PoolCorp (POOL) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $1.8 billion (or $1,769.8M), down 5% year-over-year, with maintenance products showing resilience while discretionary and construction-related sales declined due to economic headwinds and consumer hesitancy.

• Diluted EPS was $4.99, down 16% from Q2 2023; adjusted EPS (excluding ASU benefit) was $4.98, down 15%.

• Operating income for Q2 was $271.5 million, a 17% decrease year-over-year, with operating margin at 15.3%.

• Maintenance and commercial segments remained strong, partially offsetting declines in new pool construction and renovation.

• Digital initiatives and network expansion, including POOL360, drove record adoption and share gains.

Financial highlights

• Gross margin for Q2 was 30.0%, down 60 basis points year-over-year, impacted by product mix and lower-margin inventory.

• Net income for Q2 was $192.4 million, down 17% from the prior year.

• Cash flow from operations for the first half was $172.1 million, down from $376.8 million last year.

• Inventory was $1.3 billion, $97 million less than prior year, with inventory days on hand reduced from 141 to 131.

• Adjusted EBITDA for Q2 was $287.3 million, down from $341.8 million in Q2 2023.

Outlook and guidance

• Full-year diluted EPS guidance reaffirmed at $11.05–$11.45, including a $0.20 ASU benefit.

• Gross margin expected to remain around 30% for the year, with similar trends anticipated in the second half.

• Operating margin projected at approximately 12.0% for 2024.

• New pool builds expected to be down 15–20% year-over-year, with remodel activity down as much as 15%.

• Capital expenditures for 2024 projected at 1.0–1.5% of net sales.