Leslie's Q1 Earnings: EPS Beats Expectations but Revenue Declines
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy LESL?
Source: seekingalpha
- 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.
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Analyst Views on LESL
Wall Street analysts forecast LESL stock price to rise
5 Analyst Rating
0 Buy
5 Hold
0 Sell
Hold
Current: 0.996
Low
3.00
Averages
3.45
High
4.00
Current: 0.996
Low
3.00
Averages
3.45
High
4.00
About LESL
Leslie’s, Inc. is a direct-to-customer brand in the United States pool and spa care industry serving residential customers and pool professionals nationwide. The Company serves the aftermarket needs of residential and professional consumers with an assortment of essential pool and spa care products. More than 80% of its assortment consists of non-discretionary products essential to the care of residential and commercial pools and spas. Its assortment includes chemicals, equipment and parts, cleaning and maintenance equipment, and safety, recreational, and fitness-related products. It also offers essential services, such as equipment installation and repair for residential consumers and professional pool operators. The Company offers complimentary, commercial-grade in-store water testing and analysis via its proprietary AccuBlue system. The Company operates an integrated ecosystem of over 1,000 physical locations and a digital platform.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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.
See More
Leslie's Q1 Earnings: EPS Beats Expectations but Revenue Declines
- 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.
See More
Leslie's to Release Q1 2026 Financial Results on February 17
- 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.
See More
Goldman Sachs Downgrades MoonLake to Sell, Raises Price Target to $10
- MoonLake Downgrade: Goldman Sachs analyst Richard Law downgraded MoonLake Immunotherapeutics from Neutral to Sell while raising the price target from $8 to $10, indicating cautious sentiment despite the current share price of $17.41.
- Leslie’s Inc Rating Change: Morgan Stanley analyst Simeon Gutman downgraded Leslie’s Inc from Equal-Weight to Underweight, cutting the price target from $3.5 to $1.5, reflecting concerns about the company's future profitability with shares currently at $1.54.
- Rocket Lab Rating Adjustment: Keybanc analyst Michael Leshock downgraded Rocket Lab Corp from Overweight to Sector Weight, indicating a conservative outlook on its market performance, with shares priced at $91.80.
- Albertsons Downgrade: Morgan Stanley analyst Simeon Gutman downgraded Albertsons Companies Inc from Equal-Weight to Underweight, lowering the price target from $20 to $14, suggesting a pessimistic view on future growth as shares are currently at $17.71.
See More
What’s Happening with Leslie's Stock Today?
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.
See More
Leslie's Closes 80-90 Underperforming Stores to Enhance Financial Performance
- 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.
See More
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.
See More
Leslie's Q1 Earnings: EPS Beats Expectations but Revenue Declines
- 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.
See More
Leslie's to Release Q1 2026 Financial Results on February 17
- 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.
See More
Goldman Sachs Downgrades MoonLake to Sell, Raises Price Target to $10
- MoonLake Downgrade: Goldman Sachs analyst Richard Law downgraded MoonLake Immunotherapeutics from Neutral to Sell while raising the price target from $8 to $10, indicating cautious sentiment despite the current share price of $17.41.
- Leslie’s Inc Rating Change: Morgan Stanley analyst Simeon Gutman downgraded Leslie’s Inc from Equal-Weight to Underweight, cutting the price target from $3.5 to $1.5, reflecting concerns about the company's future profitability with shares currently at $1.54.
- Rocket Lab Rating Adjustment: Keybanc analyst Michael Leshock downgraded Rocket Lab Corp from Overweight to Sector Weight, indicating a conservative outlook on its market performance, with shares priced at $91.80.
- Albertsons Downgrade: Morgan Stanley analyst Simeon Gutman downgraded Albertsons Companies Inc from Equal-Weight to Underweight, lowering the price target from $20 to $14, suggesting a pessimistic view on future growth as shares are currently at $17.71.
See More
What’s Happening with Leslie's Stock Today?
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.
See More
Leslie's Closes 80-90 Underperforming Stores to Enhance Financial Performance
- 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.
See More
