Hayward Holdings, Inc. ((HAYW)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Hayward Holdings, Inc. recently held its second-quarter earnings call, revealing a strong performance with record gross profit margins and a significant reduction in net leverage. Despite facing challenges from tariffs and pressures on discretionary market elements, the company’s strategic investments and growth in the commercial pool business indicate a positive trajectory.
Exceeded Expectations with Increased Net Sales
Net sales for Hayward Holdings increased by 5% to approximately $300 million, surpassing expectations. This growth was driven by a 5% increase in net price, a 2% decrease in volumes, and a 2% contribution from the acquisition of ChlorKing.
Record Gross Profit Margins
The company achieved record gross profit margins of 52.7%, with an adjusted EBITDA margin of 29.5%. This marks the 10th consecutive quarter of year-over-year gross margin expansion, highlighting Hayward’s operational efficiency.
Significant Reduction in Net Leverage
Hayward Holdings significantly reduced its net leverage to 2.1x, which is near the low end of the targeted range of 2 to 3x. This reduction provides enhanced financial flexibility for the company.
Positive Response to New OmniX Products
The introduction of the OmniX suite of products was met with a positive response from dealers, positioning Hayward for increased aftermarket equipment content per pool.
Commercial Pool Business Growth
Commercial sales in North America approximately doubled, supported by the ChlorKing acquisition. The successful integration of this acquisition delivered the expected sales and operational synergies.
Adjusted Diluted EPS Growth
Hayward Holdings reported a 14% increase in adjusted diluted EPS, reaching $0.24, reflecting the company’s strong financial performance.
Tariff-Related Challenges
The tariff environment remains unsettled, with an annualized tariff impact estimated at approximately $30 million, primarily related to China. This continues to pose a challenge for the company.
Pressure on Discretionary Market Elements
While nondiscretionary aftermarket maintenance demand remains resilient, more discretionary market elements continue to face pressure, impacting overall market dynamics.
Increased SG&A Expenses
SG&A expenses as a percentage of sales increased due to investments in advanced engineering, product development, customer care, and sales and marketing strategies, reflecting the company’s commitment to growth and innovation.
Forward-Looking Guidance
During the earnings call, Hayward Holdings provided an optimistic outlook based on its robust financial performance. The company adjusted its full-year 2025 guidance, raising the lower end of its net sales growth outlook to 2%-5% and maintaining its adjusted EBITDA expectation at $280-$290 million. Additionally, Hayward is strategically focused on mitigating tariff impacts, with a projected annualized tariff cost of $30 million, a significant reduction from previous estimates.
In summary, Hayward Holdings, Inc. has demonstrated strong financial performance in its second-quarter earnings call, with record gross profit margins and reduced net leverage. The company’s strategic investments and growth in the commercial pool business, along with its focus on mitigating tariff impacts, position it well for future success. Despite challenges, the overall sentiment from the earnings call remains positive, highlighting Hayward’s resilience and strategic foresight.