How did SWIM's Q4 earnings surprise impact its annual performance?

Latham Group Inc.'s (SWIM) fourth-quarter (Q4) earnings surprise had a significant impact on its annual performance, reflecting the company's strategic initiatives and market conditions.

1. **Q4 Earnings Surprise**:
- SWIM's Q4 net income was $5.9 million, with an earnings per share (EPS) of $0.05. This performance met Wall Street expectations.
- The company's revenue for the quarter was $150.5 million, slightly below the consensus estimate of $153.7 million.
2. **Annual Performance Impact**:
- **Revenue Stability**: Despite the slight revenue shortfall, SWIM's annual net sales for FY2024 were stable at $421.2 million, indicating resilience in its core business.
- **Profitability Improvement**: The company reported a net loss of $7.9 million for Q1 2024 but improved to a net income of $5.9 million for Q4 2024, suggesting a significant turnaround in profitability over the year.
- **Cost Management**: SWIM's focus on lean manufacturing and value engineering initiatives led to meaningful cost reductions, contributing to improved gross margins and overall financial health.
- **Market Share Gains**: The company's leadership in fiberglass pool sales and automatic safety covers contributed to market share gains, supporting steady revenue growth.
3. **Stock Performance and Analyst Outlook**:
- SWIM's stock has seen a significant year-over-year increase of about 142.6% since the beginning of 2024, outperforming the S&P 500.
- Analysts expect SWIM to continue outperforming the industry, with a net sales guidance for FY2025 ranging from $490 million to $520 million.

In conclusion, SWIM's Q4 earnings surprise had a positive impact on its annual performance, reinforcing its position in the competitive in-ground pool market. The company's strategic cost management, market share gains, and resilience in challenging economic conditions have positioned it well for future growth.