Why Hayward Holdings Stock Climbed Today
Key Points
Hayward's pricing power is driving its margins higher.
Favorable trends are fueling long-term growth.
- 10 stocks we like better than Hayward ›
Shares of Hayward Holdings (NYSE: HAYW) popped on Wednesday after the pool equipment maker announced impressive fiscal third-quarter financial results.
As of 12:30 p.m. ET, Hayward's stock price was up more than 10% after rising as much as 15% earlier in the day.
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Higher sales and profits
Hayward's sales rose by 7% year over year to $244 million in the quarter ended Sept. 27. The gains were driven in part by price increases designed to offset the impact of tariffs.
The price hikes also helped to boost Hayward's profitability. The automation specialist's gross profit climbed 11% to $125 million, while its gross margin improved by 1.5 percentage points to 51.2%.
In turn, Hayward's adjusted net income, which also benefited from lower interest expense, surged by 26% to $32 million. The company's adjusted earnings per share, aided by stock buybacks, increased by 27% to $0.14.
"We delivered further solid margin expansion, driven by increased operational efficiencies, tariff mitigation actions, and disciplined cost management," CEO Kevin Holleran said in a press release.
Management expects growth to continue
These strong results and promising ongoing sales trends prompted Hayward to raise its full-year profit outlook. Management now sees adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rising by 5% to 7% to between $292 million and $297 million in 2025, up from a prior forecast of $280 million to $290 million.
The company highlighted several positive trends that should continue to propel its expansion, including the steadily growing installed base of pools, which provides opportunities for automation upgrades and accessory sales.
"We remain focused on profitable growth and long-term shareholder value creation, and our investments in innovation, customer experience, and operational excellence are driving positive results," Holleran said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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