Pool Corporation POOL reported first-quarter 2025 results, with earnings and revenues missing the Zacks Consensus Estimate. Both top and bottom lines declined from the prior-year quarter's actuals. Following the results, the company’s shares declined 6.7% during trading hours yesterday.

Although discretionary project spending remained under pressure, overall sales picked up in March, recovering from the weather-related challenges seen in January and February.

POOL’s Q1 Earnings & Revenue Discussion

In the first quarter, the company reported adjusted earnings per share (EPS) of $1.32, missing the Zacks Consensus Estimate of $1.42. In the prior-year quarter, the company reported an adjusted EPS of $1.85. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Quarterly net revenues of $1,071.5 million missed the consensus mark of $1,094 million. The top line declined 4.4% year over year. This decline can be primarily attributed to dismal discretionary project spending.

POOL's Operating Highlights & Expenses

In the first quarter, the cost of sales was $759.2 million compared with $782.3 million reported in the prior-year quarter. Our estimate for the metric was $771.6 million.

In the quarter, gross profits (as a percentage of net sales) were 29.2% compared with 30.2% reported in the prior-year quarter. Our estimate for the metric was 29.3%.

In the first quarter, operating income declined 28.7% year over year to $77.5 million. Our estimate for the metric was $80 million. The operating margin was 7.2%, down 250 bps from the prior-year quarter’s level. Our estimate for operating margin was 7.3%.

Selling and administrative expenses increased 2.2% year over year to $234.8 million. In the first quarter, the company’s expenses rose, primarily due to inflationary pressures and network expansion. Our estimate for the metric was $240.4 million.

Net income during the quarter totaled $53.5 million compared with $78.9 million reported in the year-ago quarter. Our estimate for net income was $51.8 million.

POOL's Balance Sheet

As of March 31, 2025, the company’s cash and cash equivalents amounted to $71.6 million compared with $68 million as of March 31, 2024. In the quarter, its net long-term debt amounted to $968 million compared with $942.5 million reported in the year-ago quarter.

For the 12 months ended March 31, 2025, net cash provided by operating activities amounted to $27.2 million compared with $145.4 million reported in the prior-year period.

POOL's 2025 Guidance

For 2025, Pool Corp. expects adjusted EPS in the range of $11.10-$11.60, up from the prior estimate of $11.08-$11.58.

POOL’s Zacks Rank

The company currently has a Zacks Rank #4 (Sell).

Key Picks

Some better-ranked stocks from the Zacks Consumer Discretionary sector are TEGNA Inc. TGNA, Life Time Group Holdings, Inc. LTH and American Outdoor Brands, Inc. AOUT.

TEGNA presently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The company delivered a trailing four-quarter earnings surprise of 6.3%, on average. The stock has gained 15.2% in the past year. The consensus estimate for TEGNA’s 2026 sales and EPS implies growth of 11.3% and 93.8%, respectively, from the year-ago levels.
 
Life Time Group carries a Zacks Rank #2 (Buy) at present. The company delivered a trailing four-quarter earnings surprise of 21.6%, on average. The stock has surged 111.5% in the past year.
 
The consensus estimate for Life Time Group’s 2025 sales and EPS implies growth of 12.9% and 37.9%, respectively, from the year-ago levels.
 
American Outdoor carries a Zacks Rank #2 at present. The company delivered a trailing four-quarter earnings surprise of 79.6%, on average. The stock has gained 40.7% in the past year.
 
The Zacks Consensus Estimate for American Outdoor’s fiscal 2025 sales and EPS indicates growth of 3.7% and 93.8%, respectively, from the year-ago levels.

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Pool Corporation (POOL) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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