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1. Company Snapshot

1.a. Company Description

Leslie's, Inc.operates as a direct-to-consumer pool and spa care brand in the United States.The company markets and sells pool and spa supplies and related products and services.


It offers pool chemicals consisting of chlorine, sanitizers, water balancers, specialty chemicals, and algae control; pool covers, including winter, solar and safety covers, leaf nets, cover reels, and cover alternatives; pool equipment, which comprise pool cleaners, pool pumps, pool filters, pool heating, and lighting; and pools, such as above ground pools, soft side pools, above ground pools liners and equipment, ladders and rails, and diving boards.The company also provides pool maintenance products, including pool closing and opening supplies, filter catridges, chlorine floaters, backwash and vacuum hoses, and cleaning attachments; parts, such as automatic pool cleaner parts, pool filter and pump parts, and pool heater and heat pump parts; and safety, recreational, and fitness-related products.In addition, it provides pool equipment and repair services.


The company markets its products through 952 company operated locations in 38 states and e-commerce websites.It serves the residential, professional, and commercial consumers.The company was founded in 1963 and is headquartered in Phoenix, Arizona.

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1.b. Last Insights on LESL

Leslie's, Inc. recent performance was marred by a Q2 loss of $0.25 per share, surpassing the Zacks Consensus Estimate of a loss of $0.24. This decline in profitability was a stark contrast to the loss of $0.17 per share reported in the same period last year. The company's inability to meet revenue estimates further exacerbated the situation, underscoring the challenges it faces in the pool and spa care industry.

1.c. Company Highlights

2. Leslie's Delivers Mixed Results, Outlines Strategic Initiatives

Leslie's reported top-line net sales of $147 million in the first quarter, largely in line with internal expectations. However, the gross profit margin contracted to 18.4% from 27.2% in the prior year period, primarily due to a decline in overall margins on core chemicals. The company's net loss for the quarter was $83 million, compared to a net loss of $44.6 million in the first quarter of the prior year. Adjusted EBITDA was negative $40.3 million, versus negative $29.3 million in the first quarter of 2025. The actual EPS loss came out at -$5.24, wider than the estimated loss of -$4.22.

Publication Date: Mar -03

📋 Highlights
  • Store Optimization Impact:: Closed 80 underperforming stores and 1 distribution center, resulting in a $10.1 million noncash impairment charge.
  • Net Loss Expansion:: Q1 net loss widened to $83 million compared to $44.6 million in the prior year, driven by margin pressures and restructuring costs.
  • Price Adjustment Strategy:: Pricing transformation aims to rebuild customer traffic, with expected $4 million to $10 million annual EBITDA improvement post-store closures.
  • Gross Margin Decline:: Q1 gross profit margin fell to 18.4% from 27.2% due to lower core chemical margins, a 880 basis point drop YoY.
  • Inventory Efficiency:: Inventory reduced by 23% year-over-year to $210 million, reflecting supply chain optimization and stock rationalization efforts.

Operational Highlights

The company is making progress on its transformation plan, with strategic initiatives aimed at improving customer engagement and optimizing operations. Leslie's has implemented a pricing transformation initiative to improve pricing for customers, and is launching a "low prices, same great quality" marketing campaign during the pool season. The company has also made significant investments in associate training and development programs to enhance customer engagement capabilities.

Store Optimization and Distribution Network

Leslie's store optimization initiative, which involves closing 80 underperforming locations, is on track. The company has implemented a comprehensive customer transition strategy to retain relationships despite physical store closures. Additionally, Leslie's has streamlined its distribution footprint to create a more efficient and cost-effective supply chain network, enabling faster and more cost-effective fulfillment of e-commerce orders.

Outlook and Valuation

Leslie's reaffirmed its full-year guidance for net sales and adjusted EBITDA, expecting sales of $1.1 billion to $1.25 billion and adjusted EBITDA of $55 million to $75 million. Analysts estimate next year's revenue growth at 2.3%. The company's current valuation metrics, including a P/S Ratio of 0.01 and EV/EBITDA of -1.41, suggest that the market is pricing in significant challenges. As Jason McDonell noted, "We've made meaningful progress on our transformation, and our strategic initiatives are advancing with urgency." With a focus on convenience and proximity to customers, Leslie's is optimizing its store footprint, DC network, and omnichannel approach to provide a one-stop shop for pool care.

3. NewsRoom

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TAAT Global Alternatives (OTCMKTS:TOBAF) and Leslie’s (NASDAQ:LESL) Head to Head Survey

Mar -13

Source: defenseworld.net

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Comparing Leslie’s (NASDAQ:LESL) and Unilever (NYSE:UL)

Mar -03

Source: defenseworld.net

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Leslie’s Q1 Earnings Call Highlights

Feb -19

Source: defenseworld.net

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Leslie's, Inc. (LESL) Q1 2026 Earnings Call Transcript

Feb -18

Source: seekingalpha.com

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Leslie's, Inc. Announces First Quarter 2026 Financial Results

Feb -17

Source: globenewswire.com

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Leslie’s, Inc. (NASDAQ:LESL) Given Average Rating of “Reduce” by Analysts

Feb -06

Source: defenseworld.net

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Leslie's, Inc. to Report First Quarter 2026 Financial Results on February 17, 2026

Feb -03

Source: globenewswire.com

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Leslie's, Inc. (LESL) Expected to Beat Earnings Estimates: Should You Buy?

Jan -29

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Pool and Spa Supplies and Related Products and Services

Expected Growth: 4.0%

Leslie's, Inc. pool and spa supplies and related products and services segment growth of 4.0% is driven by increasing consumer spending on outdoor living, rising demand for pool maintenance and repair services, and expansion into e-commerce channels, as well as strategic acquisitions and partnerships.

7. Detailed Products

Pool Chemicals

Leslie's offers a wide range of pool chemicals, including chlorine tablets, shock treatments, and algaecides, to keep pools clean and safe.

Pool Equipment

Leslie's sells pool equipment such as pumps, filters, and heaters from top brands, ensuring efficient and effective pool operation.

Pool Accessories

Leslie's offers a variety of pool accessories, including pool toys, floats, and cleaning tools, to enhance the pool experience.

Pool Services

Leslie's provides professional pool services, including pool cleaning, maintenance, and repair, to keep pools in top condition.

Spa and Hot Tub Products

Leslie's sells a range of spa and hot tub products, including chemicals, accessories, and equipment, for relaxation and wellness.

8. Leslie's, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Leslie's, Inc. operates in a market with some substitutes, but they are not a significant threat to the company's business. The score is 3, indicating a moderate level of threat.

Bargaining Power Of Customers

Leslie's, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. The score is 2, indicating a low level of bargaining power.

Bargaining Power Of Suppliers

Leslie's, Inc. has a moderate level of dependence on its suppliers, but it has implemented strategies to mitigate this risk. The score is 3, indicating a moderate level of bargaining power.

Threat Of New Entrants

The pool industry has low barriers to entry, making it easier for new entrants to join the market. The score is 4, indicating a high level of threat.

Intensity Of Rivalry

The pool industry is highly competitive, with many established players competing for market share. The score is 4, indicating a high level of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 118.42%
Debt Cost 8.51%
Equity Weight -18.42%
Equity Cost 9.27%
WACC 8.37%
Leverage -642.90%

11. Quality Control: Leslie's, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 2.8/10

Value: 10.0

Growth: 1.2

Quality: 4.8

Yield: 0.0

Momentum: 0.0

Volatility: 1.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.28$

Current Price

1.28$

Potential

-0.00%

Expected Cash-Flows