Hayward Holdings, Inc. Q1 FY2026 earnings call

Strong first quarter performance with double-digit sales and earnings growth. Net sales increased 12% against prior year comparison of 8% growth. Adjusted EBITDA grew 15%, and adjusted diluted EPS increased 30%. Margins expanded further. Made further solid progress on the balance sheet. 2025 marked 100th anniversary and 2026 marked 5th anniversary of IPO. Transformed into a more efficient, disciplined organization. Strengthened senior leadership team. Innovation remains engine. Developed industry leading aftermarket focused products. Consolidated manufacturing and distribution footprint. Elevated day-to-day operations with lean and continuous improvement initiatives. Leveraging AI across organization. Disciplined financial management strengthened balance sheet

North American net sales were up 12% to 210 million, driven by positive pricing and volume. U.S. sales were up 11%, Canada was up a robust 26%. Gross margin was consistent with the prior year as operating leverage offset incremental tariff and inflationary pressures. Sales in Europe and rest of the world increased 9% to 45 million, largely due to favorable FX gains and relatively stable price and volume. Europe's sales increased 14% and rest of the world reduced 1% impacted by geopolitical disruption in the Middle East related to the ongoing conflict in Iran. Margin performance in the segment continued to improve, with the gross margin increasing 230 basis points to 35.8%, and adjusted segment income margin expanding 280 basis points to 19.4%, driven by improved operational executions

Following better than expected first quarter, net sales expected to increase approximately 5% up from prior guidance of ~4%. Now expect adjusted diluted EPS to increase approximately 9% to 13% to a range of 84 cents to 87 cents. Geopolitical disruptions and rising costs for specialty metals, freight, and resins applying modest downward pressure on gross margin with some year-over-year compression expected in Q2 before mitigation efforts fully realized. Anticipate full-year gross margin in line with last year. Expect free cash flow in the region of $200 million

Geopolitical disruptions. Rising costs for specialty metals, freight, and resins

Q: Jeff Hammond with KeyBank Capital Markets asked about what surprised in the quarter, weather, early buy and channel inventories.

A: Weather was a pleasant surprise, sales across end markets and geographies was very strong. Well positioned with early buy orders, managed inventory levels.

Q: Follow-up on IVN about incremental inflation, Section 232 update, price.

A: Experiencing higher energy-based costs, specialty metal costs, put in two price increases, still expect full-year gross margins comparable to last year.

Q: Nigel Coe with Wolf Research asked about 10% price in North America, guide.

A: Originally thought pricing plus 3%, now expect plus 4%, surcharge not built into guidance.

Q: Andrew Carter with Steeple asked about directionally where sales were, weather.

A: Sales out consistent with full year guidance, weather didn't help but balance of country helped mute impacts.

Q: Rafi Jadrovich with Bank of America asked about guidance increase, driving factors.

A: Increase in net sales growth due to better pricing performance in Q1, EPS guide moved up due to leverage across SG&A base.

Q: Andrew Carter with Steeple asked about market share.

A: Think picking up modest share, combination of new product launches, added sales and service team resources, focused regional approaches.

Q: Brian Lee with Goldman Sachs asked about guidance, demand environment.

A: Early in year, not confident to assume more bullish outlook yet, aftermarket remains resilient, OmniX adoption good.

Q: Brian Lee with Goldman Sachs asked about product vitality.

A: Probably share vitality later, pleased with discretionary side of product range adoption