Shares of pool and spa products distributor Pool Corp, which lists its stock under the ticker symbol “POOL,” rose by 22.4% in April according to data from the S& P Global Market Intelligence. The upward move followed the release of excellent first quarter earnings results.
According to Peter D. Arvan, President and Chief Executive Officer, first quarter sales came in at $1.1 billion, the first time in the company’s history that they crossed the $1 billion mark in the first quarter. This represents a 57% increase over the same period last year and was the result of strong demand in virtually all their markets in North America, and even stronger market conditions and execution in Europe.
Europe posted dramatic results in the first quarter: sales were up 115%, with the month of March being the largest month ever for Pool Corp in Europe. As in North America, consumers are investing in their backyards.
Pool Corp describes itself as the 'world's largest wholesale distributor of swimming pool and related backyard products.' However, the overwhelming majority – 86% of its sales come from its North American pool market with its greatest geographical presence in California, Florida, Texas and Arizona, all of which showed strong growth. California saw a very robust 30% gain in the quarter. In Florida, sales grew by 33%. In Arizona, sales grew by 29%, while Texas grew by 68% in the quarter.
Texas’s growth was positively impacted by the February storm, where total sales grew by 1% to 2%, or $15 million to $20 million.
Overall, these year-round markets saw a 40% increase for the quarter, while in seasonal markets, sales increased by 66%.
Equipment sales saw gains of 61%, driven by strong demand for heaters, lighting, pumps and filters. This followed fourth quarter gains of 51%. Chemical sales were up 18% in the quarter. This is partially because of the increased pricing of dichlor and trichlor due to industry supply shortages for these products.
Pool Corp reports new pool installations grew by approximately 2% overall. Building material sales increased 34% in the quarter, which reportedly reflects a very healthy demand for construction and remodeling products. Retail-related product sales were up 43% in the quarter, reflecting strong confidence by their dealers and increased early buy activity compared to last year. Arvan says they believe that new pool construction was approximately 96,000 units in 2020. They are anticipating that in 2021, new pool construction will exceed 110,000 units for the first time since the Great Recession.
Meanwhile, commercial pool category sales growth turned positive for the first time since the onset of the pandemic, posting 3% growth, and is expected to strengthen with people beginning to travel more.
It is difficult to predict what 2021 will have in store for investors in Pool Corp stock. Bulls will argue that the 2% growth in installed pools and considerable backlog for new pool construction is evidence for continued growth. Bears would point out that the company is trading during unprecedented times, with astonishing growth rates that won’t be seen again for the foreseeable future.
