Pool (POOL) reported Q2 earnings that topped Wall Street expectations but trimmed its full-year guidance amid ongoing softness in new pool construction and discretionary consumer spending, Deutsche Bank said in a report Friday.

The swimming pool supplies distributor posted Q2 earnings per share of $5.17, slightly ahead of analysts' consensus, which was "driven by a combination of slightly better sales and margin, as well as below the line items," Deutsche Bank said.

"However, management cut the full-year guide given continued weakness in new pool construction," and without an interest rate cut a meaningful recovery remains unlikely, the report said.

Full-year sales are expected to be flat compared to its previous guidance of flat to slightly up, while new pool construction and renovation activity are expected to be flat to slightly down, after contributing a 3% and 2% drag to sales in Q1 and Q2, respectively.

The company's management expects a 1% to 2% sales drag from those categories in the second half of the year. Meanwhile, maintenance-related sales are projected to continue growing modestly, Deutsche Bank said.

Following the Q2 update, Deutsche Bank trimmed the company's 2025 earnings per share estimate to $10.92, reaffirmed a $325 price target, and reiterated a hold rating on the stock.

Shares of Pool were down 1.2% in recent Friday trading.

Price: 322.16, Change: -4.18, Percent Change: -1.28