Pool Corporation (POOL) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 20, 2023 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Pool Corporation Second Quarter 2023 Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would like now to turn the conference over to Melanie Hart, Vice President and CFO. Please go ahead.

Melanie Hart

And welcome to our second quarter 2023 earnings conference call. Our discussion, comments and responses to questions today may include forward-looking statements, including management's outlook for 2023 and future periods.

Actual results may differ materially from those discussed today. Information regarding the factors and variables that could cause actual results to differ from projected results are discussed in our 10-K. In addition, we may make references to non-GAAP financial measures in our comments. A description and reconciliation of our non-GAAP financial measures is included in our press release and posted to our corporate website in the Investor Relations section. Peter Arvan, our President and CEO, will begin today's call. Pete?

Peter Arvan

Thank you, Melanie, and good morning. Three months ago, you will recall that we said the year was off to a challenging start driven primarily by weather, but we cautiously believe at the time that as the year progressed, things would improve. Although, things did improve sequentially, allowing us to post the second best quarter in our company's history, they did not improve as much as we would have liked as weather continued to provide headwinds and new construction remains under pressure.

One notable exception to this is for high-end new construction where demand remains solid. The weather change that we count on to initiate the start of the pool season came later than what we have seen for the last couple of years. This effectively shortened our season as homeowners delayed openings into cooler weather kept water temperatures lower, which negatively impacts our maintenance business, particularly chemical usage.

Higher interest rates and uncertain macroeconomic conditions continue to weigh heavily on new pool construction, particularly at the lower end of the market. Additionally, we have seen some indication that more discretionary purchases like heaters and high-end cleaners have been deferred, but we are seeing resiliency in the remodel market.

Dealers are reporting that demand for renovation is outpacing demand for new construction in many markets. Despite the challenging market conditions, POOLCORP recorded a strong quarter, demonstrating the power of the brand and tremendous execution by the team.