Pool Stock Slips Despite Strong Earnings, Guidance

Swimming pool supplier Pool (POOL) beat earnings and revenue estimates for the second quarter and guided higher, as demand for outdoor amenities rose in a lingering pandemic. But Pool stock fell.


Pool Earnings And Outlook

EPS jumped 66% to $6.18, beating views for $5.49. Revenue climbed 40% to $1.787 billion, better than views for $1.728 billion, according to FactSet.

“Households continued to invest in outdoor living spaces, contributing to the robust demand for our products,” Pool said in a statement. Sales gains across product segments and geographies reflected strong growth in maintenance, replacement, refurbishment and construction activity among customers, the company added.

For full-year 2021, Covington, La.-based Pool expects earnings of $13.75-$14.25, up from its prior outlook for $11.85-$12.60. Analysts on average were expecting 2021 EPS of $12.39, according to FactSet.

“We believe that the strong demand trends and pipeline of projects will continue through the remainder of the year and beyond,” CEO Peter Arvan said.

POOL stock

Shares of the IBD Leaderboard stock fell 2.4% to 446.79 on the stock market today, testing the 50-day moving average. In late June, Pool stock topped a 449.54 buy point off a flat base in a base-on-base pattern and the buy range goes to 472.02, according to MarketSmith chart analysis.

The relative strength line for Pool stock rose as the stock broke out but has pulled back from early July highs. A rising RS line shows a stock is outperforming the S&P 500 index.

Pool, an IBD Long-Term Leader, also supplies irrigation and landscaping products. It has benefited from the pandemic surge in homeowners upgrading pools. The company has also shown cost discipline. In Q2, operating expenses were 11.9% vs. 13.1% of net sales in the year-ago quarter.

SiteOne Landscape Supply (SITE) fell 0.8% Thursday and Leslie’s (LESL) lost 2%.

Find Aparna Narayanan on Twitter at @IBD_Aparna.


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