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Pool Corporation (Nasdaq: POOL) today released an update on the swimming pool season and revised its earnings guidance for 2024. The preliminary results for the second quarter and full year, based on initial data and analysis, may be adjusted upon completion of the company's quarter-end closing processes.
Sales Trends and Economic Impact
For the year-to-date period, Pool Corporation's sales have decreased by approximately 6.5% compared to the same period in 2023. The company’s discretionary business segments, heavily influenced by broader economic conditions, have been particularly affected. Consumer caution regarding high-value purchases such as swimming pools and outdoor living projects has resulted in an 11% decline in sales of building materials compared to last year. Despite these challenges, there are encouraging signs in the maintenance sector. Sales of maintenance-related products have remained stable, with volume growth observed in chemicals. Equipment sales, excluding cleaners, are down only 2% for the year, marking an improvement from the 3% decline recorded in the first quarter of 2024.
Revised Earnings Expectations
Given the critical nature of the second quarter to Pool Corporation's overall annual performance, the company has revised its expectations for both the second quarter and the 2024 fiscal year. The company now anticipates that new pool unit installations could decline by 15% to 20% in 2024. Additionally, remodeling activities are expected to drop by as much as 15%, a significant revision from the previous estimate of flat to down 10% compared to 2023.
The seasonal nature of Pool Corporation's business means that the reduced sales levels will more acutely affect second-quarter results. Consequently, the company expects earnings per diluted share (EPS) for the second quarter to be in the range of $4.85 to $4.95.
Full-Year Outlook
For the full year, Pool Corporation has lowered its projected diluted EPS range to $11.04 to $11.44, down from the previous guidance of $13.19 to $14.19. Both ranges include a $0.19 per share tax benefit from the first quarter of 2024. It is important to note that the second-quarter range and the revised annual range do not account for additional tax benefits that might be realized from stock option exercises occurring after March 31, 2024.
