Pool equipment and automation systems manufacturer Hayward Holdings (NYSE: HAYW) announced better-than-expected revenue in Q1 CY2026, with sales up 11.5% year on year to $255.2 million. Its non-GAAP profit of $0.13 per share was 17.3% above analysts’ consensus estimates.

Is now the time to buy HAYW? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Hayward’s first quarter saw double-digit sales and earnings growth, but the market reacted negatively, reflecting concerns despite headline outperformance. Management attributed gains to robust aftermarket demand, successful price realization, and a rebound in discretionary product categories like automation and heaters. CEO Kevin Holleran emphasized strong execution across North America and Europe, with Canada and commercial segments particularly notable. CFO Eifion Jones pointed to disciplined cost management and operational leverage as key factors behind margin expansion. Persistent inflation and incremental tariffs tempered the margin gains, but management stressed that strategic investments in innovation and efficiency are supporting overall performance.

Looking ahead, Hayward’s updated guidance for the year is grounded in stable demand expectations, incremental pricing actions, and continued operational discipline. Management highlighted that gross margin may face modest compression in the near term due to inflation and rising input costs, but expects mitigation measures to normalize profitability over the second half. CEO Holleran underscored the role of new products like OmniX and ongoing expansion in underpenetrated markets. CFO Jones cautioned that volume growth remains uncertain, stating, “We’re being reserved a little bit, but the aftermarket remains resilient.”

Key Insights from Management’s Remarks

Management credited Q1 outperformance to robust aftermarket activity, effective pricing, and positive volume trends, despite ongoing cost pressures and regional variability.

• Aftermarket resilience: Approximately 85% of Hayward’s revenue comes from serving an installed base of pool owners, providing a stable foundation for sales. Management emphasized that aging pools require ongoing maintenance and upgrades, supporting aftermarket demand even as new pool construction remains flat.
• Price realization and targeted increases: The company implemented a targeted price increase early in the quarter for specialty metal components and a 2.5% surcharge in Q2 to offset increased costs. Management noted that these increases were carefully applied by product line and region to match market conditions, with North America seeing the strongest price realization.
• Discretionary product momentum: Automation systems, heaters, and upgraded controls—considered discretionary purchases—outpaced core product categories in Q1. CEO Holleran cited positive sales in these areas as evidence of consumer willingness to invest in enhanced pool experiences, despite broader inflationary pressures.
• Inventory management and channel health: Hayward managed channel inventory and Early Buy shipments closely, ensuring distributor and dealer inventory levels remained balanced. Management reported that inventory days on hand are in line with seasonal demand expectations, reducing risk of overstock in the channel.
• Regional performance and commercial expansion: North America and Europe delivered double-digit and low-teens growth, respectively, while Canada rebounded strongly. The commercial and industrial flow control segments also saw robust performance, though Rest of World was impacted by geopolitical instability, particularly in the Middle East.

Drivers of Future Performance

Management expects steady aftermarket demand, disciplined pricing, and operational improvements to drive results, while acknowledging inflation and geopolitical risks as ongoing challenges.

• Stable aftermarket and new products: With a large installed base, Hayward anticipates that ongoing maintenance and upgrades will underpin demand. The company is expanding its OmniX connected pool platform and introducing new product lines aimed at increasing share in both residential and commercial markets.
• Margin management amid inflation: Rising costs for specialty metals, freight, and resins are expected to pressure margins in the near term. Management is relying on targeted price actions and operational efficiencies, including supply chain initiatives, to offset these headwinds and maintain full-year gross margin in line with last year.
• Geopolitical and input cost risks: Regional instability—especially in the Middle East—and the evolving tariff landscape introduce uncertainty. Management has not built temporary surcharges into guidance, opting for flexibility depending on market developments and cost trends.

Catalysts in Upcoming Quarters

Our analysts will focus on (1) the pace of adoption for new products such as OmniX and their impact on aftermarket growth; (2) Hayward’s ability to sustain pricing power and margin resilience in the face of continued input cost inflation; and (3) execution of targeted regional expansion and channel management strategies. Developments in geopolitical risk and tariff changes will also be important signposts to monitor.

Hayward currently trades at $14.91, down from $15.80 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).

Our Favorite Stocks Right Now

ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.

Find out which 5 stocks it's flagging for this month - FREE. Get Our Top 5 Growth Stocks for Free HERE.

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.