S&P turns Hayward outlook to negative

S&P said it changed its outlook for Hayward Industries Inc. to negative from stable and affirmed all its ratings for the company, including the BB issuer rating.

“Hayward's operating results for the first quarter ended April 1, 2023, were weak. Its revenue and EBITDA significantly declined due to an industrywide slowdown and a return to historical seasonal patterns, which includes a weak first quarter when pool usage is low. The company's operating performance started to slow down in the second half of 2022 with year-over-year revenue declines of 28%, which accelerated to 49% in the first quarter of 2023. The large decline was due to channel inventory destocking and weakening consumer demand as pool use fell in part because of less at-home leisure activity,” S&P said in a press release.

The agency warned a downgrade is possible if leverage remains above 4x into fiscal year 2024.

However, S&P said it projects Hayward’s revenue to rebound in the second half of 2023.

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