Latham Group Boosts Sales Growth but Margins Squeeze on Ramp-Up Costs
Event summary
- Latham Group reported Q2 2026 net sales up 14.4%, driven by 10.3% organic growth.
- Gross profit increased 9.6%, but gross margin dropped 160 basis points due to $2.8M in ramp-up costs.
- Adjusted EBITDA rose 11.9% YoY, with margins contracting 50 basis points to 22.6%.
- Full-year guidance raised: net sales growth now expected at 11.7%, adjusted EBITDA growth at 15.2%.
- Fiberglass pools accounted for 80% of in-ground pool sales, with Sand States sales growing double-digits.
The big picture
Latham Group is capitalizing on strong demand for in-ground pools, particularly fiberglass models, while expanding its footprint in high-growth Sand States markets. The company's ability to manage ramp-up costs and sustain margin improvements will be critical as it invests heavily in sales and marketing initiatives. With full-year guidance raised, Latham appears well-positioned to outperform flat market conditions, but execution risks remain.
What we're watching
- Margin Recovery
- Whether Latham can recover the $2.8M in ramp-up costs and improve gross margins in H2.
- Sand States Expansion
- The pace at which Latham's initiatives in the Sand States drive material sales growth.
- Fiberglass Conversion
- How sustained demand for fiberglass pools will impact long-term market share and profitability.