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Hayward Holdings, Inc. (HAYW) Financial Misrepresentation Case
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D. New JerseyCourt
- In 2022, Hayward Holdings shocked investors by revealing that its channel partners to reduce their inventory on hand.
- $HAYW fell nearly 24%, damaging shareholders.
- Investors suspect Hayward of financial misrepresentations.
On July 28, 2022, Hayward Holdings (HAYW) announced financial results for Q2 2022, shocking analysts and investors by revealing that it 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 Holdings reduced its 2022 guidance to reflect a massive inventory reduction in the second half of the year.
- Notably, during an earnings call held that same day, CEO Kevin Holleran admitted that the inventory bottleneck traced back to inventory decisions made “at the end of 2021”
On this news, $HAYW fell nearly 24%, damaging investors.
Taking all representations into account, Investors have reasons to suspect Hayward and certain seniors of misleading and financial representations, specifically failing to disclose that:
- Hayward Holdings and its management had engaged in a channel-stuffing scheme designed to artificially boost Hayward Holdings’ short-term sales and earnings;
- Hayward Holdings had flooded its channel partners with inventory that they did not want or need at a level that far outpaced then-existing consumer demand;
- Hayward Holdings’ 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;
- Hayward Holdings’ channel-stuffing scheme had cannibalized future sales, materially impairing Hayward Holdings’ ability to sell to its customers;
- 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;
As a result, Hayward Holdings’ projected 2022 financial results were not achievable and lacked a reasonable basis in fact.
Failure to Disclose,
Shock Event Date
28 July 2022
02 August 2023
Lead Plaintiff Deadline
02 October 2023
Hon. William J. Martini