SWIM

Latham’s second quarter was marked by strong top-line growth, outpacing broader industry trends and exceeding market expectations for revenue. Management attributed the robust performance to a combination of organic growth, particularly in fiberglass pools, and ongoing market share gains across core regions. CEO Sean Gadd emphasized, “Several initiatives we have put in place are already producing encouraging early results,” highlighting progress in both established and emerging markets. The company also noted operational challenges tied to a sudden surge in demand, which led to temporary ramp-up costs and put pressure on gross margins, but management expects to recover these costs in upcoming quarters. Is now the time to buy SWIM? Find out in our full research report (it’s free). Revenue: $197.5 million vs analyst estimates of $188.4 million (14.4% year-on-year growth, 4.8% beat) Adjusted EPS: $0.14 vs analyst expectations of $0.16 (11.9% miss) Adjusted EBITDA: $44.62 million vs analyst estimates of $46.02 million (22.6% margin, 3.1% miss) The company lifted its revenue guidance for the full year to $610 million at the midpoint from $595 million, a 2.5% increase EBITDA guidance for the full year is $115 million at the midpoint, above analyst estimates of $110.5 million Operating Margin: 12.7%, down from 14.3% in the same quarter last year Market Capitalization: $860 million While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Timothy Weiss (Baird) asked about the sources behind the demand surge and whether it was due to share gain or sales strategy changes. CEO Sean Gadd explained it was driven by both increased marketing effectiveness and expanded presence in core and southern markets, with momentum across all regions. Ryan Merkel (William Blair) questioned whether the demand surge was geographically specific and if there was customer pushback on pool affordability. Gadd noted the growth was broad-based and that dealers were testing lower price points, though affordability concerns were not widespread among contractors. Andrew Carter (Stifel) sought clarification on whether the ramp-up challenge was a one-off planning issue and if future growth would require additional SG&A investment. Gadd stated the issue was isolated to this year and future readiness would involve modest investments funded by internal efficiencies. Jack Strader (Craig Hallum) focused on the timeline and lessons for Sand State expansion, especially entry into Texas and the West Coast. Gadd described Texas as a near-term priority, citing early positive indicators and plans to further scale sales resources. Charles Brown (Goldman Sachs) asked about the investment needed to support Sand State growth and the role of M&A. Gadd and CFO Oliver Gloe said expansion would be primarily self-funded through optimization, with M&A remaining a tool for strategic growth but not a near-term necessity. Looking ahead, the StockStory team will monitor (1) the pace and profitability of Latham’s Sand State expansion, especially the rollout in Texas and subsequent moves into Arizona and California; (2) the company’s ability to recapture Q2 margin headwinds through improved absorption and price adjustments; and (3) continued growth in fiberglass market share and national marketing traction. Execution in these areas will be critical for sustained performance. Latham currently trades at $7.31, up from $5.70 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 4:30 p.m. ET President and Chief Executive Officer - Sean Gadd Chief Financial Officer - Oliver Gloe Investor Relations Representative - Casey Kotary Operator: Thank you. Welcome to the Latham Group second quarter 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Casey Coterie, Investor Relations Representative. Please go ahead. Casey Coterie: Thank you. This afternoon, we issued our second quarter 2026 earnings press release, which is available on the investor relations portion of our website. On today's call are Latham's President and CEO, Sean Gadd, and CFO, Oliver Glow. Following their remarks, we will open the call to questions. During this call, the company may make certain statements that constitute forward-looking statements, which reflect the company's views with respect to future events and financial performance as of today or the date specified. Actual events and results may differ materially from those contemplated by such forward-looking statements due to risks and other factors that are set forth in the company's statements. annual report on Form 10-K and subsequent reports filed or furnished with the SEC, as well as today's earnings release. The company expressly disclaims any obligation to update any forward-looking statements, except as required by applicable law. In addition, during today's call, the company will discuss certain non-GAAP financial measures. Reconciliations of the directly comparable GAAP measures to these non-GAAP measures can be found in the slide presentation that is available on our Investor Relations website. I'll now turn the call over to Shawn Gadd. Sean Gadd: Thank you, Casey, and thank you all for joining today's call to review our second quarter and discuss our business outlook for the remainder of the year. This was a strong quarter for Latham, demonstrating our ability to execute on our strategic priorities and deliver growth despite a flat market for new US pool stocks, which was in line with our expectations. There is still substantial runway to outpace the market as our strategic initiatives gain traction. Now, more than two full quarters into my tenure as CEO, I've had the opportunity to develop a deep understanding of the business. encouraged by the positive momentum we are seeing. Several initiatives we have put in place are already producing encouraging early results and I am confident they position us to drive sustained growth in the quarters and years ahead. With that, I would like to highlight a few key takeaways from the quarter. First, our sales grew 14% year over year. percent of which was organic growth. Second, we continued to make solid progress in the sand state where sales increased at a double-digit rate. Building on this foundation, we are moving ahead with new strategies and resources designed to further accelerate growth. Third, we delivered solid growth in gross profit, driven by higher volumes and continued benefits from our lean manufacturing and value engineering initiatives. The sharper than expected surge in demand early in Q2 resulted in quarter specific ramp up costs that capped gross margin in the quarter at 35.5%. We expect to recapture the majority of these costs over the next two quarters and remain confident in our ability to deliver year-over-year growth and EBITDA margin expansion. And Oliver will provide more detail later in the call. And finally, our year-to-date results, together with the current audit trends, have led us to increase our full-year sales and adjusted EBITDA guidance for 2026. We weighed in the midpoint of our sales growth guidance to 11.7% from 9% and the midpoint of our adjusted EBITDA growth guidance to 15.2% from 12.7%. This reflects our expectation for higher volumes due to continued share gains and the recapture of operating leverage. Let's take a closer look at the main contributors to our second quarter sales growth. In-ground pool sales were up substantially on both a total and organic basis, thereby strong growth in fiberglass pools. Avidos pools are on track to account for approximately 80% of our full year 2026 in-ground pool sales, and we expect Fibreglass to gain another percentage point of market share this year, representing approximately 25% of new U.S. pool stocks. Cover sales were up year over year, primarily driven by the continued growth in auto covers due to what we believe is a steady increase in auto cover attachment rates. new pool installations. Line of sales also increased in the second quarter, driven by proprietary, measure-by-late technology, and benefiting from our industry-leading lead times. Looking ahead, Latham has substantial growth opportunities that are not reliant on the rebound in new U.S. full-staff. To fully capture these opportunities, we are making efforts on four strategic priorities to drive growth. One, we want to continue to grow our core business in established markets including the Northeast, Midwest, Canada, Australia and New Zealand. Two, we want to drive material conversion to fiberglass from concrete in the sand state. Three, we want to increase the attachment rate of our order covers, aiming for an order cover on every new full installation. four continue to complete accretive acquisitions that expand our market leadership and or our geographic reach and that are culturally aligned with Latham. To support these growth drivers, we need to achieve sales excellence across all of our markets. follow a disciplined market development approach, market directly to the consumer and own their parts of purchase, continue to gain efficiencies through lean manufacturing and value engineering programs, and strengthen our focus on improving safety in all of Latham's facilities. I'm pleased to report that all these initiatives are underway. Our SanSei strategy continues to gain traction in the second quarter, benefiting from the close collaboration between our sales team and the dealer network. This contributed to another quarter of double-digit growth in Florida, our initial target market, and a double-digit growth for the San States overall. We believe success in the San States has the potential to drive a step change in the company-wide growth, and we are expanding our efforts to further accelerate growth in 2027 and beyond. We introduced several initiatives designed to capture consumer demand in the Sand State, including strengthening our commercial organization, implementing a new market development framework, and adding sales resources in the field. Our new market development work alongside our dealers and partners to increase market penetration. At the same time, our national advertising and marketing campaigns continue to reinforce Latham's reputation for industry-leading product range, quality, and lead time. Those campaigns are resonating with consumers, generating increased demand and supporting our growth initiatives across our target market. In the second quarter, consumer leads were up 60% per year. Latham website traffic was up 30%. Google search demand for Latham was up over 100%. Latham remained the number one search for brand among fiberglass competitors. Additionally, as part of our Sand State strategy, I recently spent time in Texas and I believe it represents the next significant growth opportunity for Langston. We plan to expand our market development framework from Florida into Texas and thereafter, send it into the other Stan States. Arizona, and California. Importantly, we're funding some of this expansion through programs to optimize certain operational and administrative functions, allowing us to redeploy resources for the highest return growth initiative. Oliver will provide additional insight on these programs, as well as the contributions from a lean manufacturing and value engineering initiative in the second quarter. And finally, we recently launched our Zero is Possible safety initiative, which is being rolled out across all of LACAM's manufacturing facilities worldwide. More than a safety program, Zero is Possible represents a foundational shift on how we operate, fostering greater workforce engagement and reinforcing the belief that every incident is preventable. I believe that this mindset is foundational to a world-class manufacturing organization. While safety is the immediate focus, the benefits will extend well beyond safety over time through stronger operational discipline, reliability, employee engagement, and overall performance. In summary, we are pleased with our second quarter performance and the momentum we are seeing across the business. momentum has given us increased confidence in our outlook and supported our decision to raise our full year 2026 sales and adjusted EBITDA guidance. and sales trends in July are tracking towards those expectations. Now I will turn it over to our CFO, Oliver Globe, for the financial review. Oliver. Oliver Gloe: Thank you, Sean, and good afternoon, everyone. I'm pleased to report on our second quarter financial performance, which clearly demonstrates latent continued outperformance of the market. Please note that all comparisons that I will discuss today on a year-over-year basis compared to the second quarter and the first half of fiscal 2025 are less otherwise noted. Net sales for the second quarter were 197 million, 14% above 173 million in Q2 of 2025, of which 10% represented organic growth and 4% represented growth from the Freedom Pools acquisition, which we completed at the end of February 2026. organic growth was led by robust demand for latent products reflecting the strength of our sales and marketing efforts and progress of our growth strategies Across our product categories, in-ground pool sales were 96 million, up 23% in the second quarter, or 14% organically, driven by a rapid and better than anticipated influx of orders that temporarily outpaced production early in the quarter. With our manufacturing lines ramping to current demand levels, we are well positioned for the remainder of the season. Cover sales were 41 million, an increase of 10%, and liner sales were 60 million, up 6%. Gross profit increased 9.6% to 70 million. Gross margin was 35.5% in the second quarter, a 160 basis points decline compared to last year. We continue to see benefits from our lean manufacturing and value engineering programs, which had a positive impact on gross profit of approximately $2.7 million in the second quarter. However, the sudden surge in demand for fiberglass pools caused a lot of damage to the industry. our ramp up to be more pronounced compared to prior years, resulting in approximately 2.8 million of incremental costs in the quarter, which represented a gross margin headwind of approximately 140 basis points. The majority of these costs are expected to be recovered in the second half of this year. SG&A expenses increased to $38 million, up $6 million, primarily due to investment in our growth strategies. The timing of sales and marketing initiatives related to our fiberglass conversion strategy, acquisition and integration related costs, which includes 2.2 million of performance-based compensatory burnout expenses related to our CoverStar Central acquisition in 2024 and costs related to our digital transformation program. We completed a restructuring and voluntary early retirement program, resulting in $2.5 million of annualized savings. savings will be redeployed to align talent, structure, and resources with the company's strategic priorities, including strengthening the commercial organization against our highest impact growth opportunities. we will incur an associated one-time charge of $1.5 million in the second half of the year. Net income was 13 million or 11 cents per diluted share. A decrease from 16 million was 13 cents per diluted share for the prior year's second quarter. Net income margin was 6.5% compared to 9.3% and included an unfavorable change in net foreign currency transaction gains and losses associated with our international subsidiaries of 5 million. increased 5 million or 12% last 40 million and adjusted EBITDA margin contracted to 22.6%. Existing base point decline from 23.1% in the prior year period. This decrease was primarily due to lower gross margin and the timing of sales and marketing initiatives to accelerate. In the middle of cash flow, we continued to maintain 1,500 million. At the end of cash, the operating activities were 54 million in the second quarter, and in the first half, net cash provided by operating activities was 6 million. Total debt for the period was 280 million with a net debt leverage ratio of 2.2. based on expected cash flow generation for the remainder of the season, ranking towards a net debt leverage ratio of below 2 by the end. Our capital expenditures were six million for the second quarter of 2026. First half capital expenditures were $28.1 million, including the purchase of the four key fiberglass production sites, we have previously discussed. As we have also previously discussed, the company completed the acquisition of Freedom Pools for a purchase price of $17 million in February 2026. I would like to emphasize our capital allocation priorities, which are reinvesting in the business to capture organic growth opportunities, selectively pursuing strategic acquisitions, and even evaluating opportunities to return capital shareholders over time while maintaining a strong balance sheet. Moving on to our outlook. Our first half performed reinforced in raising our full-year outlook for both net sales and adjusted EBITDA. At the midpoint of our revised guidance, we now expect net sales growth of 11.7% in 2%. Increase in guidance reflects stronger source of demand for our products, continued execution of our growth initiatives, our current visibility into the remainder of the pool season. We will continue investing to strengthen our leadership position in our core markets while accelerating fiberglass conversion across the sand states. Our revised guidance takes into account our assessment of the impact of the ongoing conflict in the Middle East on our costs. To mitigate the increase in our transportation costs, we instituted a surcharge and we have additional mitigation strategies in place to fully or mostly offset commodity headwinds related to higher oil prices. Sean Gadd: With that, I will turn the call back to Sean for his closing remarks. Thank you, Oliver. As you have heard, we are excited about the growth opportunities on the horizon. I see tremendous potential to expand our share in each of the markets we serve and throughout our product portfolio. We tend to take advantage of soft markets to accelerate our fan-based strategy and strengthen our execution. It is an exciting time to be at Latham. We appreciate the commitment to excellence that our people show each day and the loyalty and trust of our dealers and customers. our confidence in our future performance. Operator, please open the call to questions. Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you were using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw the question, please press star then 2. Please limit yourself to one question and one follow-up. At this time, we will pause momentarily to assemble our roster. Our first question comes from Timothy Weiss with Baird. Please go ahead. Timothy Weiss: Hey, everybody. Good afternoon. Thanks for the questions and the detail. Maybe just to start off, if you could maybe kind of talk about the demand environment kind of, you know, obviously you're talking about a surge in demand, so I'm just kind of curious how the quarter kind of played out and what specifically was better than your expectations?. Sean Gadd: Yes, thanks Tim. I'd start with understanding Q1 was pretty soft with all the bad weather we had in the country. So I think there's a bit of pent up demand through Q1. was then built onto Q2. And then that said, the demand in Q2 was higher than we had expected. Obviously, we were planning on and still are planning on a flat to slightly up, probably flat housing cost. And so it looked like, you know, there's just a true spark in demand, which is a result in my mind from our taking share over the last 12 months and started culminating into the new season. So we didn't get any indicators in Q1, but certainly Q2, it accelerated faster than we expected compared to previous years. Timothy Weiss: Okay. Okay. And then, I mean, based on the KPIs you see internally, I mean, is this... Is this just kind of core share gain, or is this a much better or faster return on some of the sales strategies that you've changed or the Sandstates investments?. Sean Gadd: I think it's a little bit of everything. I think it's a result of a marketing campaign, you know We are now further into its run. It's certainly resonating. We hear a lot from dealers that homeowners are saying they saw us, they heard about us. That's starting to kick in. I think our core markets are growing, which is really share gain and moving essentially into more markets. in the North, in the Northeast and Midwest and Canada. And then we are getting good gains in the South as well. So, Everything is sort of clicking, although plenty of upside still to go in terms of execution. Timothy Weiss: Okay, okay, that's great. And then just maybe on the cost side, you know, Oliver just, it sounds like price cost is kind of going to be, you know, kind of kind of net neutral this year, just verifying that. And then the second piece, why do you get the inefficiencies back in the back half of the year? What I guess happened in Q2? And why do you actually get it back?. Oliver Gloe: Yes, Tim, let me start out by saying this was actually the second highest gross profit in our history as a public company. So we were within a percent of our record, which was at the peak of COVID in Q1 2022. But gross profit and with that gross margin could have been even higher. And what held us back, as Sean said, Q1 was light, right? We had snow on the ground up until late March. So we actually ran the facilities comparatively light going into Q2. And we were met with almost an instant. demand and an instant start of the season early Q2. So we didn't see the usual ramp. And what that caused was A, an underabsorption in our plants, and B, we actually sold product in order to fulfill the demand out of inventory. That is about two-thirds of the headwind that I outlined in my prepared remarks. is the portion that we plan to recover balance of year as ultimately we will restock inventory we will get that absorption back as we need to prepare for the 2027 season Then about one third of that headwind that I outlined is actually associated with the accelerated ramp, right? We obviously, you know, as I said, accelerated the ramp from a standpoint of overtime, hiring, training, and so forth. That's obviously not thankful to the outstanding performance of our operations team. Ultimately, we ramped up to demand, but as we pointed out, at comparatively higher cost. I think to your question about the price-Raw's equation, I think the simplest way to think through Q2 gross margin is that the combination of price and the contribution of lean and value engineering competitively offset commodity inflation, tariffs, and cost inflation in our plants. So all of that probably think of that as a 50 basis point tailwind, which is our normal progression. We've seen that in prior quarters as well. then we add in freedom so freedom is not doing anything to the group from an EBITDA percentage but it's slightly lower margin lower cost business so adding in freedom is actually is actually a headwind of about 40 basis points to group gross margin. And then, you know, the overriding contributor to the gap margin is the volume leverage that I discussed, the incremental absorption cost, the incremental cost associated with the accelerated rent that I just walked through. Then I want to say we had two other impacts that are about a million, million and five. They offset each other, but they're important to mention and understand. We did receive IEPA tariff refunds, so we collected those. So there was a tailwind in the quarter. But then we obviously had transportation headwinds from the Middle East conflict. We instituted a surcharge, not day one, right? It took us a couple of weeks to announce, and then you always pre-announce and implement at a later date. So the transportation surcharge from a timing perspective lagged the like the impact itself. And then we were very thoughtful of setting the surcharge, but they were not set at a level supporting an oil price and subsequent diesel price beyond $100. So temporarily, we were a little bit uncovered from a transportation surcharge perspective. So again, summarizing, gross margin could have been even higher if the REM would have been more gradual, right? But on the other hand, as I said, I'm glad that the operation team lived up to the challenge and enabled that 14% top line growth and a 10% growth in gross profit. one last sentence from a Ross margin cadence perspective in the quarter the headwind was really limited to April a little bit spilled into May June, and let me add in July as well, shows the usual gross margin and EBITDA expansion versus prior year that you're used to seeing for us. Timothy Weiss: Okay. That's a lot of great color. I appreciate it. Nice job and good luck on the rest of you guys. Thank you. Operator: Thank you. Our next question comes from Ryan Merkle with William Blair. Please go ahead. Ryan Merkel: Hey everyone, thanks for the questions. Yes, I want to follow up on Tim's question on the sudden surge of demand. I found that interesting as well. Is that comment broad-based across all the geographies or was that, did you see that surge sort of in the Midwest and the Northeast as sort of the weather thawed? And then I'd like your thoughts on, you know, what I hear from contractors is everyone wants to know, wants a less expensive pool because the in-ground pool has got so expensive. I wonder if you're starting to hear that from the contractors, if that's starting to help. Sean Gadd: Yes, I think it's across the board. So when we looked at how the quarter performed, there's no one geography outperforming another. Generally, you've got the lift everywhere. Which I think has a lot to do with the fact that we are doing national advertising. So I think that's a good outcome. We have got our team in place, our sales team's been in place consistently now for quite some time in our core markets. So I think we're getting the benefit of that. And then our southern markets, again, are doing a lot of the right activity and then starting to see some results through the data that they're working with. So that would have been across the board, not just a specific geography. In terms of less expensive pools, I've traveled now through the states and I've seen a number of dealers in the last month where people are trying or dealers are trying to get to different price points to see if it opens up more in the market. in Texas where they're offering a pool at $50,000. It's a basic pool, but an offering of $50,000, and it's there to see if the market opens up. So we're not hearing as much noise as you describe about looking for cheaper pools. However, Adidas are trying to see if opening at a fast point of $50,000 opens up more markets. Ryan Merkel: I'm too early to tell. Got it. OK, it's helpful. And then just a question on seasonality. I mean, typically revenues are down kind of 6% from 2Q to 3Q. It sounds like you might actually beat that seasonality. Sounds like orders and everything is going pretty well. So just any comments on 3Q sales and the seasonality there?. Sean Gadd: Yes, the order file is looking really robust, so we like that. I think we've got a couple of questions We feel good about Q3 and where it's going to go. I think our only challenge I see is if for whatever reason we end up with snow coming in early. we think it should follow a sort of standard quarterly flow and cadence. So that shouldn't make any difference. Ryan Merkel: All right. Got it. Thanks. Good quarter. Pass it on. Thank you. Operator: Our next question comes from Andrew Carter with Stifel. Please go ahead. Andrew Carter: Thank you. Good evening. I wanted to better understand kind of the issue you had during the quarter with the ramp up. Was it all about planning? Because ideally, you're going to go to a world that, you know, pools start growing low single digits or some people are right, mid single digits. Does this say anything about kind of your future ability to? you know capitalize on a tidal wave of demand or anything else or was this just truly a planning for this year therefore isolated this doesn't say anything about the network demands. Sean Gadd: Thank you, Andrew. Good question. I'll start with the ramp up was certainly more extreme than what we've seen in the past. So it really is a planning issue. I will tell you, as I thought, we've just come up with our strategic planning. As we think in the future, We are going to make two adjustments. One is I'm highly confident we're going to continue to grow in the coming years. are going to carry a little bit of insurance and that will be either through people or inventory or both. So that will be the adjustment we'll make moving forward. And to be quite honest, we weren't in quite the ready position when the market hit, partly because we didn't know that it was going to go that far. So we thought it would go to the traditional ramp up as it had in the past, and quite honestly, it came much quicker than we thought. So it's a planning issue. Andrew Carter: Fair enough. Second question is, I think in the deck you have the kind of old 750 sales, 160 EBITDA. Up from today, I got at the midpoint, that's a 32% EBITDA margin. So just to confirm today with kind of the commercial initiatives that you have in place, essentially you have all the resources in hand. right now there's no step change in SG&A or other investments such that it's kind of, you should still be planning on that 32% incremental from here. Thanks. Oliver Gloe: Yes, I think the strategic model that we outlined, what is it, almost two years ago, I think it's still very much intact, right? I think we are very well on track to delivering the strategic part of the equation. Obviously, the market since then has been as stable as a matter of fact slightly going backwards, but none of the assumptions have changed significantly other than the contribution towards that model is more skewed towards the execution of the strategy rather than a snapback in the market Got it. Thanks. I'll pass it on. Thanks, Andrew. Operator: Our next question comes from Jackson Schroeder with Craig Howlam. Please go ahead. Jack Strader: Hi, sorry, this is Jack Strader. I'm from Gregg Palm. I wanted to talk a little bit more about the Sand States and the growth out there. If you could kind of give a little bit more on the timeline to that Arizona-California expansion, kind of where you're at with Texas, and what some of the lessons you've had from growth in Florida is going to kind of inform that. Yes. Sean Gadd: Yes, good question. I'll start with Texas. I think my visit in Texas would suggest that the majority of the market is going to behave similar to what you'd expect in Florida. And that I do believe our segmentation target and positioning around the neighborhood and a ROFL approach around neighborhoods is going to work in Texas. I will tell you that part of the reason I'm expanding into Texas faster is one, we like the early signs in Florida with the work we're doing. Two, quite honestly, we're undermanned in Texas. Texas is a very big market. I see it as a really big opportunity for us and we've got Dallas covered and that's about it. So we want to get to San Antonio, we want to get to Austin, we want to get into Houston. So we are going to man out there. And obviously, that will be self-funded through the programs that we spoke about on the call. Okay. And then once the next step for me then is to look out at the West Coast. We have an opening, a role open for the Vice President of San States West. That'll be the first person we want to hire. And once we get that hired, then we'll start to look at Arizona and Southern California. I'm actually in Arizona in two weeks' time to have a look at the market. Andrew Carter: Perfect. And then, I mean, just kind of a follow-up, but is we assume the kind of margin profile geographically, is it all kind of the same or are those slightly different just with how the market's a little different there?. Oliver Gloe: Again, I apologize, the line was not very clear. Andrew Carter: Sorry, is it kind of similar margin profiles across geographies, or are they kind of different with the higher volumes that are produced out there? Okay. Oliver Gloe: Don't say it's a similar margin profile across the region. Andrew Carter: Perfect. I'll leave it there. Thanks. Thanks. What a question. Thank you. Operator: Our next question comes from Matthew Boley with Barclays. Please go ahead. Matthew Bouley: Good afternoon. You have a link on for Matt Boulay today. Thanks for taking my question. So first, I guess within, you know, your now high single-digit organic growth guidance, can you just call out, like, which category between, like, pools? liners, covers are you kind of seeing build towards that level and on the ground like between you know customer channels, backlog, what's kind of driving that confidence in the sustainability of this high single-digit organic growth trend?. Sean Gadd: Thank you for the question. I think from a growth perspective, all our lines are actually growing. So we feel good across the board. So that's auto covers, that's liners, that's in-ground pools. So we feel good about our portfolio. The second question around, you know, is this sustainable and is there a load in our products? So our fiberglass pipeline goes pretty much directly to this. So there's no real inventory or pileup of inventory. Our liners actually go through distribution primarily. And yes, they're flowing right through. We're not seeing anything out of the ordinary from a, from a sort of inventory growth perspective. And then I'll just say that after speaking to a number of our dealers in the last two or four weeks, their backlogs look sustainable and look kind of normal in terms of the number of weeks in which jobs are out. Matthew Bouley: Awesome, thanks. And secondly, could you elaborate a little bit more on just how some of your variable cost base is trending? You know, color on maybe your raw materials, freight costs, labor exposure. What does that look like now?. Oliver Gloe: I want to say, you know, coming out of COVID, we did a thorough job in, uh, verbalizing our cost space. I would say total cost base is about 70% variable 30% fixed cost. We usually don't. Uh, typically break down raw materials versus cost of the plan is that is different by. by product category. But I want to say coming out of COVID and after some of the restructuring and right-sizing we've done back then, I think that split 70-30 that I just mentioned before, I think has been fairly constant. Operator: Great, thank you. Thank you. Our next question comes from Susan McCleary with Goldman Sachs. Please go ahead. Charles Brown: Hi, Sean Oliver. This is Charles Brown. And for Susan, thanks for taking my question. Hi, Sean. Hi. First, I just want to talk about the momentum you're seeing from the Sand State Strategy, Florida. As you expand in Texas, Arizona, and California, can you talk about the investments needed to support that growth? And how does this inform your ability to get SG&E leverage in the back half and in the coming years to support that growth?. Sean Gadd: Yes, I think it's going to require a small investment. And I say small because it's going the marketing campaigns already a national campaign so we are all every pretty much in every market the local marketing that we do that we're carrying out in Texas actually is reasonably inexpensive so it's effective but as expand those geographies and we don't see a lot of marketing spend necessarily going up and when you think about salespeople which is essentially the majority of the investments with boots on the ground We are funding that through some optimization programs that Oliver spoke about on the call, which is, we've taken certain functions inside the business And we've eliminated some duplication, and we've been able to free up some dollars that will enable us to fund what we need to do in the southern markets. So I would not expect SG&A as a percentage to go up necessarily because it should all be self-funded either through volume. Oliver Gloe: and or our program that we just talked about. And then Charles, let me add the other side of the equation, the CapEx investments. You've heard us talk about an additional 10 million between this year and last year to build those molds for those models that resonate well in the sense that these are smaller rectangular feature-rich models as well as We've taken some dollars to de-bottleneck and optimize the flow through our same-state sites, especially in Florida and Oklahoma. Charles Brown: Got it. Now that's helpful, Collar. And then my second one is, you know, you mentioned that you're going to end the year with net leverage below two times. How do you think about the ability and willingness to do more M&A in this environment, considering the weaker macro backdrop that we're seeing these days? And when you think about, you know, your expansion, especially in those states, Texas, Arizona, California, do you see maybe M&A as one way to help support your growth and your capacity across your network? Or more broadly, how do you think about the ability to or willingness to do more deals in this market?. Sean Gadd: Yes. In terms of M&A, I mean, the reality is we are continuously and always looking for opportunities. And you know, we've got sort of a background of one a year. And so we are working with a sort of looking at a, and so a number of deals, none of which are, at a point where we're ready to pull the trigger on, but we certainly are doing the work to see what's out there. In terms of the sand states and whether we think vertically integrating or doing something along those lines is necessary, it's pretty Probably, no, not probably, it is too early to tell because quite honestly we're growing. The first few things that we're trying to do seem to be showing some signs of life and so we want to play that out for a little bit of time before we consider doing anything else. Oliver Gloe: And maybe let me ask one more sentence from a net debt leverage ratio perspective. I mean, with a year end target of below 2, which is very realistic, that gives us a lot of dry powder to execute on our capital allocation policy, which one arm is M&A, but it's not the only arm. Charles Brown: got it thank you for the color guys and good luck for next quarter. Operator: Thank you. Our next question comes from Sean Cowan with Bank of America. Please go ahead. Sean Cowan: Hi, guys. Thank you for taking my questions. The organic growth in-ground pool sales, obviously very impressive in the quarter. Are you able to break out the price versus volume there? And are you starting to see an acceleration in the fiberglass share gains just versus the overall in-ground pool?. Oliver Gloe: market? Yes, let me... So if you... If you take apart the 14% reported growth, it's 10 organic, of which three was priced, right? So the majority sits in volume and with that share. And across the product lines, it's driven by in-ground pools. within that it's fiberglass pools. So that's where the growth is coming from and this is where we execute our strategy. Sean Cowan: Okay, and then if I back out the $2.8 million one-time expense, it looks like gross margin was slightly down year over year. Do you think you need to increase prices further this year in order to offset the input cost inflation you're seeing?. Oliver Gloe: So, you know, I think what you see adding back the, what we call losses and as an incremental, you know, ramp up expense. And you adjust for the adverse impact of the freedom addition. You should see a, a gross margin, slightly up. To answer your question going forward, yes, I think, you know, some of the, um, impacts from the Middle East, especially on the commodity side, they are now going to start coming into the P&L towards mid or late Q3. This is where, in my prepared remarks, I mentioned we have mitigation strategies in place. Earlier this week, we have announced the price for vinyl liners. Price is one of the mitigation strategies, not the only one, volume and cost. contribute as well. But yes, absolutely, I think that there will be you know, an additional, you know, there will be additional price that is coming into Q3 based on the announcements earlier this week. Operator: Okay, great. Thank you. This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks. Sean Gadd: Thank you. I just wanted to say once again, thank you for joining us. I feel very good about where the business is at. I'm very excited about the year. We're happy to see the progress that's getting made, both from the operational side, as Oliver discussed, in terms of a ramp-up, because it did come quicker than we thought, but also obviously from the demand side. I think the sales organization and commercial organization is starting to come together. I think there's... business is running rather well. So with that, I just want to conclude. I want to thank everybody, and we'll speak to you guys all soon. Thank you. Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. This live transcript is auto-generated without human intervention or review. Before you buy stock in Latham Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Latham Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* Now, it’s worth noting Stock Advisor’s total average return is 965% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 11, 2026. This article is a transcript of this conference call produced for The Motley Fool. 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. Latham Group (SWIM) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Latham Group, Inc.? Here are five stocks we like better. Q2 sales grew 14% year over year to $197 million, driven by 23% growth in in-ground pools, demand for fiberglass products, and the Freedom Pools acquisition. Management cited market-share gains, stronger demand and increased consumer engagement. Fiberglass pools remain central to the strategy, expected to comprise about 80% of full-year in-ground pool sales. Latham plans to expand its “Sand States” presence beyond Florida and Dallas into Texas, Arizona and Southern California. The company raised its full-year outlook, now targeting 11.7% net sales growth and 15.2% adjusted EBITDA growth. Margins were pressured by production ramp-up costs and higher investments, but management expects improvement in the second half and leverage below 2x by year-end. Latham Group (NASDAQ:SWIM) reported second-quarter 2026 sales growth that outpaced a flat market for new U.S. pool starts, led by demand for fiberglass pools, covers and liners. The company raised its full-year sales and adjusted EBITDA growth outlook, citing first-half demand, share gains and current order trends. Net sales rose 14% year over year to $197 million in the second quarter, including 10% organic growth and a 4% contribution from the Freedom Pools acquisition completed in February. In-ground pool sales increased 23% to $96 million, or 14% organically, while cover sales rose 10% to $41 million and liner sales increased 6% to $60 million. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control President and CEO Sean Gadd said the company benefited from a stronger-than-expected increase in demand following a weather-affected first quarter. He attributed the performance to market-share gains, national marketing efforts and progress in core markets and the so-called Sand States. “The demand in Q2 was higher than we had expected,” Gadd said during the company’s earnings call. “It looked like there’s just a true spike in demand, which is a result, in my mind, from us taking share over the last sort of 12 months.” → Why Rare Earth Processing Could Be the Real 2027 Opportunity Fiberglass pools remain central to Latham’s growth strategy. Gadd said fiberglass is expected to represent about 80% of the company’s full-year 2026 in-ground pool sales and is projected to gain another percentage point of market share this year, reaching about 25% of new U.S. pool starts. The company reported double-digit sales growth in the Sand States, including Florida, where Latham has been targeting areas with favorable home values, lot sizes and household income profiles. The company plans to expand its market-development framework into Texas, followed by Arizona and California. → TSMC Insiders Are Buying the Pullback—But Is the Signal as Bullish as It Looks? Gadd said Texas represents a significant opportunity, with Latham currently concentrated in Dallas and seeking to build its presence in San Antonio, Austin and Houston. The company has also opened a role for a vice president of Sand States West as it evaluates expansion in Arizona and Southern California. Latham’s marketing activity also produced higher consumer engagement during the quarter. Consumer leads increased 60% from a year earlier, website traffic rose 30%, and Google search demand for Latham was up more than 100%, according to Gadd. He said Latham remained the most-searched brand among fiberglass pool competitors. The company is also seeking to raise automatic-cover attachment rates, with Gadd describing the goal as “an auto cover on every new pool installation.” Cover sales rose during the quarter, driven primarily by automatic covers, while liner sales benefited from Latham’s Measure by Latham technology and lead times, management said. Gross profit increased 9.6% to $70 million, though gross margin declined 160 basis points to 35.5%. Chief Financial Officer Oliver Gloe said lean manufacturing and value-engineering programs added about $2.7 million to gross profit during the quarter. However, a rapid early-quarter increase in fiberglass pool orders led to approximately $2.8 million of incremental costs, including production ramp-up expenses and lower plant-cost absorption. The costs represented roughly a 140-basis-point gross-margin headwind. Gloe said much of the impact came from selling inventory to meet demand and from accelerating hiring, training and overtime at manufacturing facilities. He said the company expects to recover the majority of those costs during the second half as it replenishes inventory and production operations normalize. “June, and let me add in July as well, shows the usual gross margin and EBITDA expansion versus prior year,” Gloe said. Second-quarter SG&A expense increased by $6 million to $38 million, reflecting investments in growth programs, sales and marketing initiatives, acquisition and integration costs, digital transformation spending, and $2.2 million of performance-based earn-out expense related to Coverstar Central acquisitions completed in 2024. The company completed a restructuring and voluntary early-retirement program that is expected to generate $2.5 million in annualized savings. Latham expects to incur a one-time $1.5 million charge in the second half related to the program, while redeploying savings toward commercial and growth initiatives. Net income was $30 million, or $0.11 per diluted share, compared with $60 million, or $0.13 per diluted share, in the prior-year quarter. Net income margin declined to 6.5% from 9.3%, including a $5 million unfavorable year-over-year change in net foreign-currency transaction gains and losses tied to international subsidiaries. Adjusted EBITDA increased 12% to $45 million, while adjusted EBITDA margin declined 50 basis points to 22.6%. Gloe said the margin decline reflected the lower gross margin and the timing of sales and marketing investments intended to accelerate share gains in the Sand States. For the first half, sales rose 11% to $315 million, including 7.5% organic growth. Adjusted EBITDA also increased 11%, reaching $57 million, while adjusted EBITDA margin remained flat at 18%. Latham ended the quarter with $43 million in cash and $280 million in total debt, for a net debt leverage ratio of 2.2. Gloe said the company is tracking toward a ratio below 2 by year-end based on expected seasonal cash-flow generation. The company raised the midpoint of its full-year net sales growth outlook to 11.7% from 9%, including expected organic growth of 8.4%. It also lifted the midpoint of its adjusted EBITDA growth outlook to 15.2% from 12.7%. Management said the revised outlook incorporates higher transportation costs associated with the Middle East conflict. Latham implemented a surcharge to address transportation costs and said it has additional strategies to fully or mostly offset commodity headwinds linked to higher oil prices. Gloe also said the company announced a price increase for vinyl liners that is expected to take effect in the third quarter. Latham Group, Inc designs, manufactures and supplies a broad range of aquatic products and services for residential and commercial applications. Offerings include fiberglass and vinyl-liner pool shells, commercial water park structures, water slides, surf simulators, pumps, filters, heaters and sanitation systems. The company also provides parts, equipment and technical support for pool installation, maintenance and repair. Operating across three core segments—commercial, residential and aftermarket—Latham delivers turnkey aquatic facilities and attractions for municipal, hospitality and resort clients, offers packaged pool kits and equipment packages to builders and dealers, and supplies replacement parts, service contracts and technical assistance to support ongoing pool operations. Headquartered in the United States, Latham Group maintains manufacturing and distribution centers throughout North America and Europe. 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 "Latham Group Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Net Sales: $197 million, up 14% year-over-year (10% organic, 4% from Freedom Pools acquisition). In-Ground Pool Sales: $96 million, up 23% (14% organically). Cover Sales: $41 million, up 10%. Liner Sales: $60 million, up 6%. Gross Profit: $70 million, up 9.6%. Gross Margin: 35.5%, down 160 basis points year-over-year. Net Income: $13 million, or $0.11 per diluted share, down from $16 million ($0.13 per diluted share) in the prior year. Net Income Margin: 6.5%, down from 9.3%. Adjusted EBITDA: $44.5 million, up 12% year-over-year. Adjusted EBITDA Margin: 22.6%, down 50 basis points from 23.1%. SG&A Expenses: $38 million, up $6 million. Cash Flow from Operations: $54 million in Q2; $6 million in the first half. Capital Expenditures: $6 million in Q2; $28.1 million in the first half. Total Debt: $280 million, with a net debt leverage ratio of 2.2x. Warning! GuruFocus has detected 4 Warning Signs with SWIM. Is SWIM fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Latham Group Inc (NASDAQ:SWIM) delivered strong Q2 2026 results with net sales up 14% year-over-year, including 10% organic growth, despite a flat market for new US pool starts. The company raised its full-year 2026 guidance, now expecting net sales growth of 11.7% and adjusted EBITDA growth of 15.2% at the midpoint, reflecting confidence in continued momentum. The Sand State strategy is gaining traction, with double-digit sales growth in Florida and the broader Sand States, and plans to expand into Texas, Arizona, and California. Consumer demand initiatives are working, with consumer leads up 60%, website traffic up 30%, and Google search demand for Latham up over 100% in Q2. The company completed a restructuring and voluntary early retirement program, generating $2.5 million in annualized savings to be redeployed toward high-impact growth initiatives. Latham Group Inc (NASDAQ:SWIM) expects to recapture the majority of the $2.8 million in Q2 ramp-up costs over the next two quarters, supporting gross margin recovery and EBITDA expansion. The company maintains a strong balance sheet with a net debt leverage ratio of 2.2x, trending toward below 2x by year-end, providing dry powder for M&A and capital allocation. Gross margin contracted 160 basis points year-over-year to 35.5% in Q2, primarily due to a sudden surge in demand that caused higher-than-expected ramp-up costs. The company incurred approximately $2.8 million in incremental costs during Q2 due to the accelerated production ramp, which temporarily capped gross margin. SG&A expenses increased by $6 million year-over-year, driven by investments in growth strategies, acquisition-related costs, and digital transformation expenses. Net income decreased to $13 million in Q2 from $16 million in the prior year, with net income margin contracting to 6.5% from 9.3%. The ongoing Middle East conflict has increased transportation costs, and while a surcharge was instituted, it lagged the impact, creating a temporary headwind. The company expects to incur a one-time charge of $1.5 million in the second half of 2026 related to the restructuring and voluntary early retirement program. The Freedom Pools acquisition contributed a 40 basis point headwind to gross margin, as it is a lower-margin, lower-cost business. Q: Can you elaborate on the demand environment and what specifically drove the surge in demand during the second quarter?A: Sean Gadd, President and CEO, explained that Q1 was soft due to bad weather, creating pent-up demand that carried into Q2. The demand in Q2 was higher than expected, driven by the company taking market share over the last 12 months, which culminated in a strong start to the season. He noted that the acceleration was faster than in previous years, with no specific geographic region outperforming another. Q: Is the strong performance driven by core share gains or a faster return on the new sales strategies and Sand State investments?A: Sean Gadd stated it is a combination of factors: the national marketing campaign is resonating with consumers, core markets in the Northeast, Midwest, and Canada are growing through share gains, and the Southern markets are also showing good progress. He emphasized that while everything is "clicking," there is still significant upside in execution. Q: Can you explain the gross margin decline and why the inefficiencies from the demand surge will be recovered in the back half of the year?A: Oliver Gloe, CFO, noted that Q2 gross profit was the second highest in company history, but margin was capped at 35.5% due to ramp-up costs. The sudden demand surge caused underabsorption in plants and forced the company to sell from inventory. About two-thirds of the headwind is expected to be recovered as they restock inventory and regain absorption. The remaining third is tied to accelerated ramp costs like overtime and training. He also detailed that price and lean initiatives offset commodity inflation, while the Freedom Pools acquisition was a 40-basis-point headwind to gross margin. Q: Was the demand surge broad-based across all geographies, and are you seeing a shift toward less expensive pool options?A: Sean Gadd confirmed the surge was across the board, attributing it to national advertising and a consistent sales team. Regarding pricing, he mentioned that while some dealers are experimenting with lower price points (e.g., a $50,000 basic pool in Texas) to open up the market, they are not hearing widespread demand for cheaper pools yet. Q: Does the ramp-up issue indicate a future inability to capitalize on a tidal wave of demand, or was it just a planning issue for this year?A: Sean Gadd clarified that the ramp-up was more extreme than past years and was a planning issue. Moving forward, the company will carry "insurance" through either additional people or inventory to be better prepared for demand surges. He admitted they were not in a ready position because the market came quicker than anticipated. Q: Can you provide more detail on the timeline for expanding the Sand State strategy from Florida into Texas, Arizona, and California?A: Sean Gadd stated that Texas is the next significant opportunity, and they are expanding faster there because they are currently undermanned, with only Dallas covered. They plan to add resources in San Antonio, Austin, and Houston. The expansion will be self-funded through optimization programs. Next, they will hire a Vice President of Sand States West to lead expansion into Arizona and Southern California. Q: What investments are needed to support the Sand State expansion, and how will it impact SG&A leverage?A: Sean Gadd noted the investment is small because the national marketing campaign already covers all markets, and local marketing in Texas is inexpensive. The main investment is in salespeople, which will be funded by eliminating duplication and optimizing functions. Oliver Gloe added that CapEx investments include $10 million for new molds for models that resonate in the Sand States and de-bottlenecking efforts in Florida and Oklahoma. Q: Can you break out the price versus volume contribution to the organic growth, and are fiberglass share gains accelerating?A: Oliver Gloe explained that of the 10% organic growth, 3% was price, with the majority coming from volume and share gains. The growth is driven by in-ground pools, specifically fiberglass, which is where the company's strategy is executing. He confirmed that fiberglass is gaining market share. Q: Do you need to increase prices further this year to offset input cost inflation?A: Oliver Gloe stated that when adjusting for the ramp-up expenses and the Freedom Pools acquisition, gross margin was slightly up year-over-year. However, due to Middle East conflict impacts on commodities, they have announced a price increase for vinyl liners, which will take effect in Q3. He confirmed that price is one of several mitigation strategies, alongside volume and cost initiatives. Q: How do you think about M&A given the weaker macro backdrop and your net leverage target?A: Sean Gadd said the company is continuously looking for opportunities and has a track record of about one acquisition per year. They are evaluating several deals but none are ready to execute. Oliver Gloe added that with a year-end net debt leverage target of below 2x, the company has significant dry powder to execute on its capital allocation policy, which includes M&A but is not limited to it. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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. Achieved 14% sales growth (10% organic) despite a flat U.S. pool market, driven by accelerated share gains in fiberglass and increased auto cover attachment rates. Attributed the sharper-than-expected Q2 demand surge to a combination of pent-up Q1 demand and the cumulative impact of national marketing campaigns resonating with consumers. Reported double-digit growth in the 'Sand States' (Sunbelt), specifically Florida, validating the company's regional market development framework and dealer collaboration model. Maintained that fiberglass pools are on track to reach approximately 25% of new U.S. pool starts in 2026, up one percentage point from the prior year. Implemented the 'Zero is Possible' safety initiative to drive foundational operational discipline and employee engagement across all global manufacturing facilities. Leveraged lean manufacturing and value engineering to generate $2.7 million in gross profit benefits, helping offset commodity and inflationary headwinds. Increased the midpoint of full-year 2026 sales growth guidance to 11.7% and the midpoint of adjusted EBITDA growth guidance to 15.2%. based on robust July order trends and sustained volume momentum. Plans to expand the Sand State market development framework from Florida into Texas, followed by Arizona and Southern California, to capture material conversion from concrete to fiberglass. Expects to recover the majority of the $2.8 million in Q2 ramp-up costs during the second half of 2026 as production levels align with demand and inventory is restocked. Anticipates reaching a net debt leverage ratio below 2.0 by year-end 2026, providing 'dry powder' for potential M&A and capital returns to shareholders. Instituted transportation surcharges and additional price increases for vinyl liners to mitigate commodity headwinds and higher oil prices stemming from Middle East conflicts. Incurred $2.8 million in incremental costs due to a sudden demand surge early in Q2 that outpaced production, resulting in a 140 basis point gross margin headwind. Completed a restructuring and voluntary early retirement program expected to yield $2.5 million in annualized savings, which will be redeployed into commercial growth initiatives. Recognized a $1.5 million one-time charge related to restructuring to be incurred in the second half of the year. Recorded $2.2 million in performance-based compensatory earn-out expenses related to the 2024 CoverStar Central acquisition. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that while Q1 was soft due to weather, Q2 demand accelerated faster than expected across all geographies, not just specific regions. The surge is viewed as a culmination of long-term marketing efforts and core share gains rather than a temporary market rebound. CEO Sean Gadd admitted the ramp-up was more extreme than historical patterns, characterizing it as a planning issue. Future strategy will involve carrying 'insurance' in the form of higher inventory levels or additional staffing to handle similar demand spikes. Texas is identified as a major opportunity where the company is currently 'undermanned'; new sales resources will be added in San Antonio, Austin, and Houston. Expansion into Arizona and California will follow the hiring of a new Vice President for Sand States West. Management confirmed that price increases and lean initiatives currently offset commodity inflation, but new surcharges were needed for rising freight costs. Additional pricing actions for vinyl liners were announced recently to address late-Q3 commodity headwinds.

Second Quarter Net Sales Up 14.4% Driven By 10.3% Organic Growth Sand States Sales Increased at a Double-Digit Rate Gross Profit Increased 9.6%; Surge in Demand Impacted Gross Margin by 140 Basis Points Due to Incremental Quarter-Specific Ramp-Up Costs Increasing Full-Year Guidance to 11.7% Net Sales Growth and 15.2% Adjusted EBITDA Growth at the Midpoints Second Quarter 2026 Financial Highlights: Net sales of $197.5 million Net income of $12.8 million / net income per diluted share of $0.11 Adjusted EBITDA of $44.6 million / 22.6% of net sales Six Months 2026 Financial Highlights: Net sales of $314.8 million Net income of $4.2 million / net income per diluted share of $0.04 Adjusted EBITDA of $56.8 million / 18.0% of net sales LATHAM, N.Y., Aug. 04, 2026 (GLOBE NEWSWIRE) -- Latham Group, Inc. (Nasdaq: SWIM), the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand, today announced financial results for the second quarter 2026 ended June 27, 2026. Commenting on the results, Sean Gadd, President and CEO, said, “Second quarter sales growth was driven by execution of our strategic priorities and supports our expectations of continued share gains across our product lines. Our in-ground pool sales increased 22.5%, or 13.6% organically, led by fiberglass pool sales, which are on track to account for approximately 80% of our full year in-ground pool sales in 2026. Cover sales were up 10% in the second quarter, led by growth in autocovers, indicating a steady increase in attachment rates on new pool installations. “We continued to gain traction in the Sand States, a key growth market for Latham, where second quarter sales increased at a double-digit rate. As noted last quarter, we are moving ahead with several new initiatives to accelerate our growth in these geographies, which have the potential to drive a step-change in companywide sales. In the last several months, we have made considerable progress in building our commercial organization, identified multiple target micro-markets as part of a refined market development framework around segmentation by communities, and added sales resources in the field to facilitate the sales process in concert with our dealers. “Second quarter gross profit increased, supported by higher volume and continued progress with lean manufacturing and value engineering initiatives. Demand for fiberglass pools accelerated faster than our typical seasonal ramp-up, resulting in approximately $2.8 million of incremental costs in the quarter, which represented a gross margin headwind of approximately 140 basis points. The majority of these costs are expected to be recovered in the second half of the year. Adjusted EBITDA increased 11.9% year-over-year, with adjusted EBITDA margin of 22.6%, reflecting the impact of lower gross margin and the timing of sales and marketing investments. We also completed a program to optimize certain operational and administrative functions, which is enabling us to redeploy resources to sales and marketing initiatives designed to accelerate growth.” Second Quarter 2026 Results Compared to the Prior-Year Period Net sales increased 14.4% to $197.5 million. The increase in net sales was primarily the result of organic growth in each of our product lines, particularly the growth of our in-ground pool sales, sales growth in the Sand States, the acquisition of Freedom Pools, and the full year benefit of the 2025 price increase. Gross profit increased by 9.6% to $70.1 million. Gross margin was 35.5%, 160-basis points below year-ago levels. Gross profit and gross margin included quarter-specific ramp-up costs of approximately $2.8 million, or 140 basis points. Selling, general, and administrative expenses (“SG&A”) increased by 17.8% to $37.6 million. The increase in SG&A was due to investments in our growth strategies, the timing of sales and marketing initiatives to accelerate the fiberglass conversion strategy in the Sand States, acquisition and integration related costs, which included $2.2 million of performance-based compensatory earn-out expenses related to our Coverstar Central acquisition in 2024, as well as our digital transformation efforts. Net income was $12.8 million, or $0.11 per diluted share, compared to $16.0 million, or $0.13 per diluted share, in the prior year period. Net income margin was 6.5% compared to 9.3% and included an unfavorable change in net foreign currency transaction gains and losses associated with our international subsidiaries of $5.0 million. Adjusted EBITDA increased by 11.9% to $44.6 million; adjusted EBITDA margin contracted by 50 basis points to 22.6%, due to lower gross margin and the timing of sales and marketing campaigns to accelerate market penetration in the Sand States. Six Months 2026 Results Compared to the Prior-Year Period Net sales increased 10.8% to $314.8 million, primarily due to organic growth of 7.5% with the acquisition of Freedom Pools contributing the remainder. Gross profit increased by 10.7% to $107.2 million. Gross margin of 34.1% was in line with the prior year and included second-quarter-specific ramp-up costs that offset the benefits of lean manufacturing and value engineering initiatives. Selling, general, and administrative expenses increased by 18.6% to $74.2 million. The increase in SG&A was primarily driven by increased sales and marketing investments to accelerate our fiberglass conversion strategy in the Sand States, acquisition and integration-related costs, which included $4.5 million of performance-based compensatory earn-out expenses related to our Coverstar Central acquisition in 2024, and costs related to our digital transformation program. Net income was $4.2 million, or $0.04 per diluted share, compared to $10.0 million, or $0.08 per diluted share, in the prior year period. Net income margin was 1.3% compared to 3.5% and included an unfavorable change in net foreign currency transaction gains and losses associated with our international subsidiaries of $6.4 million. Adjusted EBITDA increased by 11.3% to $56.8 million, and adjusted EBITDA margin remained flat at 18.0%. Balance Sheet, Cash Flow, and Liquidity Latham ended the second quarter of 2026 with cash of $43.5 million. Net cash provided by operating activities was $53.5 million in the second quarter. In the first half, net cash provided by operating activities was $5.8 million, representing seasonal trends in working capital requirements in line with the Company’s expectations. Total debt was $279.8 million at the end of the second quarter, and the net debt leverage ratio was 2.2. Capital expenditures totaled $5.6 million in the second quarter of 2026, compared to $6.8 million in the comparable quarter last year. First half capital expenditures were $28.1 million, inclusive of the purchase of the four key production sites. In last year’s first half, capital expenditures were $10.3 million. In addition, the Company completed the acquisition of Freedom Pools for a purchase price of $17.0 million in February 2026. Summary and Outlook “Our strong first-half results support our conviction that Latham has substantial growth opportunities, and that we are gaining share in a market that we expect to be flat versus the prior year. Based on our year-to-date performance and our current visibility into Q3, we are pleased to increase our full year guidance for sales and adjusted EBITDA growth. Our revised guidance for 2026, contained in the table below, anticipates net sales growth of 11.7% at the midpoint, of which 8.4% is expected to be organic growth, and adjusted EBITDA growth of 15.2% at the midpoint, while we continue to invest to grow our position in established markets and drive material conversion in the Sand States. “As a leader in each of our product categories, Latham is well-positioned to continue to significantly outperform new U.S. pool starts, supported by the commitment to excellence that our people have consistently shown and the loyalty and trust of our dealers,” Mr. Gadd concluded. 1) A reconciliation of Latham’s projected Adjusted EBITDA to net income (loss) for 2026 is not available due to uncertainty related to our future income tax expense (benefit). Conference Call Details Latham will hold a conference call to discuss its second quarter 2026 financial results today, August 4, 2026, at 4:30 PM Eastern Time. Participants are encouraged to pre-register for the conference call by visiting https://dpregister.com/sreg/10209873/1043c6f57f1. Callers who pre-register will be sent a confirmation e-mail including a conference passcode and unique PIN to gain immediate access to the call. Participants may pre-register at any time, including up to and after the call start time. To ensure you are connected for the full call, please register at least 10 minutes before the start of the call. A live audio webcast of the conference call, along with related presentation materials, will be available online at https://ir.lathampool.com/ under “Events & Presentations.” Those without internet access or unable to pre-register may dial in by calling: PARTICIPANT DIAL IN (TOLL FREE): 1-833-953-2435 PARTICIPANT INTERNATIONAL DIAL IN: 1-412-317-5764 An archived webcast will be available approximately two hours after the conclusion of the call, through August 4, 2027, on the Company’s investor relations website under “Events & Presentations.” A transcript of the event will also be available on the Company’s investor relations website approximately three business days after the call. About Latham Group, Inc. Latham Group, Inc., headquartered in Latham, NY, is the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand. Latham has a coast-to-coast operations platform consisting of approximately 1,900 employees on average across around 40 locations. Non-GAAP Financial Measures We track our non-GAAP financial measures to monitor and manage our underlying financial performance. This earnings release includes the presentation of Adjusted EBITDA, Adjusted EBITDA margin, net debt and net debt leverage ratio, which are non-GAAP financial measures that exclude the impact of certain costs, losses, and gains that are required to be included under U.S. GAAP. Although we believe these measures are useful to investors and analysts for the same reasons it is useful to management, as discussed below, these measures are neither a substitute for, nor superior to, U.S. GAAP financial measures or disclosures. Other companies may calculate similarly-titled non-GAAP measures differently, limiting their usefulness as comparative measures. In addition, our presentation of non-GAAP financial measures should not be construed to imply that our future results will be unaffected by any such adjustments. We have reconciled our historic non-GAAP financial measures to the applicable most comparable U.S. GAAP measures in this news release. Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA and Adjusted EBITDA margin are key metrics used by management and our board of directors to assess our financial performance. Adjusted EBITDA and Adjusted EBITDA margin are also frequently used by analysts, investors and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA and Adjusted EBITDA margin to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, to utilize as a significant performance metric in our incentive compensation plans, and to compare our performance against that of other companies using similar measures. We have presented Adjusted EBITDA and Adjusted EBITDA margin solely as supplemental disclosures because we believe they allow for a more complete analysis of results of operations and assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as (i) depreciation and amortization, (ii) interest expense, net, (iii) income tax expense (benefit) (iv), (gain) loss on sale and disposal of property and equipment, (v) restructuring charges, (vi) stock-based compensation expense, (vii) unrealized (gains) losses on foreign currency transactions, (viii) strategic initiative costs, (ix) acquisition and integration related costs and (x) other. Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures and should not be considered as alternatives to net income (loss) as a measure of financial performance or any other performance measure derived in accordance with GAAP, and they should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. We encourage evaluation of these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA and Adjusted EBITDA margin, be mindful that in the future we may incur expenses that are the same as or similar to some of the adjustments in this earnings release. There can be no assurance that we will not modify the presentation of Adjusted EBITDA and Adjusted EBITDA margin in the future, and any such modification may be material. In addition, other companies, including companies in our industry, may not calculate Adjusted EBITDA and Adjusted EBITDA margin at all or may calculate Adjusted EBITDA and Adjusted EBITDA margin differently and accordingly, are not necessarily comparable to similarly entitled measures of other companies, which reduces the usefulness of Adjusted EBITDA and Adjusted EBITDA margin as tools for comparison. Adjusted EBITDA and Adjusted EBITDA margin have their limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that Adjusted EBITDA and Adjusted EBITDA margin: do not reflect every expenditure, future requirements for capital expenditures or contractual commitments; do not reflect changes in our working capital needs; do not reflect the interest expense, net, or the amounts necessary to service interest or principal payments, on our outstanding debt; do not reflect income tax (benefit) expense, and because the payment of taxes is part of our operations, tax expense is a necessary element of our costs and ability to operate; do not reflect non-cash stock-based compensation, which will remain a key element of our overall compensation package; and do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations. Although depreciation and amortization are eliminated in the calculation of Adjusted EBITDA and Adjusted EBITDA margin, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA and Adjusted EBITDA margin do not reflect any costs of such replacements. Net Debt and Net Debt Leverage Ratio Net Debt and Net Debt Leverage Ratio are non-GAAP financial measures used in monitoring and evaluating our overall liquidity, financial flexibility, and leverage. Other companies may calculate similarly titled non-GAAP measures differently, limiting their usefulness as comparative measures. We define Net Debt as total debt less cash and cash equivalents. We define the Net Debt Leverage Ratio as Net Debt divided by last twelve months (“LTM”) of Adjusted EBITDA. We believe this measure is an important indicator of our ability to service our long-term debt obligations. There are material limitations to using Net Debt Leverage Ratio as we may not always be able to use cash to repay debt on a dollar-for-dollar basis. Forward-Looking Statements Certain statements in this earnings release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this release other than statements of historical fact may constitute forward-looking statements, including statements regarding our future operating results and financial position, our business strategy and plans, business and market trends, our objectives for future operations, macroeconomic and geopolitical conditions, changes in U.S. trade priorities, policies, regulations and tariffs, the implementation of our cost reduction plans and expected benefits, and the sufficiency of our cash balances, working capital and cash generated from operating, investing, and financing activities for our future liquidity and capital resource needs. These statements involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of our control, which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including: inflationary impacts, including on consumer demand for our products; the impact of trade policies on our global supply chain, the import or export of goods and their related costs, as well as on consumer confidence; natural disasters, public health issues or other catastrophic events; adverse weather conditions impacting our sales, which can lead to significant variability of sales in reporting periods; interruption of our production capability at our manufacturing facilities from accident, fire, calamity and other causes; unfavorable economic conditions and related impact on consumer spending and demand for our products; our ability to keep pace with technological developments and standards, such as generative artificial intelligence; compliance with government regulations; declining home ownership affecting demand for our products; our ability to source raw materials and components for manufacturing our products; competitive risks; product quality issues, warranty claims or safety concerns such as those due to the failure of builders to follow our product installation instructions and specifications; our ability to attract, develop and retain highly qualified personnel; our ability to collect accounts receivables from our customers; our ability and the cost to obtain transportation services; the protection of our intellectual property and defense of third-party infringement claims; international business risks; realizing anticipated benefits from acquisitions; possible asset impairments; and our ability to secure financing and our substantial indebtedness; and other factors set forth under “Risk Factors” and elsewhere in our most recent Annual Report on Form 10-K and subsequent reports we file with the SEC. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time that may impair our business, financial condition, results of operations and cash flows. Although we believe that the expectations reflected in the forward-looking statements are reasonable and our expectations based on third-party information and projections are from sources that management believes to be reputable, we cannot guarantee future results, levels of activities, performance or achievements. These forward-looking statements reflect our views with respect to future events as of the date hereof or the date specified herein, and we have based these forward-looking statements on our current expectations and projections about future events and trends. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date hereof. We anticipate that subsequent events and developments will cause our views to change. Our forward-looking statements further do not reflect the potential impact of any future acquisitions, merger, dispositions, joint ventures or investments we may undertake. Contact: Lynn Morgen Casey KotaryADVISIRY [email protected] 212-750-5800 (a) Represents costs that include severance and other expenses for our executive management changes.(b) Represents non-cash stock-based compensation expense.(c) Represents unrealized foreign currency transaction (gains) losses associated with our international subsidiaries.(d) Represents fees paid to external consultants and other expenses for our strategic initiatives.(e) Represents acquisition and integration costs, as well as other costs related to potential transactions.(f) Other costs consist of other discrete items as determined by management, primarily including: (i) fees paid to external advisors for various matters and (ii) other items. (1) LTM Adjusted EBITDA is defined as Adjusted EBITDA for the most recent 12-month period.

Latham Group (SWIM) came out with quarterly earnings of $0.12 per share, missing the Zacks Consensus Estimate of $0.17 per share. This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -29.41%. A quarter ago, it was expected that this swimming pool maker would post a loss of $0.05 per share when it actually produced a loss of $0.06, delivering a surprise of -20%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. Latham Group, which belongs to the Zacks Building Products - Miscellaneous industry, posted revenues of $197.47 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.93%. This compares to year-ago revenues of $172.64 million. The company has topped consensus revenue estimates two 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. Latham Group shares have lost about 11.2% since the beginning of the year versus the S&P 500's gain of 11%. While Latham Group 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 Latham Group was mixed. 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 #3 (Hold) for the stock. So, the shares are expected to perform in line with 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 $0.14 on $177 million in revenues for the coming quarter and $0.25 on $591 million 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, Building Products - Miscellaneous is currently in the top 40% 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. Another stock from the same industry, Advanced Drainage Systems (WMS), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This maker of water drainage systems and pipes is expected to post quarterly earnings of $2.19 per share in its upcoming report, which represents a year-over-year change of +12.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Advanced Drainage Systems' revenues are expected to be $976.86 million, up 17.7% 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 Latham Group, Inc. (SWIM) : Free Stock Analysis Report Advanced Drainage Systems, Inc. (WMS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Residential swimming pool manufacturer Latham (NASDAQ:SWIM) will be announcing earnings results this Tuesday afternoon. Here’s what investors should know. Latham missed analysts’ revenue expectations last quarter, reporting revenues of $117.3 million, up 5.3% year on year. It was a mixed quarter for the company, with EPS in line with analysts’ estimates but a miss of analysts’ EBITDA estimates. Is Latham a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting Latham’s revenue to grow 9.1% year on year, improving from the 7.8% increase it recorded in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Latham has missed Wall Street’s revenue estimates multiple times over the last two years. Looking at Latham’s peers in the consumer discretionary - leisure products segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Ruger delivered year-on-year revenue growth of 19.3%, beating analysts’ expectations by 23%, and Harley-Davidson reported a revenue decline of 5.9%, topping estimates by 5.4%. Ruger traded up 2.8% following the results while Harley-Davidson was down 7.7%. Read our full analysis of Ruger’s results here and Harley-Davidson’s results here. In the last twelve months or so, the market has shifted its attention from one area of macro importance to the next (AI disintermediation and AI capex spending to geopolitical conflict, rates, and whether the economy is on solid footing or not). While some of the consumer discretionary - leisure products stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 2.4% on average over the last month. Latham is down 13.6% during the same time and is heading into earnings with an average analyst price target of $8.14 (compared to the current share price of $5.36). ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all. Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE.

Latham’s first quarter results were marked by positive market reaction despite revenue falling short of Wall Street’s expectations. Management emphasized that sales grew across all product lines, with notable gains in Florida driven by the company’s Sand States strategy. CEO Sean Gadd cited the “double-digit sales gains in fiberglass pools in our priority Florida market” and highlighted adverse weather in North America as a headwind that tempered organic growth but did not derail momentum. The company’s ongoing investments in brand awareness, dealer partnerships, and manufacturing efficiency were cited as key contributors to the quarter’s performance. Is now the time to buy SWIM? Find out in our full research report (it’s free). Revenue: $117.3 million vs analyst estimates of $119.2 million (5.3% year-on-year growth, 1.6% miss) Adjusted EPS: -$0.04 vs analyst estimates of -$0.04 (in line) Adjusted EBITDA: $12.16 million vs analyst estimates of $12.88 million (10.4% margin, 5.6% miss) The company reconfirmed its revenue guidance for the full year of $595 million at the midpoint EBITDA guidance for the full year is $112.5 million at the midpoint, above analyst estimates of $110.4 million Operating Margin: -5.6%, down from -4.4% in the same quarter last year Market Capitalization: $630.5 million While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Ryan James Merkel (William Blair) asked about the strength of the fiberglass order backlog as the season begins. CEO Sean Gadd confirmed that order trends in April were strong and the company feels confident reaffirming guidance. Gregory William Palm (Craig-Hallum Capital Group) questioned how Latham is handling input cost volatility and potential resin shortages. CFO Oliver Gloe explained that transportation headwinds are being managed with fuel surcharges and there are no current material shortages due to diversified sourcing. Timothy Ronald Wojs (Baird) sought clarity on whether investments in sales initiatives are incremental or reallocated. Gadd responded that both approaches are being used, with additional front-end investment balanced by efficiencies elsewhere to keep SG&A ratios stable. William Andrew Carter (Stifel) probed the implications of transportation surcharges and whether product pricing could adjust mid-season. Gloe noted the surcharge represents about 60 basis points and that mid-season price changes are possible, though not preferred. Analyst (Barclays) asked about top buyer concerns and fiberglass awareness. Gadd identified financing difficulties and increased competition for each sale, but stated that smaller pool sizes and the benefits of fiberglass remain attractive in the current environment. Going forward, the StockStory team will closely watch (1) the pace of sales growth in targeted Sand States neighborhoods, (2) the effectiveness of operational efficiency programs in supporting margins despite rising input and freight costs, and (3) the realization of synergies from the Freedom Pools acquisition. Shifts in consumer demand or disruptions in supply chains will also be important markers of execution. Latham currently trades at $5.38, down from $5.86 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it's flagging for this month - FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.