Leslie's (NasdaqGS:LESL) Q1 2026 Earnings call February 17, 2026 05:00 PM ET Company ParticipantsJason McDonell - CEOJeff White - CFOJonathan Matuszewski - SVPSimeon Gutman - Managing DirectorOperatorGood afternoon, and welcome to the fiscal first quarter 2026 earnings conference call for Leslie's. At this time, all participants are in a listen-only mode. Following the prepared remarks, management will conduct a question-and-answer session. If you require any operator assistance during the conference call, ...

Leslie's (NasdaqGS:LESL) Q1 2026 Earnings call February 17, 2026 05:00 PM ET Speaker3Good afternoon, and welcome to the fiscal first quarter 2026 earnings conference call for Leslie's. At this time, all participants are in a listen-only mode. Following the prepared remarks, management will conduct a question-and-answer session. If you require any operator assistance during the conference call, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded and will be ...

Frontier Group FY Conference Summary Industry Overview - The airline market is currently experiencing a better demand environment compared to the previous year, with constructive supply-demand dynamics noted [3][4] - The airline industry is seeing a disciplined pricing strategy, with Frontier implementing a basic fare plus bundle strategy [4] Company Performance - Frontier reported a 10%+ improvement in stage length adjusted RASM (Revenue per Available Seat Mile) year-over-year in Q1 [5] - The airline faced a $30 million loss due to a shutdown in November but recovered in December, with positive trends continuing into January and February [5] - Capacity is expected to be flat or slightly down in Q1, with a projected 10% unit revenue growth driven by both internal initiatives and industry pricing improvements [6] Strategic Priorities - The new CEO, Jimmy Dempsey, emphasized the importance of right-sizing the fleet, with 24 aircraft being removed from service to align capacity with demand [9][10] - Frontier aims for a long-term growth profile of 8%-10% and an increase in aircraft utilization from less than 9 hours to 11.5 hours over the next 18-24 months [10] - Cost discipline is a key focus, with anticipated savings of $200 million from rent reductions and operational efficiencies [11] Fleet Management - Frontier deferred the delivery of 69 Airbus aircraft, pushing growth rates to align with the 8%-10% target [13][14] - The AerCap deal involves returning A320s, which is expected to optimize maintenance costs and improve fleet utilization [24][60] Revenue and Pricing Strategy - The airline expects unit revenues to remain strong despite capacity growth, with March showing an 8% increase in capacity and unit revenues expected to rise over 10% year-over-year [29][30] - The implementation of NDC (New Distribution Capability) has improved product visibility and conversion rates on online travel agents [30][36] Loyalty Program and Customer Engagement - Frontier is investing in its loyalty program, with cash flows from loyalty assets up 30% year-over-year [39] - The introduction of a first-class seat and a new Wi-Fi provider is planned to enhance customer experience [39][57] Operational Improvements - The airline is focused on improving operational performance, particularly on-time performance and reducing cancellations [65][66] - A series of 60 projects are underway to enhance operational efficiency and customer loyalty [68] Market Position and Competitive Landscape - Frontier is capitalizing on reduced competition in markets like Atlanta and Las Vegas, where Spirit Airlines has decreased capacity [42][44] - The company is focused on building a sustainable, profitable path without relying on industry consolidation [46] Financial Outlook - The CEO aims to restore sustainable profitability and improve operating cash flows, moving away from reliance on sale and leaseback gains [71][72] - The airline is positioned to generate operating cash flows and provide low fares, with a focus on long-term growth [72]

Financial Data and Key Metrics Changes - The company is pleased with the momentum in emerging markets and has seen sequential improvements in developed markets, although not fully recovered [12] - The guidance for 2026 is cautious due to short-term pressures, particularly in the U.S. biscuit category, which is expected to remain subdued in the first half of the year [12][13] - The company anticipates a significant impact of $500 million in the first quarter due to inventory accounting adjustments [21] Business Line Data and Key Metrics Changes - The chocolate category has shown resilience despite price volatility, with successful execution of the chocolate strategy through pricing and revenue growth management [5][7] - In North America, the biscuit category has seen a volume decline of 4% in the last three months and 3% for the year 2025, indicating a challenging operating environment [26] - The company plans to invest more in brand awareness and improve frequency and quantity of purchases in North America, focusing on successful products like Perfect Bar and Tate's Premium Biscuit [27][28] Market Data and Key Metrics Changes - Emerging markets are expected to continue growing, with high single-digit growth anticipated, while developed markets may decline in the low to mid-single digits [36] - The company is adjusting pricing strategies in Europe, expecting stability in the chocolate category after significant price increases in 2025 [12][13] - The North American market is characterized by low consumer confidence and a shift towards value-seeking behavior, affecting overall snacking categories [25][26] Company Strategy and Development Direction - The company aims to increase investments behind its brands to drive volume growth and improve profitability, particularly in the chocolate segment [8][54] - There is a focus on innovation and new product activations, with plans to enhance the chocolate strategy further during the CAGNY Conference [10] - The company is diversifying its cocoa supply sources to mitigate risks associated with reliance on traditional cocoa-growing regions [68][69] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the recent decline in cocoa prices, which may lead to competitive reactions and necessitate flexibility in guidance for 2026 [9][13] - The company expects to see improved margins in the chocolate business by 2027, driven by better cocoa pricing and strategic investments [9][54] - Management is optimistic about returning to pre-2025 profitability levels in the European chocolate division, with plans for selective price investments if necessary [59][60] Other Important Information - The company is investing in cocoa-growing regions outside of West Africa to balance supply and reduce long-term risks [68][69] - There is an expectation of a significant uplift in chocolate margins in 2027, with a focus on reinvesting part of the gains back into the business [54] Q&A Session Summary Question: What is the company's outlook on cocoa pricing and its impact on guidance? - Management indicated that recent cocoa dynamics might require adjustments and flexibility in guidance, with a focus on winning with consumers and in the marketplace [13][14] Question: How does the company plan to address cost phasing and pricing in 2026? - The company plans to maintain flat pricing in chocolate while managing costs, with a significant impact expected in the first quarter due to inventory adjustments [20][21] Question: What is the strategy for North America given the current market conditions? - Management highlighted the need to adapt to consumer behavior, focusing on value-seeking strategies and increasing market share through targeted investments [25][27] Question: How does the company view the impact of GLP-1 medications on its business? - Management believes that the adoption rate of GLP-1 medications will not significantly impact overall business volumes in the short term [65][66] Question: What are the company's plans for investments in cocoa-growing regions? - The company is diversifying its cocoa supply sources to reduce risks and is investing in regions like Ecuador and Brazil to enhance output [68][69]

Core Viewpoint - Apple reported strong quarterly results but CEO Tim Cook indicated a need to reset expectations due to supply constraints and rising component costs [1][4][5]. Financial Performance - Apple achieved revenue of $143.8 billion, a 16% increase year over year, and diluted EPS of $2.84, up 19% year over year, with a net income of $42.1 billion [6]. - The gross margin was reported at 48.2%, exceeding guidance, and operating cash flow reached a record $53.9 billion [6]. - Segment sales included iPhone at $85.3 billion (+23%), Services at $30.0 billion (+14%), Mac at $8.4 billion (-7%), iPad at $8.6 billion (+6%), and Wearables/Home/Accessories at $11.5 billion (-2%) [6]. Supply Chain and Component Costs - Cook highlighted that Apple is in "supply chase mode" due to advanced chip constraints and rising memory prices, which are expected to persist for several years [2][8]. - The memory market is experiencing record demand, with companies like SanDisk seeing stock increases of 1,230% in the past six months [3]. - Apple is facing challenges in balancing supply and demand, with Cook noting that demand is currently outpacing Apple's planning [7][8]. Market Outlook - For the upcoming March quarter, Apple anticipates revenue growth of 13% to 16% year over year and a gross margin between 48% and 49% [6]. - Analysts remain optimistic about Apple's stock, with average price targets suggesting significant upside potential, ranging from $280 to $330 [19]. Pricing Strategy - Apple's pricing strategy for the iPhone has historically shown resilience, with demand remaining strong even at higher price points [14][15]. - Consumer sentiment indicates that while many perceive iPhones as overpriced, a notable percentage still consider them worth the investment despite financial constraints [17].

Core Insights - e.l.f. Beauty Inc. is leveraging pricing discipline to manage tariff pressures through fiscal 2026, achieving a 14% year-over-year net sales growth in Q2 of fiscal 2026 despite significant tariff challenges [1][9] Pricing Strategy - A $1 price increase across the portfolio was implemented on August 1, 2025, to mitigate the impact of higher tariffs from China-based production, with 75% of products still priced at $10 or below and an average retail price of $7.50 [2] - The core e.l.f. brand experienced a 7% growth in Q2, indicating strong consumer demand and limited price elasticity following the price increase [2] Profitability and Margins - Tariffs negatively impacted the gross margin, which declined by approximately 165 basis points year-over-year, but pricing and product mix helped stabilize margins against an estimated 3,500-basis-point tariff headwind for the year [3] - Management estimates that a 10 percentage-point increase in tariffs results in $17 million in annualized cost pressure, highlighting the importance of proactive pricing adjustments [3] Product Mix and Growth Outlook - The introduction of the Rhode brand supports margin defense through product mix enhancement, contributing positively to gross margin recovery despite near-term profitability compression due to tariffs [4] - e.l.f. Beauty anticipates sequential gross margin improvement in the second half of fiscal 2026, driven by pricing strategies, product mix benefits, and moderating tariff rates, with full-year net sales growth projected at 18-20% and organic growth at 3-4% [5] Market Performance and Valuation - e.l.f. Beauty's shares have declined by 35.1% over the past six months, contrasting with the industry's growth of 16.5%, while competitors Nu Skin and Coty have seen share price movements of 30.1% increase and 33.4% decrease, respectively [6] - The forward 12-month price-to-earnings ratio for e.l.f. Beauty is 23.55, lower than the industry average of 29.35, indicating a premium valuation compared to Nu Skin and Coty [7] Earnings Estimates - The Zacks Consensus Estimate for e.l.f. Beauty's fiscal 2026 earnings suggests a year-over-year decline of 15.9%, while fiscal 2027 indicates a growth of 24.7%, with recent downward revisions of 8 cents and 18 cents per share for fiscal 2026 and 2027, respectively [10]

Core Insights - Hormel Foods Corporation reported earnings per share (EPS) of $0.32, exceeding estimates of $0.30, but down from $0.42 in the same quarter last year, indicating a need for further analysis of year-over-year performance and analyst estimates [2][6] - The company's revenue for the quarter ending October 2025 was approximately $3.19 billion, slightly below the estimated $3.22 billion, but representing a 1.5% increase from the previous year, showing resilience in a competitive market [3][6] - Strategic cost-cutting measures, increased pricing, and steady demand for turkey products are expected to drive future profits, helping to offset high input costs associated with beef and pork [4][6] Financial Metrics - Hormel's price-to-earnings (P/E) ratio is approximately 27.47, indicating investors are willing to pay $27.47 for each dollar of earnings [5] - The price-to-sales ratio is about 1.08, and the enterprise value to sales ratio is around 1.03, reflecting the company's valuation relative to its sales [5] - The current ratio of 2.47 indicates a strong ability to cover short-term liabilities with short-term assets [5]

Core Insights - Chipotle Mexican Grill, Inc. is adopting a new pricing strategy for 2026, moving from annual price increases to smaller, gradual adjustments over time to adapt to tightening household budgets and declining frequency among lower-income guests [1][4] - The company anticipates mid-single-digit inflation in 2026, primarily due to rising beef costs and tariffs, and does not plan to fully offset these costs, indicating potential pressure on profitability [2][9] - Chipotle's management will test pricing changes in smaller restaurant cohorts to gauge customer resistance before broader implementation, marking a shift from previous practices of uniform price increases [3][9] Pricing Strategy - The new pricing approach reflects Chipotle's commitment to discipline and flexibility, allowing for data-driven adjustments based on customer feedback [3] - The gradual pricing strategy aims to balance value preservation with margin recovery, especially as same-store sales are expected to decline in the low to mid-single-digit range in the fourth quarter [4] Comparisons with Peers - McDonald's Corporation is also focusing on affordability and traffic stabilization, responding to similar pressures among lower-income guests with value offerings and promotions [5] - BJ's Restaurants, Inc. is taking a more modest approach to pricing, with a year-over-year increase of just over 2%, while enhancing perceived value through specific meal deals [6] Stock Performance and Valuation - Chipotle's stock has decreased by 47.9% over the past year, compared to a 16.1% decline in the industry [7] - The company trades at a forward price-to-sales multiple of 3.42, slightly above the industry average of 3.30 [11] - The Zacks Consensus Estimate for Chipotle's 2026 earnings suggests a year-over-year increase of 4.9%, although earnings per share estimates have declined in the past 60 days [12]

Financial Data and Key Metrics Changes - The company reported a sequential acceleration in comparable net sales growth, with a projected top line growth of 4% on a reported basis and about 5.5% comparable growth year over year [40][68] - The second quarter segment profit margin in coffee was 18.2%, with expectations for slight improvement in the third quarter but not surpassing 20% [37] Business Line Data and Key Metrics Changes - Organic sales in the sweet baked snacks segment exceeded expectations, with improved performance noted in convenience stores and a focus on a streamlined portfolio [7][20] - The sweet baked snacks bottom line did not meet expectations due to costs absorbed during the transition of the bakery network, but improvements are anticipated in the third and fourth quarters [20][21] - The pet portfolio is expected to see low single-digit growth in the third and fourth quarters, driven by the Milk-Bone and Meow Mix brands [25][24] Market Data and Key Metrics Changes - The company anticipates a $75 million impact from coffee tariffs in the third quarter, which will be a headwind for fiscal 2026 but a tailwind for fiscal 2027 [10][16] - The spreads portfolio, particularly peanut butter, faced challenges in the second quarter, contributing to a reduced net sales expectation for frozen handhelds and spreads [27][30] Company Strategy and Development Direction - The company is committed to investing in long-term brand health, with marketing dollars projected to increase year-over-year, maintaining about 5.5% of net sales [18] - A three-pronged plan to strengthen the portfolio by eliminating 25% of SKUs has shown positive results, particularly for core brands [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver financial outlooks for the fiscal year while advancing long-term objectives to increase shareholder value [70] - The company expects to see acceleration in growth across various segments, with a focus on innovation and marketing support [41][48] Other Important Information - The company is on track to achieve $975 million in free cash flow this fiscal year, supporting $500 million in debt repayment [62] - The pace of innovation has accelerated across various product lines, with notable advancements in Uncrustables and pet snacks [61] Q&A Session Summary Question: Insights on sweet baked goods performance - Management noted that the improvement in sweet baked snacks is sustainable, with a focus on core brands and a successful relaunch of Susie Q's [7] Question: Impact of tariffs on coffee pricing - The majority of the $0.50 tariff impact is related to green coffee tariffs, which will be a tailwind for fiscal 2027 [10] Question: SG&A guidance and marketing plans - Marketing investments will increase year-over-year, with a focus on growth brands while managing discretionary spending [18] Question: Profit results in sweet baked snacks - The second quarter's profit results did not meet expectations due to transitional costs, but improvements are expected in subsequent quarters [20] Question: Expectations for pet treats - Management anticipates strong growth for Milk-Bone in the third quarter, supported by marketing campaigns and innovation [24] Question: Reduced net sales expectation for frozen handhelds - The reduction is primarily driven by the spreads portfolio, with Uncrustables still on track for significant growth [27][30] Question: Coffee margin expectations - Coffee margins are expected to improve slightly in the third quarter but will not exceed 20% [37] Question: Tariff impact confirmation - The $75 million tariff expense is confirmed to be entirely due to coffee tariffs [58]

Financial Data and Key Metrics Changes - Consolidated revenues for the third quarter were $210 million, down 9.7% compared to the prior year quarter [5] - Operating income decreased by $10.1 million to $22.7 million compared to the prior year quarter [5] - Consolidated adjusted EBITDA was $40.4 million, a decrease of $11.9 million from the third quarter of fiscal 2024 [5] - Net earnings for the quarter were $16.2 million, or $0.52 per share, impacted by a non-recurring gain on a property insurance settlement of $3 million [5][6] - Excluding the gain, net earnings were $13.2 million, or $0.42 per share, compared to $24.8 million, or $0.78 per share in the prior year [6] Business Line Data and Key Metrics Changes Theater Division - Total revenue for the theater division was $119.9 million, a decrease of approximately 16% compared to the prior year [6] - Comparable theater admission revenue decreased by 15.8%, and attendance decreased by 18.7% compared to the fiscal third quarter 2024 [7] - Adjusted EBITDA for the theater division was $22.1 million, a 33% decrease over the prior year quarter [10] Hotels and Resorts Division - Total revenues before cost reimbursements were $80.3 million, a 1.7% increase compared to the prior year [10] - RevPAR for comparable owned hotels decreased by 1.5%, with an average occupancy rate of 78.4% [10][11] - Adjusted EBITDA for hotels was essentially flat compared to the prior year quarter [14] Market Data and Key Metrics Changes - U.S. box office receipts decreased by 12% during the fiscal 2025 third quarter compared to the previous year, indicating a trailing performance relative to the industry [7] - Comparable competitive hotels experienced a RevPAR decrease of 6.7%, indicating that the company's hotels outperformed the competitive set by 5.2 percentage points [12] Company Strategy and Development Direction - The company plans to continue pursuing growth investments while returning capital to shareholders through dividends and share repurchases [17][32] - Capital expenditures for fiscal 2025 are expected to be between $75 to $85 million, with a significant decrease anticipated in 2026 [15][32] - The company is focused on optimizing pricing strategies to capture premium during peak periods while maintaining value-oriented options for price-sensitive customers [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a mixed quarter with solid results in hotels but challenges in theaters due to a less concentrated film slate [4][18] - The company remains optimistic about the upcoming film slate and expects continued growth in admission per caps [25][49] - There is an increased level of economic uncertainty, but the company is prepared to react and adjust quickly if needed [30] Other Important Information - The company repurchased approximately 600,000 shares for $9.1 million during the third quarter, totaling over 1 million shares repurchased this year [16] - The board approved a 4 million share increase in the current repurchase authorization, bringing it to 4.7 million shares [32] - The company celebrated its 90th anniversary, emphasizing its entrepreneurial legacy [33] Q&A Session Summary Question: On the hotel side, what is the situation with rate growth in three hotels? - Management indicated that the lack of rate growth was due to market dynamics, with two hotels facing persistent supply issues and one experiencing recent demand softening [36][37] Question: Is the $50 million to $55 million CapEx primarily maintenance? - Management confirmed that while it includes some ROI investments, it is primarily maintenance and ROI capital [38] Question: How does the company view M&A opportunities? - The company is comfortable with its current leverage and has capacity for M&A if attractive opportunities arise [40][41] Question: Have there been changes in consumer behavior regarding concessions? - Management noted no significant changes in consumer buying patterns, with consistent basket sizes and increased merchandise sales [42][43] Question: How does the company view the M&A market in the current macro environment? - Management observed a sluggish transaction volume but noted a potential increase in activity as interest rates decrease [44][45] Question: What are the expectations for admission per cap growth? - Management expects growth to continue, driven by strategic pricing moves implemented in the third quarter [46][47] Question: What growth opportunities does the company see for theaters and hotels? - Management highlighted the strong film slate for 2026 and the benefits of recent investments in hotel renovations [49][51]