HAYW

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the home construction materials stocks, including Hayward (NYSE:HAYW) and its peers. Traditionally, home construction materials companies have built economic moats with expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advances to address labor availability and job site productivity have spurred innovation that is driving incremental demand. However, these companies are at the whim of residential construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of home construction materials companies. The 10 home construction materials stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 1.7% above. Thankfully, share prices of the companies have been resilient as they are up 6.5% on average since the latest earnings results. Credited with introducing the first variable-speed pool pump, Hayward (NYSE:HAYW) makes residential and commercial pool equipment and accessories. Hayward reported revenues of $318.4 million, up 6.3% year on year. This print exceeded analysts’ expectations by 2.8%. Overall, it was a very strong quarter for the company with full-year EPS guidance beating analysts’ expectations and a solid beat of analysts’ EBITDA estimates. Interestingly, the stock is up 1.3% since reporting and currently trades at $15.30. Is now the time to buy Hayward? Access our full analysis of the earnings results here, it’s free. Founded in the 1960s as a general wood-making company, JELD-WEN (NYSE:JELD) manufactures doors, windows, and other related building products. JELD-WEN reported revenues of $817.8 million, flat year on year, outperforming analysts’ expectations by 3.2%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations. JELD-WEN pulled off the highest full-year guidance raise in the group. The market seems happy with the results as the stock is up 36.7% since reporting. It currently trades at $1.97. Is now the time to buy JELD-WEN? Access our full analysis of the earnings results here, it’s free. Headquartered in Irving, TX, Builders FirstSource (NYSE:BLDR) is a construction materials manufacturer that offers a variety of lumber and lumber-related building products. Builders FirstSource reported revenues of $3.86 billion, down 8.8% year on year, falling short of analysts’ expectations by 1.5%. It was a disappointing quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly and a significant miss of analysts’ EPS estimates. Builders FirstSource delivered the slowest revenue growth and weakest full-year guidance update among its peers. Interestingly, the stock is up 9.2% since the results and currently trades at $74. Read our full analysis of Builders FirstSource’s results here. Credited with the discovery of fiberglass, Owens Corning (NYSE:OC) supplies building and construction materials to the United States and international markets. Owens Corning reported revenues of $2.76 billion, flat year on year. This result topped analysts’ expectations by 4%. It was an exceptional quarter as it also put up a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates. Owens Corning had the weakest guidance update of the whole group. The stock is up 7.1% since reporting and currently trades at $155.85. Read our full, actionable report on Owens Corning here, it’s free. Aiming to build safer and stronger buildings, Simpson (NYSE:SSD) designs and manufactures structural connectors, anchors, and other construction products. Simpson reported revenues of $671.1 million, up 6.3% year on year. This print beat analysts’ expectations by 1.9%. Overall, it was an exceptional quarter as it also produced a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates. The stock is up 1% since reporting and currently trades at $195.26. Read our full, actionable report on Simpson here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

In late July 2026, Hayward Holdings, Inc. reported higher quarterly and half-year sales and earnings, reaffirmed its full-year 2026 guidance for approximately 5% net sales growth, and highlighted strong operating and free cash flow alongside low leverage and ample liquidity. The company also completed a refinancing to lower its cost of capital, finished a US$67.79 million share repurchase of 4,671,816 shares, and indicated that its financial position supports both acquisition opportunities and continued capital returns. We’ll now examine how Hayward’s reaffirmed 2026 guidance and cash-generative profile may shape the company’s investment narrative. Rare earth metals are the new gold rush. Find out which 28 stocks are leading the charge. To own Hayward, you have to believe that a cash-generative, pool-focused equipment business can keep growing through technology upgrades and aftermarket demand, despite its exposure to discretionary homeowner spending. The latest results and reaffirmed 2026 outlook support the near term sales and earnings story, while the key risk remains a pullback in residential pool spending if consumers favor repair over replacement; the July update does not materially change that risk profile. Among the recent announcements, the completion of the US$67.79 million share repurchase stands out, as it underscores Hayward’s confidence in its balance sheet while it targets about 5% net sales growth in 2026. For investors focused on catalysts, that combination of ongoing buybacks and steady guidance, backed by strong operating and free cash flow, may be central to how the stock trades around upcoming earnings and any future M&A activity. Yet for all the cash generation, investors still need to weigh the risk that a slower replacement cycle in pools could... Read the full narrative on Hayward Holdings (it's free!) Hayward Holdings' narrative projects $1.4 billion revenue and $217.4 million earnings by 2029. This requires 5.9% yearly revenue growth and about a $56.8 million earnings increase from $160.6 million today. Uncover how Hayward Holdings' forecasts yield a $17.31 fair value, a 9% upside to its current price. Two members of the Simply Wall St Community currently see Hayward’s fair value in a tight US$17.14 to US$17.31 range, underscoring how closely some private investors are clustered. You should weigh those views against the company’s reliance on residential aftermarket demand and consider how a shift toward repair over replacement could affect future expectations for the business. Explore 2 other fair value estimates on Hayward Holdings - why the stock might be worth as much as 9% more than the current price! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Hayward Holdings research is our analysis highlighting 4 key rewards that could impact your investment decision. Our free Hayward Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Hayward Holdings' overall financial health at a glance. Right now could be the best entry point. These picks are fresh from our daily scans. Don't delay: Invest in the nuclear renaissance through our list of 89 elite nuclear energy infrastructure plays powering the global AI revolution. The future of work is here. Discover the 36 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. Find 51 companies with promising cash flow potential yet trading below their fair value. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include HAYW. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Wednesday, July 29, 2026 at 9:00 a.m. ET Vice President, Investor Relations and FP&A - Kevin Maczka President and Chief Executive Officer - Kevin Holleran Senior Vice President and Chief Financial Officer - Eifion Jones Operator: Welcome to Hayward Holdings Second Quarter 2026 Earnings Conference Call. My name is Robert, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Kevin Maczka, Vice President, Investor Relations and FP&A. Mr. Maczka, you may begin. Kevin Maczka: Thank you, and good morning, everyone. We issued our second quarter 2026 earnings press release this morning, which has been posted to the Investor Relations section of our website at investor.hayward.com. There, you can also find the earnings slide presentation referenced during this call. I'm joined today by Kevin Holleran, President and Chief Executive Officer; and Eifion Jones, Senior Vice President and Chief Financial Officer. Before we begin, I would like to remind everyone that during this call, the company may make certain statements that are considered forward-looking in nature, including management's outlook for 2026 and future periods. Such statements are subject to a variety of risks and uncertainties, including those discussed in our most recent Forms 10-K and subsequent Forms 10-Q filed with the Securities and Exchange Commission that could cause actual results to differ materially. The company does not undertake any duty to update such forward-looking statements. During today's call, the company will discuss non-GAAP measures. Reconciliations of historical non-GAAP measures discussed on this call to the comparable GAAP measures can be found in our earnings release and the appendix to the slide presentation. All comparisons will be made on a year-over-year basis unless otherwise indicated. I will now turn the call over to Kevin Holleran. Kevin Holleran: Thank you, Kevin, and good morning, everyone. It's my pleasure to welcome all of you to Hayward's second quarter earnings call. I'll begin on Slide 4 of our earnings presentation with today's key messages. I'm pleased to report another strong quarter. Net sales increased 6% in the second quarter and 9% through the first half with positive price realization and stable volume. This performance reflects the resilience of our installed base aftermarket business model, coupled with focused execution across the organization. Our teams are advancing strategic initiatives to strengthen our market position and drive profitable growth even as we navigate macroeconomic, geopolitical and inflationary challenges. We are clearly gaining traction, and I'm proud of the team's performance. During the quarter, we completed a comprehensive debt refinancing, extending our maturities, reducing our cost of capital by approximately $6 million on a full year basis and adding financial flexibility to support our strategic priorities. Eifion will provide further details on the refinancing in a moment. We also made further solid progress on the balance sheet, generating cash and reducing net leverage to 1.5x, the lowest level since our IPO in 2021. We achieved this while increasing share repurchases, demonstrating our confidence in the business and our commitment to disciplined capital allocation. Given the first half performance and our visibility into the second half, we are maintaining our guidance for full year 2026. We continue to expect net sales to increase approximately 5% and adjusted diluted EPS to increase approximately 9% to 13%. Turning now to Slide 5, highlighting our second quarter and first half results. Net sales increased 6% to $318 million in the second quarter. North America increased 9%, driven by positive contribution from both price and volume as demand remained resilient across our installed base aftermarket. Europe and Rest of World declined 8% as certain regions continued to be impacted by macroeconomic conditions and geopolitical disruption related to the ongoing conflicts in Ukraine and the Middle East. We were pleased to see continued solid demand for some of our more discretionary product categories such as salt chlorine generators, automation and lighting. Commercial Pool and industrial flow control delivered solid growth again this quarter with net sales for both businesses up double digits in the first half. Gross profit margin declined modestly in the second quarter and was approximately flat to the first half, consistent with our expectations. As previously communicated, we anticipated second quarter pressure from incremental inflation in specialty metals, freight and resin costs before our mitigation actions are fully implemented. Importantly, margins remain near record levels. The second quarter 2025 represented Hayward's highest ever quarterly gross margin as a public company and second quarter 2026 was the second highest. I'm pleased with how our sales and operational teams maintained strong profitability despite these new pressures. Similarly, adjusted EBITDA margin in the first half remained healthy and consistent with the prior year as we continue to make targeted investments in product innovation and customer initiatives. Adjusted diluted EPS increased 8% to $0.26 in the second quarter. Combined with our outstanding first quarter performance, we delivered a strong first half with net sales up 9%, adjusted EBITDA also up 9% and adjusted diluted EPS up 18%. Our performance reflects the strength and execution of our strategy. Let me highlight some of the initiatives gaining traction and helping position Hayward for sustained profitability growth on Slide 6. The focus of our strategy is clear: support our customers with superior products and services to drive share gains while sharpening our operational excellence to enable profitable growth. Starting with the customer side. Innovation continues to be our engine. We've increased our RD&E investment and it's paying off with new product vitality now up to 23%. Our proprietary OmniX platform is leading the way, especially in the aftermarket, and we will introduce more OmniX-enabled product categories to expand the connected ecosystem. We're also deepening our reach with the trade through our Hayward hub training centers. These hubs are reinforcing our position in our strongest markets by further developing existing dealer capabilities while also supporting dealer conversions in targeted growth markets. We look forward to opening our sixth center in Atlanta in the fourth quarter. We're increasingly using AI to raise the bar across the organization. One use case in customer service resulted in 98% of our North America calls now being answered within 1 second by an AI agent and 80% of those calls resolved with no need for escalation to a live technical service representative. That's a better experience for our customers and greater efficiency for us. On the operational excellence side, we're staying disciplined and proactive. We're taking continued cost actions, investing in automation and productivity, nearshoring and increasingly dual sourcing to mitigate tariff and geopolitical risk and driving value engineering across our processes and products. Internally, we're managing our own inventory tightly across both finished goods and raw materials and accelerating SKU rationalization and product platforming. We maintain visibility in the inventory levels and sell-through across our primary North America channel partners through regular communication and reporting. Current channel inventory remains consistent with seasonal patterns, including the normal second quarter reduction and is aligned with our assumptions for end market sell-through and product availability. Finally, the Power of Us campaign reinforces all of this. This is a compelling message and is resonating across the industry. As a proud American company since 1925, approximately 90% of our products sold in the United States today are manufactured or assembled in our domestic centers of excellence. The takeaway is simple. We're driving both growth and productivity. The combination of customer intimacy and operational excellence driving market share and profitability is exactly how we intend to outperform our industry and create long-term value. And with that, I'd like to turn the call over to Eifion to discuss our financial results in more detail. Eifion Jones: Thank you, Kevin, and good morning. Turning to Slide 7. I'll walk through our second quarter financial performance in more detail. We delivered another strong quarter of sales and earnings growth, with net sales increasing 6% to $318 million against a 5% growth comparison in the prior year period. Growth was primarily driven by price realization to offset inflation with volumes stable in the quarter. I am particularly pleased to see positive volume growth in our primary North American market, which reflects the impact of the investments we have made in our sales, marketing and customer care teams to strengthen customer engagement, improve execution and support sustainable demand generation. Gross profit increased 8% to $155 million, while gross profit margin declined 50 basis points to 48.7%. As communicated last quarter, we anticipated sequential second quarter gross margin increases to be more moderate than the prior year due to the timing of incremental inflation and the partial quarter benefit of our surcharges and other mitigation actions. As Kevin noted, we were pleased to deliver our second highest quarterly gross margin since the IPO, surpassed only by the prior year period despite facing challenges over the past 12 months, including tariffs, commodity inflation, higher transportation costs and the management effort required to nearshore production from China and established dual sourcing to continue to improve supply chain resilience. Adjusted EBITDA increased 5% to $93 million, with adjusted EBITDA margin increasing 700 basis points sequentially from the first quarter and declining 40 basis points year-over-year to 29.1%. We continue to make targeted investments in sales and marketing, advanced engineering and customer service. The effective tax rate was 23% and adjusted diluted EPS increased 8% to $0.26. Moving to Slide 8 to discuss our segment performance for the second quarter. North America net sales were up 9% to $278 million, driven by 7% price realization and 2% volume growth. Within the region, U.S. sales also increased 9% and Canada was up 2% given the weather-related slow start to the season. Gross margin reduced 90 basis points from the prior year to 50.4% due to inflationary pressures and timing of our mitigation actions. Similar to the consolidated result, the North American gross margin trailed only the segment record performance in the year ago period. Sales in Europe and Rest of World declined 8% to $41 million with positive contributions from price and FX, offset by reduced volume. Europe sales declined 4% and Rest of World declined 16% impacted primarily by the geopolitical disruption related to the ongoing conflict in the Middle East. That said, we were pleased to see continued margin improvement in the segment. Gross margin increased 50 basis points to 37.9% and adjusted segment income margin was consistent with the prior year at 18.1%, driven by improved operational execution. Moving to Slide 9. Our first half segment performance was strong. North American net sales increased 10%, driven by 8% price realization and 2% volume growth with both the U.S. and Canada delivering double-digit gains. Europe and Rest of World was flat overall as 5% growth in Europe offset a 9% decline in Rest of World, again, primarily reflecting the disruption from the Middle East conflict. Adjusted segment income margin remained consistent with strong prior year levels in North America and expanded 130 basis points in Europe and Rest of World. Overall, we are pleased with our first half performance. Turning to Slide 10. During the quarter, we successfully amended our existing Term Loan B, extending the maturity profile, reducing our interest rate and enhancing financial flexibility. The amended Term Loan B of $960 million now matures in 2033 compared to 2028 previously and carries a 61 basis point lower spread. This reduces annual run rate interest expense by approximately $6 million, leaving total debt substantially unchanged. We also replaced our $425 million ABL revolver due 2028 with a new undrawn $425 million 5-year cash flow revolver maturing in 2031, providing full availability without a borrowing base limitation. The refinancing was well received with Moody's upgrading our corporate family rating and S&P affirming its rating with a positive outlook. Together, these actions strengthen the balance sheet and support organic investment, strategic M&A and capital returns while maintaining disciplined leverage. Turning to Slide 11. Our financial position remains a source of strength and gives us meaningful flexibility to execute our plans. We continue to strengthen the balance sheet during the quarter, reducing net leverage to 1.5x, the lowest level since our IPO from 2.1x a year ago. We ended the quarter with a combined $483 million of cash, cash equivalents and short-term investments. Combined with availability under our credit facility, that's over $900 million of total liquidity. Cash flow from operations was strong in the second quarter, resulting in $172 million in the first half of 2026 compared to $188 million in the prior year period. Free cash flow was $154 million, and our outlook for the full year is unchanged at approximately $200 million. To sum it up, with low leverage, ample liquidity and strong cash flow, we are well positioned to support continued organic investment, pursue strategic M&A and return capital to shareholders. Turning to Slide 12, capital allocation. We balance strategic growth investment with stockholder returns while maintaining prudent leverage. As an OEM, we prioritize organic investment into our manufacturing and supply chain footprint, followed by strategic M&A while remaining opportunistic with respect to share repurchases. We accelerated our share repurchase activity in the first half, deploying approximately $64 million to repurchase 4.4 million shares. Turning to Slide 13. Given our strong half performance and current visibility into the second half, we are maintaining our guidance for full year 2026. We continue to expect net sales to increase approximately 5% with adjusted diluted EPS increasing approximately 9% to 13% to a range of $0.84 to $0.87. We continue to expect free cash flow in the region of $200 million, exceeding 100% of net income. This outlook includes net interest expense of approximately $45 million, a normalized effective tax rate of around 24% and increased CapEx of approximately $40 million as we continue to invest in upgrading our operational capabilities. Overall, we're confident in our ability to execute and remain positive on pool industry growth, supported by the strength and the resilience of the aftermarket. With that, I'll turn the call back to Kevin. Kevin Holleran: Thanks, Eifion. Before we open the line for questions, let me close by reinforcing the key messages from today's call. Hayward delivered another strong quarter and first half, underscoring the durability of our installed base aftermarket model, the strength of our brand and product portfolio and the consistency of our execution. We grew sales and protected profitability in a dynamic cost environment. At the same time, we continued advancing the initiatives to define Hayward's next phase of value creation, deepening customer relationships through innovation and service, expanding our connected product ecosystem and operating with even greater efficiency and discipline. We also reduced leverage to the lowest level since our IPO, accelerating our share repurchase activity and completed an important refinancing. Looking ahead, we remain confident in the long-term fundamentals of the pool industry and in Hayward's ability to deliver results through a range of market conditions. With that, we're now ready to open the line for questions. Operator: [Operator Instructions] Our first question comes from Andrew Carter with Stifel. W. Andrew Carter: Given the news in the industry with Pentair's declines and channel rightsizing, could you step back and, kind of, give us an estimate of what your readout is, like your sellout to customers, also potentially how much that sellout varies by customer? And then I guess the second part to build on that, how many days of inventory are in the channel now? Is that meaningfully different than what it was, say, pre-COVID because you've obviously got the quicker supply chain? And then what are your estimates for days inventory in the channel by the end of the year? Kevin Holleran: Andrew, Eifion might have some of those statistics you were asking about. I mean, overall, we feel really balanced with our inventory in the channel ending Q2. I would call it very normal. As expected, Q2 is a big sellout quarter for us, traditionally the biggest net reduction in inventory after the channel builds inventory in Q4 and Q1 get ready for the season. And as we move into Q3, we would expect another net reduction, although historically not normally at the same level that we see in Q2, all culminating with lower inventories than what we would expect to be a very normal participation from the channel come early by time. You mentioned COVID. There were certainly lessons learned coming through the COVID experience through supply chain disruption and demand profile. We embarked on a much improved process with our largest North American channel partners of sharing information around inventory levels, out-the-door sales, what we expect them to be moving forward. And I would say our conversations with our largest channel partners are very productive. They -- in general, we all feel very balanced. We're aligned on what we believe the go-forward sales out figures are in Q3 and Q4. We're not hearing any kind of divergent opinions on what we expect Hayward sales out to be, nor are we hearing from the channel partners any expectations to make step level reductions in their days on hand that they've had historically. So I think all of this is supported by the fact that we're proud of the reliable supply chain in the domestic centers of excellence with shorter lead times that really negates any reason for the channel to order ahead or to increase stocking levels. So we feel really good exiting Q2 and we feel -- we see very balanced inventories across our largest channel partners. Eifion Jones: Yes. Andrew, if you look at the entirety of the channel across North America and take into consideration primary European markets, we typically operate at this time of the year just over 4 months' worth of inventory in the channel. And in aggregate, that's kind of where we're at exiting out of June. Some channel partners who have got stronger balance sheets may go a little bit higher, others lower. Between now and the end of the year, we typically start to see inventories climb as folks start to take in their positions for the early buy, particularly in Q4. As Kevin mentioned, normalized inventory across the channel coming out of Q2 and feel really good about how we're set up for Q3 stepping into Q4 as well. Operator: Our next question comes from Jeff Hammond with KeyBanc Capital Markets. Jeffrey Hammond: So maybe sticking with the competitor news and dislocation. I'm just wondering maybe any color where you think you might be benefiting from some of that dislocation. I think they talked about some customer share loss around 80/20 implementation and then maybe like-for-like replacement on older pool pads. So just wondering what you're seeing there and any opportunities. Kevin Holleran: Yes. Jeff, as I've said for -- pretty consistently for several quarters running, we feel good about our share gains. We think that it's been over a longer period of time, perhaps than was seen by the market. I think that's a little bit more apparent maybe in the current period. I'd say our team is executing a playbook. We've had basically the grow greater than market has been a consistent theme in the organization since I joined in 2019. And I think it's multipronged. I think we're playing offense and that the investments that we've made around SG&A and RD&E are paying off. From a product and innovation standpoint, it's a steady pipeline of products that touch a number of different themes, Jeff, whether it's like-for-like replacement or bringing automation and upgrade to the established installed base or filling in some product gaps that we may have had historically like a 4 horsepower or bringing some products to market that can drop in on some competitive products. Those are kind of the prongs around products and the innovation. There's a long list around commercial excellence, whether it's brand building, making sure that our brand is resonating with all builders and servicers to some reorganization around our field organization, bringing sales and technical service together under common leadership, adding some business development folks to tell the Hayward story and to start recruiting into the family and then some dealer support, whether it's some education or whether it's the hubs, the OmniPro app, et cetera. So I think all of that is really wrapped up again with a comment I made to Andrew's question around supply chain capabilities. And I think having shorter lead times, manufactured in the U.S. in our centers of excellence, all supports a multipronged share playbook that we've been executing for several years, and we continue to see gains from it. Jeffrey Hammond: Okay. Great. And then just on gross margins. I know you guys telegraphed pretty well that you had a tough comp in the gross margin, you'd be down year-over-year, and there were some maybe some price cost transition issues. Can you just speak to how you see gross margins trending into 3Q, 4Q as you look year-on-year and maybe how you're working through those price cost issues and how price is translating? Eifion Jones: Yes. Thanks. I'll kick off, and Kevin can correct me where needed. But you're exactly right. Stepping into Q2, we expected to have a lower sequential gain than we did in the prior year. I was actually more pleasantly surprised with the amount of gross margin gain that we actually achieved. But nonetheless, when the announcements on the war came through in Iran in February, that obviously accelerated inflation, came out as quickly at the end of Q1. We immediately reacted and announced a surcharge to be effective on orders mid-quarter and given the order to invoice lag to be effective on the invoice sometime later in the quarter. That played out. Maybe we got a little bit more on the invoice than we were originally expecting in terms of timing, but that played out exactly as expected. So at the end of Q2, we would say we're all caught up now on that particular inflationary pressure. As we look into the balance of the year, normally, we see margins decrease in Q3 as it's a lower leverage period for us. And then in Q4, margins open back up again as we get more leverage from volume in that particular quarter. Right now, as I said at Q1, we believe based on the activities that we have in place right now that we'll be able to maintain gross margins for the full year approximately in line with last year. The guys are doing an absolutely fantastic job in the operational and supply team, battling all these headwinds. And then with the assistance of the commercial team and pricing action, in some cases, discrete pricing action, we're able to hold our gross margins at last year's level, which is obviously a great position to be at. Last year was a record level. So feeling really good about the balance of the year and the ability to deliver another good margin year in '26. Operator: Our next question comes from Brian Lee with Goldman Sachs. Brian Lee: This is Brian. Sorry for technical difficulty. I guess, first, just a follow-up to the prior question around kind of the price cost actions and gross margin trajectory that's helpful color for the balance of the year. How should we think about -- and I know you get this question every now and then, the ability to continue to leverage price here? Are you getting any flag pushback from the channel? I know it's been a good kind of tailwind for the past couple of years. How should we think about your ability to continue to capture price and then kind of what magnitude as you head into next year? I know it sounds like the second half, you're recalibrating pretty well there, and you're seeing good momentum. But beyond that, I guess, just big picture, how should we be thinking about the price here? Kevin Holleran: Yes. There certainly -- Brian, there certainly has been a lot of price pushed through the marketplace over the last several years due to inflationary or tariff pressures that we've all felt. And we're actually contemplating as we speak, what some of those inflationary assumptions are as we make the turn into the second half of this year, and it's always part of our early buy program where we announce what those impacts are heading into the next year. So we're going through that as we speak right now, Brian. But to your question, I feel confident in our ability to continue to pass along at least dollar for dollar what those impacts are. We're all hoping for a little bit more muted inflationary environment going forward. But we are confident that we can pass dollar for dollar. And what we have done more recently is we take it on ourselves to take on cost out and productivity and efficiency projects internally to protect that structural margin. We think that, that's the right thing to do given some of the pressures, pricing pressures that have been pushed into the market over the last 3-plus years. So that's our approach. Eifion, do you have anything to add around broad price cost? Eifion Jones: No. I mean, as Kevin mentioned here, we have the ability at the beginning of each season here to adjust pricing in line with inflation. We have, for the last several periods here, tried to protect dollar for dollar and then use our manufacturing facilities and the supply chain to return structural gross margin, and that's played out as expected. So it's a disciplined industry with that ability, but we're conscious that a lot of price has gone in over the last several years, and we're doing our darndest here to make sure that we're limiting price increases as we continue to go forward, only those that are necessary to protect dollar for dollar and leveraging our facilities to return structural margin. Brian Lee: Absolutely. Helpful color, guys. Second question for me, and I'll pass it on. Just in terms of the market share gains, as you mentioned, Kevin, you've said that consistently over the past few quarters, I guess, kind of come to light that does seem to be playing out based on what we've seen from some of your peer group in the recent past. So when you think about the share gains you've seen, I'd imagine some of that's through technology, some of that's through innovation, but some of that may be just through kind of how you're interfacing with the dealers and the channel. How do you envision kind of being able to maintain those share gains, maybe even accelerate them? Kind of what are some levers you think you can put forth to kind of keep those sticky? Kevin Holleran: Yes. Thanks for the question. And I think they're very durable, very sticky. These share gains have been won by our commercial and operations team doing a better job of telling the Hayward story. We've been focused on this industry for decades, and we're bringing great products that resonate, that are dealer-driven, things that they're telling us that they would like to improve, we take to heart, and we work through our product management and our design teams. I think we really continue to focus and impress upon the dealers out there that we are looking to help them be successful, help them with as some small, some large business owner operators, what we can do from the OEM side to enable them to be more successful in the profession and in the business that they operate. So we -- given the fact it's multipronged, whether it's around the commercial side, around the supply chain side and listening to our dealers, bringing product innovation to life, I think we have a lot to offer, a lot to sell and the momentum is gaining. So our expectation is not to sit back but to continue the positive trajectory that we've been on over the last several years. Operator: Our next question comes from Rafe Jadrosich with Bank of America. Rafe Jadrosich: It's Rafe. The first one is just on IEEPA refunds. Is there any benefit that you're seeing either in the second quarter or later this year? Or what's sort of embedded in guidance? Or what's your expectation there? Eifion Jones: No, at this particular point, we're still in the process of substantially receiving IEEPA refunds as we stepped into Q3. I think the first tranche of IEEPA refunds are now in. Currently, we're evaluating what's the most appropriate way to return to customer. That will be our ambition. There's complexity to that. Obviously, whatever we would return would be net of cost we incur for those refunds. But right now, we're still in the process of claiming those refunds in the aggregate, they're less than $10 million for us. Some of that is a consequence of the great job that we did recalibrating the supply chain last year to get away from the impact of those IEEPA refunds. But right now, our line of sight is to approximately $8 million to $10 million worth of refunds. We have ambition to return to customers, still working through that complexity. We'll update you at the end of Q3 on how that played out. Rafe Jadrosich: Got it. Okay. So nothing in guidance or anything like that? Eifion Jones: There isn't. Rafe Jadrosich: Okay. And then just in terms of sellout, there's an earlier question on that. Can you just tell what you think like industry sell-out was in 2Q? And if I were to go back 90 days ago to when you reported 1Q, like what's your full year expectation for the end markets? And have they changed at all? Like what are you expecting for new construction, R&R, international? Just how do we think about how the sellout has evolved and your outlook for the back half of the year? Kevin Holleran: I think the best proxy for what sellout was in the second quarter, Rafe, would be the largest distributor that reported last week, who I believe reported plus 3% in the equipment category over second quarter. We -- across our largest trade partners, Hayward sales out was a bit better than that. Actually, traditional distribution saw even a bit better than that of Hayward product as well. So we were encouraged with what we saw through our largest trade partners in Q2 in terms of Hayward sales out vis-a-vis the broader equipment category in general. In terms of first quarter, do you have that handy? Eifion Jones: Yes. I mean we were up mid-single digits in the first quarter on the sellout. I mean we don't get perfect information across the wider channel. But based on the reporting distributors, we were up mid-single digits. Rafe, let me just also clarify an earlier point that I made that was asked by Andrew, which may be part of your question as well. I mean, typically, what we see in the channel inventory position is during Q2 and Q3, sales out exceed sell-in. So you see decreasing absolute inventories as we get to the end of Q3, you typically see days on hand start to increase even though those absolute dollar values are lower in terms of inventory. And then as you step into Q4, you see the absolute inventory climb as we get ready for the season, which then takes place, obviously, in the subsequent year. And typically, days on hand are going to be the highest at the end of the year, given that inventory pull in by the channel. Operator: We have reached the end of the question-and-answer session. I'd like to turn the call back over to Kevin Holleran for closing comments. Kevin Holleran: Thanks, Robert. In closing, I want to thank our employees and partners around the world. Your dedication and hard work continues to be critical to the progress we're making across our business. We're encouraged by our strong first half of the year and remain confident in our strategy. If you have any follow-on questions, please reach out to our team. We appreciate your continued interest in Hayward and look forward to speaking with you again on our next earnings call. Robert, you may now end the call. Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation. 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While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Hayward (HAYW) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Net sales growth of 6% in Q2 was driven by positive price realization and stable volumes, reflecting the resilience of the installed base aftermarket model. North American performance (up 9%) benefited from demand in discretionary categories like salt chlorine generators and automation, offsetting an 8% decline in Europe and Rest of World due to geopolitical conflicts. Management attributes market share gains to a multi-year 'offense' playbook, including increased RD&E investment which has raised new product vitality to 23%. Operational excellence initiatives, such as nearshoring and dual sourcing, are being utilized to mitigate tariff risks and improve supply chain reliability. The company is leveraging AI in customer service to resolve 80% of North American calls without human intervention, enhancing both customer experience and operational efficiency. Gross margins remain near record levels (48.7%) despite inflationary pressures in specialty metals, freight, and resin, supported by proactive surcharges and cost-out actions. Full year 2026 guidance is maintained, assuming approximately 5% net sales growth and 9% to 13% adjusted diluted EPS growth. Management expects gross margins for the full year to remain approximately in line with the prior year's record levels as mitigation actions fully take hold. Channel inventory is expected to follow seasonal patterns, with further net reductions in Q3 followed by a build in Q4 for the 'early buy' season. The company plans to open its sixth Hayward Hub training center in Atlanta during Q4 to support dealer conversions and technical capabilities. Capital allocation priorities remain focused on organic investment and strategic M&A, supported by a reduced net leverage of 1.5x. A comprehensive debt refinancing completed in the quarter extended maturities to 2033 and is expected to reduce annual interest expense by approximately $6 million. Geopolitical disruption in the Middle East and Ukraine continues to act as a headwind for the Europe and Rest of World segment, particularly impacting volume. Incremental inflation in commodities and transportation required the implementation of mid-quarter surcharges to protect dollar-for-dollar margins. Management is currently evaluating the process for returning approximately $8 million to $10 million in IEEPA refunds to customers, net of associated costs. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management stated the channel currently holds just over 4 months of inventory, which is considered normalized and aligned with seasonal expectations. Improved data sharing with large North American partners and shorter lead times from domestic manufacturing have negated the need for the channel to 'order ahead' or carry excess stock. Management believes share gains are durable and 'sticky,' driven by filling product gaps (e.g., 4 horsepower pumps) and products designed to 'drop in' as replacements for competitive equipment. The strategy focuses on helping small business owner-operators (dealers) be more successful through the OmniPro app and technical education. Hayward aims to protect margins 'dollar for dollar' against inflation rather than seeking margin expansion through price alone. The company is increasingly relying on internal productivity and value engineering to protect structural margins, acknowledging the significant amount of price already pushed into the market over the last three years.

Interested in Hayward Holdings, Inc.? Here are five stocks we like better. Second-quarter performance improved: Net sales rose 6% to $318 million, adjusted EBITDA increased 5% to $93 million and adjusted diluted EPS grew 8% to $0.26. North American sales increased 9%, offsetting an 8% decline in Europe and Rest of World amid macroeconomic and geopolitical disruptions. Balance sheet strengthened: Hayward refinanced its debt, extending the Term Loan B maturity to 2033 and reducing annualized interest expense by about $6 million. Net leverage fell to 1.5 times, while liquidity exceeded $900 million. 2026 outlook reaffirmed: Management continues to expect approximately 5% sales growth and adjusted diluted EPS of $0.84 to $0.87, supported by aftermarket demand, pricing actions, productivity initiatives and roughly $200 million in projected free cash flow. Hayward (NYSE:HAYW) reported higher second-quarter sales and earnings, citing price realization, stable overall volume and continued demand in its North American installed-base aftermarket business, while maintaining its full-year 2026 outlook. Net sales increased 6% to $318 million in the second quarter, following 5% growth in the prior-year period. Sales rose 9% in North America, including 7% from price realization and 2% from volume growth, while Europe and Rest of World sales declined 8% amid macroeconomic conditions and geopolitical disruption tied to conflicts in Ukraine and the Middle East. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? President and Chief Executive Officer Kevin Holleran said the company’s first-half performance reflected the resilience of its aftermarket-focused business model and execution across its strategic initiatives. For the first half, net sales rose 9%, adjusted EBITDA increased 9%, and adjusted diluted earnings per share increased 18%. Gross profit increased 8% to $155 million, while gross margin declined 50 basis points to 48.7%. Senior Vice President and Chief Financial Officer Eifion Jones said the margin pressure was anticipated, reflecting higher specialty-metal, freight and resin costs as well as the timing of surcharges and other mitigation efforts. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Despite the year-over-year decline, Holleran said the quarter produced Hayward’s second-highest quarterly gross margin since becoming a public company. The only higher result was recorded in the second quarter of 2025. Adjusted EBITDA rose 5% to $93 million, while adjusted EBITDA margin declined 40 basis points year over year to 29.1%. Adjusted diluted EPS increased 8% to $0.26. Jones said Hayward continued to invest in sales and marketing, advanced engineering and customer service during the period. → Oil Prices Are Surging and These 4 Stocks Are Cashing In In North America, net sales reached $278 million. U.S. sales increased 9%, while Canada sales rose 2%, with the Canadian result affected by a weather-related slow start to the season. North American gross margin declined 90 basis points to 50.4% because of inflationary pressures and the timing of mitigation actions. Europe and Rest of World sales totaled $41 million. Europe sales declined 4%, while Rest of World sales fell 16%, primarily due to disruption from the conflict in the Middle East. However, segment gross margin rose 50 basis points to 37.9%, and adjusted segment income margin was unchanged at 18.1%. Holleran said demand remained solid in discretionary product categories including salt chlorine generators, automation and lighting. Commercial pool and industrial flow-control businesses also posted double-digit net sales growth in the first half, he said. Management said channel inventory levels were consistent with seasonal patterns. Holleran described inventory exiting the second quarter as “very normal” and balanced among the company’s largest channel partners. Jones said the North American channel and primary European markets typically held slightly more than four months of inventory at this point in the year, which was approximately where Hayward stood at the end of June. The company expects inventories to decline in absolute terms during the third quarter as sales outpace sales into the channel, before channel partners build inventory during the fourth quarter for the following season’s early-buy period. Jones said end-of-year days on hand typically rise as that inventory is pulled into the channel. Addressing analyst questions about industry competition, Holleran said Hayward believes it has been gaining share over several years. He attributed that view to product innovation, sales and service investments, dealer support, domestic manufacturing, shorter lead times and products designed for replacement and upgrade opportunities. Hayward said it is expanding its connected-product ecosystem through its OmniX platform and expects to open its sixth Hayward Hub training center in Atlanta during the fourth quarter. The company also said its use of artificial intelligence in customer service has enabled 98% of North American calls to be answered within one second, with 80% resolved without escalation to a live technical-service representative. During the quarter, Hayward amended its Term Loan B, extending its maturity to 2033 from 2028 and lowering its spread by 61 basis points. The $960 million loan is expected to reduce annual run-rate interest expense by approximately $6 million, Jones said. The company also replaced its $425 million asset-based lending revolver, previously due in 2028, with an undrawn $425 million cash-flow revolver maturing in 2031. The new facility provides full availability without a borrowing-base limitation, according to management. Net leverage fell to 1.5 times at quarter-end from 2.1 times a year earlier, the lowest level since Hayward’s 2021 initial public offering. The company ended the quarter with $483 million in cash equivalents and short-term investments and said total liquidity, including credit-facility availability, exceeded $900 million. Cash flow from operations was $172 million in the first half, compared with $188 million a year earlier. Free cash flow was $154 million, and the company continues to forecast approximately $200 million of free cash flow for the full year. Hayward repurchased approximately 4.4 million shares for about $64 million during the first half. Management said its capital-allocation priorities remain organic investment in manufacturing and supply-chain capabilities, strategic acquisitions and opportunistic share repurchases. Hayward reaffirmed its 2026 outlook, forecasting net sales growth of approximately 5% and adjusted diluted EPS growth of approximately 9% to 13%, or $0.84 to $0.87 per share. The outlook assumes net interest expense of about $45 million, a normalized effective tax rate of roughly 24% and capital expenditures of about $40 million. Jones said Hayward expects full-year gross margins to remain approximately in line with the prior year. Management said it intends to use pricing actions to offset necessary inflation dollar for dollar while relying on productivity, cost-reduction initiatives, nearshoring, dual sourcing and value engineering to preserve structural margins. Hayward Holdings, Inc is a leading manufacturer and marketer of residential and commercial swimming pool equipment and related outdoor living products. The company designs, engineers and produces a comprehensive range of products that address water circulation, filtration, heating, sanitation, automation, lighting and cleaning needs for pools and spas. Hayward's offerings include pumps, filters, heaters, salt and chemical sanitization systems, automation controls, lights, robotic cleaners and various accessories that serve both new pool construction and aftermarket renovation markets. Hayward's product portfolio is organized into several core categories. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Hayward Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Net Sales: Increased 6% to $318 million in Q2 2026. North America Sales: Up 9%, driven by 7% price realization and 2% volume growth. Europe and Rest of World Sales: Declined 8% to $41 million. Gross Profit Margin: Declined 50 basis points to 48.7%. Adjusted EBITDA: Increased 5% to $93 million, with a margin of 29.1%. Adjusted Diluted EPS: Increased 8% to $0.26. Net Leverage: Reduced to 1.5 times, the lowest level since IPO. Free Cash Flow: $154 million in the first half of 2026. Share Repurchases: $64 million spent to repurchase 4.4 million shares. Full Year 2026 Guidance: Net sales expected to increase approximately 5%, adjusted diluted EPS to increase 9% to 13%. Warning! GuruFocus has detected 4 Warning Sign with HAYW. Is HAYW fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Net sales increased by 6% in the second quarter and 9% in the first half, driven by positive price realization and stable volume. Completed a comprehensive debt refinancing, reducing the cost of capital by approximately $6 million annually and extending maturities. Reduced net leverage to 1.5 times, the lowest level since the IPO in 2021, while increasing share repurchases. Continued solid demand for discretionary product categories such as salt chlorine generators, automation, and lighting. Maintained guidance for full year 2026 with expected net sales increase of approximately 5% and adjusted diluted EPS increase of 9% to 13%. Gross profit margin declined modestly in the second quarter due to incremental inflation in specialty metals, freight, and resin costs. Europe and rest of world sales declined 8% due to macroeconomic conditions and geopolitical disruptions. Adjusted EBITDA margin declined 40 basis points year-over-year to 29.1%. Faced challenges over the past 12 months, including tariffs, commodity inflation, and higher transportation costs. Inventory levels in the channel are expected to climb as the year progresses, potentially impacting cash flow. Q: Given the news in the industry with Pentair's declines and channel rightsizing, could you provide an estimate of your sellout to customers and how it varies by customer? Also, how many days of inventory are in the channel now, and how does it compare to pre-COVID levels? A: Kevin Holleran, President and CEO, explained that Hayward feels balanced with their inventory in the channel, ending Q2 at very normal levels. They expect another net reduction in Q3, although not as significant as in Q2. The company has improved processes with North American channel partners, sharing information on inventory levels and sales expectations. Eifion Jones, CFO, added that they typically operate with just over four months' worth of inventory in the channel, and they feel good about their setup for Q3 and Q4. Q: Regarding competitor dislocation, are there any areas where you might be benefiting from this? A: Kevin Holleran noted that Hayward has been gaining market share over a longer period, driven by a consistent strategy to grow greater than the market. The company has been executing a multi-pronged playbook, including product innovation, brand building, and supply chain capabilities, which have contributed to their share gains. Q: Can you discuss how you see gross margins trending into Q3 and Q4, and how you're managing price-cost issues? A: Eifion Jones stated that they expected a lower sequential gain in Q2 compared to the prior year but were pleased with the gross margin gain achieved. They have reacted to inflationary pressures with surcharges and expect margins to decrease in Q3 due to lower leverage, with an improvement in Q4. They aim to maintain gross margins in line with last year, which was a record level. Q: How should we think about your ability to continue leveraging price, and are you facing any pushback from the channel? A: Kevin Holleran expressed confidence in passing along dollar-for-dollar impacts of inflationary pressures. They are focusing on cost-out and productivity projects to protect structural margins, aiming to limit price increases to necessary levels while leveraging their facilities to maintain margins. Q: Regarding market share gains, how do you plan to maintain or accelerate these gains? A: Kevin Holleran emphasized that their share gains are durable and sticky, driven by better storytelling and product innovation that resonates with dealers. They focus on helping dealers succeed and continue to offer a multi-pronged approach involving commercial operations, supply chain, and product innovation to maintain their positive trajectory. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Hayward Holdings, Inc. (HAYW) came out with quarterly earnings of $0.26 per share, beating the Zacks Consensus Estimate of $0.24 per share. This compares to earnings of $0.24 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +8.33%. A quarter ago, it was expected that this company would post earnings of $0.11 per share when it actually produced earnings of $0.13, delivering a surprise of +18.18%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Hayward Holdings, which belongs to the Zacks Electronics - Miscellaneous Products industry, posted revenues of $318.38 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.88%. This compares to year-ago revenues of $299.6 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Hayward Holdings shares have lost about 2.2% since the beginning of the year versus the S&P 500's gain of 8.5%. While Hayward Holdings has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Hayward Holdings was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.16 on $255 million in revenues for the coming quarter and $0.85 on $1.18 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Miscellaneous Products is currently in the top 23% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Owlet, Inc. (OWLT), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 11. This company is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of +200%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Owlet, Inc.'s revenues are expected to be $30.5 million, up 16.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Hayward Holdings, Inc. (HAYW) : Free Stock Analysis Report Owlet, Inc. (OWLT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

SECOND QUARTER FISCAL 2026 SUMMARY Net Sales increased 6% year-over-year to $318.4 million Net Income increased 2% year-over-year to $45.6 million Adjusted EBITDA* increased 5% year-over-year to $92.7 million Diluted earnings per share (EPS) increased 5% year-over-year to $0.21 Adjusted diluted EPS* increased 8% year-over-year to $0.26 CHARLOTTE, N.C., July 29, 2026--(BUSINESS WIRE)--Hayward Holdings, Inc. (NYSE: HAYW) ("Hayward," the "Company," "we," "us," or "our"), a leading global specialty water management company focused on designing and manufacturing pool and outdoor living technology and industrial flow control products, today announced financial results for the second quarter of fiscal year 2026, ended June 27, 2026. Comparisons are to financial results for the prior-year second fiscal quarter. CEO COMMENTS "Hayward delivered a strong second quarter and first half of 2026, reflecting continued disciplined execution and the resilience of our installed base aftermarket business model," said Kevin Holleran, Hayward’s President and Chief Executive Officer. "Net sales increased 6% year-over-year in the quarter and 9% through the first half, driven by strong price realization and stable volume performance. Solid cash flow generation enabled us to reduce net leverage to 1.5x, the lowest level since the Company’s initial public offering ("IPO") in 2021, while returning capital to stockholders through share repurchases. During the quarter, we completed a successful debt refinancing to extend maturities, reduce our cost of capital, and further enhance our financial flexibility. With balanced channel inventory levels and increasing traction with our share gain initiatives, we are maintaining our full year guidance. We remain confident in our ability to execute our strategic growth plans, deliver profitable growth, and create long-term stockholder value." SECOND QUARTER FISCAL 2026 CONSOLIDATED RESULTS Net sales increased by 6% to $318.4 million for the second quarter of fiscal 2026. The increase in net sales during the quarter was driven by positive net price to offset inflation and tariffs and the favorable impact from foreign currency translation. Gross profit increased by 5% to $155.1 million for the second quarter of fiscal 2026. Gross profit margin decreased by 50 basis points to 48.7% primarily due to an increase in cost of sales driven by tariffs and inflation, partially offset by positive net price. Selling, general, and administrative expense ("SG&A") increased by 4% to $64.3 million for the second quarter of fiscal 2026. The increase in SG&A was mainly attributable to higher incentive compensation. As a percentage of net sales, SG&A decreased to 20.2% for the second quarter of fiscal 2026 as compared to 20.5% in the prior-year period, a decrease of 30 basis points, as the growth in net sales exceeded the growth in SG&A. Research, development, and engineering expense ("RD&E") increased by 25% to $7.7 million for the second quarter of fiscal 2026. RD&E spend continues to be focused on new product development and new product performance improvements. As a percentage of net sales, RD&E increased to 2.4% for the second quarter of fiscal 2026 as compared to 2.0% in the prior-year period, an increase of 40 basis points. Operating income increased by 6% to $76.0 million for the second quarter of fiscal 2026, due to the aggregated effects of the items described above. Operating income as a percentage of net sales was 23.9% for the second quarter of fiscal 2026, a 10 basis point increase compared to 23.8% in the prior-year period. Interest expense, net, increased by 24% to $17.0 million for the second quarter of fiscal 2026, primarily due to $5.2 million of debt financing costs from the entry into the Amended and Restated First Lien Credit Agreement on June 23, 2026, partially offset by higher interest income on cash deposits and lower net interest expense on bank debt. Net income increased by 2% to $45.6 million for the second quarter of fiscal 2026. Net income margin decreased by 70 basis points to 14.3%. Adjusted net income* increased by 11% to $57.8 million for the second quarter of fiscal 2026. Adjusted net income margin* increased by 70 basis points to 18.1%. Adjusted EBITDA* increased by 5% to $92.7 million for the second quarter of fiscal 2026 compared to $88.2 million in the prior-year period. Adjusted EBITDA margin* decreased by 40 basis points to 29.1%. Diluted EPS increased by 5% to $0.21 for the second quarter of fiscal 2026. Adjusted diluted EPS* increased by 8% to $0.26 for the second quarter of fiscal 2026. SECOND QUARTER FISCAL 2026 SEGMENT RESULTS North America ("NAM") Net sales increased by 9% to $277.7 million for the second quarter of fiscal 2026. The increase was driven by positive net price to offset inflation and tariffs and an increase in volume. Segment income increased by 8% to $90.2 million for the second quarter of fiscal 2026. Adjusted segment income* increased by 9% to $97.1 million. Europe & Rest of World ("E&RW") Net sales decreased by 8% to $40.7 million for the second quarter of fiscal 2026. The decrease was primarily due to a decline in volume, partially offset by the favorable impact of foreign currency translation and positive net price. The decrease in volume was driven by the impact of geopolitical conflicts in the Middle East. Segment income decreased by 13% to $6.6 million for the second quarter of fiscal 2026. Adjusted segment income* decreased by 8% to $7.4 million. BALANCE SHEET AND CASH FLOW As of June 27, 2026, Hayward had cash and cash equivalents of $304.1 million, short-term investments of $179.3 million and $425.6 million available for future borrowings under its revolving credit facilities. Net cash provided by operating activities for the six months ended June 27, 2026 decreased by $16.8 million from the six months ended June 28, 2025. The decrease in net cash provided by operating activities was primarily driven by higher incremental payments for accrued expenses, mainly customer rebates and incentive plans, partially offset by an increase in net income. OUTLOOK Hayward is reaffirming its full year 2026 guidance reflecting continued sales and earnings growth driven by solid execution across the organization, positive price realization and continued technology adoption. For Fiscal Year 2026, Hayward continues to expect net sales to increase approximately 5% from Fiscal Year 2025 and adjusted diluted earnings per share* of $0.84 to $0.87, an increase of approximately 9% to 13% from Fiscal Year 2025. Hayward is excited about the long-term dynamics of the pool industry. The installed base of pools increases every year, providing continued growth opportunities, and the Company benefits from favorable secular demand trends in outdoor living, sunbelt migration, and technology adoption. Hayward continues to leverage its competitive advantages and drive increasing adoption of its leading SmartPad™ pool equipment products both in new construction and the aftermarket, which represents approximately 85% of North America residential pool net sales. Hayward is confident in its long-term outlook for profitable growth and robust cash flow generation, driven by its technology leadership, operational excellence, strong brand and installed base, and multi-channel capabilities. Please see the Forward-Looking Statements section of this release for a discussion of certain risks relevant to Hayward’s outlook. CONFERENCE CALL INFORMATION Hayward will hold a conference call to discuss the results today, July 29, 2026 at 9:00 a.m. (ET). Interested investors and other parties can listen to a webcast of the live conference call by logging on to the Investor Relations section of the Company’s website at https://investor.hayward.com/events-and-presentations/default.aspx. An earnings presentation will be posted to the Investor Relations section of the Company’s website prior to the conference call. The conference call can also be accessed by dialing (877) 423-9813 or (201) 689-8573. For those unable to listen to the live conference call, a replay will be available approximately three hours after the call through the archived webcast on the Hayward website or by dialing (844) 512-2921 or (412) 317-6671. The access code for the replay is 13761599. The replay will be available until 11:59 p.m. Eastern Time on August 12, 2026. ABOUT HAYWARD HOLDINGS, INC. Hayward Holdings, Inc. (NYSE: HAYW) is a leading global specialty water management company focused on designing and manufacturing pool and outdoor living technology and industrial flow control products. Driven by a mission to transform the experience of water, Hayward offers a comprehensive portfolio of energy‑efficient and sustainable pool equipment—including pumps, heaters, sanitizers, filters, LED lighting, water features, and cleaners—integrated through its intuitive, IoT‑enabled SmartPad™ platform. The Company also provides industrial thermoplastic valves and process control products serving a wide range of applications. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This earnings release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act") and rules and regulations of the Securities and Exchange Commission ("SEC"). Forward-looking statements include, without limitation, statements regarding our plans, strategies, objectives, expectations, intentions, outlook, expenditures, guidance, targets, and assumptions, as well as other statements that are not historical facts. Forward-looking statements are based on management’s current beliefs, assumptions, expectations, and information available at the time the statements are made. Words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "intend," "may," "outlook," "plan," "potential," "predict," "project," "seek," "should," "target," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. These statements are made in reliance upon the safe harbor provisions of the Act. However, forward-looking statements are subject to risks, uncertainties, and other factors, many of which are beyond our control, that could cause actual results to differ materially from those expressed or implied by such statements. Readers are cautioned not to place undue reliance on forward-looking statements. We undertake no obligation to publicly update, revise, or correct any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable federal securities laws. Forward-looking statements should be read in conjunction with the risk factors and other cautionary statements, including those described under the heading "Risk Factors" in our most recent Annual Report on Form 10-K and other filings with the SEC. Important factors that could cause actual results to differ materially include, but are not limited to, the following: our business depends on the performance of distributors, builders, buying groups, retailers and servicers; the demand for our products may be adversely affected by unfavorable economic and business conditions; we operate in markets with high levels of competition; our future success depends on developing, manufacturing and attaining market adoption of new products and maintaining product quality and reliability; our ability to keep pace with rapidly evolving technological developments and standards, including artificial intelligence, and effectively develop and deploy such technologies; our results of operations and cash flows may fluctuate from quarter to quarter; a loss of, or material cancellation, reduction or delay in purchases by one or more of our largest customers; our exposure to credit risk on our accounts receivable; risks arising from our international business operations; past growth may not be indicative of future growth; our inability to identify, finance and complete suitable acquisitions; negative impacts of litigation and other claims; future impairment of our goodwill and intangible assets; exchange rate fluctuations, cost increases and other inflation, changes in our effective tax rate or exposure to additional income tax liabilities; our ability to attract, develop and retain highly qualified personnel, including key members of management; disruptions in the financial markets; significant disruption or breach of our technology infrastructure or that of our vendors or third parties, or failure to maintain the security of confidential information; difficulties in operating or implementing the new ERP system or human resources information system; misuse of our technology-enabled products; failure to maintain an effective system of internal controls; dependence on key suppliers, including single-source suppliers and sole-source suppliers; ability to manage product inventory in an effective and efficient manner; product manufacturing disruptions, including as a result of catastrophic or other events beyond our control; tariffs and other trade restrictions and the cost of raw materials; compliance with, and potential liabilities under, employment, environmental, health, transportation, safety and other governmental laws and regulations; risks related to our handling of personal information; our employees, commercial partners and vendors may engage in misconduct or other improper activities; violations of the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and other anti-corruption laws; our failure to comply with international trade compliance regulations, and changes in U.S. government sanctions; changes in laws, regulations, government policies or regulatory interpretations; climate change and legal or regulatory responses thereto, and increasing scrutiny from stakeholders on environmental, social and other sustainability matters; our ability to obtain, maintain and enforce our intellectual property and proprietary rights; protection of our trademarks or trade names; our reliance on access to intellectual property owned by third parties; claims that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets or other proprietary information or claims asserting ownership of intellectual property that we regard as our own; our ability to enforce our intellectual property rights in all jurisdictions; other risks related to our indebtedness, corporate structure and ownership of our common stock; and other factors described in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2025. Many of these factors are beyond our control. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, actual results, performance, or achievements may differ materially from those expressed or implied by forward-looking statements in this earnings release. The forward-looking statements included in this earnings release speak only as of the date of this release. *NON-GAAP FINANCIAL MEASURES This earnings release includes certain financial measures not presented in accordance with the generally accepted accounting principles in the United States ("GAAP"), including adjusted net income, adjusted net income margin, adjusted basic EPS, adjusted diluted EPS, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted segment income and adjusted segment income margin. These financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company’s financial results. Hayward believes these non-GAAP measures provide analysts, investors and other interested parties with additional insight into the underlying trends of its business and assist these parties in analyzing the Company’s performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance, which allows for a better comparison against historical results and expectations for future performance. Management uses these non-GAAP measures to understand and compare operating results across reporting periods for various purposes including internal budgeting and forecasting, short and long-term operating planning, employee incentive compensation, and debt compliance. These measures should not be considered in isolation or as an alternative to net income, segment income or other measures of profitability, performance or financial condition under GAAP. You should be aware that the Company’s presentation of these measures may not be comparable to similarly titled measures used by other companies, which may be defined and calculated differently. See the appendix for a reconciliation of historical non-GAAP measures to the most directly comparable GAAP measures. Reconciliation of full fiscal year 2026 adjusted diluted earnings per share outlook to diluted earnings per share is not being provided, as Hayward does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliation. The outlook for adjusted diluted earnings per share for full year 2026 is calculated in a manner consistent with the historical presentation of these measures, as shown in the appendix. Reconciliations Consolidated ReconciliationsNet Income and Net Income Margin to Adjusted EBITDA and Adjusted EBITDA Margin Reconciliations (Non-GAAP) Following is a reconciliation from net income and net income margin to adjusted EBITDA and adjusted EBITDA margin: Following is a reconciliation from net income and net income margin to adjusted EBITDA and adjusted EBITDA margin for the last 12 months: Net Income, Net Income Margin and Diluted EPS to Adjusted Net Income, Adjusted Net Income Margin and Adjusted EPS Reconciliations (Non-GAAP) Following is a reconciliation of net income and net income margin to adjusted net income and adjusted net income margin, and a reconciliation of earnings per share to adjusted earnings per share: Reconciliation of Net Debt to Net Leverage (Non-GAAP) Following is a reconciliation of Net Leverage, defined as total debt less cash and cash equivalents and short-term investments divided by the sum of the last twelve months adjusted EBITDA: Segment ReconciliationsFollowing is a reconciliation from segment income and segment income margin to adjusted segment income and adjusted segment income margin for the NAM and E&RW segments: View source version on businesswire.com: https://www.businesswire.com/news/home/20260729965727/en/ Contacts Investor Relations:Kevin [email protected] Media Relations:Misty [email protected]