Hayward (HAYW) Q2 2024 earnings summary

Executive summary

• Q2 2024 results met expectations, with net sales rising to $284.4 million, record gross margin of 51.0%, and strong cash flow generation, despite softer demand in new construction and select international markets.

• Net income increased 28% year-over-year to $37.6 million, with adjusted diluted EPS up 11% to $0.21.

• Adjusted EBITDA grew 4% to $82.6 million, with margin expanding 100 basis points to 29.0%.

• Acquisition of ChlorKing for $62.4 million expands commercial pool product portfolio and market presence.

• Full-year 2024 guidance narrowed due to mixed demand trends and macro uncertainty.

Financial highlights

• Q2 2024 net sales: $284.4 million (+0.3% YoY); gross profit: $145.1 million (+6.3% YoY); gross margin: 51.0% (+290 bps YoY).

• Adjusted EBITDA: $82.6 million (+3.9% YoY); margin: 29.0% (+100 bps YoY).

• Adjusted EPS: $0.21; reported diluted EPS: $0.17.

• Operating cash flow for six months: $209.8 million (+26% YoY); cash and equivalents at $215.1 million.

• Free cash flow for 2024 anticipated at approximately $160 million, exceeding 100% of net income.

Outlook and guidance

• FY 2024 net sales expected at $1.010–$1.040 billion, up 2–5% year-over-year, including ~1% from ChlorKing.

• Adjusted EBITDA guidance: $255–$270 million, up 3–9% year-over-year.

• Free cash flow for 2024 expected at ~$160 million.

• Guidance narrowed due to better-than-expected margins but softer demand, especially in new construction, remodels, and certain international markets.

• Long-term outlook remains positive, supported by robust aftermarket trends and product innovation.