Pool Corporation's Net Sales Decrease by 7% in Q1 2024

Pool Corporation has recently released its 10-Q report, revealing a decrease in net sales by 7% to $1.1 billion in the first quarter of 2024 compared to $1.2 billion in the same period of 2023. The company's gross profit also decreased by 8% to $338.6 million from $369.8 million in the first quarter of 2023, with a gross margin of 30.2% in the first quarter of 2024 compared to 30.6% in the first quarter of 2023.

The decrease in net sales was attributed to lower sales volumes from reduced pool construction activity and discretionary activity, as well as the negative impact of unfavorable weather conditions. Sales of equipment used in maintenance, renovation, and new construction activities decreased by 3%, while sales of building materials, primarily used in new construction and remodeling, decreased by 11% compared to the first quarter of 2023.

Operating expenses increased by 3% to $229.8 million in the first quarter of 2024, with selling and administrative expenses as a percentage of net sales increasing to 20.5% in the first quarter of 2024 compared to 18.6% in the same period of 2023. Operating income decreased by 25% to $108.7 million from $145.8 million in the first quarter of 2023, with an operating margin of 9.7% in the first quarter of 2024 compared to 12.1% in the first quarter of 2023.

Net income decreased by 22% to $78.9 million in the first quarter of 2024 compared to $101.7 million in the first quarter of 2023, with earnings per diluted share decreasing by 21% to $2.04 in the first quarter of 2024 compared to $2.58 in the same period of 2023. Without the impact from ASU 2016-09, earnings per diluted share decreased by 25% to $1.85 compared to $2.46 in the first quarter of 2023.

The company's total debt outstanding decreased by $386.6 million from March 31, 2023, to $979.2 million at March 31, 2024, as a result of using operating cash flows to reduce debt over the past year.

Pool Corporation expects sales for the full year of 2024 to be flat to slightly positive compared to 2023, impacted by factors such as normal weather patterns, sustained demand for pool maintenance products, and inflationary product cost increases of approximately 2% to 3%. The company projects an annual effective tax rate of approximately 25.3% for 2024 and expects 2024 diluted EPS in the range of $13.19 to $14.19, including the impact of year-to-date tax benefits of $0.19.

Following these announcements, the company's shares moved -1.6%, and are now trading at a price of $365.37. Check out the company's full 10-Q submission here.

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