PHOENIX, Jan. 08, 2026 (GLOBE NEWSWIRE) -- Leslie's, Inc. ("Leslie's" or the “Company”; NASDAQ: LESL), the largest and most trusted direct-to-customer brand in the U.S. pool and spa care industry serving residential customers and pool professionals nationwide, announced that it has appointed John Hartmann as an independent director to its Board of Directors, effective January 7, 2026. Mr. Hartmann brings nearly 25 years of retail leadership experience where he has executed successful turnaround as a C-suite ...

Financial Performance - The company experienced a decline in sales and profitability starting from the fiscal year ending September 30, 2023, through the fiscal year ending October 4, 2025[133]. - For the year ended October 4, 2025, Leslie's, Inc. reported a net loss of $236.97 million, compared to a net income of $27.24 million for the year ended September 30, 2023[346]. - Sales for the year ended October 4, 2025, were $1.24 billion, down from $1.33 billion in the prior year, representing a decline of about 6.6%[340]. - The company recorded an impairment loss of $180.7 million in the fourth quarter, significantly impacting the operating income, which resulted in an operating loss of $169.9 million for the year[340]. - The stockholders' deficit increased to $408 million as of October 4, 2025, compared to $177.1 million the previous year, reflecting a worsening financial position[337]. - Net cash provided by operating activities decreased significantly to $8.82 million from $107.47 million in the previous year[346]. - The company incurred impairments totaling $183.83 million during the fiscal year, indicating potential asset value concerns[346]. Market and Economic Risks - The company faces significant risks related to achieving comparable sales growth, which could materially impact profitability and performance[94]. - Macroeconomic and geopolitical developments, including public health crises and supply chain disruptions, may adversely affect financial and operating performance[79]. - Economic conditions, including consumer discretionary spending, unemployment rates, and access to credit, directly affect demand for pool and spa products[110]. - The company faces risks from potential tightening of credit markets, which could limit consumer financing for pool and spa projects, negatively affecting sales[111]. - Recent changes in U.S. trade policies, including tariff exchanges with China, have disrupted supply chains and increased costs, potentially affecting customer spending patterns[145]. - Disruptions from natural disasters, geopolitical events, and economic crises could negatively impact demand for products and disrupt supply chains[104]. Competition and Market Position - The company operates in a highly competitive and fragmented aftermarket pool and spa care industry, facing significant competition from online platforms, mass merchants, and independent retailers[105]. - Competition from mass-market retailers like Walmart and Costco, as well as online retailers like Amazon, poses a significant threat to the company's market share[108]. - The company must manage competitive pressures and pricing strategies to maintain operating margins amid economic uncertainties[94]. Operational Challenges - Inventory management is critical; misalignment with consumer demand could lead to excess inventory or lost sales, adversely affecting financial performance[98]. - The company faces risks related to the cost of raw materials, particularly granular chlorine compounds, which could increase the cost of goods sold and negatively impact financial results[146]. - The company may incur significant costs associated with the closure of underperforming locations, including impairment charges and inventory write-offs[135]. - The company may face challenges in effectively managing product inventory, which could harm profitability and long-term growth prospects[150]. - The company relies on a network of suppliers for product inventory, and disruptions in supply could adversely affect profitability and operating results[144]. Human Resources and Compliance - The company is significantly dependent on attracting and retaining qualified personnel to maintain operations and customer service quality[101]. - Legal proceedings may pose material risks, with potential liabilities that could impact financial results[103]. - The company faces risks related to compliance with various governmental regulations, which could increase operating costs and divert management's attention[157]. - The company may incur significant legal fees and expenses due to product liability claims, which could adversely affect its financial condition[155]. Financial Management and Debt - The company has total borrowings of $756.7 million under its Credit Facilities as of December 5, 2025[168]. - The company's credit rating has been downgraded, impacting its ability to access capital markets and increasing borrowing costs[169]. - The company’s ability to generate sufficient cash flow to service its debt obligations is uncertain, which may require refinancing or asset sales[171]. - The company has pledged substantially all of its assets as collateral to secure its Credit Facilities, which could limit operational flexibility[175]. Seasonal and Environmental Factors - Seasonal fluctuations significantly impact sales, with a greater percentage of revenues generated during the warm months of April through September[114]. - The company is susceptible to adverse weather conditions, which can reduce chemical consumption and consumer purchases during peak sales seasons[117]. - The demand for pool chemicals may decline if consumer attitudes shift towards environmental or safety concerns, impacting sales[113]. - Changes in consumer preferences, particularly a shift from DIY to DIFM (Do It For Me) services, could impact demand for pool and spa care products[132]. Internal Controls and Governance - The company has identified material weaknesses in its internal control over financial reporting, which could affect the accuracy and timeliness of financial results[199]. - Remediation of identified material weaknesses is ongoing, but completion does not guarantee continued effectiveness of controls[203]. - The company may incur increased costs due to compliance with public company responsibilities and corporate governance practices[196]. - The company has faced potential delisting from Nasdaq due to non-compliance with the minimum bid price requirement, but has regained compliance[197][198]. Asset Management - As of October 4, 2025, Leslie's, Inc. reported total assets of $741.5 million, a decrease from $1.05 billion as of September 28, 2024, reflecting a decline of approximately 29.4%[337]. - The company recorded a goodwill impairment of $180.7 million during fiscal 2025, with no impairments in fiscal 2024 and 2023[382]. - The company has 9,290,311 shares of common stock outstanding, all eligible for resale, which could impact stock price if significant stockholders sell[185]. - The company executed a reverse stock split at a ratio of 1-for-20, effective September 29, 2025, to adjust its share structure[350].

Core Viewpoint - Leslie's, Inc. reported mixed financial results for the fourth quarter, with earnings significantly below analyst expectations but sales exceeding estimates [1][2]. Financial Performance - The company reported quarterly earnings of $0.09 per share, compared to the analyst consensus estimate of $1.29 per share [1]. - Quarterly sales reached $389.206 million, surpassing the analyst consensus estimate of $370.635 million [1]. Future Outlook - Leslie's projects FY2026 sales between $1.100 billion and $1.250 billion, which is below market estimates of $1.219 billion [1]. Operational Changes - The CEO announced the closure of 80-90 underperforming stores and one distribution center to improve operations and financial recovery [2]. - The company aims to reduce inventory by 10% year over year and achieve direct cost reductions of $7 million to $12 million, which will be reinvested into customer value [2]. Stock Performance - Following the earnings announcement, Leslie's shares fell by 14.3%, trading at $3.07 [2]. Analyst Ratings - Baird analyst Peter Benedict maintained a Neutral rating on Leslie's and lowered the price target from $6.50 to $3 [5]. - Mizuho analyst David Bellinger also maintained a Neutral rating, cutting the price target from $5 to $4 [5].

Core Insights - Leslie's, Inc. reported mixed fourth-quarter financial results, with earnings of $0.09 per share, significantly below the analyst consensus estimate of $1.29 per share, while quarterly sales of $389.206 million exceeded the consensus estimate of $370.635 million [1] - The company anticipates FY2026 sales between $1.100 billion and $1.250 billion, which is lower than market estimates of $1.219 billion [1] Financial Performance - Fourth-quarter sales and adjusted EBITDA were above the high end of previously established guidance [2] - The company plans to close 80-90 underperforming stores and one distribution center to improve operations and financial recovery [2] - Leslie's aims to reduce inventory by 10% year over year and achieve direct cost reductions of $7 million to $12 million, which will be reinvested into customer price value [2] Market Reaction - Following the earnings announcement, Leslie's shares fell by 14.3%, trading at $3.07 [2] - Analysts have adjusted their price targets for Leslie's stock, with Baird lowering it from $6.5 to $3 and Mizuho from $5 to $4, both maintaining a Neutral rating [5]

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Core Insights - Leslie's, Inc. reported quarterly earnings of $0.09 per share, significantly missing the Zacks Consensus Estimate of $1.12 per share, representing an earnings surprise of -91.96% [1] - The company posted revenues of $389.21 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 5.64%, but down from $397.86 million year-over-year [2] - The stock has underperformed, losing approximately 93.4% since the beginning of the year, while the S&P 500 gained 15.8% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$4.04 on revenues of $165.7 million, and -$1.34 on revenues of $1.21 billion for the current fiscal year [7] - The estimate revisions trend for Leslie's was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Consumer Products - Staples industry, to which Leslie's belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Another company in the same industry, Ollie's Bargain Outlet, is expected to report quarterly earnings of $0.71 per share, reflecting a year-over-year increase of 22.4% [9]

Financial Data and Key Metrics Changes - Net sales for Q4 were $389.2 million, a 2.2% decline from $397.9 million in the same quarter last year [26] - Same-store sales decreased by 6.8% on a 13-week basis compared to the same period in fiscal year 2024 [27] - Adjusted EBITDA for Q4 increased to $45.2 million from $43 million in Q4 2024 [31] - Net loss for Q4 was $162.8 million, or $17.54 per diluted share, compared to a net loss of $9.9 million, or $1.07 per diluted share in the prior year [30] - Full year 2025 sales were approximately $1.24 billion, down from $1.33 billion in 2024 [32] Business Line Data and Key Metrics Changes - Chemicals category sales were down approximately 7.1%, and equipment category sales were down 7.6% on a 13-week comparable basis [27] - The company experienced a net loss of over 160,000 residential customers, with a decline in residential traffic of 8.6% in 2025 [6][10] Market Data and Key Metrics Changes - The company noted a significant price-value challenge leading to market share loss [5] - The competitive pricing environment in Q4 was influenced by excess supply and aggressive pricing from competitors [80] Company Strategy and Development Direction - The company is focusing on cost optimization, cash and capital management, and improving the price-value equation [4][6] - Plans to close 80 to 90 underperforming stores, which will impact annual sales by approximately $25 million to $35 million but improve net EBITDA by $4 million to $10 million [17][34] - The company aims to enhance its customer value proposition through targeted marketing and improved pricing strategies [8][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment and its impact on consumer spending [38] - The company expects to generate the majority of its sales and earnings in the second half of the year due to the seasonal nature of the industry [38] - For fiscal 2026, the company anticipates sales between $1.1 billion and $1.25 billion and adjusted EBITDA of $55 million to $75 million [39] Other Important Information - The company is implementing a comprehensive expense reduction initiative and renegotiating contracts with vendors and suppliers [35] - Inventory levels were reduced by $26 million year-over-year, with a focus on improving in-stock percentages on core SKUs [29][32] Q&A Session Summary Question: Are supplier partners supporting the turnaround efforts? - Management confirmed that vendor partners have been supportive, allowing for better inventory forecasts and improved in-stock positions [49][51] Question: How much of the EBITDA guide is expected to convert into free cash flow? - The midpoint of the EBITDA guide assumes free cash flow positivity for the year [53] Question: Where do you see the most opportunity in pricing? - The focus is on key value items, particularly in the chemicals category, with a strategy to remain competitive against specialty and big box retailers [60][61] Question: What is the impact of store closures on revenue? - The closures are expected to have a $25 million to $35 million impact on revenue, but the majority of the stores being closed were unprofitable [70][72] Question: What is the plan to regain lost customers? - The company plans to target lost customers with customized marketing efforts based on their previous purchasing behavior [74][76] Question: Can you comment on competitive dynamics in Q4? - Management noted aggressive pricing in the marketplace and the need to remain competitive, which has led to sequential improvements in performance [80]

Financial Data and Key Metrics Changes - Net sales for Q4 were $389.2 million, a decline of 2.2% from $397.9 million in the same quarter last year [26] - Same-store sales decreased by 6.8% on a 13-week basis compared to the same period in fiscal year 2024 [27] - Gross margin for Q4 increased to 38.6% from 36% in the prior year, driven by favorable vendor rebates and freight costs [29] - Net loss for Q4 was $162.8 million, or $17.54 per diluted share, compared to a net loss of $9.9 million, or $1.07 per diluted share in the same quarter last year [30] - Adjusted EBITDA for Q4 increased to $45.2 million from $43 million in Q4 2024 [31] - Full year 2025 sales were approximately $1.24 billion, down from $1.33 billion in 2024 [31] Business Line Data and Key Metrics Changes - Chemicals sales were down approximately 7.1%, and equipment sales were down 7.6% on a 13-week comparable basis [27] - The company experienced a net loss of over 160,000 residential customers, with a decline in residential traffic of 8.6% in 2025 [6][10] Market Data and Key Metrics Changes - The company noted a competitive pricing environment in Q4, which affected sales performance [80] - The company is focusing on improving its price-value perception to regain market share lost due to pricing challenges [6][10] Company Strategy and Development Direction - The company is implementing immediate actions to improve operations and accelerate financial profitability, including closing 80-90 underperforming stores [7][17] - A restructuring of field teams is underway to enhance customer relationships and drive growth [11] - The company is focusing on a customer-centric approach, enhancing its value proposition through targeted marketing and pricing strategies [12][44] - Plans to optimize inventory and reduce SKU counts by over 2,000 are in place to improve operational efficiency [20][37] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment and its impact on consumer spending, but expressed confidence in the company's strategic direction [38] - The company expects to generate the majority of its sales and earnings in the second half of the year, consistent with the seasonal nature of the industry [39] - Guidance for fiscal 2026 includes expected sales of $1.1 billion to $1.25 billion and adjusted EBITDA of $55 million to $75 million [39] Other Important Information - The company ended the fiscal year with no outstanding borrowings on its line of credit and $752 million of net long-term debt [32] - A $184 million impairment charge was recorded in Q4, primarily related to goodwill and the closure of underperforming stores [30] Q&A Session Summary Question: Are supplier partners supporting the turnaround efforts? - Management confirmed that vendor partners have been supportive, allowing for better inventory forecasts and improved in-stock positions [49][51] Question: What is the expected free cash flow conversion for this year? - The midpoint of the guidance assumes free cash flow positivity for the year [52] Question: Where do the most pricing opportunities lie? - The focus is on key value items, particularly in the chemicals category, with a strategy to remain competitive against other retailers [60] Question: What is the impact of store closures on revenue? - The closures are expected to impact annual sales by approximately $25-$35 million, but the majority of the stores being closed were unprofitable [70][72] Question: How does the company plan to regain lost customers? - Targeted marketing efforts will be employed to reach former customers, leveraging data from the Pool Perks Loyalty Program [74][76] Question: What are the competitive dynamics observed in Q4? - Management noted aggressive pricing in the marketplace and the need to remain competitive, which has led to sequential improvements in performance [80]

Financial Data and Key Metrics Changes - Net sales for Q4 2025 were $389.2 million, a 2.2% decline from $397.9 million in Q4 2024, with the 53rd week contributing an estimated $18.3 million in net sales [26][27] - Same-store sales decreased by 6.8% in Q4 2025 compared to the same period in 2024, with chemicals down approximately 7.1% and equipment down 7.6% [27] - Adjusted EBITDA for Q4 increased to $45.2 million from $43 million in Q4 2024, while the net loss for Q4 was $162.8 million compared to a net loss of $9.9 million in the prior year [30][31] Business Line Data and Key Metrics Changes - The company experienced a net loss of over 160,000 residential customers in 2025, with a decline in residential traffic of 8.6% [6][30] - The company is focusing on improving the price-value equation on key items to regain lost customers and improve traffic performance [6][11] Market Data and Key Metrics Changes - The competitive landscape saw aggressive pricing strategies from competitors, impacting the company's pricing and sales performance [58] - The company is adjusting its pricing strategy to ensure competitiveness, particularly in the chemicals category, which is a key focus area [50][51] Company Strategy and Development Direction - The company is undergoing a transformation to achieve sustainable, profitable growth, focusing on cost optimization, cash management, and capital structure [4][24] - Key initiatives include closing 80-90 underperforming stores, optimizing inventory, and enhancing customer value propositions through targeted marketing [7][18][34] - The company aims to become America's one-stop shop for pool care by integrating services and improving customer relationships [12][43] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment and its impact on consumer spending, emphasizing the need for strategic pricing and operational efficiency [39][41] - The outlook for fiscal 2026 includes expected sales of $1.1 billion to $1.25 billion and adjusted EBITDA of $55 million to $75 million, with a focus on long-term value creation [40][41] Other Important Information - The company is committed to transparent communication and has engaged advisors to identify opportunities for enhancing profitability and optimizing operations [41][42] - A significant impairment charge of $184 million was recorded in Q4, primarily related to goodwill and store closures [29][30] Q&A Session Summary Question: Are supplier partners supporting the turnaround efforts? - Management confirmed strong support from vendor partners, which has been crucial for maintaining inventory levels and improving in-stock positions [46][47] Question: What is the expected free cash flow conversion for this year? - The midpoint of the EBITDA guidance assumes free cash flow positivity for the year, although specific guidance was not provided [48] Question: Where do you see the most opportunity in pricing? - The focus is on optimizing prices for key value items, particularly in the chemicals category, to remain competitive against other retailers [49][50] Question: What is the impact of store closures on revenue? - The closure of 80-90 underperforming stores is expected to impact annual sales by approximately $25-$35 million, but will improve net EBITDA by $4-$10 million [34][55] Question: How will the company regain lost customers? - The company plans to target lost customers with personalized marketing efforts, leveraging data from the Pool Perks Loyalty Program to efficiently allocate marketing spend [56] Question: What are the competitive dynamics observed in Q4? - Management noted high competitive pricing in the marketplace, which led to aggressive pricing strategies to maintain competitiveness [58] Question: What are the biggest learnings from the strategic pillar framework? - The strategic framework has unified the team around a common vision, with a focus on improving price value to regain market share [60][61]

Financial Performance - Fourth quarter sales were $389.2 million, a decrease of 2.2% compared to $397.9 million in the prior year period[3]. - Adjusted EBITDA increased to $45.2 million compared to $43.0 million in the prior year period[3]. - The net loss for the fourth quarter was $(162.8) million compared to $(9.9) million in the prior year period[3]. - Full year fiscal 2025 sales were $1,242.0 million, a decrease of 6.6% compared to $1,330.1 million in the prior year[9]. - Gross profit for the fourth quarter was $150.1 million, an increase of 4.8% compared to $143.2 million in the prior year[3]. - Basic and diluted earnings per share for the three months ended October 4, 2025, were both $(17.54), compared to $(1.07) for the same period in 2024[23]. - Adjusted net income for the year ended October 4, 2025, was $(43,664), compared to $(1,084) for the year ended September 28, 2024[25]. Impairments and Valuation - The company recorded an impairment of $183.8 million, including $180.7 million for goodwill[3][9]. - The company incurred impairments of $183,826 for the three months ended October 4, 2025, with no impairments reported for the same period in 2024[23]. - The company reported a non-cash change in valuation allowance for deferred taxes, impacting income tax benefit (expense) in the condensed consolidated statements of operations[35]. - The tax effect of total adjustments was based on the combined U.S. federal and state statutory tax rates, reflected in income tax benefit (expense) in the condensed consolidated statements of operations[35]. Store Closures and Operational Changes - The company plans to close 80 to 90 underperforming stores and one distribution center, which is expected to yield immediate EBITDA improvement for FY26[1][2]. - Inventory efficiency improved with a year-over-year reduction of approximately 10%[1][2]. Future Projections - Fiscal 2026 sales guidance is projected between $1,100 million and $1,250 million, with adjusted EBITDA expected between $55 million and $75 million[6]. Cash and Assets - Cash and cash equivalents totaled $64.3 million as of October 4, 2025, a decrease of $44.2 million compared to $108.5 million as of September 28, 2024[9]. - Total current assets decreased to $328,789 as of October 4, 2025, from $422,434 as of September 28, 2024[28]. - Total liabilities decreased to $1,149,467 as of October 4, 2025, from $1,227,474 as of September 28, 2024[28]. - The company had cash and cash equivalents of $64,340 as of October 4, 2025, down from $108,505 as of September 28, 2024[28]. Sales Data - Total sales for the three months ended October 4, 2025, were $389,206, a decrease of 2% from $397,859 for the same period in 2024[23]. - Gross profit for the three months ended October 4, 2025, was $150,094, an increase of 5.1% compared to $143,214 for the same period in 2024[23]. - Adjusted EBITDA for the three months ended October 4, 2025, was $45,163, an increase from $42,972 for the same period in 2024[25].