Pool Corp's (POOL) Q4 Earnings And Revenues Beat Estimates

Pool Corporation Price, Consensus and EPS Surprise

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

Let’s discuss the quarterly numbers.

Segmental Performance

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

Revenues in the Base Business segment increased 6.9% year over year to $575.8 million. Also, operating income moved up 3.8% to $27.4 million. However, operating margin contracted 10 basis points (bps) from the year-ago quarter’s number to 4.8%.

The Excluded segment delivered net revenues of $6.4 million, up from $4.5 million registered in the prior-year quarter. The segment reported operating loss of $1.6 million compared with the year-ago quarter’s loss of $0.4 million.

Operating Highlights & Expenses

Cost of sales in the fourth quarter increased 9.8% from the prior-year quarter’s figure. Gross profit, as a percentage of net sales, declined 170 basis points (bps) to 27.8% from the year-ago quarter’s figure.

Operating income dropped 0.7% year over year to $25.8 million. Also, the operating margin declined 40 bps to 4.4% from the prior-year quarter’s level. Selling and administrative expenses inched up 1.3% year over year. Net income totaled $18 million, up from $16.8 million recorded in the year-ago quarter.

Balance Sheet

As of Dec 31, 2019, Pool Corp’s cash and cash equivalents amounted to $28.6 million compared with $16.4 million on Dec 31, 2018. Total net receivables, including pledged receivables, rose 9% and inventory levels rose 4% year over year. Its net long-term debt amounted to $499.7 million, down 24% from the prior-year quarter’s level. Goodwill increased to $188.6 million compared with $188.5 million reported in the prior-year quarter.

2019 Highlights

In 2019, net sales amounted to $3.2 billion, up 6.7% year over year.

Adjusted earnings per share (EPS) for the year ended Dec 31, 2019 was reported at $5.83 compared with $5.26 in 2018.

Operating margin increased 20 bps to 10.7% for the year ended Dec 31, 2019, compared with 10.5% reported in 2018.

2019 Guidance

For 2020, Pool Corp expects EPS in the range of $6.47-$6.77 compared with the prior guidance of $6.41-$6.71. The Zacks Consensus Estimate for current-year earnings is pegged at $6.64.

Zacks Rank & Key Picks

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

Some better-ranked stocks in the same space include Vista Outdoor Inc. (NYSE:VSTO) , YETI Holdings, Inc. (NYSE:YETI) and Acushnet Holdings Corp. (NYSE:GOLF) . Vista Outdoor and YETI Holdings sport a Zacks Rank #1, while Acushnet Holdings carries a Zacks Rank #2 (Buy).

Vista Outdoor has trailing four-quarter positive earnings surprise of 23.1%, on average. The company’s earnings beat estimates in two of the last four quarters.

YETI Holdings has three-five year expected EPS growth rate of 17.2%.

Acushnet Holdings 2020 earnings is expected to rise nearly 6%.

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