Latham's Q1 2025 Earnings Call: Unpacking Contradictions in Fiberglass Pool Growth and Strategy

Fiberglass pool market share growth, fiberglass pool market penetration in Sand States, autocover product category performance, and Sand States strategy progress are the key contradictions discussed in Latham's latest 2025Q1 earnings call.



Revenue Performance and Market Share Gains:
- Latham Group reported strong performance in its fiberglass and autocover product categories with notable market share gains.
- This growth was attributed to the cost advantages and eco-friendly attributes of fiberglass pools, as well as the labor intensity associated with building concrete pools.

Gross Margin Expansion and Lean Manufacturing Initiatives:
- Latham achieved a 190 basis point expansion in gross margin in the first quarter.
- This expansion is due to the ongoing benefits of lean manufacturing and value engineering initiatives, which have improved operational efficiency.

Autocover Success and Safety Initiatives:
- Sales of autocovers outperformed in the first quarter, attributed to a combination of organic growth and tuck-in acquisitions.
- The success of autocovers is driven by their safety benefits and cost savings, with emphasis on partnerships like the one with Olympic gold medalist Bode Miller to promote pool safety.

Sand State Expansion Strategy:
- Latham is actively growing its presence in Florida, Texas, Arizona, and California through expanding its dealer base and targeting master planned communities.
- This strategy aims to capture a larger share of the new pool starts in these high-demand markets, demonstrating strategic long-term growth plans.