Latham Group, Inc. reported net sales of $111.4 million for the first quarter of 2025, a modest increase of 0.7% from $110.6 million in the prior year's first quarter. This performance was in line with the company's expectations, reflecting positive sales momentum at the end of the quarter.
Gross margin expanded by 190 basis points to 29.5% in Q1 2025, up from 27.7% in Q1 2024, primarily due to production efficiencies from lean manufacturing and value engineering initiatives, as well as the margin benefit from the three Coverstar acquisitions. However, Adjusted EBITDA decreased by 9.4% to $11.1 million, largely due to increased investments in sales and marketing programs.
The company reported a net loss of $6.0 million, or $0.05 per diluted share, an improvement from a net loss of $7.9 million, or $0.07 per diluted share, in the prior year period. Latham ended the quarter with $24.0 million in cash and total debt of $306.9 million.
Latham reaffirmed its full year 2025 guidance for net sales between $535 million and $565 million, representing 8% growth at the midpoint, and Adjusted EBITDA between $90 million and $100 million, representing 19% growth at the midpoint. This guidance is driven by category share gains in fiberglass pools and autocovers, along with contributions from recent acquisitions.
The company noted progress on its Sand State expansion strategy, including active engagement in master-planned communities and targeted marketing campaigns. Latham is also monitoring the impact of elevated tariffs on imported raw materials, which represent 15-20% of its raw materials, and is mitigating risks through strategic pre-purchasing and targeted price increases.
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