Pool Corp profit warning pours cold water on consumer outlook

Anyone looking for a novel market indicator may look no further than Pool Corp as they take the temperature of consumers.

Pool Corp, “the world’s largest distributor of pools and backyard products”, saw its shares plummet on Tuesday as it issued a profit warning, citing “persistently weak demand for new pool construction”, at a time that is typically deemed peak pool selling season.

The company told investors that it now believes new pool construction could be down between 15% and 20% this year, and that pool ‘remodels’ will be down as much as 15%.

Pool Corp’s ‘seasonally significant’ second-quarter revenues would be below market expectations, the company said.

It downgraded its full-year earnings guidance for 2024, by around $2 per share, to $11.04 to $11.44, with group sales ‘trending down around 6.5%’ and are expected to be impacted by a similar amount for the full year.

The company now intends to tighten its belt, whilst focussing on ‘recurring revenue’ items such as the supply of chemical treatments and maintenance equipment.

“With more than 60% of our business derived from recurring revenues and generally not impacted by macroeconomic conditions, we are heavily focused on managing controllable expenses and generating free cash flow while providing best-in-class service to all of our customers,” chief executive Peter D. Arvan said in statement.

In New York, Pool Corp stock was down $27.17 or 8.04% changing hands at $310.74 each.