Earnings

Latham Narrows 2026 Sales Range After Gross Margin Expansion

The Tip Desk · November 10, 2026 · 3 min read

Third-quarter net sales were $182.2 million, up 12.5%, as gross margin reached 36.7% and adjusted EBITDA hit $45.3 million.

Latham Group, Inc. (SWIM), the largest designer, manufacturer, and marketer of in-ground residential swimming pools in North America, Australia, and New Zealand, reported third-quarter net sales of $182.2 million, up 12.5% from a year earlier, including 8.4% organic growth. The company said the increase was primarily the result of organic growth in in-ground pools, including Sand States sales, organic growth of autocovers, recent price increases, and the Freedom Pools acquisition earlier in the year.

In-ground pool sales were $92.4 million, up 22.6%, or 13.9% organically. The company said the increase was driven almost entirely by fiberglass pools, which it said continue to gain traction for ease of installation, cost efficiency, durability, lifetime warranty, and low maintenance costs. Cover sales were $59.6 million, up 8.7%, led by autocovers that the company said are benefiting from Coverstar dealer acquisitions completed in the last two years. Liner sales were $30.1 million.

Sand States sales growth accelerated to 21.1% in the third quarter, after a double-digit rate in the second quarter, led by Florida and Texas. Latham said it hosted community pool events in targeted Florida neighborhoods, with additional events planned in Florida and Texas before year-end, and partnered with a national homebuilder to offer Latham fiberglass pools as an option for new construction in Florida. The company said it added field sales resources in Florida, with further expansion planned in Texas and Arizona, and completed the build-out of its commercial organization with a new Chief Commercial Officer.

Gross profit increased 16.6% to $66.8 million. Gross margin was 36.7%, 130 basis points above year-ago levels. Latham said the third-quarter expansion reflected greater plant absorption on higher volumes and ongoing lean manufacturing and value engineering initiatives. Adjusted EBITDA increased 18.1% to $45.3 million, and adjusted EBITDA margin expanded 110 basis points to 24.8%, which the company said reflected higher gross margin that more than offset higher sales and marketing expenses.

Selling, general, and administrative expenses increased 25.5% to $35.9 million. The company said the increase was due to investments in growth strategies and market share expansion, sales and marketing for accelerated fiberglass conversion in the Sand States, acquisition and integration costs that included $3.2 million of performance-based earn-out expenses related to the 2024 Coverstar Central acquisition, and digital-transformation costs.

Net income was $12.1 million, or $0.10 a share, compared with $8.1 million, or $0.07 a share, a year earlier. Third-quarter net income included a one-time $5.0 million loss on extinguishment and modification of debt related to a refinancing. Net income margin was 6.6%.

In the third quarter, Latham completed a debt refinancing including a $75 million revolver and a $300 million term loan to extend maturities until 2033. Total debt was $292.5 million at quarter-end, and the net debt leverage ratio was 1.8. Cash was $94.8 million. Capital expenditures were $6.1 million in the quarter.

The board approved a three-year $100 million stock repurchase plan. President and Chief Executive Officer Sean Gadd said that, with much of the pool-building season behind it and based on current visibility through year-end, the company is narrowing net sales guidance to $605 million to $615 million and adjusted EBITDA guidance to $112 million to $118 million, representing 11.7% net sales growth and 15.2% adjusted EBITDA growth at the midpoints, from prior ranges of $600 million to $620 million and $110 million to $120 million. Gadd said the company expects to continue to outperform the U.S. in-ground pool market in 2027.

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