Group 1 - The core viewpoint is that Leslie's (NASDAQ: LESL) is recommended to hold due to uncertainty about demand outlook and potential to miss FY24 guidance if macro conditions do not improve [1] - The ideal investment is characterized by performing core business in a sector expected to grow structurally above GDP growth over the next 5-10 years, possessing sustainable competitive advantages, and being managed by ethical long-term thinkers [1] - The company should also be valued fairly to be considered an attractive investment opportunity [1]

Financial Data and Key Metrics Changes - For Q4 2024, total sales were $398 million, down 8% year-over-year, consistent with revised guidance [34][38] - Adjusted earnings per share were $0.02 for Q4, compared to $0.14 in the same period last year [45] - Adjusted EBITDA for Q4 was $43 million, down from $59 million year-over-year [44] - For the full year, total sales were $1.33 billion, also down 8% compared to the previous year [46] - Adjusted net income for the full year was a loss of $1 million, compared to income of $51 million in the prior year [50] Business Line Data and Key Metrics Changes - Residential pool sales declined 10% in Q4, while PRO pool sales decreased by 1% [40] - For the full year, residential pool sales were down 9%, PRO pool sales down 4%, and residential hot tub sales down 9% [47] - The PRO consumer group showed relative strength, with a low single-digit sales decline during the peak pool season [41] Market Data and Key Metrics Changes - The installed base of pools and spas in the U.S. is over 14 million, with a total addressable market of approximately $15 billion [14] - The company remains the only national large-scale omnichannel player in aftermarket pool and spa care [16] Company Strategy and Development Direction - The company plans to focus on three strategic themes: customer centricity, convenience, and asset utilization [19][33] - Emphasis on getting back to retail fundamentals to drive long-term profitable growth [15] - The company aims to leverage its competitive advantages, including proximity to customers and strong brand recognition [18][19] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro environment remains dynamic, impacting sales trends [36] - The company expects continued softness in larger ticket and discretionary categories in Q1 2025, with sales guidance of $169 million to $176 million [58][55] - Management is optimistic about improving customer service and leveraging strategic themes to drive growth [56][64] Other Important Information - The company ended Q4 with cash and cash equivalents of $109 million, up from $55 million in the previous year [53] - Inventory decreased by $78 million or 25% year-over-year, indicating improved operational efficiencies [53] Q&A Session Summary Question: Which strategic theme will have the largest impact in the near to medium term? - Management believes asset utilization will have the most significant impact, focusing on optimization and improving same-store sales [70][72] Question: Why is the PRO business showing relative strength? - The PRO business has benefited from targeted promotional activities and an increase in PRO partners, which are now 14% higher than last year [81] Question: Can you break down the negative comps between ticket and traffic? - The decline was primarily driven by traffic, which has been the main driver of comparable sales [86] Question: What is the long-term unit growth outlook? - The company aims to focus on debt paydown before engaging in new store builds or M&A activity, but still sees opportunities for growth in the future [89] Question: What strategies are in place to improve gross margins? - The focus will be on driving top-line growth to leverage fixed costs, rather than solely on cost reductions [95] Question: How is the company addressing inventory management? - There is still room to optimize inventory, particularly through a more precise allocation strategy [99][100] Question: Can you provide insights on the 1Q gross margin pressures? - The first quarter will see pressures from fixed rebates and occupancy costs, but product margins are expected to be slightly favorable [123]

Core Viewpoint - Leslie's, Inc. reported quarterly earnings of $0.02 per share, missing the Zacks Consensus Estimate of $0.11 per share, representing an earnings surprise of -81.82% [1][2] Financial Performance - The company posted revenues of $397.86 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 1.81%, compared to year-ago revenues of $432.37 million [2] - Over the last four quarters, Leslie's has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Stock Performance - Leslie's shares have lost approximately 53.8% since the beginning of the year, contrasting with the S&P 500's gain of 25.2% [4] - The current consensus EPS estimate for the upcoming quarter is -$0.19 on revenues of $179.36 million, and for the current fiscal year, it is $0.19 on revenues of $1.39 billion [8] Industry Outlook - The Consumer Products - Staples industry, to which Leslie's belongs, is currently in the bottom 43% of over 250 Zacks industries, indicating potential challenges ahead [9] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the outlook for the industry can significantly impact stock performance [6][9] Future Expectations - The estimate revisions trend for Leslie's is currently favorable, translating into a Zacks Rank 2 (Buy) for the stock, indicating expectations of outperforming the market in the near future [7] - It will be important to monitor how estimates for the coming quarters and the current fiscal year change following the recent earnings report [5][8]

Core Insights - Leslie's, Inc. reported a net loss of $9.9 million in Q4 and $23.4 million for fiscal 2024, with sales decreasing by 8.0% in Q4 and 8.3% for the fiscal year [1][4][3] - The company experienced a decline in gross profit and adjusted EBITDA, primarily due to lower sales volume and increased costs [3][5] Financial Performance - Q4 sales were $397.9 million, down from $432.4 million year-over-year, with comparable sales decreasing by 8.3% [3] - Fiscal 2024 sales totaled $1,330.1 million, a decrease from $1,451.2 million in the previous year [4] - Gross profit for Q4 was $143.2 million, a decline of 10.6% compared to the prior year, resulting in a gross margin of 36.0% [3] - For fiscal 2024, gross profit decreased by 13.0% to $476.8 million, with a gross margin of 35.8% [4][5] Profitability Metrics - Adjusted EBITDA for Q4 was $43.0 million, down from $59.5 million in the prior year [3] - Fiscal 2024 adjusted EBITDA was $108.7 million, compared to $168.1 million in the previous year [5] - Diluted earnings per share for Q4 were $(0.05), compared to $0.09 in the prior year [3] - Adjusted diluted earnings per share for Q4 were $0.02, down from $0.14 in the previous year [3] Operational Highlights - Selling, general and administrative expenses (SG&A) decreased by 4.0% in Q4 to $116.8 million [3] - For fiscal 2024, SG&A expenses decreased by $26.4 million to $419.7 million [5] - The company established a valuation allowance of approximately $11 million against deferred tax assets [3] Balance Sheet and Cash Flow - Cash and cash equivalents increased to $108.5 million as of September 28, 2024, from $55.4 million a year earlier [7] - Inventories decreased by 24.9% to $234.3 million [7] - Funded debt was $783.7 million, slightly down from $789.8 million [7] Future Outlook - The company anticipates a dynamic environment but sees opportunities for growth and plans to detail its strategic roadmap in upcoming quarters [2]

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuati ...

Core Viewpoint - The article emphasizes the importance of value investing and highlights Leslies (LESL) as a strong value stock currently being undervalued in the market [2][8]. Company Analysis - Leslies (LESL) holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4]. - The stock has a Forward P/E ratio of 14.06, significantly lower than its industry's average Forward P/E of 18.37, suggesting it is undervalued [4]. - Over the past year, LESL's Forward P/E has fluctuated between 34.62 and 7.49, with a median of 15.17, indicating volatility but also potential for recovery [4]. Valuation Metrics - LESL has a PEG ratio of 1.61, which is lower than the industry average PEG of 2.03, indicating favorable growth expectations relative to its price [5]. - The stock's P/S ratio is 0.36, compared to the industry's average P/S of 0.69, further supporting the notion of undervaluation [6]. - LESL's P/CF ratio stands at 12.82, which is attractive compared to the industry's average P/CF of 21.13, highlighting strong cash flow relative to its price [7]. Investment Outlook - The combination of favorable valuation metrics and a strong earnings outlook positions LESL as an impressive value stock at present [8].

Jason McDonell Appointed CEO; Joining Company on September 9, 2024 Mike Egeck Departs Leslie's; Chairman John Strain to Serve as Interim CEO Until Mr. McDonell Joins Company Reaffirms Fiscal 2024 Outlook PHOENIX, Aug. 26, 2024 (GLOBE NEWSWIRE) -- Leslie's, Inc. ("Leslie's" or the "Company"; NASDAQ: LESL), the largest and most trusted direct-to-consumer brand in the U.S. pool and spa care industry, today announced the appointment of Jason McDonell as Chief Executive Officer, effective September 9, 2024. Mr. ...

NEW YORK, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Leslie's, Inc. (NASDAQ: LESL) on behalf of long-term stockholders following a class action complaint that was filed against Leslie's on September 8, 2023 with a Class Period from February 5, 2021 to July 13, 2023. Our investigation concerns whether the board of directors of Leslie's have breached their fiduciary duties to the company. The Cla ...

Financial Performance - Sales for the third quarter of 2024 were $570 million, which includes a negative impact of 230 basis points from June 2023 chemical price actions[10] - The company's gross profit was $229 million, but the gross margin rate contracted by 101 basis points compared to the same quarter last year[10] - Adjusted EBITDA was $109 million, a decrease of $20 million compared to the prior year quarter[10] - Adjusted EPS was $034, compared to $041 a year ago[10] Sales Trends - Overall sales decreased by 7%, with comparable sales also down by 7%[10] - PRO Pool sales decreased by 2%, while Residential Pool sales decreased by 8% and Residential Hot Tub sales decreased by 4%[10] - Chemical sales decreased by 1% for the quarter but increased by 5% in June[9] - Non-discretionary sales decreased by 6%, while discretionary sales decreased by 10%[10] Inventory and Customer Metrics - Inventory was reduced by 31%, a decrease of $134 million year-over-year[9, 10] - The customer file remained flat year-over-year[14] - Average revenue per customer decreased by 7%, although loyalty members outperformed with a decrease of 4%[14] Guidance - The company reaffirmed its fiscal year 2024 sales guidance of $1321 million to $1347 million[22]

Financial Data and Key Metrics Changes - Total fiscal third quarter sales were $570 million, down 7% year-over-year, impacted by unfavorable weather and continued weakness in discretionary product sales [10][18] - Gross margin was 40%, down 101 basis points year-over-year, primarily due to chemical price actions and occupancy deleverage [13][20] - Adjusted EBITDA was $109 million, compared to $129 million in the same period last year, with adjusted diluted earnings per share at $0.34, down from $0.41 [21][22] Business Line Data and Key Metrics Changes - Residential pool sales declined 8%, PRO pool sales were down 2%, and residential hot tub sales decreased by 4% [18] - Chemical sales improved to down 1% in the quarter, with a positive year-to-date volume, while equipment sales were down 15% [11][25] - Discretionary product sales were down 10%, showing a sequential improvement from the previous quarter [11][25] Market Data and Key Metrics Changes - Total transactions were down 2% year-over-year, with traffic improving to down 5% in the quarter from down 10% in the second quarter [10][9] - The company outperformed specialty pool retailers in sales growth during the third quarter, indicating a gain in market share [11][12] - Digital traffic share grew during the quarter, reflecting an increase in online engagement [11] Company Strategy and Development Direction - The company aims for long-term sales growth in the mid-single digits, targeting a gross margin of 40% and an adjusted EBITDA margin in the mid-teens [7][14] - Strategic initiatives include enhancing customer loyalty programs, expanding PRO contracts, and pursuing store growth while prioritizing debt reduction [15][16][27] - The company is focused on improving operational efficiency and profitability through cost management and inventory reduction [26][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing normalization of industry demand post-pandemic and the impact of weather on sales [4][28] - There are positive signs emerging, such as improved chemical sales and a return to pre-pandemic equipment unit volumes [25][28] - The company remains cautious about consumer spending due to inflation and high interest rates, which may affect future performance [8][28] Other Important Information - The company ended the quarter with $784 million outstanding on its secured term loan, a decrease from the previous year [22] - Cash and cash equivalents increased to $74 million, up from $19 million in the prior year [23] - Inventory levels decreased by 31% year-over-year, indicating improved supply chain management [23] Q&A Session Summary Question: Understanding the shortfall in 3Q versus prior guidance - Management explained that the shortfall was primarily due to lower transactions and average order value, driven by cautious consumer behavior and weather impacts [31][32] Question: Gross margin outlook and headwinds - Management indicated that the difference in gross margin targets is due to changes in business mix, with lower margins in the growing PRO business [34][35] Question: Performance of loyalty customers - Loyalty customers continue to outperform non-members, and management is focused on increasing loyalty penetration [40][41] Question: Chemical pricing and market dynamics - Management noted that chemical pricing has stabilized, and they do not anticipate significant price deflation in the near future [62][63] Question: Fourth quarter sales outlook - The outlook for Q4 reflects continued cautious consumer behavior and potential weather disruptions, with a projected sales decline of around 7% [57][58]