Hayward Holdings Inc (HAYW) Reports Q3 2023 Earnings, Net Income Down by 49%
Hayward Holdings Inc (NYSE:HAYW) reported Q3 2023 net sales of $220.3 million, a decrease of 10% from the prior-year third fiscal quarter.
The company's net income for the same period was $11.8 million, down by 49% from the previous year.
Adjusted EBITDA for Q3 2023 was $47.2 million, a decrease of 22% from the prior-year period.
Hayward Holdings Inc (NYSE:HAYW) reported strong year-to-date cash flow from operations of $216.9 million.
On October 31, 2023, Hayward Holdings Inc (NYSE:HAYW), a global designer, manufacturer, and marketer of a broad portfolio of pool and outdoor living technology, announced its financial results for the third quarter of fiscal year 2023. The company reported net sales of $220.3 million, a decrease of 10% from the prior-year third fiscal quarter. The net income for the same period was $11.8 million, down by 49% from the previous year.
Company Performance and Challenges
Despite the challenging operating conditions, Hayward Holdings Inc (NYSE:HAYW) managed to deliver strong gross profit margin expansion of nearly 400 basis points and generated cash flow through operational excellence and effective cost control. However, the company faced additional pressure in Canada and other international markets, leading to a modestly reduced outlook for the US and Europe.
Financial Highlights
The company's gross profit decreased by 2% to $105.4 million for the third quarter of fiscal 2023, while the gross profit margin increased 390 basis points to 47.8%. The increase in gross profit margin was mainly due to the management of manufacturing costs, including reduced costs specifically in freight and tariffs. However, the operating income decreased by 28% to $28.9 million for the third quarter of fiscal 2023, due to the aggregated effects of the items described above.
Segment Results
In North America, net sales decreased by 9% to $185.1 million for the third quarter of fiscal 2023, primarily due to lower volume and a decrease in net price. In Europe & Rest of the World, net sales decreased by 15% to $35.2 million for the same period, mainly due to lower volume as a result of distribution channel destocking, geopolitical factors, and macroeconomic uncertainty.
Balance Sheet and Cash Flow
As of September 30, 2023, Hayward had cash and cash equivalents of $244.2 million and approximately $158.0 million available for future borrowings under its revolving credit facilities. The cash flow provided by operations for the nine months ended September 30, 2023, was approximately $217 million, an increase of approximately $73 million from the prior-year period.
Outlook
Hayward is updating its guidance primarily to reflect the impact of more challenging macro conditions in Canada, the Middle East, and Latin America, in addition to modestly reduced expectations for the US and Europe. For the full fiscal year 2023, Hayward now expects net sales to decrease 24% to 26% from the prior year and Adjusted EBITDA in the range of $245 million to $255 million.
Explore the complete 8-K earnings release (here) from Hayward Holdings Inc for further details.
This article first appeared on GuruFocus.
