Leslie's, Inc. reported a significant decline in financial performance for the three months ended January 3, 2026, with total sales of $147.1 million, down 16% from $175.2 million in the same period last year. The company attributed this decrease to several factors, including a one-week shift in the fiscal calendar, reduced sales from hurricane-related demand in the prior year, and the impact of closing underperforming stores. The gross profit also fell sharply to $27.1 million, a 43.3% decrease from $47.7 million, resulting in a gross margin of 18.4%, down from 27.2% in the previous year.

The company's operating loss widened to $68.7 million, compared to a loss of $39.7 million in the prior year, primarily due to a $10.1 million impairment charge related to store and distribution center closures. Selling, general, and administrative expenses decreased slightly to $85.7 million from $87.4 million, reflecting cost-cutting measures. However, the net loss for the quarter was $83.0 million, compared to a loss of $44.6 million in the same quarter last year, leading to a diluted loss per share of $8.92, up from $4.82.

In terms of operational developments, Leslie's closed 80 underperforming stores and one distribution center as part of a strategic plan to enhance operational efficiency. This initiative resulted in non-cash impairment charges and is expected to improve long-term profitability. The company operated approximately 950 locations across 38 states as of January 3, 2026, down from 1,021 locations a year earlier. Comparable sales decreased by 15.5%, reflecting the challenges faced during the quarter.

Looking ahead, Leslie's management expressed cautious optimism about future performance, emphasizing the importance of their strategic initiatives and cost optimization strategies. The company plans to continue focusing on its core product offerings and enhancing customer engagement through its omnichannel approach. However, they acknowledged the ongoing risks posed by macroeconomic factors, including inflation and supply chain disruptions, which could impact sales and profitability in the near term. The company remains committed to monitoring its operational efficiency and adapting to market conditions as they evolve.

About Leslie's, Inc.

Leslie’s, Inc. is the leading direct-to-consumer provider of pool and spa care products and services in the U.S., offering chemicals, equipment, maintenance, and repair solutions through a nationwide network of over 1,000 locations and a robust digital platform. The company serves residential and professional markets, leveraging proprietary brands, water testing expertise, and integrated marketing to deliver essential, recurring products and services for pool and spa maintenance.

This description was generated via AI from an annual report. Updated 8 months ago.

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