Latham Group's Q2 2025: Unpacking Contradictions in Sand State Strategy, Labor Dynamics, and Tariff Management

Sand State expansion strategy, labor availability and impact on fiberglass pool growth, tariff mitigation and impact on business, growth strategy and market share in Sand States, labor availability and fiberglass pool advantages are the key contradictions discussed in Latham Group's latest 2025Q2 earnings call.



Revenue and EBITDA Growth:
- Latham Group reported 7.8% year-on-year revenue growth and an even greater increase in adjusted EBITDA of 15.7% for the second quarter of 2025.
- This growth was driven by organic sales improvements, particularly in fiberglass pools and autocovers, and acquisitions that contributed to sales growth and margin enhancements.

Fiberglass Pool Performance:
- In-ground pool sales, which comprised mainly of fiberglass pools, accounted for approximately 75% of Latham's in-ground pool sales for the full year, demonstrating a notable market penetration gain.
- The strong performance of fiberglass pools is attributed to their lower labor requirements, which have become a key advantage in a market with widespread labor shortages.

Autocover Growth:
- Cover sales increased by 46%, primarily due to both organic growth and recent acquisitions.
- Latham's marketing efforts and the growing adoption of autocovers as a safety measure, alongside favorable regulatory changes, have driven the growth in this segment.

Gross Margin Improvement:
- The company's gross margin rose to 37.1%, up 400 basis points from the previous year.
- This improvement was primarily due to volume leverage in covers and liners, cost benefits from lean manufacturing initiatives, and margin contributions from recent acquisitions.