Leslie's, Inc. Q1 2026 Earnings Call Insights
- Sales Guidance Reaffirmed: Leslie's projects full-year net sales between $1.1 billion and $1.25 billion, with adjusted EBITDA ranging from $55 million to $75 million, despite first-quarter sales of $147.1 million reflecting a 16% year-over-year decline, indicating market challenges.
- Customer Loss Mitigation: The company lost 160,000 residential customers last year, and management aims to enhance customer traffic and loyalty through a nationwide pricing strategy, although gross margin pressure is anticipated, with a projected decline of 100 to 150 basis points for fiscal 2026.
- Store Optimization Progress: Leslie's closed 80 underperforming locations, with approximately 80% of these closures occurring within seven days of the announcement, expected to impact annual sales by $25 million to $35 million, while annualized EBITDA improvement is projected between $4 million and $10 million.
- Cost Reduction Initiatives: The company anticipates achieving $7 million to $12 million in annualized savings through expense reduction measures, with benefits expected to materialize in the second half of 2026, although management remains cautious about the sustainability of pricing changes.
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- Sales Guidance Reaffirmed: Leslie's projects full-year net sales between $1.1 billion and $1.25 billion, with adjusted EBITDA ranging from $55 million to $75 million, despite first-quarter sales of $147.1 million reflecting a 16% year-over-year decline, indicating market challenges.
- Customer Loss Mitigation: The company lost 160,000 residential customers last year, and management aims to enhance customer traffic and loyalty through a nationwide pricing strategy, although gross margin pressure is anticipated, with a projected decline of 100 to 150 basis points for fiscal 2026.
- Store Optimization Progress: Leslie's closed 80 underperforming locations, with approximately 80% of these closures occurring within seven days of the announcement, expected to impact annual sales by $25 million to $35 million, while annualized EBITDA improvement is projected between $4 million and $10 million.
- Cost Reduction Initiatives: The company anticipates achieving $7 million to $12 million in annualized savings through expense reduction measures, with benefits expected to materialize in the second half of 2026, although management remains cautious about the sustainability of pricing changes.
- Earnings Beat Expectations: Leslie's reported a Q1 non-GAAP EPS of $5.24, exceeding expectations by $9.48, indicating resilience in profitability despite overall revenue decline.
- Significant Revenue Decline: The company posted revenue of $147.1 million, a 16.1% year-over-year decrease, missing expectations, reflecting weak market demand and the impact of store closures.
- Gross Margin Decline: Gross profit fell to $27.1 million, down 43.3% year-over-year, with gross margin decreasing to 18.4%, primarily due to a $6.4 million non-cash impairment charge and lower product margins on core chemicals.
- Slight Improvement in Cost Control: Selling, general, and administrative expenses were $85.7 million, down from $87.4 million in the prior year, demonstrating the company's efforts in cost management, although overall financial performance remains under pressure.
- Earnings Release Schedule: Leslie's, Inc. will announce its Q1 2026 financial results after market close on February 17, 2026, providing crucial insights into the company's financial health and helping investors assess its market performance.
- Conference Call Details: The company will host a conference call at 5:00 p.m. Eastern Time on February 17, 2026, to discuss the financial results and progress on strategic transformation initiatives, aiming to enhance transparency and engage effectively with investors.
- Webcast Availability: The conference call will be available via live webcast on the company's Investor Relations website, ensuring that all stakeholders can access real-time information and improve interaction between the company and its investors.
- Replay Service: A replay of the call will be available approximately three hours after its conclusion and will remain accessible on the Investor Relations website for 180 days, allowing investors who could not attend live to obtain key information.
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Mixed Financial Results: Leslie’s, Inc. reported adjusted earnings per share of nine cents, significantly missing the consensus estimate of $1.29, while revenue of $389.20 million exceeded expectations of $370.63 million.
Store Closures and Strategic Changes: The company plans to close 80 to 90 underperforming stores and one distribution center as part of a strategy to improve EBITDA by fiscal 2026, alongside a 10% reduction in inventory.
Impairment Charges and Profit Margins: Leslie's recorded $183.8 million in impairment charges, with gross profit increasing by 4.8% to $150.1 million, despite a 6.5% decline in comparable sales.
Analyst Reactions and Stock Performance: Following the earnings report, analysts adjusted their price targets downward, with Leslie’s shares trading 20.95% lower at $2.83.

- Sales Decline: Leslie's reported fourth-quarter sales of $389.2 million, a 2.2% decrease year-over-year, indicating challenges in a competitive market and the urgent need for transformation to restore growth.
- EBITDA Improvement Plan: The company announced the closure of 80-90 underperforming stores and one distribution center, which is expected to yield immediate EBITDA improvements for FY26, reflecting management's urgency in optimizing operations.
- Inventory Efficiency Enhancement: Leslie's achieved approximately a 10% year-over-year reduction in inventory, which not only lowers holding costs but also provides greater flexibility for future pricing competition, aiming to enhance customer value propositions.
- Deteriorating Financial Condition: The net loss for FY2025 reached $237 million, a significant increase from the previous year, highlighting the substantial financial pressures faced during the strategic transformation process.








