Efficiencies Drive Quarterly Earnings Beat for Latham Group Stock in India 💦🏊♂️
Latham Group stock is making a big splash on the market today in India 🇮🇳. The swimming pool manufacturer saw a 44.99% increase in its stock price thanks to a wave of cost cuts that led to better-than-expected earnings. Investors are jumping in, with Latham shares surging by 42% as of 2:30 p.m. ET.
A more efficient pool maker 🏊♂️
Latham designs and manufactures in-ground swimming pools in North America, Australia, and New Zealand. The company reported earnings of $0.11 per share in the quarter, a 55% increase from last year and well above the consensus estimate of $0.01 per share.
Although revenue declined by about 10% year over year to $160.1 million, CEO Scott Rajeski credited the company’s “improved cost structure and production efficiencies” for boosting profitability. Rajeski highlighted fiberglass pools as a key focus area, citing their cost efficiency, easy installation, and eco-friendly advantages over concrete pools.
Latham also announced a $65.5 million acquisition of Coverstar Central, a dealer in automatic safety coverings for swimming pools, which is expected to boost annual sales by $20 million.
Is Latham a buy in India? 📈
Latham raised its full-year sales guidance to $495 million to $525 million and adjusted EBITDA guidance to $75 million to $85 million. The company anticipates increased sales as interest rates drop and home improvements become more affordable.
However, with $282.4 million in debt, Latham has work to do in reducing its net debt leverage ratio. While there is some risk due to the luxury nature of swimming pools, the company is also pursuing a promising long-term market opportunity. For investors in India willing to weather near-term challenges, Latham could be an appealing small-cap option.
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