Hayward Stock Rises 12% as Pool Equipment Maker Beats Estimates, Raises Outlook and Cuts Leverage to IPO Low

Shares of Hayward Holdings Inc. rose more than 12% on Wednesday. The maker of swimming pool equipment reported third-quarter results that beat Wall Street's expectations and raised its full-year forecast.

Hayward shares gained $1.63, or 12.47%, to $14.65 in early trading on the New York Stock Exchange. The gain lifted the company's market value to about $3.1 billion.

Despite Wednesday's jump, the stock is down about 24% over the past 52 weeks.

Quarterly results

For the third quarter, which ended Sept. 26, Hayward reported:

Net sales of $260.1 million, up 6% from a year earlier and above analysts' estimate of about $252.5 million, according to market data Net income of $32.4 million, up 35% Diluted earnings of 15 cents a share, up 36% Adjusted earnings of 18 cents a share, up 29% Adjusted EBITDA of $64.5 million, up 9%

Gross margin was 47.9%, and operating margin rose to 19.3%.

"Hayward delivered another solid quarter, reflecting disciplined execution," President and Chief Executive Kevin Holleran said.

"We further expanded margins and delivered double-digit earnings growth," he said.

North America drives growth

Sales in North America, Hayward's largest market, rose 9% to $226.4 million, and segment income rose 12%.

Sales in Europe and the rest of the world fell 6% to $33.8 million, mainly because of lower volume linked to geopolitical conflicts in the Middle East.

Guidance raised

Hayward raised its 2026 outlook:

Net sales growth of about 5% to 6%, up from about 5% Adjusted earnings of 86 to 88 cents a share, up from 84 to 87 cents

Lower debt

Hayward said its net leverage fell to 1.5 times earnings, which Holleran described as "the lowest level since our 2021 initial public offering."

The company ended the quarter with $236.3 million in cash and $239.2 million in short-term investments.

Operating cash flow for the first nine months was $225.5 million, down $57.5 million from a year earlier, mainly because of the timing of collections and inventory purchases.

About Hayward

Hayward, based in Charlotte, North Carolina, makes pool and spa equipment, including pumps, filters, heaters, automation systems and lighting. Much of its business comes from replacing and upgrading equipment for existing pools, which tends to be more stable than new pool construction.

Tough market recovering

The pool industry has faced a downturn since the pandemic, when demand for backyard pools surged. Higher interest rates have weighed on new pool construction, and dealers worked through excess inventory.

Hayward's results suggest conditions are improving, particularly in North America. The company has benefited from pricing actions and demand for higher-value products, such as variable-speed pumps and smart pool automation, which carry better margins.

Shares lagged

Hayward's stock has struggled over the past year amid concerns about consumer spending, high interest rates and tariffs on imported components. The strong quarter and raised outlook appeared to ease some of those concerns.

The Federal Reserve's interest rate decision on Wednesday is in focus for housing-related companies like Hayward, because borrowing costs affect home improvement spending and new pool construction.

Investors will watch whether North American demand stays strong heading into next year's pool season, how the company manages tariffs and costs, and whether it can continue expanding margins.