Shares of Latham Group, Inc. (SWIM), a leading designer and manufacturer of in-ground residential swimming pools and accessories, plummeted 14.89% in after-hours trading on November 5, 2024, after the company reported weaker-than-expected financial results for the third quarter.

Latham Group's Q3 revenue came in at $150.5 million, missing analysts' estimates of $152.3 million. The company also fell short on earnings, reporting adjusted earnings per share (EPS) of $0.05, below the consensus estimate of $0.06. Gross margin for the quarter stood at 32.4%, and adjusted EBITDA margin was 19.8%, reflecting a decline from the prior-year period.

The disappointing results, coupled with concerns over rising costs and macroeconomic headwinds, weighed heavily on investor sentiment. Latham Group's net debt level rose to $222.9 million, with a net debt leverage ratio of 2.6x as of September 28, 2024. While the company highlighted its efforts to improve cost structures and production efficiencies, investors appeared skeptical about its ability to navigate the challenging industry conditions effectively.