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]

Leslie's (NasdaqGS:LESL) Q4 2025 Earnings Call December 02, 2025 05:00 PM ET Company ParticipantsJonathan Matuszewski - Senior VPJason McDonell - CEOJeff White - CFONitza McKee - Senior AssociateConference Call ParticipantsDavid Bellinger - Senior Equity AnalystJustin Kleber - Senior Equity Research AnalystLauren Englund - Research AnalystOperatorGood afternoon, and welcome to the Fiscal Fourth Quarter and Full Year 2025 Earnings Conference call for Leslie's. At this time, all participants are in a listen-o ...

Core Insights - Pool Corporation reported a modest beat on revenue and earnings per share (EPS) for Q2 2025, with revenue at $1.79 billion and adjusted EPS at $5.17, surpassing analyst expectations of $1.78 billion and $5.09 respectively [1][2] - The company trimmed its full-year 2025 earnings outlook based on second-quarter performance and expectations for the remainder of the year [1][12] Financial Performance - Adjusted EPS for Q2 2025 was $5.17, a 3.8% increase from $4.98 in Q2 2024 [2] - Revenue totaled $1.79 billion, reflecting a year-over-year increase of 0.6% from $1.77 billion in Q2 2024 [2] - Gross margin remained stable at 30%, while operating margin was unchanged at 15.3% [2][7] - Net income for Q2 2025 was $194.3 million, a slight increase from $192.4 million in Q2 2024 [2][7] Business Operations - Pool operates 451 sales centers across North America, Europe, and Australia, focusing on chemicals, equipment, parts, and building materials for pool professionals and retailers [3] - Approximately 65% of annual revenue in 2024 came from the recurring maintenance and repair market, providing stability against economic fluctuations [4] - The company is expanding its sales center footprint and enhancing private-label offerings, with a focus on technology-driven products [4][8] Market Dynamics - The second quarter saw steady business in pool maintenance products, particularly private-label chemicals, which experienced double-digit growth [5] - Discretionary sales, including new pool construction and upgrades, showed incremental improvement but remained below pre-pandemic levels [6] - Competitive dynamics intensified, leading to pricing pressure in certain regions as competitors sought market share [6] Cash Flow and Shareholder Returns - Cash flow from operations for the first half of 2025 fell to $170.6 million, down from $172.1 million in the same period last year, influenced by a deferred tax payment and inventory build [10] - The company prioritized shareholder returns, repurchasing $156.4 million in shares and paying $92.2 million in dividends during the first half of 2025 [10][11] - The quarterly dividend was raised by 4% to $1.25 per share, supported by disciplined capital management [11] Future Outlook - Management updated its annual diluted EPS guidance to a range of $10.80 to $11.30, reflecting macroeconomic uncertainties impacting consumer confidence and interest rates [12] - The company noted a growing proportion of sales to larger, lower-margin customers, which could affect profitability [13]

Investment Rating - The report assigns a Neutral rating on Leslie's Inc. (LESL) with a 12-month price target of $3 based on EV/EBITDA multiples of 8.0x/9.0x/10.0x for downside/base/upside cases [40]. Core Insights - Memorial Day weekend demand for pools was in line with the previous year, and similar sales are expected for the summer, with chemical sales likely to remain stable but discretionary sales anticipated to decline [1][3]. - Google search trends indicate an increase in interest for pool-related topics in key states, suggesting a potential uptick in demand, although Leslie's Pool Supplies experienced a decline in search interest [19][24]. - Approximately 75% of surveyed retailers do not view Leslie's or Walmart as strong competitors in the pool supply market [3][16]. Summary by Sections Survey Results - A survey of 27 independent specialty pool retailers indicated that demand during Memorial Day 2025 was consistent with 2024, with no expectations for increased demand for chemicals or discretionary items [2][3]. - Retailers expressed that prices for pool supplies are not expected to be lower than the previous year [10]. Google Search Trends - Google search interest for "pool" in April and May 2025 remained stable compared to 2024, with increases noted against 2023 and pre-pandemic levels [24]. - Searches for Leslie's Pool Supplies showed a decline in interest compared to previous years, indicating potential challenges for the company [24][31]. Market Competitiveness - The majority of retailers surveyed do not consider Leslie's or Walmart as significant competitors, with 22% affirming Leslie's as a competitor and 5% for Walmart [3][16]. - Retailers are cautious about the competitive landscape, with many not expecting significant changes in market dynamics [3].