Shares of Pool Corporation ( NASDAQ: POOL ) slumped on Thursday as a narrowed full-year EPS guide and caution on margins overshadowed a Q3 earnings beat.
For the third quarter, the swimming pool supply distributor posted $4.76 in earnings per share, exceeding the analyst consensus, while notching a healthy 14.9% growth in revenue to narrowly exceed expectations. The total sales of $1.6B in the quarter was noted as a record for the company.
“Our sales activity, lifted by increased pricing, showed stable demand for our products,” CEO Peter D. Arvan said. “Over the long-term, we expect that our vast network and the steady growth in the installed base of pools will sustain the industry-leading position that we have built on over our 27 years as a public company.”
However, Arvan also narrowed the full-year earnings guidance range to $18.50 to $19.05 per diluted share from $18.38 to $19.13 forecast in the previous earnings call. Pool construction is expected to be down by a double-digit percentage into year-end.
The most immediate cause of the crash for shares appeared to be management commentary on margins, however. During the earnings call following the release, management said Q4 gross margin would be down 1.5% to 2% from the prior year.
Shortly after that warning, the stock gave up gains and dipped into the red. The stock sustained a 5.36% slide into afternoon trading on Thursday.
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Pool Corporation stock plunges despite earnings beat