Residential swimming pool manufacturer Latham (NASDAQ:SWIM) reported Q4 FY2023 results topping analysts' expectations , with revenue down 15.8% year on year to $90.87 million. On the other hand, the company's full-year revenue guidance of $505 million at the midpoint came in 6.9% below analysts' estimates.

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Latham (SWIM) Q4 FY2023 Highlights:

• Revenue: $90.87 million vs analyst estimates of $86.95 million (4.5% beat)

• EPS: $0 vs analyst estimates of -$0.12 ($0.12 beat)

• Management's revenue guidance for the upcoming financial year 2024 is $505 million at the midpoint, missing analyst estimates by 6.9% and implying -10.9% growth (vs -18.3% in FY2023)

• Gross Margin (GAAP): 23.3%, up from 17.9% in the same quarter last year

• Market Capitalization: $378.7 million

Commenting on the results, Scott Rajeski, President and CEO, said, “Latham navigated a very difficult market environment in 2023. We successfully implemented cost reduction programs and lean manufacturing initiatives that structurally reduced our cost basis, while maintaining our investments in future growth. These cost reduction programs improved margins as the year progressed and we expect they will enable us to considerably expand margins and overall profitability once volumes recover. At the same time, we increased productivity and efficiency for our dealers, developed new fiberglass pool models, and invested in digital tools that have enhanced the consumer’s pool buying experience. As a result of these actions, Latham is positioned for meaningful market share gains as overall industry conditions improve.

Started as a family business, Latham (NASDAQ:SWIM) is a global designer and manufacturer of in-ground residential swimming pools and related products.

Leisure Products

Leisure products cover a wide range of goods in the consumer discretionary sector. Maintaining a strong brand is key to success, and those who differentiate themselves will enjoy customer loyalty and pricing power while those who don’t may find themselves in precarious positions due to the non-essential nature of their offerings.

Sales Growth

Examining a company's long-term performance can provide clues about its business quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Latham's annualized revenue growth rate of 12% over the last three years was mediocre for a consumer discretionary business.

Within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends. That's why we also follow short-term performance. Latham's recent history shows a reversal from its already weak three-year trend as its revenue has shown annualized declines of 5.2% over the last two years.