Q2 2026 Latham Group Inc Earnings Call Transcript
Key Points
- Latham Group Inc (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 (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.
Welcome to the Latham Group second quarter 2026 earnings conference call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Casey Kotary, Investor Relations Representative. Please go ahead.
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
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
