SAN DIEGO--(BUSINESS WIRE)--Robbins LLP informs investors that a shareholder filed a class action against Hayward Holdings, Inc. (NYSE: HAYW) on behalf of persons who purchased shares of Hayward common stock between March 2, 2022 and July 27, 2022. Hayward Holdings, Inc. is a global designer, manufacturer and marketer of a broad portfolio of pool equipment and outdoor living technology.
What is this Case About: Hayward Holdings, Inc. (HAYW) Misled Investors Regarding its Financial Prospects
According to the complaint, during the class period, defendants failed to disclose that: (a) Hayward and its management had engaged in a channel stuffing scheme designed to artificially boost Hayward’s short-term sales and earnings; (b) 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; (c) Hayward’s channel partners were suffering from an inventory glut as a result of the channel-stuffing scheme that would require a massive destocking in the second half of 2022; (d) Hayward’s channel-stuffing scheme had cannibalized future sales, materially impairing the Company’s ability to sell to its customers; (e) 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 (f) as a result, Hayward's projected 2022 financial results were not achievable.
On July 28, 2022, Hayward announced the Company’s financial results for the second fiscal quarter of 2022, revealing that the Company was expecting its channel partners to reduce their Hayward inventory on hand by approximately four to six weeks in the second half of 2022. As a result, the Company reduced its 2022 guidance to reflect a massive inventory reduction in the second half of the year. Hayward slashed expected 2022 net sales growth from a range of 9% to 12% to a decline of 2% to 6%. Notably, during an earnings call held that same day, defendant Holleran admitted that the inventory bottleneck traced back to inventory decisions made “at the end of 2021” – i.e., before the class period. As a result of this news, the price of Hayward common stock dropped from $13.71 per share when the market closed on July 27, 2022, to a low of $10.48 per share during market trading on July 28, 2022, a nearly 24% decline.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Hayward Holdings, Inc. Shareholders who want to act as lead plaintiff for the class must file their motion for lead plaintiff by October 2, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
About Robbins LLP: Some law firms issuing releases about this matter do not actually litigate securities class actions; Robbins LLP does. A recognized leader in shareholder rights litigation, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. Since our inception, we have obtained over $1 billion for shareholders.
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