Q2 Earnings Outperformers: Latham (NASDAQ:SWIM) And The Rest Of The Leisure Products Stocks
As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at leisure products stocks, starting with Latham (NASDAQ:SWIM).
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.
The 16 leisure products stocks we track reported a slower Q2. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 16.6% below.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
Thankfully, leisure products stocks have been resilient with share prices up 8.1% on average since the latest earnings results.
Latham (NASDAQ:SWIM)
Started as a family business, Latham (NASDAQ:SWIM) is a global designer and manufacturer of in-ground residential swimming pools and related products.
Latham reported revenues of $160.1 million, down 9.6% year on year. This print exceeded analysts’ expectations by 2.2%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ earnings and operating margin estimates.
Commenting on the results, Scott Rajeski, President and CEO, said, “This was another quarter of strong execution, in which we drove substantial increases in profitability, while managing through difficult industry conditions and supporting future growth initiatives. Margin expansion was a key highlight of our second quarter performance, reflecting our improved cost structure and the impact of production efficiencies resulting from lean manufacturing and value engineering programs, ongoing cost containment, and lower raw material costs."
Latham scored the highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 104% since reporting and currently trades at $6.31.
Is now the time to buy Latham? Access our full analysis of the earnings results here, it’s free.
Best Q2: American Outdoor Brands (NASDAQ:AOUT)
Spun off from Smith and Wesson in 2020, American Outdoor Brands (NASDAQ:AOUT) is an outdoor and recreational products company that offers firearms and firearm accessories.
American Outdoor Brands reported revenues of $41.64 million, down 4.1% year on year, outperforming analysts’ expectations by 1.4%. The business had a very strong quarter with an impressive beat of analysts’ earnings estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.2% since reporting. It currently trades at $9.07.
Is now the time to buy American Outdoor Brands? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Ruger (NYSE:RGR)
Founded in 1949, Ruger (NYSE:RGR) is an American manufacturer of firearms for the commercial sporting market.
Ruger reported revenues of $130.8 million, down 8.4% year on year, falling short of analysts’ expectations by 5%. It was a disappointing quarter, leaving some shareholders looking for more.
As expected, the stock is down 6.4% since the results and currently trades at $42.22.
Read our full analysis of Ruger’s results here.
Solo Brands (NYSE:DTC)
Started through a Kickstarter campaign, Solo Brands (NYSE:DTC) is a provider of outdoor and recreational products.
Solo Brands reported revenues of $131.6 million, flat year on year. This print beat analysts’ expectations by 2.4%. Aside from that, it was a weaker quarter as it produced full-year revenue guidance missing analysts’ expectations.
The stock is down 25% since reporting and currently trades at $1.50.
Read our full, actionable report on Solo Brands here, it’s free.
MasterCraft (NASDAQ:MCFT)
Started by a waterskiing instructor, MasterCraft (NASDAQ:MCFT) specializes in designing, manufacturing, and selling sport boats.
MasterCraft reported revenues of $67.18 million, down 59.7% year on year. This result surpassed analysts’ expectations by 6.5%. Taking a step back, it was a weak quarter as it logged revenue guidance for next quarter missing analysts’ expectations.
MasterCraft had the slowest revenue growth and weakest full-year guidance update among its peers. The stock is down 10.6% since reporting and currently trades at $17.75.
Read our full, actionable report on MasterCraft here, it’s free.
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