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Leslie's (LESL)
NASDAQ:LESL
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Leslie's (LESL) AI Stock Analysis

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LESL

Leslie's

(NASDAQ:LESL)

Rating:46Neutral
Price Target:
$0.50
▼(-16.67%Downside)
Leslie's stock is currently challenged with declining financial performance marked by negative profitability and high leverage. Technical analysis shows bearish momentum, and valuation metrics indicate unprofitability. While there are some positive operational initiatives, the overall outlook remains cautious.
Positive Factors
Cost Optimization
LESL has made good progress on transformation initiatives including cost optimization, with expectations to reduce indirect procurement costs by $5M-$10M.
Inventory Management
Management is guiding to a $15M year-over-year decrease in year-end inventory, which will benefit free cash flow.
Operational Improvements
Early signs of progress from the business initiatives focus on customer centricity, convenience, asset utilization, and cost optimization.
Negative Factors
Financial Flexibility
LESL's leverage ratio limits the business's financial flexibility and reinvestments to stimulate growth and improve market share positioning.
Market Share Concerns
Continued concerns on market share erosion and limited visibility on a sustainable inflection in topline.
Revenue Performance
F'Q2'25 topline results were softer than anticipated, driven by severe weather trends.

Leslie's (LESL) vs. SPDR S&P 500 ETF (SPY)

Leslie's Business Overview & Revenue Model

Company DescriptionLeslie'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.
How the Company Makes MoneyLeslie's generates revenue primarily through the sale of its diverse range of pool supplies and equipment via its extensive retail store network and e-commerce platform. The company's key revenue streams include sales of pool chemicals, cleaning equipment, and various pool maintenance and accessory products. Additionally, Leslie's offers professional services such as installation, repair, and maintenance, which contribute to its earnings. The company's revenue is further supported by customer loyalty programs and various marketing initiatives that drive repeat business. Strategic partnerships with manufacturers and suppliers of pool-related products enhance Leslie's ability to offer a wide selection of high-demand items, further solidifying its revenue model.

Leslie's Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q2-2025)
|
% Change Since: -14.29%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call highlights several strategic initiatives showing promise, such as improved conversion rates and operational efficiencies. However, the company faces challenges with declining sales and increased costs, resulting in a mixed performance overall.
Q2-2025 Updates
Positive Updates
Pro Pool Sales Improvement
Pro Pool sales showed a 700 basis point improvement from the previous year's 9% decline, indicating progress in this segment.
Enhanced Conversion Rate
Overall conversion rate improved by 174 basis points, with a notable increase of over 450 basis points after a water test using AccuBlue technology.
Operational Success of Local Fulfillment Centers
All 26 Local Fulfillment Centers were completed on time and under budget, supporting inventory optimization with more than 99% in-stock levels for critical SKUs.
Significant Inventory Reduction
Inventory reduced by 12% year-over-year, with inventory turns improving by 8%.
Launch of Enhanced Loyalty Program
The new Pool Perks loyalty program was launched with tiered benefits, aiming to increase customer retention and spend.
Same-Day Delivery Initiative
A partnership with Uber was announced for same-day delivery services, enhancing convenience for customers.
Negative Updates
Sales Decline
Total sales were $177.1 million, down from $188.7 million in the previous year, primarily due to weaker foot traffic and weather impacts.
Residential Pool Sales Decline
Residential pool sales declined by 9% year-over-year, contributing to overall sales challenges.
Gross Margin Decline
Gross margin decreased to 24.8% from 28.8% in the prior year, impacted by increased DC and occupancy costs, mix, rebate overlap, and lower volume.
Increased SG&A Expenses
SG&A expenses were $92.3 million, up from $84.9 million, driven by increased labor costs and professional fees.
Company Guidance
During the fiscal second quarter of 2025 earnings call for Leslie's, Inc., the company provided guidance on several key metrics. Sales were reported at $177.1 million, showing a decline from $188.7 million in the previous year, primarily due to weaker foot traffic affected by colder temperatures. Pro Pool sales outpaced total company sales, with a year-over-year decline of just 2%, while residential pool sales decreased by 9% and hot tub sales increased by 4%. Despite the sales drop, conversion rates improved by 174 basis points, with a significant 450 basis point increase after water tests using the AccuBlue technology. The company achieved a more than 99% in-stock level for its "never out" SKUs, improving inventory turns by 8% year over year, and reduced inventory by 12% compared to the prior year. Adjusted EBITDA was reported at a loss of $36 million, aligning with expectations, even with the top-line softness. Leslie's reaffirmed its commitment to reducing debt, with borrowings on the secured term loan reduced by $27 million and plans to repay $101.5 million on the revolving credit facility by the third quarter. The company also introduced initiatives such as improved inventory management, enhancements to its loyalty program, and a partnership with Uber for same-day delivery, underpinning its focus on customer centricity, convenience, and asset utilization.

Leslie's Financial Statement Overview

Summary
Leslie's financial performance is under significant pressure with declining revenue and profitability margins, negative shareholder equity, and high leverage. Although cash flow remains positive, overall financial health indicates notable challenges requiring strategic improvements to stabilize and grow.
Income Statement
45
Neutral
Leslie's shows a declining revenue trend over recent periods, with TTM (Trailing-Twelve-Months) revenue at $1.32 billion, down from $1.33 billion in the previous year and $1.45 billion two years ago. Gross profit margin has decreased to 35.1% in the TTM period, and net profit margin is negative at -3.42%, highlighting profitability challenges. The declining EBIT and EBITDA margins further emphasize the pressure on operational efficiency.
Balance Sheet
30
Negative
The company's balance sheet is concerning, with negative stockholders' equity at -$269.46 million in the TTM period and a high debt-to-equity ratio due to significant liabilities. A negative equity ratio and decreasing return on equity (ROE) indicate financial instability and potential risks related to leverage.
Cash Flow
55
Neutral
Despite operational challenges, Leslie's shows some positive aspects in cash flow with a TTM operating cash flow of $68.24 million and a free cash flow of $33.79 million. However, the free cash flow growth rate is negative compared to previous periods, and the operating cash flow to net income ratio reflects operational difficulties.
BreakdownSep 2024Sep 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.33B1.45B1.56B1.34B1.11B
Gross Profit476.79M548.22M673.74M595.16M460.71M
EBITDA90.19M136.32M269.13M224.09M176.81M
Net Income-23.38M27.24M159.03M126.63M58.56M
Balance Sheet
Total Assets1.05B1.03B1.11B1.04B746.44M
Cash, Cash Equivalents and Short-Term Investments108.50M55.42M112.29M345.06M157.07M
Total Debt1.05B1.04B1.03B1.02B1.37B
Total Liabilities1.23B1.20B1.31B1.26B1.57B
Stockholders Equity-177.15M-161.36M-197.95M-217.56M-827.00M
Cash Flow
Free Cash Flow60.22M-32.11M34.92M140.63M82.78M
Operating Cash Flow107.47M6.47M66.64M169.56M103.41M
Investing Cash Flow-47.16M-52.54M-138.98M-35.35M-26.81M
Financing Cash Flow-7.22M-10.80M-158.87M53.78M-10.43M

Leslie's Technical Analysis

Technical Analysis Sentiment
Positive
Last Price0.60
Price Trends
50DMA
0.60
Positive
100DMA
0.67
Negative
200DMA
1.50
Negative
Market Momentum
MACD
>-0.01
Negative
RSI
63.46
Neutral
STOCH
79.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LESL, the sentiment is Positive. The current price of 0.6 is above the 20-day moving average (MA) of 0.45, above the 50-day MA of 0.60, and below the 200-day MA of 1.50, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 63.46 is Neutral, neither overbought nor oversold. The STOCH value of 79.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LESL.

Leslie's Risk Analysis

Leslie's disclosed 46 risk factors in its most recent earnings report. Leslie's reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Leslie's Peers Comparison

Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$371.20B25.31299.52%2.42%7.33%-1.19%
70
Outperform
$343.24M16.616.97%5.98%-12.29%-55.73%
67
Neutral
$8.47B42.299.74%2.96%-9.49%
65
Neutral
$291.19M359.780.66%-6.41%-91.36%
63
Neutral
$126.41B18.68-51.07%2.05%-2.52%-2.98%
57
Neutral
HK$26.40B4.11-2.03%5.49%-0.23%-68.02%
46
Neutral
$103.00M12.90%-6.12%-396.11%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LESL
Leslie's
0.60
-2.31
-79.38%
HVT
Haverty
21.41
-5.36
-20.02%
HD
Home Depot
375.34
22.19
6.28%
LOW
Lowe's
226.80
-8.45
-3.59%
TTSH
Tile Shop
6.62
-0.61
-8.44%
FND
Floor & Decor Holdings
79.90
-17.46
-17.93%

Leslie's Corporate Events

Executive/Board Changes
Leslie’s Appoints New Chief Merchandising Officer
Neutral
Jul 15, 2025

On July 15, 2025, Leslie’s, Inc. announced the appointment of Amy College as the new Chief Merchandising and Supply Chain Officer, effective July 20, 2025. Ms. College brings over 25 years of retail operations experience, having held leadership roles at Petco Health and Wellness Company and Best Buy Co., Inc. Her responsibilities at Leslie’s will include overseeing merchandising, inventory, supply chain, logistics, manufacturing, and the digital marketplace business. The company also announced the departure of Moyo LaBode, the former Chief Merchandising and Supply Chain Officer, effective July 15, 2025. Mr. LaBode’s departure was amicable and he will receive severance benefits as per the company’s Executive Severance Pay Plan.

The most recent analyst rating on (LESL) stock is a Hold with a $3.00 price target. To see the full list of analyst forecasts on Leslie’s stock, see the LESL Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 23, 2025