Key Highlights

  • Net sales rose 12.5% to USD 182.2 million, with organic growth of 8.4%, and gross Margin was 36.7%.
  • Net income was USD 12.1 million, or USD 0.10 per diluted share, and adjusted EBITDA was USD 45.3 million.
  • Sand State sales increased 21.1% in the third quarter and 16.6% year to date, led by Florida and Texas.
  • The Board approved a three-year, USD 100 million share repurchase plan, and full-year guidance was narrowed.

Net Sales and Product Lines

Latham Group, Inc. (NASDAQ:SWIM), the designer, manufacturer and marketer of in-ground residential swimming pools in North America, Australia and New Zealand, reported third-quarter 2026 net sales of USD 182.2 million, up 12.5% from USD 161.9 million. Organic growth was 8.4%. The company attributes the increase to organic growth in in-ground pool sales, including the Sand States, organic growth of autocovers, recent price increases and the Acquisition of Freedom Pools earlier in the year.

In-ground swimming pool sales were USD 92.4 million versus USD 75.4 million, covers were USD 59.6 million versus USD 54.9 million, and liners were USD 30.1 million versus USD 31.6 million. President and Chief Executive Officer Sean Gadd said in-ground pool sales grew 22.6%, or 13.9% organically, driven by fiberglass pools, and that cover sales increased 8.7%. For the nine months, net sales were USD 497.0 million, up 11.4%, with organic growth of 7.9%.

Analyst estimates were EPS of USD 0.16 against reported EPS of USD 0.15, and Revenue of USD 181.1 million against reported revenue of USD 182.2 million.

Margins and Earnings

Gross profit increased 16.6% to USD 66.8 million, and gross margin was 36.7%, which is 130 basis points above the year-ago quarter. Selling, general and administrative expenses increased 25.5% to USD 35.9 million, reflecting growth investments, sales and Marketing initiatives in the Sand States, acquisition and integration costs, including USD 3.2 million of earn-out expenses related to the Coverstar Central acquisition, and digital transformation costs.

Net income was USD 12.1 million, or USD 0.10 per diluted share, compared with USD 8.1 million, or USD 0.07 per diluted share, a year earlier. It included a one-time loss on extinguishment and modification of Debt of USD 5.0 million related to the debt refinancing. Adjusted EBITDA increased 18.1% to USD 45.3 million, and the adjusted EBITDA margin was 24.8%, up 110 basis points.

For the nine months, Net Income was USD 16.3 million, or USD 0.14 per diluted share, and adjusted EBITDA was USD 102.0 million.

Balance Sheet, Guidance and Buyback

Latham ended the quarter with cash of USD 94.8 million. Net cash provided by Operating Activities was USD 48.8 million in the quarter and USD 54.6 million for nine months. The company completed a debt refinancing consisting of a USD 75 million revolver and a USD 300 million term loan, which extends maturities to 2033. Total debt was USD 292.5 million, and the net debt Leverage Ratio was 1.8. Capital expenditures were USD 6.1 million in the quarter and USD 34.2 million for nine months, which includes the purchase of four previously leased production sites.

The company narrowed its full-year net sales guidance to USD 605 million to USD 615 million and its adjusted EBITDA guidance to USD 112 million to USD 118 million, which at the midpoints represent growth of 11.7% and 15.2%. Management expects fiberglass to gain at least one percentage point of Market Share in 2026, reaching 25% of total U.S. in-ground pool sales.

The chief executive noted that Todd Antonelli was appointed Chief Commercial Officer, and that field sales resources were added in Florida, with expansion planned in Texas and Arizona.

Items to Follow

Items to follow are Sand State sales in Florida and Texas, execution of the USD 100 million repurchase plan, the fourth quarter against the narrowed guidance and the pace of fiberglass conversion.