Hayward Holdings, Inc. (HAYW) Q1 2026 Earnings Report, Transcript and Summary

Welcome to Hayward Holdings First Quarter 2026 Earnings Call. My name is Carrie, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Kevin Maczka, Vice President, Investor Relations and FP&A. Mr. Maczka, you may begin.

Thank you, and good morning, everyone. We issued our first quarter 2026 earnings press release this morning, which has been posted to the Investor Relations section of our website at investor.hayward.com. There, you can also find the earnings slide presentation referenced during this call. I'm joined today by Kevin Holleran, President and Chief Executive Officer; and Eifion Jones, Senior Vice President and Chief Financial Officer. Before we begin, I would like to remind everyone that during this call, the company may make certain statements that are considered forward-looking in nature, including management's outlook for 2026 and future periods. Such statements are subject to a variety of risks and uncertainties, including those discussed in our most recent Forms 10-K and 10-Q filed with the Securities and Exchange Commission that could cause actual results to differ materially. The company does not undertake any duty to update such forward-looking statements. During today's call, the company will discuss non-GAAP measures. Reconciliations of historical non-GAAP measures discussed on this call to the comparable GAAP measures can be found in our earnings release and the appendix to the slide presentation. All comparisons will be made on a year-over-year basis, unless otherwise indicated. I will now turn the call over to Kevin Holleran.

Thank you, Kevin, and good morning, everyone. It's my pleasure to welcome all of you to Hayward's first quarter earnings call. I'll begin on Slide 4 of our earnings presentation with today's key messages. The headline is clear. We delivered an outstanding first quarter, meaningfully ahead of expectations, highlighted by double-digit sales and earnings growth. Net sales increased 12% against the prior year comparison of 8% growth, driven by strong price realization and positive volume. Adjusted EBITDA grew 15% and adjusted diluted EPS increased 30%, demonstrating the earnings power of our model. Margins expanded further with both gross margin and adjusted EBITDA margin rising despite incremental inflation, tariffs and targeted investments in innovation, operations and customer initiatives. We also made further solid progress on the balance sheet. Q1 is typically a seasonally low cash flow quarter, yet we reduced net leverage from 2.8x to 2.4x year-over-year. These results underscore the strength of our predominantly installed base aftermarket business model and disciplined execution of our strategic initiatives. Given our strong first quarter performance and confidence in our outlook, we are increasing our full year guidance. For the full year 2026, we now expect net sales to increase approximately 5% and adjusted diluted EPS to increase approximately 9% to 13%. Turning now to Slide 5, highlighting the results of the first quarter. Net sales increased 12% to $255 million, driven by strong pricing execution, positive volume and a favorable contribution from foreign exchange. North America and Europe and Rest of World increased 12% and 9%, respectively. As demand remained resilient across our installed base aftermarket, we were pleased to see some of our more discretionary products like automation and heaters outpace core categories in the quarter. This top line growth, combined with disciplined cost management translated into meaningful margin expansion. Gross margin increased 50 basis points to 46.5% and adjusted EBITDA margin expanded 60 basis points to 22.1%. Adjusted diluted EPS increased 30% to $0.13. Overall, this was another quarter of strong execution, delivering balanced growth and increased profitability. Turning now to Slide 6. 2025 marked Hayward's 100th anniversary and 2026 marks the fifth anniversary of our IPO on the New York Stock Exchange. These milestones provide an opportunity to reflect on the significant evolution in the company over the past 5 years. During this period, we've transformed Hayward into a more efficient, more disciplined and better-positioned organization for long-term market leadership. We strengthened our senior leadership team with proven operators to guide the next phase of growth. Innovation remains our engine. We continue to develop industry-leading aftermarket-focused products and solutions to expand our total addressable market. On the commercial side, we've redesigned our commercial excellence programs to support builder, dealer and servicer conversions to Hayward. Operational excellence has long been part of Hayward's DNA, and we further consolidated our manufacturing and distribution footprint to improve efficiency, better serve customers and derisk our supply chain amid geopolitical uncertainty. At the same time, we elevated how we operate day-to-day, accelerating lean and continuous improvement initiatives to drive productivity across the organization. All of this is underpinned by disciplined financial management. We've strengthened the balance sheet, meaningfully reducing net leverage and increased flexibility to invest through challenging market environments. In parallel, we're increasingly leveraging AI across the organization to enhance decision-making, sharpen execution and improve productivity. These are not just incremental improvements. Together, they set a strong foundation for Hayward's next chapter of profitable growth. Turning now to Slide 7. These accomplishments are important, but what matters most is how they translate into results and support future value creation. When you step back and look at our track record, the results are clear. Over the last several years, we've delivered top line growth in line with our long-term targets, while expanding margins and growing earnings, all in a challenging macro backdrop. Specifically looking back to before the pandemic, our 6-year CAGRs from 2019 to 2025 were approximately 7% for net sales and 10% for both gross profit and adjusted EBITDA. That performance underscores the resilience of our organic growth profile. Our position is advantageous and differentiated with approximately 85% of our sales derived from serving the aftermarket needs of a large and growing installed base built over decades. This mix provides visibility and a significant runway for continued growth. Our pricing discipline, operational agility and cost control have helped us expand margins despite inflation, giving us the financial strength to fully fund growth and productivity initiatives. Looking ahead, our momentum is supported by an aging installed base requiring continuous maintenance, repair and upgrade. We are expanding our addressable market through new aftermarket innovations such as OmniX, providing pool owners a low-cost path to a connected pool pad and an improved overall experience. By investing in customer care, we are strengthening our competitive position and driving conversions to Hayward. At the same time, we continue to expand our presence in commercial pool and flow control. With durable secular tailwinds in place, we remain confident in our long-term growth trajectory and our ability to deliver compelling value for shareholders. With that, I'd like to turn the call over to Eifion to discuss our financial results in more detail.

Thank you, Kevin, and good morning. Turning to Slide 8. I'll walk through our financial performance in more detail. We delivered a strong first quarter with results meaningfully ahead of last year. Net sales increased 12% to $255 million against an 8% growth comparison a year ago. Price realization remained strong, offsetting inflation, and we also saw positive contributions from both volume and foreign exchange. The majority of the net price realization reflects underlying price increases over the last 12 months, including a specific product category increase in Q1 this year related to specialty metal components inflation. A portion of the increase, approximately 2 percentage points, was attributable to incentive mix across the retailer and builder channels. Gross profit increased 13% to $119 million, driving gross margin expansion of 50 basis points to 46.5%. Adjusted EBITDA increased 15% to $56 million, with margin expanding 60 basis points to 22.1%, reflecting cost management and operating leverage in the model. The effective tax rate was 22%. Adjusted diluted EPS increased 30% to $0.13. Moving to Slide 9, segment performance for the first quarter. North America net sales were up 12% to $210 million, driven by positive pricing and volume. Within the region, U.S. sales were up 11% and Canada was up a robust 26%. Gross margin was consistent with the prior year as operating leverage offset incremental tariff and inflationary pressures. Sales in Europe and Rest of World increased 9% to $45 million, largely due to favorable FX gains and relatively stable price and volume. Europe sales increased 14% and Rest of World reduced 1%, impacted by geopolitical disruption in the Middle East related to the ongoing conflict in Iran. Margin performance in the segment continued to improve with gross margin increasing 230 basis points to 35.8% and adjusted segment income margin expanding 280 basis points to 19.4%, driven by improved operational execution. Turning to Slide 10. We have a strong balance sheet and cash flow profile. Cash flows are seasonal in nature with typical cash usage in the first quarter due to extended payment terms offered for the Early Buy program, followed by cash generation in the second quarter, driven by the collection of the Early Buy receivables. Cash flow used in operations was $151 million in the first quarter 2026 compared to $6 million in the year ago period. As a reminder, the first quarter 2025 benefited from $99 million in net proceeds from the sale of accounts receivable, whereas we did not recognize any such proceeds in 2026. We continue to strengthen the balance sheet, reducing net leverage to 2.4x from 2.8x a year ago. While net leverage increased in the first quarter from 1.9x at year-end, this is expected due to the seasonal cash usage tied to the Early Buy program. Net leverage usually rises in Q1 due to the extended Early Buy payment terms, then reduces in Q2 due to cash inflows from those receivables. Importantly, leverage is lower year-over-year, reflecting ongoing balance sheet improvement. We have ample liquidity and financial flexibility to support continued organic investment, strategic M&A and return capital to shareholders, all while maintaining disciplined leverage. Capital allocation on Slide 11. We balance strategic growth investment with stockholder returns, while maintaining prudent financial leverage. As an OEM, we prioritize organic investment into our manufacturing and supply chain footprint, followed by strategic M&A, while remaining opportunistic for share repurchases. In the first quarter, we made a modest anti-dilutive repurchase of approximately $6 million. Turning to Slide 12. We are updating our outlook for 2026. Following a better-than-expected first quarter, net sales are expected to increase approximately 5%, up from our prior guidance of approximately 4%. We now expect adjusted diluted EPS to increase approximately 9% to 13% to a range of $0.84 to $0.87. Geopolitical disruptions and rising costs for specialty metals, freight and resins are currently applying a modest downward pressure on gross margin with some year-over-year compression expected in Q2 before our mitigation efforts are fully realized. We anticipate that these countermeasures will safeguard gross profit levels and allow us to maintain full year gross margin in line with last year, with margins expected to normalize during the second half as our initiatives are implemented. We expect free cash flow in the region of $200 million, exceeding 100% of net income. This outlook includes modest working capital improvement, net interest expense of approximately $45 million, a normalized effective tax rate of around 24% and increased CapEx of approximately $40 million as we continue to invest in upgrading our operational capabilities. Overall, we're confident in our ability to execute in the current environment and remain positive on pool industry growth, supported by the strength and the resilience of the aftermarket. With that, I'll turn the call back to Kevin.

Thanks, Eifion. Before closing, I want to thank the team again for their performance. Hayward delivered an outstanding first quarter, highlighted by double-digit sales and earnings growth. Given the strong start to the year and our confidence in our outlook, we are increasing our guidance for the year. Importantly, the company is far stronger today than it was just 5 years ago at the time of our IPO and the structural improvements we've made across leadership, innovation, commercial execution and operations are enduring and continue to compound. With a large aging installed base, industry-leading technologies like OmniX and a disciplined operating culture, we believe Hayward is exceptionally well positioned to deliver consistent growth, expanding profitability and strong cash flow over time. We remain confident in the long-term fundamentals of the pool industry and excited about the opportunities ahead. With that, we're now ready to open the line for questions.

[Operator Instructions] And our first question will come from Jeff Hammond with KeyBanc Capital Markets.

Great start to the year. I wonder, one, just what really surprised you? Was it weather late in the quarter? Was it better Early Buy follow through? And then just around Early Buy, some concern or question about channel inventories, big distributor showing good growth and a competitor kind of talking about some normalization of inventories needed to happen. Just touch on how you're feeling about your inventories and sell-in versus sell-through?

Sure. So first about the quarter, Jeff, weather was certainly good. I would say warm and generally dry, which are good for our industry. There were some regions that certainly had some exceptions to that, namely parts of the East Coast with some extremely cold and some precipitation. But in general, I would think weather was a pleasant surprise for the winter months, which are not always that way. I would say the other thing that was really positive is as you look across the geographies and the specific end markets, we saw a nice participation and double-digit growth out of most regions. Overall, U.S. was 11%. Canada continues with its strong recovery in the mid-20% growth. Commercial has been a great story for us, nearly 20% growth. Industrial Flow Control, low double-digit growth. And then Europe, in the low teens growth year-on-year. I would say the one exception to that would be Rest of World, which is where Middle East is part of that. We did see some softness for some obvious reasons during the quarter. But on balance, I would say sales across all end markets and geographies was very strong for us. You mentioned Early Buy. We were well positioned coming into the start of the year with a nice carryover from our Early Buy orders that were received during fourth quarter. Because of some nice flow business in fourth quarter, we were able to really meter the Early Buy shipments both fourth quarter and carried more of that into first quarter of this year, allowing us to really stage the inventory in the channel as the season starts. As for the inventory question, second part of your comments there, we closely monitor channel inventory levels with our partners. And as I said, we were able to manage the timing of those Early Buy shipments to ensure that the inventories remain balanced at year-end, and we feel good about where they are exiting the first quarter. On balance, we're comfortable with overall inventory levels from a days on hand standpoint based on our current outlook for the seasonal demand profile. As of today, our mid-single-digit net sales guide assumes sell-in approximates to the sell-out for the full year. and the normal inventory levels will be achieved within the channel throughout the year and exiting the year. I know you're aware of this, but just as a reminder, the normal cadence for our industry is that sell-in exceeds sell-out in fiscal fourth quarter and first quarter. And then as you work through the season in Q2 and Q3, the sell-out of the channel exceeds what the OEMs or what Hayward sells into the channel. So in summary, we feel comfortable with the inventory levels that are staged in the channel and in the market currently and expect it to stay that way through the year.

Okay. Good. Just a follow-up here. Eifion, you mentioned some inflation and margin impact into 2Q. Can you just speak to where you're seeing incremental inflation, how the Section 232 update does or doesn't impact you? And what you're doing in terms of price? Is it broad or more targeted? I know there's some issues with ruthenium and other -- with salt chlorinators, et cetera, but just walk us through that.

Yes. Jeff, before I jump into the response, let me just lead off by saying, despite these high pockets of inflation, which are higher than we originally expected, the team is doing a really good job getting after limiting the impact of these cost increases. And we're executing the playbook that we've become adapted to over the last several years. But to be clear, look, we are experiencing some inflation as we step into 2026. I'd also say, despite -- just to clarify what I said in the call, we continue to expect sequential gross margin to improve from Q1 to Q2, but it will be probably a little bit more modest than we did last year, in part because we'll start to lap price increases that we put into place. But specifically, we're experiencing higher energy-based costs coming through as a consequence of the disruption, I'd say, on a global basis. And we've also experienced slightly higher specialty metal costs earlier in the year, and we've acted quickly. We put 2 price increases and the first one in Q1, which was an out-of-cycle price increase on the alternative salt sanitization line. That went in on orders in Q1, most likely to start impacting invoices in Q2 onwards. And then more recently, early on in Q2, we put in a surcharge of approximately 2.5% which, again, on orders early in the quarter may be affecting invoices positively at the end of the quarter, but certainly rolling on to the full invoice profile in Q3 and Q4 onwards. So those are the necessary actions that we've taken. I'd say as a consequence of both of those actions, we still expect full year gross margins to be comparable to the record we set last year. And the operational team continues to execute all of their supply chain initiatives to limit the impact of any further inflation. There was the second part of the question that you had, second part? It is tariffs. In terms of the tariffs, Jeff, what I would say is the roll of IPA and then the reinstitution of the 122s and to your point, the 232s, we've evaluated the net impact of that, and it's no different from what we thought coming into the year. So we don't see any further headwind to the year as a consequence of this change in tariff regime.

And our next question comes from Nigel Coe with Wolfe Research.

So I just -- Eifion, I just want to go back to the 10% price in North America. You mentioned a couple of what sounds like unusual contributions. I just wanted to make sure we understand that. And maybe just specify what's baked in for price in your guide? I think it was 3% prior. How does that look right now?

Yes. As you mentioned, we originally thought pricing for the full year would average broadly speaking, plus 3%, obviously, higher in North America, lower outside North America. We now expect it to be plus 4%. Some of that now is consequential to the benefit we took in Q1, slightly different incentive mix across the channel, retailers and builders earning a little bit less, normal distributors earning their normal margin benefits there. But we've increased guidance up 1% to reflect the pricing positivity. As I mentioned, the Q1 price increase associated with specialty metals impact salt chlorination. That's a very discrete product line. It doesn't affect -- that price increase does not affect the entirety of our product line. So that has a very small positive impact on the full year when you think about total Hayward pricing. The surcharge, which is 2.5%, we've put that in, in early Q2. We have not built that into guidance because we view it as temporary but structural. At any particular point in time, we may withdraw that 2.5%. So it's not appropriate for us to include that within our guidance. But for the balance of the year, we expect pricing to be developing quite similar to what we originally thought, which is, again, mid-single digits for North America, maybe slightly higher in the U.S. specifically, and then lower single-digit development in Europe and Rest of World, overall averaging about plus 4% for the entire year.

Just to reiterate what you said, to Jeff, again, we'll be lapping in Q2, Nigel, the tariff off-cycle increase that was announced in Q2 of 2025. So that will start to expire here as we work through the second quarter.

Okay. And then just you made it very clear that you're not expecting there to be any channel inventory headwind this year, sell-in versus sell-through relatively similar. Do you think that there's any impact though from the price increases? Obviously, there's been a lot of price going in over the last several years in 2026 as well. Is there any elasticity impact here? Are you seeing any mix away towards lower-cost competitors? Any descoping of the pads? Anything you can point to?

Yes. I mean we certainly have our eyes peeled for that, Nigel. It's a very logical question with the amount of price that has been passed through to the pool owner. We can't point to anything specific that would say absolutely yes. I would say here in first quarter, we were very encouraged to see positive volume for the first time in several quarters. So that would actually be absolutely contrary to that concern. That said, there is a lot of price there. We continue to try and price products for the value that we think they create for the pool owner, and that's how we're driving our product development and our pricing decisions. Again, when we make these announcements, they're not necessarily blanket same percentage across all product categories or all SKUs, Nigel. We're fairly tactical and specific in where we think the market can accept the pricing, and frankly, where it can't. From a sales standpoint, as we look at first quarter, we were encouraged by some of the sales in numbers on what we would call discretionary products. You don't necessarily need color LED lights on your pool or salt chlorine generators or controls, but we saw a nice sales up in those numbers in the first quarter. So to summarize, we certainly are very aware of the question that you're asking, looking for data and early indication. But thus far, we see that the market is accepting the pricing that we've put in. And we hope it's nearing an end, though. We're not -- we don't want to continue having to put these dollar-for-dollar price increases into the marketplace. So stay tuned on that one, Nigel.

We'll go next to Andrew Carter with Stifel.

First off, I wanted to ask, I think Pentair said yesterday, their sell-out was above what POOLCORP said, that their equipment sell-out was 7%. Could you kind of comment directionally where you were? I think it's interesting in there, you said that weather was favorable. You're heavier skewed to the Northeast. That weather has been absolutely terrible. So I think that'd be late. So if you want to add any context to that.

Yes. I mean in terms of sales out with the larger channel partners that we get that information from, I would say our sales out was consistent, Andrew, with really what our full year guidance is. So we saw, call it, mid-single-digit sales out through our larger channel partners, which gives us confidence there. In terms of weather, yes, I mean, some of our larger share geographies, certainly in the U.S. are more seasonal in nature. And we view that -- while sales were okay in those regions, it certainly didn't help us in the first quarter. So we see that as an opportunity as the weather finally starts to turn in the Northeast and the Midwest. I quoted Canada earlier at plus mid-20s, high share region or country for us as well. So it didn't necessarily help. But overall, the balance of the country where we are growing share, which has been very targeted in our go-to-market and our dealer conversion strategies helped mute some of the weather impacts from the Midwest and East Coast, Andrew.

Moving next to Rafe Jadrosich with Bank of America.

Just on the guidance increase for the full year, can you just talk about sort of what's driving that? Is that just 1Q upside? Is it better price realization or volume compared to your expectations? Or are you seeing it in the order book? What's changed versus what you're expecting a couple of months ago?

Yes. Let me start on that, Rafe, and then I'll ask Eifion to give more detail. But for the balance of the year, our guide assumes relatively stable demand environment with some regional differences. In North America, we're expecting pricing, as Eifion mentioned earlier, to be up in the mid-single-digit range, supported by disciplined execution and with modest improvements in aftermarket volume, perhaps offset slightly with new construction activity. And then in Europe, Rest of World, where pricing is more limited and volumes will be broadly flat. So taken together, all of this supports the full year outlook of that approximate 1% increase in the net sales growth.

Yes, I think you got it, Kevin. The increase from 4% to 5% of top line growth is a reflection of the better pricing performance in Q1, recognizing Q1 typically only represents about 20%, 21% of [indiscernible] sales, but we moved up modestly there. In terms of the EPS guide, we've moved up, I think, a little bit more meaningfully. Original guidance that was $0.82 to $0.86. We've now moved that low end up to $0.84 and top end to $0.87. So about $0.015 increase at the midpoint in those ranges. And that really reflects continued leverage across the SG&A base. And we've been investing in SG&A progressively over the last couple of years. We increased in Q1 year-over-year in SG&A, but less than the net sales growth. So we're beginning to see leverage come across the SG&A base as we talked about as we exited last year. So we're pleased with the development in the EPS, obviously, again, fueled in part by the top line movement.

Okay. That's helpful. And then just on the -- on your market share, it's obviously tough for us to tell because you have different channel dynamics and sell-in and sell-out. But it seems to us like you're gaining a little bit of market share. One, would you agree with that? And if it's true, like what are the -- what do you think the key drivers are? Is it like were you underpenetrated regionally? Is it like OmniX? Like what's leading to that outperformance relative to the industry?

Yes. I mean we think that we are picking up some modest share. It's hard fought certainly because there are some great competitors out there. But this has been a concerted effort several years in the making, Rafe. And it is a combination of things from some great new product launches. OmniX is certainly grabbing a lot of headlines. But there's other products behind it, whether it's entry into a 4-horsepower variable speed or some aftermarket lights or bringing some new cleaner products to the market. As Eifion just mentioned, we've added some resources to our field sales and service teams to provide better service, better support in our efforts to gain the attention of some new dealers out there. And then certainly, geographically, as we spoke, Andrew highlighted earlier some of our higher share regions. We were underpenetrated in some markets, not only around the country, but around the globe. And we've had some very focused regional approaches to try and grow out West and in the Southwest and in the South Central and parts of Florida. So it's a multipronged approach across new product introduction, in-market sales support, marketing programs and focused on some of those underpenetrated markets where Hayward has been historically underrepresented.

[Operator Instructions] We'll go next to Brian Lee with Goldman Sachs.

I guess on the guidance, it does sound like most of it is price in terms of the incremental 1 percentage point on the top line. But you did allude to the fact that volume went positive here for the first time in a while and your tone sounds relatively constructive. I know it's early in the year, but any sense of kind of the demand environment maybe picking up or at least modestly being better and that being a potential tailwind as you move through the year? I know prices obviously helped a lot and looks like it will continue to help. But any additional commentary you can make on sort of what you're seeing here from a demand perspective and what it might translate to for the rest of the year?

Yes, I think it's a great question. As you said, when you're framing the question, Brian, it's early in the year, though. And Q1, not all markets are even open for business at that point in time. So while we're optimistic, I don't -- we're not yet confident to assume that there will continue to be market demand or market volume that could assist with the revision to guidance at this point. As we look, the aftermarket continues to be resilient. As I mentioned, we see nice sales in demand for some of the upgraded -- or products that we see adding features and functionality to the pool pad. From a remodel standpoint, there seems to be some pockets of optimism as we interact with our dealers in the first quarter. And new construction, I think it's just responsible for us to assume that it's going to remain flattish until there's some catalyst for us to think otherwise or see otherwise on the new construction side. So we certainly would like to be back in front of this audience in the coming quarter talking about some more bullish outlook on market demand, but we're not yet to the point of adding that as an element of our guidance.

Yes. Maybe just to tag on one last point, which is a follow-up to what Rafe was asking as well. We have introduced the OmniX, I'll call it, platform into our product range. We started last year. And we've seen good momentum year-over-year in the adoption of OmniX as it was launched attached to that original pump category. That confidence there, that uptick in activity allows us to think about expanding, and we are expanding it across other product categories. So as Kevin just mentioned, we're being reserved a little bit, but the aftermarket remains resilient. Discretionary spend for us, at least both in sell-in and what we can see in sell-out is positive and the adoption of OmniX has been good.

Yes, absolutely. I appreciate that color. And maybe on that point, I know in the past, you guys have kind of shared some product vitality statistics, and you're clearly gaining some share and definitely from a body language perspective, you sound more constructive than some of your peers. So this feels company specific. But is there anything you can share in terms of product vitality, sort of what amount of growth is coming from new products? And -- because that seems like that could be one of the more sustainable uptrends for you from a growth perspective. I get the underpenetrated regions and things of that nature, there's multiple prongs to it. But maybe on the new product front, anything you can share just to provide some additional growth for you guys?

Yes, sure. It's probably more appropriate for us to share vitality as we come out of the season, so we get a really good view on what's sold out right now for the last couple of quarters we've been selling in. So let's maybe hold the answer to that question until we come out of Q2 when we can get better visibility on vitality out of the channel. What I would say is we -- last year, we did launch and introduce a number of different new products. We're very pleased with the success of that. We featured a bunch of those at the end of last year in our earnings presentation. And as we look at Q1, specifically this year, we're very pleased with what we would call the discretionary side of the product range. It continues as a positive momentum sell-in over the last -- certainly in Q1, but over the last couple of preceding quarters. So we're seeing good adoption of technology, good adoption of features, including lights, control systems, heaters on an LTM basis continues to do well. So from a discretionary perspective, which is attached to a lot of our new product launches, we're seeing very good adoption.

And this now concludes our question-and-answer session. I would like to turn the floor back over to Kevin Holleran for closing comments.

Thanks, Carrie. In closing, I want to thank our employees and partners around the world. Your dedication and hard work continue to be critical to the progress we're making across the business. We're encouraged by our strong start to the year and remain confident in our strategy. If you have any follow-on questions, please reach out to our team. We appreciate your continued interest in Hayward and look forward to speaking with you again on the next earnings call. Carrie, you may now end the call.

Thank you. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.