Leslie's, Inc. Reports 12.2% Sales Decline and Significant Net Income Drop in Q3 Fiscal 2025

Leslie's, Inc. reported a decline in financial performance for the third quarter of fiscal 2025, with sales totaling $500.3 million, down 12.2% from $569.6 million in the same period last year. The decrease was attributed to lower transaction volumes and a less favorable product mix. For the nine months ending June 28, 2025, sales also fell by 8.5% to $852.7 million compared to $932.3 million in the prior year. The company's gross profit for the quarter was $197.9 million, a decrease of 13.5% year-over-year, resulting in a gross margin of 39.6%, down from 40.2% in the previous year.

In terms of profitability, Leslie's reported a net income of $21.7 million for the three months ended June 28, 2025, a significant drop from $60.7 million in the prior year. The nine-month net loss increased to $74.2 million from a loss of $13.5 million in the same period last year. The company’s diluted earnings per share were $0.12 for the quarter, down from $0.33, while the nine-month diluted loss per share was $(0.40), compared to $(0.07) in the previous year.

Operationally, Leslie's continues to expand its footprint, operating over 1,000 locations across 39 states. The company opened three new locations during the quarter, bringing the total to 1,023. However, comparable sales growth was negative, with a decline of 12.4% for the quarter and 8.8% for the nine months. The company’s Adjusted EBITDA for the quarter was $81.6 million, down from $109.5 million in the prior year, reflecting the impact of lower sales and increased selling, general, and administrative expenses.

Leslie's has also faced challenges related to inventory management, with cash and cash equivalents decreasing to $42.7 million as of June 28, 2025, from $108.5 million at the end of the previous fiscal year. The company reported net cash used in operating activities of $(39.4) million for the nine months, a stark contrast to the $60.4 million generated in the prior year. The company’s long-term debt remains substantial at $751.5 million, with interest expenses decreasing due to lower rates and balances.

Looking ahead, Leslie's management remains cautious, citing macroeconomic uncertainties, including inflation and changing consumer behaviors, as potential risks to future performance. The company is focused on executing its growth strategies while navigating these challenges, with plans to continue investing in its operational capabilities and expanding its market presence.