Latham Group, Inc.

What they do

Latham operates as one reportable segment making in-ground swimming pools, pool covers, and pool liners, and describes itself as holding the leading North American position in every product category in which it competes. It markets directly to homeowners through digital and social channels to generate purchase-ready leads that it passes to its dealer partners, with whom it says relationships average over 15 years. Operations span roughly 1,850 to 1,900 employees and about 30 to 40 locations, with a manufacturing and distribution network built for short lead times.

Revenue drivers

• In-ground swimming pools — Largest product line; $96.3M of Q2 2026 net sales versus $78.6M a year earlier, with management saying fiberglass is on track to be about 80% of full-year in-ground pool sales in 2026.
• Liners — $60.2M in Q2 2026 versus $56.8M in Q2 2025; the second-largest quarterly line and a recurring replacement category tied to the installed base.
• Covers — $41.0M in Q2 2026 versus $37.2M a year earlier, with Q2 cover sales up 10% led by autocovers, which management cites as evidence of rising attachment rates on new pool installations.
• Sand States and international footprint — Management calls the Sand States a key growth market where Q2 2026 sales rose at a double-digit rate; the February 2026 Freedom Pools acquisition adds Australia and New Zealand fiberglass pool manufacturing and installation, expected to contribute roughly $20.0M annualized net sales.

Recent performance

Second quarter 2026 net sales rose 14.4% to $197.5M, with 10.3% organic growth, and six-month net sales were $314.8M. Q2 net income was $12.8M, or $0.11 per diluted share, and adjusted EBITDA was $44.6M, or 22.6% of net sales, up 11.9% year over year. Gross profit rose 9.6% to $70.1M but gross margin of 35.5% was 160 basis points below the prior-year level, including about $2.8M (140 basis points) of quarter-specific ramp-up costs from faster-than-typical fiberglass demand, most of which management expects to recover in the second half. SG&A increased 17.8% to $37.6M on growth investments, sales and marketing timing, and acquisition and integration costs including $2.2M of performance-based earn-out expense. For the full year 2025, net sales were $545.9M, net income was $11.1M, and adjusted EBITDA was $99.8M at an 18.3% margin.

Strategy

Management's stated priorities are building the Latham brand and driving awareness and adoption of fiberglass pools and automatic safety covers, with greater contractor and homebuilder engagement in the Sand States. It says it expects to significantly outperform a U.S. in-ground pool market it believes will be flat in 2026, and plans to expand and further target branding and marketing spend in 2026. Supporting initiatives include value engineering and lean manufacturing, disciplined capital investment in product innovation, facility upgrades and technology, and ongoing digital transformation. Acquisitions remain part of the plan: Freedom Pools closed February 26, 2026 for about $17.0M in cash. Sean Gadd became President and CEO effective January 5, 2026, succeeding Scott Rajeski, who retired and serves as a Special Adviser for six months. The company also completed a program to optimize certain operational and administrative functions and redeploy resources to sales and marketing.

Risks

• Consumer and interest-rate sensitivity — Latham states demand is affected by interest rate levels, credit availability, consumer confidence, housing affordability, employment and other macro factors that influence whether homeowners undertake pool installation projects.
• Tariffs and trade policy — The 10-K specifically flags the impact of trade policies, including tariffs, on products, raw materials and components imported into the U.S., alongside broader political uncertainty and trade-relationship changes.
• Manufacturing concentration and weather — The company cites interruption of production at one or more manufacturing facilities from accident, fire, calamity or other causes, and adverse weather conditions that impact sales and the timing of sales.
• Technology and cyber exposure — Risk factors list potential cyber-attacks or system failures on information technology infrastructure, and the ability to keep pace with and integrate rapidly evolving technologies such as artificial intelligence.

Outlook

For full-year 2026, management raised guidance to 11.7% net sales growth and 15.2% adjusted EBITDA growth at the midpoints, following Q2 results and the Freedom Pools contribution. It expects the U.S. in-ground pool market to be flat in 2026 while its fiberglass and autocover penetration gains let it outgrow the market. Management expects most of the roughly $2.8M of Q2 ramp-up costs to be recovered in the second half. It also cites several new Sand States initiatives that it says have the potential to drive a step-change in companywide sales.