David Goldman/AP
- There's sluggishness in the backyard pool industry.
- Consumer spending is slowing, and people already have chemicals stockpiled from previous seasons.
- The pool company Leslie's has been particularly hard-hit, with its stock tumbling 41% over the past month.
As Americans get more price-sensitive, pool retailers are navigating a broad spending slowdown. Other factors such as abnormal weather and leftover supplies from past seasons have decelerated an industry that enjoyed a robust post-COVID boom.
Pool-products retailer Leslie's, for example, has seen its stock plunge more than 41% over the last month. In a July 13 earnings report, the company cut its profit outlook for the year. CEO Mike Egeck also noted that in-store foot traffic saw declines in the low double digits.
"The discretionary business has proven to be extremely sensitive to macroeconomic pressure including items such as hot tubs and aboveground pools," Egeck told analysts.
Pool Corp. also cut annual guidance. And while its stock hasn't taken the same hit as Leslie's, leadership struck a similarly cautious tone on its earnings call.
"Higher interest rates and uncertain macroeconomic conditions continue to weigh heavily on new pool construction, particularly at the lower end of the market," CEO Peter Arvan said on a company earnings call Thursday. "Additionally, we have seen some indication that more discretionary purchases like heaters and high-end cleaners have been deferred."
The Federal Reserve, meanwhile, is largely expected to make a 25-basis-point rate hike Wednesday, which could put further pressure on businesses and deter spending.