Latham (SWIM) Reaffirms FY25 EBITDA Forecast Amid Strategic Growth Amid Challenging Market Conditions.

Latham Group Inc. maintains its FY25 EBITDA forecast of $90-100mln despite challenging market conditions. The company anticipates 60,000 new pool installations in the US for 2025, driven by market share growth in fiberglass pools, autocovers, and liners. Latham's financial health reveals a mixed picture with revenue growth declining 8% YoY, but a strong liquidity position and manageable leverage. The Altman Z-Score of 1.79 places Latham in the distress zone, but the company is confident in its growth prospects.

Latham Group Inc. (SWIM) has maintained its full-year 2025 EBITDA forecast of $90-100 million, despite challenging market conditions. The company reported strong second-quarter (Q2) results, with net sales of $173 million, a 7.8% increase year-over-year (YoY) [1]. The stock closed at $6.74, marking a 1.34% increase in after-hours trading, reflecting investor confidence in the company’s reaffirmed full-year guidance despite minor revenue shortfalls [2].

The company anticipates 60,000 new pool installations in the US for 2025, driven by market share growth in fiberglass pools, autocovers, and liners. Latham's financial health reveals a mixed picture with revenue growth declining 8% YoY, but a strong liquidity position and manageable leverage. The Altman Z-Score of 1.79 places Latham in the distress zone, but the company is confident in its growth prospects.

Latham Group's CEO Scott M. Rajeski highlighted the company's diversified product portfolio and market leadership in every subcategory as key contributors to performance. He noted that fiberglass pools are tracking to account for approximately 75% of in-ground pool sales for the full year and expects fiberglass pools to gain another 1% of market penetration in 2025 [1]. The company's investments in targeted marketing programs led to an 18% increase in leads to dealers and a 34% increase in consumer sessions on the website year-to-date.

The replacement liner business showed solid growth, supported by the proprietary AI measuring tool Measure by Latham, with 25% of the dealers who purchased this tool being new to Latham. Rajeski outlined progress in the Sand State strategy, noting increased dealer base and expanded product offerings in Florida and Texas. The company announced that Jeff Jackson, CEO at Cabinetworks Group and former CEO of PGT Innovations, joined the Board of Directors [1].

The company's CFO Oliver Carsten Gloe stated that net sales for the second quarter were $173 million compared to $160 million, up $13 million or 7.8%, reflecting both organic- and acquisition-related growth, primarily driven by an increase in volumes for autocovers as well as an increase in volume for pool liners. Gloe added that the company delivered a gross margin of 37.1% in the second quarter, 400 basis points above last year [1].

Latham Group reconfirmed its 2025 guidance of 8% net sales growth and 19% adjusted EBITDA growth at the midpoints. The company's financial results for Q2 showed acceleration in revenue and adjusted EBITDA growth, with Q2 adjusted EBITDA up 15.7% YoY versus Q1's 9.1% increase. Gross margin expanded to 37.1% in Q2 from approximately 30% in Q1 [1].

Analysts were generally neutral to positive, probing on marketing ROI, Sand State execution, weather impacts, and margin sustainability. Management maintained an optimistic and confident tone, reiterating guidance, emphasizing operational improvements, and providing detailed responses [1].

Latham Group delivered strong Q2 results, highlighted by significant revenue and margin growth, successful execution of its Sand State expansion, and accretive acquisitions. The company reconfirmed its 2025 guidance for 8% net sales and 19% adjusted EBITDA growth, underpinned by strengthened product adoption and operational improvements. Management projects substantial financial upside as market volumes recover and continues to prioritize investments, acquisitions, and disciplined capital allocation to drive long-term shareholder value.

References:
[1] https://seekingalpha.com/news/4479447-latham-reconfirms-8-percent-sales-and-19-percent-ebitda-growth-guidance-for-2025-while
[2] https://www.investing.com/news/transcripts/earnings-call-transcript-latham-group-q2-2025-sees-steady-performance-93CH-4171609