Hayward Holdings, Inc. (HAYW): 5 FORCES Analysis [Nov-2025 Updated]

You're looking for the real competitive picture for Hayward Holdings, Inc. as we close out 2025, and after two decades analyzing these markets, I can tell you it's a complex tug-of-war. Honestly, supplier power remains moderate due to persistent material costs, but Hayward Holdings, Inc.'s strong brand helps keep customer power in check, especially as that resilient aftermarket demand props up full-year net sales guidance between $1.095 billion and $1.110 billion. The defintely high rivalry, particularly in the connected equipment segment against players like Pentair and Pool Corporation, is the main heat source, while the biggest behavioral threat isn't a new competitor, but homeowners opting for cheaper repairs instead of full replacements. Let's break down exactly where the pressure is coming from across all five forces below.

Hayward Holdings, Inc. (HAYW) - Porter's Five Forces: Bargaining power of suppliers

You're analyzing Hayward Holdings, Inc.'s position against its suppliers, and the reality is that this force is currently sitting in the middle ground-it's not a free-for-all for suppliers, but it's definitely not a buyer's market either. Supplier power is moderate due to continued supply chain pressures and material cost inflation that Hayward Holdings, Inc. has been battling through 2025. We see this tension reflected in the gross margin performance across the year so far.

Honestly, the cost environment has been tough. For instance, the company estimated an annualized cost increase of approximately $30 million due to tariffs alone, with about $18 million of that impacting the fiscal year 2025. Still, Hayward Holdings, Inc. has shown it can push back.

The company has demonstrated pricing power, implementing a 3% price increase in North America effective in April 2025 specifically to offset these rising costs, including tariff impacts. This pricing strength is evident in the top-line results; for example, Q3 2025 net sales of $244.3 million were driven by a 5% net price realization. That's a concrete action that helps neutralize supplier leverage.

Here's a quick look at how pricing and margins have tracked against the backdrop of these cost challenges:

Raw material costs for plastics and metals remain a persistent challenge in 2025, contributing to the cost pressures that necessitated these price hikes. You can see the margin fluctuation: Q1 was 49.5%, it peaked at a record 52.7% in Q2, and settled at 51.2% in Q3. That movement shows the ongoing battle to absorb or pass through input costs.

To manage this, Hayward Holdings, Inc. is actively working to reduce dependency on China, which increases short-term cost/complexity as they qualify new sources. The company is executing mitigation plans to reduce direct sourcing from China from approximately 10% down to 3% by the end of fiscal year 2025. This structural shift is a direct response to geopolitical risk and supplier concentration, but it costs time and money in the near term.

The key takeaways for you on supplier power are:

• Supplier power is moderate due to continued supply chain pressures and material cost inflation.
• Hayward is actively working to reduce dependency on China, which increases short-term cost/complexity.
• The company has demonstrated pricing power, implementing a 3% tariff-related price increase to offset rising costs.
• Raw material costs for plastics and metals remain a persistent challenge in 2025.

Finance: draft the Q4 2025 cost-of-goods-sold forecast, explicitly modeling the impact of the reduced China sourcing by owner.

Hayward Holdings, Inc. (HAYW) - Porter's Five Forces: Bargaining power of customers

You're assessing customer power in a market where the product is essential but has a long lifespan. For Hayward Holdings, Inc. (HAYW), the bargaining power of customers lands squarely in the moderate zone. This balance is mostly due to the nature of the pool equipment business itself.

Power is moderate, as a large portion of sales is resilient aftermarket replacement demand. Honestly, this is the key stabilizer. Hayward Holdings, Inc. management reaffirmed confidence in the business model by noting that 85% of sales are tied to the aftermarket. This recurring revenue stream, supported by a product replacement cycle estimated between 8 to 11 years, means many customers are locked into buying parts and service regardless of minor economic wobbles.

Customers are price-sensitive; a shift toward repairing rather than replacing equipment is a risk to margins. We see this tension play out in pricing actions. To offset inflation and tariffs, Hayward implemented a 3% price increase in North America effective April 2025, with an additional 4% increase planned for June 2025. If homeowners opt for cheaper repairs over full unit replacements, it definitely pressures the higher-margin new equipment sales.

Hayward's strong brand and large installed base create high switching costs for pool owners. The company benefits from a large installed base of equipment, which acts as a natural barrier. Switching from one ecosystem to another-say, moving from Hayward pumps to a competitor's-often means replacing multiple integrated components, which is a hassle and an expense you'd rather avoid.

The company's full-year 2025 net sales guidance is strong, between $1.095 billion and $1.110 billion. This upward revision in guidance, following Q3 results, signals management's confidence in demand momentum despite potential customer price sensitivity.

Here's a quick look at some recent performance metrics that frame this dynamic:

The fact that the company achieved a record gross profit margin of 52.7% in Q2 2025 suggests that, for now, the brand strength and aftermarket necessity are outweighing customer desire to push prices down.

• Resilient aftermarket demand provides a floor for sales volume.
• Recent price increases were successfully implemented in 2025.
• The installed base naturally raises the cost to switch brands.
• Management is confident enough to raise the low end of the 2025 sales outlook.

Finance: draft 13-week cash view by Friday.

Hayward Holdings, Inc. (HAYW) - Porter's Five Forces: Competitive rivalry

The competitive rivalry within the pool equipment sector is quite intense, driven by a handful of large, well-established players. You see this clearly when you look at the scale of the main competitors in the North American market. Hayward Holdings, Inc. is definitely a major force, but it competes directly against giants like Pool Corporation (POOL) and Pentair (PNR).

Hayward Holdings holds an estimated 33% market share in the North American residential pool market, which is a strong position, but it means nearly two-thirds of the market is split among rivals and smaller entities. To put the scale into perspective, here's a quick comparison based on recent reported figures:

Competition is definitely heating up in the higher-margin, automated and connected pool equipment segment. This is where the real differentiation is happening now. Hayward is clearly pushing this, noting that their new OmniX platform targets the aftermarket of approximately 3.5 million non-automated pools in the U.S.. This focus is a direct response to the market dynamics, as the total addressable market for new construction automation is much smaller, estimated at only about 62,000 annual pool builds in the U.S.. Rivals are also investing here; for instance, Pentair formed a partnership in January 2025 to co-develop next-generation chlorinators merging IoT monitoring with heat-pump efficiency.

The industry structure itself forces this rivalry toward the installed base. The overall U.S. swimming pool construction industry is valued at $16.5 billion in 2025, but it's only growing at a CAGR of 3.0% over the last five years. That maturity, coupled with slowing new pool construction-which Pool Corporation noted was down 15% in 2024 and is expected to be flat to slightly down in 2025-pushes everyone to fight harder for the aftermarket share. Hayward Holdings benefits from this, as nearly 80% of its revenue historically comes from aftermarket service and replacement parts. When new pool sales stall, the replacement cycle of 8 to 11 years becomes the primary battleground for revenue generation.

You can see the strategic shift in focus through these key competitive moves:

• Hayward Holdings is targeting an installed base of roughly 3.5 million non-automated pools.
• Pool Corporation is seeing its digital sales grow from 12% in Q2 2023 to 16% in Q2 2025.
• Pentair's pool sales grew 9% in Q2 2025, reaching $427 million.
• Hayward Holdings' North America segment grew 7.9% in Q1 2025, driven by price and acquisitions.

Finance: draft 13-week cash view by Friday.

Hayward Holdings, Inc. (HAYW) - Porter's Five Forces: Threat of substitutes

You're looking at the competitive landscape for Hayward Holdings, Inc. as of late 2025, and the threat of substitutes is a nuanced area. For core, essential pool equipment like pumps and filters, direct product substitution is low; a pool needs these to function, period. Still, the way owners manage that need presents a substitute threat to Hayward Holdings, Inc.'s higher-margin replacement sales.

The primary substitute behavior we see is the consumer choosing lower-cost repairs over full equipment replacement. Hayward Holdings, Inc.'s aftermarket sales historically account for about 80% of net sales, which is good, but the underlying decision is key. A minor fix for a component like a seal or cartridge might cost only $150-$500, whereas a major replacement for a heater or salt-system runs between $2,000-$3,000. This cost disparity definitely pushes owners toward repair when possible, which can impact the average selling price of an aftermarket transaction.

Also, homeowners are increasingly substituting professional service labor with do-it-yourself (DIY) maintenance, especially as automation tools become more common. While complex equipment servicing still often requires a pro, the general maintenance load is shifting. For context, the average annual residential pool maintenance spend ranges from $3,000 to $6,000. This DIY trend is supported by the market seeing a shift toward automated tools like robotic cleaners, which enhance efficiency for companies but also offer owners an option for routine cleaning themselves.

We also have to look at where discretionary dollars go outside of pool maintenance itself. The entire pool and outdoor living space competes with other high-ticket home improvements. To frame the scale of the market Hayward Holdings, Inc. operates in, the global swimming pool equipment market was valued at USD 14,215.6 million in 2025. The broader pool cleaning and maintenance services market is projected to reach between $26.76 billion and $26.92 billion in 2025. This means that investments in things like high-end landscaping or new hot tubs are direct substitutes for a homeowner deciding whether to upgrade their existing pump system or spend that capital elsewhere on their property.

Here's a quick look at how maintenance spending breaks down, which informs where a repair-over-replacement decision hits the hardest:

The product replacement cycle for equipment is long, estimated between 8 to 11 years, so managing the service and repair portion of that cycle is defintely crucial for Hayward Holdings, Inc. to maintain its revenue stream, especially since the company raised its full-year 2025 net sales guidance to between $1.095 billion and $1.110 billion.

The key substitute pressures you should watch are:

• The consumer preference for minor repairs costing $150-$500 over major replacements costing $2,000-$3,000.
• The risk that homeowners choose to delay replacement past the 8 to 11 year cycle.
• The increasing adoption of DIY maintenance, which pressures the 20-25% labor portion of the average $3,000 to $6,000 annual maintenance bill.
• Competition for discretionary spending against other outdoor living options in a market segment valued at over $14.2 billion globally in 2025.

Hayward Holdings, Inc. (HAYW) - Porter's Five Forces: Threat of new entrants

You're looking at the core equipment manufacturing side of Hayward Holdings, Inc. (HAYW), and honestly, the barrier to entry here is quite steep for a newcomer. Building a competitive product line requires serious, sustained investment, especially in automation. New entrants must overcome significant capital hurdles just to get to the starting line. This is reflected in Hayward Holdings, Inc.'s own spending; for the third quarter of fiscal 2025, Research, development, and engineering expenses totaled $7.1 million, representing 2.9% of net sales. This commitment to R&D is necessary to keep pace with the demand for advanced, energy-efficient systems.

Here's a quick look at how Hayward Holdings, Inc. has been investing in the technology that creates this barrier:

Beyond the technical requirements, Hayward Holdings, Inc. has deep structural advantages. They benefit from established, long-standing relationships with key channel partners and trade customers. This network is not built overnight; it's the result of a century in the business. Hayward Holdings, Inc. is celebrating its 100th anniversary in 2025, and this legacy supports a massive installed base. Furthermore, the aftermarket-repairs and replacements-is the bedrock of the business, historically representing 80% of net sales. New entrants struggle to immediately capture this recurring revenue stream.

The threat shifts when we look at the pool service segment, which creates indirect pressure. That part of the industry has a relatively low barrier to entry. In the United States, the Swimming Pool Cleaning Services industry is fragmented, comprising 78,817 businesses as of 2025. This low barrier means established companies like Hayward Holdings, Inc. must compete with a large number of smaller, local operators. To combat this, 40% of pool service professionals surveyed planned to increase their marketing budgets in 2025.

Here are some statistics showing the competitive nature of the service side:

• US Pool Cleaning Services industry market size in 2025: $8.8bn.
• CAGR for US Pool Cleaning Services industry (2020-2025): 4.2%.
• Percentage of pool pros prioritizing internal efficiencies in 2025: 60%.
• Percentage of pool pros increasing marketing budgets in 2025: 40%.

The competition in service is about local presence and operational efficiency, not necessarily the high-cost manufacturing expertise that protects Hayward Holdings, Inc.'s core.