additional tax benefits related to stock option exercises that may be realized after March 31, 2024.

“Despite the recent trends dampening discretionary spending, we continue to believe that the desire for swimming pools and outdoor living projects remains strong, which allows our industry to grow over time as new pools are added to the installed base every year. We are confident that the strategic investments in our business position us for growth coming out of this economic cycle and are allowing us to continue to gain market share by providing unmatched value to our customers and suppliers,” said Arvan.

POOLCORP will release its second quarter 2024 earnings results before the market opens on July 25, 2024, and will hold a conference call to discuss the results at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) that same day.

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