| COMPANY |
Hayward Holdings, Inc. |
| COURT |
United States District Court for the District of New Jersey |
| CASE NUMBER |
23-cv-04146 |
| JUDGE |
The Hon. William J. Martini |
| CLASS PERIOD |
March 2, 2022 and July 27, 2022 |
| SECURITY TYPE |
Common Stock |
Hayward investors may receive additional information about the case by clicking the link "Submit Your Information" above. If you are a member of the class described below, you may no later than October 2, 2023 move the Court to serve as lead plaintiff of the class, if you so choose.
A class action lawsuit has been filed on behalf of those who purchased or acquired Hayward Holdings, Inc. (“Hayward”) (NASDAQ: HAYW) common stock between March 2, 2022 and July 27, 2022, both dates inclusive (the “Class Period”).
Case Background:
During the Class Period, Hayward management continued to represent to investors that the company was experiencing record-setting demand. For example, on March 2, 2022 – the first day of the Class Period – Hayward issued a press release hailing the company’s “Record Net Sales” for the year which purportedly had increased “60% year-over-year to $1,401.8 million.” Defendant Holleran was quoted in the release as stating: “‘We continue to benefit from key secular tailwinds within our industry and with our leading product portfolio and technology we were able to enhance our market share at improved profitability levels’” and “‘are entering 2022 with significant momentum.’”
The complaint alleges that these and similar representations were materially false and misleading when made. Unbeknownst to investors, defendants had engaged in a channel-stuffing scheme in order to artificially inflate the company’s revenues and create the appearance of demand that far exceeded actual demand trends.
On July 28, 2022, Hayward shocked the market when it announced financial results for the second fiscal quarter of 2022, and disclosed that the company was expecting its channel partners to reduce their inventory on hand by approximately four to six weeks in the second half of 2022. As a result, Hayward reduced its 2022 guidance to reflect a massive inventory reduction in the second half of the year. Additionally, during an earnings call held that same day, Hayward’s CEO admitted that the inventory bottleneck traced back to inventory decisions made “at the end of 2021.”
Following this news, the price of Hayward’s common stock declined $3.23 per share, or approximately 23.5%, to close at $10.48 per share on July 29, 2022.
The complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Hayward and its management had engaged in a channel-stuffing scheme designed to artificially boost Hayward’s short-term sales and earnings; (2) Hayward had flooded its channel partners with inventory that they did not want or need at a level that far outpaced then-existing consumer demand; (3) Hayward’s channel partners were suffering from an inventory glut as a result of the channel-stuffing scheme that would require a massive de-stocking in the second half of 2022; (4) Hayward’s channel-stuffing scheme had cannibalized future sales, materially impairing Hayward’s ability to sell to its customers; (5) the demand for pool equipment had slowed down, which, combined with flooding channel partners with more inventory, led to an inventory glut and the need for these channel partners to reduce inventory levels; and (6) as a result of the above, Hayward’s projected 2022 financial results were not achievable and lacked a reasonable basis in fact.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: Jonathan Naji, Esq. (484) 270-1453 or via e-mail at info@ktmc.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.