Leslie's, Inc. Reports 8.4% Revenue Decline in Q3 Fiscal 2026

Leslie's, Inc. reported a decline in financial performance for the third quarter of fiscal 2026, with revenues of $458.5 million, down 8.4% from $500.3 million in the same period last year. For the nine months ending July 4, 2026, total sales reached $790.4 million, a decrease of 7.3% compared to $852.7 million in the prior year. The company attributed this decline to reduced consumer traffic and transactions, particularly during a slower summer pool season, as well as the impact of closing underperforming stores. Gross profit for the quarter was $167.1 million, down 15.5% year-over-year, leading to a gross margin of 36.5%, a decrease of approximately 310 basis points.

In terms of profitability, Leslie's reported a net income of $47.8 million for the three months ended July 4, 2026, compared to $21.7 million in the prior year, primarily due to a one-time gain from a credit card interchange fee settlement. However, the company recorded a net loss of $87.7 million for the nine-month period, worsening from a loss of $74.2 million in the previous year. The increase in losses was largely driven by lower gross profit and impairment charges related to store closures. Diluted earnings per share for the quarter were $5.01, up from $2.34, while the nine-month diluted loss per share was $(9.40), compared to $(8.01) in the prior year.

Operationally, Leslie's closed 80 underperforming stores and one distribution center as part of a strategic plan to enhance efficiency. This restructuring resulted in a non-cash impairment charge of $8.3 million for the nine months ended July 4, 2026. The company operated 943 locations across 38 states as of the end of the quarter, with a focus on improving customer engagement through initiatives like the AccuBlue® water testing system. Despite these efforts, comparable sales decreased by 6.2% for the quarter and 5.5% for the nine-month period.

Looking ahead, Leslie's faces significant challenges, including a persistently difficult retail environment characterized by reduced consumer spending and heightened price sensitivity. The company has expressed substantial doubt about its ability to continue as a going concern, emphasizing the need for strategic initiatives to improve financial resilience. Management plans to engage with financial stakeholders to explore alternatives for addressing existing debt obligations, particularly as its Term Loan matures in March 2028. The company has withdrawn its previous fiscal 2026 outlook, citing macroeconomic uncertainties and the impact of ongoing strategic transformations.