Pool Corp(US:POOL) The Motley Foolยท2024-07-02 11:34Core Viewpoint - Pool Corp. has experienced a significant decline in share price due to disappointing sales and lowered earnings estimates for the year, primarily driven by weak demand for new pool construction and high interest rates affecting consumer spending [3][4][6]. Sales Performance - Shares in Pool Corp. fell by 15.5% in June following a disappointing swimming pool season update [3]. - The company revised its full-year earnings per share (EPS) estimate down from a range of $13.19 to $14.19 to a new range of $11.04 to $11.44 [4]. Market Demand - Management reported "persistently weak demand for new pool construction," predicting a decline in new pool units by 15% to 20% in 2024 compared to 2023, with remodeling activity down by up to 15% [6]. - Previous estimates for remodeling activity had anticipated it to be flat or decline by 10% in 2023 [6]. Economic Factors - High interest rates are pressuring consumer discretionary spending and slowing the housing market, leading to reduced expenditures on big-ticket items like swimming pools [7][10]. - A natural correction is occurring after a boom in spending on leisure activities during lockdowns [11]. Future Outlook - Investors are hopeful that lower interest rates in the future will lead to a normalization in spending on pools [12]. - Despite the decline in new pool unit spending, the installed base of new pools is still growing, which is expected to spur long-term equipment sales [12]. - Maintenance-based revenue is anticipated to support the company while waiting for new pool spending to recover [13].