Latham Group, Inc. (NASDAQ: SWIM), a leading designer and manufacturer of in-ground residential swimming pools, saw its stock plunge over 7.9% in pre-market trading on November 6, 2024, following the release of its third-quarter 2024 financial results.

The company reported a 6.4% year-over-year decline in net sales to $150.5 million, primarily due to lower sales volumes. Despite the revenue drop, Latham Group managed to expand its gross margin by 250 basis points to 32.4%, thanks to its lean manufacturing and value engineering programs.

However, adjusted EBITDA decreased by 17.3% from the prior year to $29.8 million, and the adjusted EBITDA margin contracted by 260 basis points to 19.8%. The company cited operational disruptions caused by hurricanes, including a week-long plant shutdown, as one of the factors impacting sales and shipments during the quarter.

Latham Group narrowed its full-year 2024 guidance, now expecting net sales of $500 million to $510 million and adjusted EBITDA of $77 million to $83 million. The company anticipates a 15% decline in new pool starts for 2024, reflecting challenging market conditions.