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Leslie's(LESL) - 2024 Q4 - Earnings Call Transcript
LESLLeslie's(LESL)2024-11-26 01:13
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Financial Data and Key Metrics Changes - For Q4 2024, total sales were 398million,down8398 million, down 8% year-over-year, consistent with revised guidance [34][38] - Adjusted earnings per share were 0.02 for Q4, compared to 0.14inthesameperiodlastyear[45]−AdjustedEBITDAforQ4was0.14 in the same period last year [45] - Adjusted EBITDA for Q4 was 43 million, down from 59millionyear−over−year[44]−Forthefullyear,totalsaleswere59 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 1million,comparedtoincomeof1 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 15billion[14]−Thecompanyremainstheonlynationallarge−scaleomnichannelplayerinaftermarketpoolandspacare[16]CompanyStrategyandDevelopmentDirection−Thecompanyplanstofocusonthreestrategicthemes:customercentricity,convenience,andassetutilization[19][33]−Emphasisongettingbacktoretailfundamentalstodrivelong−termprofitablegrowth[15]−Thecompanyaimstoleverageitscompetitiveadvantages,includingproximitytocustomersandstrongbrandrecognition[18][19]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementnotedthatthemacroenvironmentremainsdynamic,impactingsalestrends[36]−ThecompanyexpectscontinuedsoftnessinlargerticketanddiscretionarycategoriesinQ12025,withsalesguidanceof15 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 176million[58][55]−Managementisoptimisticaboutimprovingcustomerserviceandleveragingstrategicthemestodrivegrowth[56][64]OtherImportantInformation−ThecompanyendedQ4withcashandcashequivalentsof176 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 55millioninthepreviousyear[53]−Inventorydecreasedby55 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]