Shares of Latham Group experienced a significant increase after the fiberglass pool manufacturer announced second-quarter sales that exceeded expectations, despite challenges in the home-improvement market.
Strong Performance Driving Stock Price Surge
In morning trading, Latham Group’s stock surged by 18% to $4.50. Year-to-date, the stock has shown an impressive 39% increase, outperforming the S&P 500’s gain of 16% during the same period.
Second-Quarter Sales Exceed Analysts’ Estimates
Latham Group, headquartered in Latham, N.Y., reported second-quarter sales of $177.1 million. Although this represents a 14.3% drop from last year, it surpassed analysts’ expectations of $170.7 million, according to FactSet.
Profit Falls Short of Forecasts
Despite the positive sales performance, the company’s profit for the quarter amounted to 5 cents per share, falling short of analysts’ projections of 11 cents per share, as reported by FactSet.
Adjusting Expectations and Guidance
To navigate the current market conditions, Latham Group has revised its full-year sales outlook and reduced its capital expenditure guidance. In an effort to cut costs, the company has implemented measures such as streamlining plants, reducing headcount, and restricting discretionary spending internally.
Persistent Challenges in the Pool Industry
Latham Group continues to face challenges due to higher interest rates for pool financing and inflationary pressures affecting customer demand. However, the company is seeing an increase in purchases of pool covers and other equipment, as customers who bought pools in the past three years now seek additional accessories.
