Pool Corp (NASDAQ:POOL) shares reached a new 52-week high of $97.15 on Jul 8, 2016 that eventually closed at $96.67 reflecting a solid year-to-date return of nearly 20%. The trading volume for the session was 271 million shares. Since releasing its earnings on Apr 21 its shares have increased 8.19%.
After strong first-quarter results in April, the wholesale distributor of swimming pool supplies and equipment looks poised for the upcoming second quarter.
Strong Outlook for the Upcoming Quarter
In the second quarter, Pool Corp. is expected to benefit from base business sales growth and favorable trends in the housing market. Against the backdrop of an improving new home construction market, the company’s Green business — which involves construction and installation of new pools and landscaping — is expected to do well.
Pool Corp. reported better-than-expected results in the first quarter of 2016. Earnings of 38 cents per share surpassed the Zacks Consensus Estimate of 25 cents by a substantial 52% and surged 100% from the prior-year figure of 19 cents. The bottom-line growth was driven by higher sales and gross profits, partially offset by unfavorable foreign currency fluctuations.
Net sales were $515.3 million in the quarter, surpassing the Zacks Consensus Estimate of $482 million by 6.8% and increasing 14% year over year. The upside was mainly driven by 13% growth in base business sales.
Despite a 14.3% year-over-year rise in cost of sales, gross profits surged 14.6% to $143 million backed by sales growth.
The company’s robust first-quarter 2016 sales paved the way for the improved outlook. Accordingly, the company increased its outlook for 2016 earnings per diluted share at the first quarter conference call.
Pool Corp.'s board of directors announced a 19% hike in its quarterly dividend this May. The board has declared a quarterly cash dividend of 31 cents per share, a 19% increase over the previous quarterly dividend of 26 cents per share. The increased dividend was paid on Jun 2, 2016, to stockholders of record on May 19, 2016.
Pool Corp currently holds a Zack Rank#3 (Hold).
Stocks to Consider
Stocks which are better-ranked in the same sector are Smith & Wesson Holding Corporation (NASDAQ:SWHC) and Callaway Golf Co. (NYSE:ELY) . While Smith & Wesson sports a Zacks Rank #1 (Strong Buy), Callaway carries a Zacks Rank #2 (Buy). Another bullish stock in the broader consumer discretionary sector is Intrawest Resorts Holdings, Inc. (NYSE:SNOW) , sporting a Zacks Rank #1(Strong Buy).
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