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Leslie's, Inc. (LESL)
:LESL
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Leslie's
(NASDAQ:LESL)
Rating:43Neutral
Price Target:
$0.50
▲(19.05%Upside)
Positive Factors
Customer Convenience
A new partnership with Uber is set to add same-day delivery capabilities, placing further emphasis on LESL’s focus on customer convenience.
Inventory Management
Management is guiding to a $15M year-over-year decrease in year-end inventory, which will benefit free cash flow.
Operational Improvements
All 26 local fulfillment centers are now operational, helping improve in-stock levels for its never-out SKUs to over 99% in the quarter.
Negative Factors
Earnings Performance
The adjusted EBITDA guidance for fiscal year 2025 is notably below previous expectations.
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
There are concerns on market share due to competitive dynamics, such as increased ecommerce penetration and the shift to other mass channels.
Leslie's (LESL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$77.49M
Dividend YieldN/A
Average Volume (3M)4.19M
Price to Earnings (P/E)―
Beta (1Y)1.07
Revenue Growth-6.12%
EPS Growth-396.11%
CountryUS
Employees3,850
SectorConsumer Cyclical
Sector Strength60
IndustryHome Improvement
Share Statistics
EPS (TTM)-0.25
Shares Outstanding185,421,660
10 Day Avg. Volume7,652,399
30 Day Avg. Volume4,187,854
Financial Highlights & Ratios
PEG Ratio0.64
Price to Book (P/B)-13.70
Price to Sales (P/S)0.00
P/FCF Ratio77.66
Enterprise Value/Market Cap46.81
Enterprise Value/Revenue0.68
Enterprise Value/Gross Profit7.82
Enterprise Value/Ebitda11.24
Forecast
1Y Price Target
$0.99Price Target Upside135.71% Upside
Rating ConsensusHold
Number of Analyst Covering6
Leslie's Business Overview & Revenue Model
Company DescriptionLeslie's, Inc. (LESL) is a prominent retailer specializing in swimming pool supplies and related products. With a focus on serving residential and commercial pool owners, the company offers a comprehensive range of products, including pool chemicals, cleaning equipment, automatic cleaners, pumps, filters, and pool accessories. Leslie's operates through a network of retail stores across the United States and provides services such as pool equipment installation and maintenance, water testing, and repair services. As a leader in the pool supply industry, Leslie's is dedicated to enhancing the pool ownership experience by providing high-quality products and expert advice.
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: -40.00%|
Next Earnings Date:Jul 30, 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 pressure with declining revenue, negative profitability margins, and high leverage. The balance sheet shows negative shareholder equity and liabilities surpassing assets, posing significant risks. Although cash flow remains positive, operational difficulties are evident in the declining growth rate.Income Statement
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.45
Neutral
Balance Sheet
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.30
Negative
Cash Flow
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.55
Neutral
| Breakdown | TTM | Sep 2024 | Sep 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.32B | 1.33B | 1.45B | 1.56B | 1.34B | 1.11B |
| Gross Profit | 463.72M | 476.79M | 548.22M | 673.74M | 595.16M | 460.71M |
| EBITDA | 60.79M | 90.19M | 136.32M | 269.13M | 224.09M | 176.81M |
| Net Income | -45.16M | -23.38M | 27.24M | 159.03M | 126.63M | 58.56M |
Balance Sheet | ||||||
| Total Assets | 1.04B | 1.05B | 1.03B | 1.11B | 1.04B | 746.44M |
| Cash, Cash Equivalents and Short-Term Investments | 17.25M | 108.50M | 55.42M | 112.29M | 345.06M | 157.07M |
| Total Debt | 1.11B | 1.05B | 1.04B | 1.03B | 1.02B | 1.37B |
| Total Liabilities | 1.31B | 1.23B | 1.20B | 1.31B | 1.26B | 1.57B |
| Stockholders Equity | -269.46M | -177.15M | -161.36M | -197.95M | -217.56M | -827.00M |
Cash Flow | ||||||
| Free Cash Flow | 33.79M | 60.22M | -32.11M | 34.92M | 140.63M | 82.78M |
| Operating Cash Flow | 68.24M | 107.47M | 6.47M | 66.64M | 169.56M | 103.41M |
| Investing Cash Flow | -34.32M | -47.16M | -52.54M | -138.98M | -35.35M | -26.81M |
| Financing Cash Flow | -25.10M | -7.22M | -10.80M | -158.87M | 53.78M | -10.43M |
Leslie's Technical Analysis
Negative
0.42
Price Trends
0.66
Negative
0.80
Negative
1.68
Negative
Market Momentum
-0.08
Positive
31.11
Neutral
16.46
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LESL, the sentiment is Negative. The current price of 0.42 is below the 20-day moving average (MA) of 0.53, below the 50-day MA of 0.66, and below the 200-day MA of 1.68, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 31.11 is Neutral, neither overbought nor oversold. The STOCH value of 16.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $369.79B | 25.22 | 299.52% | 2.47% | 7.33% | -1.19% | |
70 Outperform | $361.78M | 17.51 | 6.97% | 5.71% | -12.29% | -55.73% | |
65 Neutral | $8.83B | 43.44 | 9.74% | ― | 2.96% | -9.49% | |
65 Neutral | $312.66M | 379.89 | 0.66% | ― | -6.41% | -91.36% | |
64 Neutral | $127.95B | 18.91 | -51.07% | 2.01% | -2.52% | -2.98% | |
62 Neutral | $16.85B | 11.50 | -7.38% | 2.96% | 1.59% | -23.36% | |
43 Neutral | $77.49M | ― | 12.90% | ― | -6.12% | -396.11% |
* Consumer Cyclical Sector Average
Performance Comparison
LESL
Leslie's
0.42
-2.79
-86.92%
HVT
Haverty
22.40
-0.30
-1.32%
HD
Home Depot
371.68
40.08
12.09%
LOW
Lowe's
228.31
15.18
7.12%
TTSH
Tile Shop
6.99
0.19
2.79%
FND
Floor & Decor Holdings
82.07
-10.14
-11.00%
Leslie's Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Leslie’s Announces Key Leadership Changes for 2025
Neutral
Mar 17, 2025
Leslie’s, Inc. announced significant leadership changes effective March 14, 2025, as part of its transformation strategy. Tony Iskander was appointed as the Interim Chief Financial Officer and Treasurer, bringing nearly 30 years of experience in corporate finance and operational transformation. Naomi Cramer was promoted to Chief Retail Operations and Talent Officer, combining roles to enhance retail execution and drive long-term growth. These changes aim to strengthen Leslie’s strategic focus on customer centricity, convenience, and asset utilization, with an emphasis on debt reduction and operational efficiency. The departures of Scott Bowman, the former CFO, and Dave Caspers, Chief Stores Officer, were not due to disagreements with the company.
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.