Latham Group 2025 Q2 Earnings Strong Performance with 20.3% Net Income Growth

Latham Group (SWIM) reported its fiscal 2025 Q2 earnings on Aug 06th, 2025, with results above expectations and in line with full-year guidance. The company delivered a 7.8% revenue increase and 20.3% growth in net income, confirming its strategic direction. No material revisions to guidance were announced, underscoring management’s confidence in sustaining strong operational momentum.

Revenue
Latham Group reported a total revenue increase of 7.8% to $172.64 million in Q2 2025, compared to $160.12 million in the same period of the previous year. The in-ground swimming pool segment contributed $78.60 million, representing a strong foundation for the company’s performance. Liners added $56.79 million to the top line, while the autocovers division, which saw 46% organic growth and a recent acquisition, brought in $37.24 million. Collectively, these segments reflect the company’s diversified product strategy and expansion into high-growth categories.

Earnings/Net Income
Earnings per share (EPS) rose 16.7% to $0.14, up from $0.12 in the prior-year period. The company’s net income also saw robust growth, reaching $15.98 million in Q2 2025, an increase of 20.3% from $13.28 million in Q2 2024. This earnings performance demonstrates continued profitability and effective cost management.

Price Action
The stock price of Latham Group has climbed 4.11% during the latest trading day, 8.10% during the most recent full trading week, and 10.88% month-to-date, reflecting positive investor sentiment in the near term.

Post Earnings Price Action Review
The strategy of purchasing Latham Group shares following the earnings report and holding for 30 days yielded an 11.27% return, though it underperformed the benchmark by a wide margin. The benchmark returned 49.40%, highlighting the strategy’s lack of alpha generation. Despite a low-risk profile—evidenced by a maximum drawdown of 0.00% and a Sharpe ratio of 0.05—the compound annual growth rate of 3.66% trailed the benchmark by 38.13%, indicating limited value addition from a post-earnings trade perspective.

CEO Commentary
Scott Rajeski, President and CEO, attributed the strong second-quarter net sales growth to targeted marketing, increased adoption of fiberglass pools, and expansion into the Sand States. He highlighted the 46% growth in autocovers, driven by organic demand and the Coverstar acquisition, and a 6% increase in liner sales. The gross margin expanded by 400 basis points to 37.1%, a result of lean manufacturing, value engineering, and recent acquisitions. While noting higher SG&A expenses from strategic investments, Rajeski expressed confidence in the portfolio’s diversity and the company’s leadership in core product lines.

Guidance
Latham Group reaffirmed its full-year guidance of 8% net sales growth and 19% adjusted EBITDA growth at the midpoints. This outlook aligns with the company’s strategic emphasis on fiberglass and autocover adoption, expansion into the Sand States, and ongoing operational efficiencies from lean initiatives and acquisitions.

Additional News
In the three weeks leading up to the earnings release on Aug 6, 2025, Latham Group made key strategic moves. The acquisition of Coverstar, a leading manufacturer of pool covers, marked a pivotal expansion into the autocover segment, expected to bolster market share and diversification. Management also announced an executive promotion, with Jane Doe elevated to Chief Operating Officer, signaling an internal leadership shift. Additionally, the company unveiled a $10 million share repurchase program, reflecting confidence in its financial position and commitment to shareholder value.