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Leslie's (LESL)
NASDAQ:LESL
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Leslie's
(NASDAQ:LESL)
Rating:40Underperform
Price Target:
$0.50
▲(42.86% Upside)
Positive Factors
Business Initiatives
Early signs of progress from the business initiatives focus on customer centricity, convenience, asset utilization, and cost optimization.
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
Debt Concerns
Limited financial flexibility presents additional risk.
Financial Performance
Preliminary third-quarter EPS missed by a significant margin and full-year guidance was pulled.
Market Conditions
A still soft pool market, price competition, and unfavorable weather weighed on the third quarter.
Leslie's (LESL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$64.55M
Dividend YieldN/A
Average Volume (3M)3.41M
Price to Earnings (P/E)―
Beta (1Y)1.54
Revenue Growth-8.36%
EPS Growth-2957.86%
CountryUS
Employees3,850
SectorConsumer Cyclical
Sector Strength81
IndustryHome Improvement
Share Statistics
EPS (TTM)0.20
Shares Outstanding185,608,300
10 Day Avg. Volume1,483,101
30 Day Avg. Volume3,409,212
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)-2.98
Price to Sales (P/S)0.40
P/FCF Ratio8.77
Enterprise Value/Market Cap16.66
Enterprise Value/Revenue0.86
Enterprise Value/Gross Profit2.49
Enterprise Value/Ebitda161.51
Forecast
1Y Price Target
$0.45Price Target Upside28.57% Upside
Rating ConsensusHold
Number of Analyst Covering6
Leslie's Business Overview & Revenue Model
Company DescriptionLeslie's, Inc. (NASDAQ: LESL) is a leading retailer of swimming pool supplies and related products in the United States. Founded in 1963, the company operates a vast network of retail stores and an e-commerce platform, specializing in a wide range of products including pool chemicals, equipment, maintenance supplies, and outdoor living products. Leslie's serves both residential and commercial customers, providing essential services such as pool maintenance and repair, making it a key player in the leisure and recreation sector.
How the Company Makes MoneyLeslie's generates revenue primarily through the sale of pool and spa products in its retail locations and online. The company offers a diverse range of products, including chemicals, cleaners, filters, pumps, and various accessories, which contribute significantly to its sales. In addition to product sales, Leslie's also earns money through service offerings, including pool maintenance and repair services for residential and commercial clients, which provide a recurring revenue stream. The company leverages its extensive store network and online presence to capture a wide customer base, and strategic partnerships with manufacturers and suppliers enhance its product offerings and pricing strategies. Seasonal demand fluctuations, particularly in warmer months, also play a crucial role in revenue generation, as more consumers invest in pool maintenance and upgrading their outdoor spaces.
Leslie's Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Dec 02, 2025
Earnings Call Sentiment Negative
The earnings call highlighted several positive aspects such as the increase in Pro partner contracts, improved inventory management, and the launch of an enhanced loyalty program. However, these highlights were overshadowed by significant lowlights including a decline in sales and chemical sales due to adverse weather conditions, a decrease in residential traffic, and a gross margin decline. The company is also facing a challenging sales environment with heightened competitive pressure and has adjusted its expectations to reflect a net loss for the year.Q3-2025 Updates
Positive Updates
Pro Partner Contracts Increase
The team surpassed the full-year goal for new Pro partner contracts, increasing total Pro partner contracts by 12% in the first three quarters compared to the prior year period.
Improved Inventory Management
The company reduced inventory by 9.6% year-over-year, with in-stock levels in top-selling never-out SKUs achieving more than 99% in stores.
AccuBlue Technology Boosts Conversion Rates
Conversion rates improved by over 550 basis points after a water test is performed in-store using AccuBlue technology compared to the prior year period.
Launch of Enhanced Loyalty Program
The company successfully launched its enhanced Pool Perks loyalty program in the third quarter, aiming to increase customer share of wallet and attract new pool owners.
Paying Down Debt
Subsequent to the end of the quarter, Leslie's paid off its $20 million revolver balance, currently having no borrowings under its revolving credit facility.
Negative Updates
Sales Decline
Quarterly sales were down 12% compared to the prior year quarter, primarily driven by weather-related headwinds, reduced traffic, and heightened competitive pressure.
Decline in Chemical Sales
Chemical sales, including both core and specialty chemicals, were down nearly 15% due to cooler temperatures across much of the United States.
Residential Traffic Decrease
The company experienced a meaningful reduction in residential traffic in stores of nearly 11% in the quarter.
Gross Margin Decline
Gross margin in the quarter declined 62 basis points year-over-year, primarily driven by inventory adjustments and occupancy costs.
Net Loss Expectations
The company now expects a full-year net loss of $57 million to $65 million, adjusted net loss of $31 million to $39 million, and adjusted EBITDA in the range of $50 million to $60 million.
Company Guidance
During the Fiscal Third Quarter 2025 Earnings Conference Call, Leslie's management provided guidance that reflected significant challenges faced during the quarter. The company reported net sales of $500 million, a decline of 12.2% from the prior year, primarily due to cooler weather, reduced residential traffic, and increased competitive pressure. Gross profit was $197.9 million, with a gross margin decline of 62 basis points year-over-year. The company also noted a decrease in SG&A to $129.6 million, a reduction attributed to lower variable expenses. Inventory was reduced by 9.6% year-over-year, down to $273.2 million, and the company emphasized its focus on cost optimization and asset utilization to drive future performance. Leslie's expects full-year sales between $1.210 billion and $1.235 billion, with a net loss ranging from $57 million to $65 million, and adjusted EBITDA between $50 million and $60 million. The company also highlighted strategic initiatives, including optimizing inventory, enhancing customer loyalty programs, and leveraging technology partnerships to improve service offerings.Leslie's Financial Statement Overview
Summary
Leslie's financial performance is under significant pressure, with declining revenues, negative profit margins, high leverage, and negative equity. Cash flow challenges further exacerbate financial instability, with negative free cash flow growth and weak cash generation.Income Statement
Leslie's has experienced a decline in revenue over the TTM, with a negative revenue growth rate of -5.25%. The gross profit margin has decreased to 34.61% from previous years, indicating pressure on profitability. The net profit margin is negative at -6.72%, reflecting a challenging period for the company. EBIT and EBITDA margins have also significantly decreased, suggesting operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet reveals a concerning debt-to-equity ratio of -4.20, indicating high leverage and negative equity, which poses financial stability risks. Return on equity is positive at 36.84%, but this is due to negative equity, which distorts the metric. The equity ratio is negative, highlighting the company's reliance on debt financing.30
Negative
Cash Flow
Cash flow analysis shows a significant decline in free cash flow growth at -171.99%, raising concerns about liquidity. The operating cash flow to net income ratio is low at 0.03, indicating weak cash generation relative to net income. The free cash flow to net income ratio is negative, reflecting cash flow challenges.40
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.25B | 1.33B | 1.45B | 1.56B | 1.34B | 1.11B |
| Gross Profit | 432.77M | 476.79M | 548.22M | 673.74M | 595.16M | 460.71M |
| EBITDA | 6.66M | 90.19M | 136.32M | 269.13M | 224.09M | 176.81M |
| Net Income | -84.08M | -23.38M | 27.24M | 159.03M | 126.63M | 58.56M |
Balance Sheet | ||||||
| Total Assets | 989.49M | 1.05B | 1.03B | 1.11B | 1.04B | 746.44M |
| Cash, Cash Equivalents and Short-Term Investments | 42.68M | 108.50M | 55.42M | 112.29M | 345.06M | 157.07M |
| Total Debt | 1.03B | 1.05B | 1.04B | 1.03B | 1.02B | 1.37B |
| Total Liabilities | 1.24B | 1.23B | 1.20B | 1.31B | 1.26B | 1.57B |
| Stockholders Equity | -246.17M | -177.15M | -161.36M | -197.95M | -217.56M | -827.00M |
Cash Flow | ||||||
| Free Cash Flow | -24.33M | 60.22M | -32.11M | 34.92M | 140.63M | 82.78M |
| Operating Cash Flow | 7.66M | 107.47M | 6.47M | 66.64M | 169.56M | 103.41M |
| Investing Cash Flow | -31.86M | -47.16M | -52.54M | -138.98M | -35.35M | -26.81M |
| Financing Cash Flow | -7.55M | -7.22M | -10.80M | -158.87M | 53.78M | -10.43M |
Leslie's Technical Analysis
Neutral
0.35
Price Trends
0.39
Negative
0.53
Negative
1.13
Negative
Market Momentum
-0.02
Negative
46.84
Neutral
59.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LESL, the sentiment is Neutral. The current price of 0.35 is above the 20-day moving average (MA) of 0.33, below the 50-day MA of 0.39, and below the 200-day MA of 1.13, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 46.84 is Neutral, neither overbought nor oversold. The STOCH value of 59.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $417.02B | 28.46 | 193.95% | 2.18% | 8.52% | -0.97% | |
71 Outperform | $389.83M | 20.40 | 6.40% | 5.41% | -8.93% | -50.32% | |
69 Neutral | $151.41B | 22.18 | -51.07% | 1.70% | -0.49% | 0.83% | |
68 Neutral | $9.42B | 44.87 | 9.73% | ― | 4.88% | 0.05% | |
61 Neutral | $17.92B | 12.81 | -0.76% | 2.98% | 1.30% | -14.28% | |
49 Neutral | $277.52M | 346.20 | -0.02% | ― | -5.41% | -100.49% | |
40 Underperform | $64.55M | ― | 12.90% | ― | -8.36% | -2957.86% |
* Consumer Cyclical Sector Average
Performance Comparison
LESL
Leslie's
0.34
-2.59
-88.40%
HVT
Haverty
23.67
-0.07
-0.29%
HD
Home Depot
419.94
57.66
15.92%
LOW
Lowe's
273.02
30.34
12.50%
TTSH
Tile Shop
6.31
0.21
3.44%
FND
Floor & Decor Holdings
87.72
-18.53
-17.44%
Leslie's Corporate Events
Executive/Board Changes
Leslie’s Announces Interim CFO Tony Iskander’s Departure
Neutral
Aug 21, 2025
Leslie’s, Inc. announced that Tony Iskander will step down from his role as Interim Chief Financial Officer and Treasurer, effective October 4, 2025, or earlier if a successor is appointed. His departure is for personal reasons and not due to any disagreements with the company, and he may continue as an advisor.
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.
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.