Latham Pools' Fiberglass Bet Pays Off, Fueling Growth in a Flat Market

LATHAM, NY – August 04, 2026

In a market that many analysts describe as flat, Latham Group, Inc. is making a significant splash. The largest designer and manufacturer of in-ground residential pools in North America today announced second-quarter financial results that not only beat expectations but also prompted the company to raise its financial outlook for the full year. With net sales climbing 14.4% to $197.5 million, Latham is demonstrating that strategic execution can create powerful currents of growth, even when the tide isn't rising for everyone.

The company’s performance is a case study in navigating a post-pandemic normalization. While the frenzied demand for home improvements has cooled, Latham is gaining market share by aggressively pushing a material conversion trend and expanding its geographic footprint. The results suggest a fundamental reshaping of the residential pool landscape, driven by innovation, consumer preference, and a highly focused corporate strategy.

The Fiberglass Future is Now

At the heart of Latham's success is its deep commitment to fiberglass pools. Once a niche alternative to traditional concrete (gunite) pools, fiberglass is rapidly becoming a mainstream choice, and Latham is leading the charge. The company reported a staggering 22.5% increase in in-ground pool sales for the quarter, a surge overwhelmingly powered by its fiberglass offerings.

“Second quarter sales growth was driven by execution of our strategic priorities and supports our expectations of continued share gains across our product lines,” said Sean Gadd, President and CEO. He highlighted that fiberglass pools are on track to represent approximately 80% of the company's full-year in-ground pool sales in 2026, a significant jump from 76.5% in 2025.

This isn't just an internal company trend; it reflects a broader market shift. Across the United States, fiberglass pools now account for roughly 24% of all new installations, a 600-basis-point increase since 2019. The appeal is multi-faceted. For homeowners, fiberglass offers a lower-maintenance, durable, and often more cost-effective alternative with a much faster installation time. For builders grappling with persistent skilled labor shortages, the less labor-intensive installation process is a critical advantage. Latham has capitalized on this by pioneering a direct-to-homeowner digital marketing strategy that educates consumers and generates high-quality leads for its dealer network, effectively creating demand from the ground up.

A Calculated Conquest of the Sun Belt

Latham’s fiberglass strategy is being deployed with near-military precision in the so-called 'Sand States'—high-growth markets like Florida, Texas, and Arizona that account for a substantial portion of annual new pool construction. The company reported double-digit sales growth in these key geographies, validating a multi-pronged expansion plan.

This strategy involves more than just shipping more products south. Latham is systematically building out its commercial organization, adding field-level sales resources to support dealers, and using a sophisticated market development framework. The company is analyzing communities and even specific neighborhoods based on data points like home values, lot sizes, and income levels to identify the highest-potential micro-markets. This data-driven approach allows for highly targeted marketing and sales efforts designed to accelerate the conversion from concrete to fiberglass in regions where concrete has historically dominated.

The investment in this expansion is visible on the balance sheet. Selling, general, and administrative (SG&A) expenses rose 17.8% to $37.6 million, a figure the company attributes directly to its strategic investments in the Sand States and a broader digital transformation. While such increases can sometimes worry investors, in this context, they appear to be the fuel for sustainable, long-term market share acquisition.

The Price of Rapid Growth

Latham's rapid growth did not come without challenges. The company's gross margin contracted by 160 basis points compared to the prior year, a development that could raise eyebrows if taken out of context. However, the primary driver was approximately $2.8 million in incremental ramp-up costs incurred because demand for fiberglass pools accelerated faster than the typical seasonal plan anticipated.

These costs, which accounted for a 140-basis-point headwind on their own, are indicative of a company scaling at high speed. They represent the operational friction—overtime, expedited logistics, and production inefficiencies—that comes from meeting a surge in orders. Crucially, management expressed confidence that the majority of these costs will be recovered in the second half of the year, a belief that underpins their decision to raise full-year guidance.

Adjusted EBITDA, a key metric of profitability that excludes certain non-recurring items, still grew an impressive 11.9% to $44.6 million. The slight contraction in the Adjusted EBITDA margin to 22.6% reflects the impact of the ramp-up costs and the timing of the aforementioned SG&A investments. This financial picture portrays a company willing to absorb temporary margin pressure and make strategic investments to secure a stronger, more profitable future.

Charting a Course in a Cautious Market

Latham's assertion that it is outperforming a flat market appears well-supported. While new U.S. pool starts have normalized from their pandemic-era highs, the industry remains healthy. Latham's ability to post double-digit organic growth in this environment is a clear indicator of market share gains against competitors and against the traditional gunite pool itself. The strategy is not just about selling more pools into the existing market, but about fundamentally changing the composition of that market.

This strong performance enabled the company to confidently raise its full-year guidance. It now expects net sales to land between $600 million and $620 million, with Adjusted EBITDA projected between $110 million and $120 million. This upward revision in a climate of macroeconomic uncertainty, marked by inflation and fluctuating interest rates, is a powerful statement about management's conviction in its strategy.

By raising its full-year guidance for both sales and earnings, Latham's leadership is signaling a firm belief that its strategic investments and dominant position in the fiberglass market will continue to deliver growth, even as the wider economy sends mixed signals.