Latham Group Stock Earnings Reports

Latham delivered a strong Q3 2025: net sales rose 7.6% year-over-year to $162M, adjusted EBITDA increased 28.5% to $38.3M, and gross margin expanded 300 bps to 35.4%. All three product lines grew (pools, covers, liners). Fiberglass pools showed continued momentum and are tracking to ~75% of the company’s in-ground pool mix for the year, with Latham estimating fiberglass penetration of the overall U.S. in-ground market reaching ~24% in 2025. Auto covers (+15%) and liners (+13%) were notable drivers—auto covers benefiting from acquisitions and regulatory acceptance as an alternative to fencing, and liners aided by the Measure by Latham/Measure Pro tools which speed and improve quoting. Tariff exposure (previously ~$20M) has been largely mitigated via supply-chain actions and a June price increase; management reports a remaining net exposure of roughly $10M that is covered by the price increase. Balance sheet and cash flow are healthy: $71M cash, net leverage ~2.3x (expected to approach ~2.0x by year-end), and $281M total debt. Management narrowed FY guidance: net sales $540–$550M (midpoint ~+7%) and adjusted EBITDA $92–$98M (midpoint ~+19%); CapEx guidance is $22–$24M. Capital allocation priorities remain: invest in organic growth (notably sand states), targeted M&A (company historically acquisitive), and deleveraging. Key risks highlighted include macro uncertainty (tariffs, interest rates) and localized market softness (notably Texas and California). Overall, investors should note durable margin improvement, successful deployment of growth tools (Measure), traction in Florida/sand states, continued shift toward fiberglass and auto covers, improved cash generation, and a disciplined but opportunistic M&A posture.