Hayward Q2 Earnings Call Highlights

Hayward NYSE: HAYW reported higher second-quarter sales and earnings, citing price realization, stable overall volume and continued demand in its North American installed-base aftermarket business, while maintaining its full-year 2026 outlook.

Net sales increased 6% to $318 million in the second quarter, following 5% growth in the prior-year period.

Sales rose 9% in North America, including 7% from price realization and 2% from volume growth, while Europe and Rest of World sales declined 8% amid macroeconomic conditions and geopolitical disruption tied to conflicts in Ukraine and the Middle East.

President and Chief Executive Officer Kevin Holleran said the company’s first-half performance reflected the resilience of its aftermarket-focused business model and execution across its strategic initiatives.

For the first half, net sales rose 9%, adjusted EBITDA increased 9%, and adjusted diluted earnings per share increased 18%.

Gross profit increased 8% to $155 million, while gross margin declined 50 basis points to 48.7%.

Senior Vice President and Chief Financial Officer Eifion Jones said the margin pressure was anticipated, reflecting higher specialty-metal, freight and resin costs as well as the timing of surcharges and other mitigation efforts.

Despite the year-over-year decline, Holleran said the quarter produced Hayward’s second-highest quarterly gross margin since becoming a public company.

The only higher result was recorded in the second quarter of 2025.

Adjusted EBITDA rose 5% to $93 million, while adjusted EBITDA margin declined 40 basis points year over year to 29.1%.

Adjusted diluted EPS increased 8% to $0.26.

Jones said Hayward continued to invest in sales and marketing, advanced engineering and customer service during the period.

In North America, net sales reached $278 million.

U.S. sales increased 9%, while Canada sales rose 2%, with the Canadian result affected by a weather-related slow start to the season.

North American gross margin declined 90 basis points to 50.4% because of inflationary pressures and the timing of mitigation actions.

Europe and Rest of World sales totaled $41 million.

Europe sales declined 4%, while Rest of World sales fell 16%, primarily due to disruption from the conflict in the Middle East.

However, segment gross margin rose 50 basis points to 37.9%, and adjusted segment income margin was unchanged at 18.1%.

Holleran said demand remained solid in discretionary product categories including salt chlorine generators, automation and lighting.

Commercial pool and industrial flow-control businesses also posted double-digit net sales growth in the first half, he said.

Management said channel inventory levels were consistent with seasonal patterns.

Holleran described inventory exiting the second quarter as “very normal” and balanced among the company’s largest channel partners.

Jones said the North American channel and prim...