LESL

This article first appeared on GuruFocus. Release Date: August 12, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Leslies Inc (NASDAQ:LESL) achieved positive comparable sales on leslies.com during the quarter, indicating that its pricing strategy is resonating with customers who make direct price comparisons. The company saw strong growth in reactivated customersthose who did not shop with Leslies Inc (NASDAQ:LESL) last year but did between 2021 and 2024demonstrating the effectiveness of its targeted marketing and value proposition. Leslies Inc (NASDAQ:LESL) successfully redirected customers from recently closed underperforming stores to nearby locations and digital platforms, validating its store optimization strategy. The company maintained strong in-stock levels on key products despite significant inventory reductions, supporting healthy in-store conversion rates and units per transaction growth. Leslies Inc (NASDAQ:LESL) reduced SG&A expenses by 17.9% year-over-year, improved SG&A as a percentage of sales by 270 basis points, and lowered inventory by 15%, reflecting disciplined cost management and operational efficiency. Leslies Inc (NASDAQ:LESL) experienced a total sales decline of 8.4% and a comparable sales decline of 6.2% in the third quarter, driven by softer consumer demand and lower customer traffic. Gross profit margin decreased to 36.5% from 39.6% year-over-year, due to lower sales of higher-margin products, a shift in product mix, and higher distribution center and manufacturing costs. The company faced heightened promotional activity from competitors, which pressured sales and operating leverage during the peak season. Unfavorable weather patterns negatively impacted demand and traffic, leading to fewer prescribed pool problems that typically drive higher-margin specialty chemical purchases. Leslies Inc (NASDAQ:LESL) withdrew its full-year sales and adjusted EBITDA guidance due to lower-than-anticipated customer traffic, and is exploring strategic alternatives to address its long-term debt, indicating ongoing financial uncertainty. Warning! GuruFocus has detected 9 Warning Signs with LESL. Is LESL fairly valued? Test your thesis with our free DCF calculator. Q: What is the company's strategy to address its long-term debt obligations and strengthen its balance sheet?A: Jason McDonell (CEO) stated that the company is exploring strategic alternatives with certain financial stakeholders to provide incremental financial flexibility. These alternatives may include a deleveraging transaction, potentially combined with one or more financing transactions. No determinations have been made, and there is no assurance any such transaction will result, but the company is committed to operating effectively while this work is underway. Q: Why did the company withdraw its full-year fiscal 2026 sales and adjusted EBITDA guidance?A: Jeff White (CFO) explained that due to the evolving macroeconomic environment and lower-than-anticipated customer traffic during the peak season, the company withdrew its previously issued full-year sales and adjusted EBITDA guidance and is not providing an updated outlook at this time. Q: What were the primary drivers of the decline in comparable sales during the third quarter?A: Jason McDonell (CEO) attributed the 6.2% decline in comparable sales primarily to lower transactions and customer traffic. Unfavorable weather patterns during the quarter reduced demand and traffic, leading to fewer prescribed pool problems that typically drive purchases of higher-margin specialty chemicals. Competitors also reacted with more aggressive inventory-driven pricing actions, which added to the pressure. Q: How is the company's new pricing strategy performing, and what evidence supports its effectiveness?A: Jason McDonell (CEO) noted that the new pricing strategy continues to resonate with customers, and targeted marketing campaigns are reaching core audiences. A key proof point is that leslies.com delivered positive comparable sales during the quarter, where customers most often make direct price comparisons. However, translating this into consistent store traffic improvement is taking longer. Q: What progress has been made on customer reactivation and store operations?A: Jason McDonell (CEO) reported strong growth in reactivated customersthose who did not shop with Leslie's last year but did between 2021 and 2024demonstrating that the pricing strategy and marketing efforts are bringing former customers back. Additionally, the company completed full-scale training across its store organization, maintained strong in-stock levels on never-out SKUs, and saw healthy in-store conversion rates and units per transaction growth. Q: Can you provide details on the gross profit margin decline and SG&A improvements?A: Jeff White (CFO) stated that gross profit margin decreased to 36.5% from 39.6% in the prior year, driven by lower sales of higher-margin products, a shift in product mix, and higher distribution center and manufacturing costs. SG&A decreased by $23.2 million, or 17.9%, to $106.4 million, reflecting lower labor and store operating costs, as well as a $17.5 million one-time gain from a credit card interchange fee settlement, partially offset by technology investments. Q: What is the company's current liquidity position and inventory status?A: Jeff White (CFO) reported that the company ended the quarter with $30 million outstanding under its revolving credit facility and $753 million of net long-term debt. Availability, including cash and borrowing capacity, was approximately $207 million. Inventory decreased 15% year-over-year to $233.4 million, reflecting progress on inventory optimization initiatives, while in-stock levels on key products remained strong. Q: What is the company's focus going forward to drive traffic and growth?A: Jason McDonell (CEO) emphasized that traffic generation, not just pricing or conversion, is now the central challenge. The company is focusing on driving new and retained customers into stores and digital channels through competitive pricing, clear communication of expertise, and convenient offerings. The goal is to show up and win when customers are actively looking for solutions, while continuing to provide loyalty, unmatched service, and deep expertise. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

PHOENIX, Aug. 12, 2026 (GLOBE NEWSWIRE) -- Leslie’s, Inc. (NASDAQ: LESL), the largest and most trusted direct-to-customer brand in the U.S. pool and spa care industry serving residential customers and pool professionals nationwide, today announced its financial results for the fiscal third quarter 2026. "We continued to advance our strategic transformation in the third quarter, taking decisive action to right-size our cost structure and supply chain, realign our pricing strategy, and invest in omnichannel capabilities. Despite this progress, the macroenvironment remains challenging. We have begun exploring strategic alternatives with certain of our financial stakeholders to provide the incremental financial flexibility needed to continue to deliver on our strategic priorities and drive sustainable growth. Such strategic alternatives may include but are not limited to a deleveraging transaction, potentially combined with one or more financing transactions," said Jason McDonell, Chief Executive Officer. McDonell added: "While this work is underway, we are focused on driving traffic to our stores and digital platforms as we optimize our business model. We continue to have meaningful liquidity and are operating our business in the normal course. We are encouraged by the feedback received from customers on the new pricing strategy and will continue to refine the strategy with additional input and data." Fiscal Third Quarter Ended July 4, 2026 Results Sales were $458.5 million, a decrease of 8.4% compared to $500.3 million in the prior year period. Comparable sales decreased 6.2%. Gross profit was $167.1 million, a decrease of 15.5% compared to $197.9 million in the prior year period. Gross margin was 36.5% compared to 39.6% in the prior year period. Selling, general and administrative expenses (“SG&A”) were $106.4 million compared to $129.6 million in the prior year period. As a percentage of sales, SG&A decreased 270 basis points (“bps”). Non-cash impairment was $(0.7) million, comprised of non-cash lease gains due to lease terminations on stores that were closed and impaired during the first quarter of 2026. No impairment charges were recorded in the comparable prior year period. Net income increased by $26.1 million to $47.8 million compared to $21.7 million in the prior year period. Adjusted net income was $37.8 million compared to $25.2 million in the prior year period. Diluted earnings per share was $5.01 compared to $2.34 in the prior year period. Adjusted diluted earnings per share was $3.96 compared to $2.72 the prior year period. Adjusted EBITDA was $55.7 million compared to $81.6 million in the prior year period. Fiscal Nine Months Ended July 4, 2026 Results Sales were $790.4 million, a decrease of 7.3% compared to $852.7 million in the prior year period. Comparable sales decreased 5.5%. Gross profit was $247.5 million, a decrease of 14.5% compared to $289.6 million in the prior year period. Gross margin was 31.3% compared to 34.0% in the prior year period. SG&A decreased by $25.1 million to $284.2 million compared to $309.3 million in the prior year period. As a percentage of sales, SG&A decreased 30 bps. Non-cash impairment was $8.3 million, comprised of asset write-offs related to the closure of 80 underperforming stores and one distribution center. No impairment charges were recorded in the comparable prior year period. Net loss was $(87.7) million compared to net loss of $(74.2) million in the prior year period. Adjusted net loss was $(79.7) million compared to adjusted net loss of $(66.0) million in the prior year period. Diluted loss per share was $(9.40) compared to $(8.01) in the prior year period. Adjusted diluted loss per share was $(8.55) compared to $(7.13) in the prior year period. Adjusted EBITDA was $(11.4) million compared to $16.2 million in the prior year period. Balance Sheet Highlights Capital expenditures totaled $10.5 million in the period ended July 4, 2026 compared to $19.1 million in the period ended June 28, 2025. Cash and cash equivalents totaled $45.9 million as of July 4, 2026, an increase of $3.2 million, compared to $42.7 million as of June 28, 2025. Inventories totaled $233.4 million as of July 4, 2026, a decrease of $39.8 million or 14.6% compared to inventories of $273.2 million as of June 28, 2025. Total liquidity was $207.1 million from cash on-hand and borrowings available under the credit facility as of July 4, 2026. Full Year Fiscal 2026 Expectations Given macroeconomic softness and the uncertainty around the company’s ability to continue to drive consumer behavior, the company is withdrawing its prior full year outlook and not updating it at this time. Conference Call Details The company will host a conference call at 5:00 p.m. Eastern time on August 12, 2026 to discuss the financial results for the third quarter of fiscal 2026 as well as progress against the company’s strategic transformation initiatives. A live audio webcast of the conference call will be available online at https://ir.lesliespool.com/. A replay of the conference call will be available within approximately three hours of the conclusion of the call and will be available on the company’s Investor Relations website for 180 days. About Leslie’s Founded in 1963, Leslie’s is the largest and most trusted direct-to-customer brand in the U.S. pool and spa care industry serving residential consumers and pool professionals nationwide. The company serves the aftermarket needs of residential and professional consumers with an extensive and largely exclusive assortment of essential pool and spa care products. The company operates an integrated ecosystem of over 900 physical locations and a robust digital platform, enabling consumers to engage with Leslie’s whenever, wherever, and however they prefer to shop. Its dedicated team of associates, pool and spa care experts, and experienced service technicians are passionate about empowering every single Leslie’s customer with the knowledge, products, and solutions necessary to confidently maintain and thoroughly enjoy their pools and spas. Use of Non-GAAP Financial Measures and Other Operating Measures In addition to reporting financial results in accordance with accounting principles generally accepted in the United States (“GAAP”), we use certain non-GAAP financial measures and other operating measures, including comparable sales growth, Adjusted EBITDA, Adjusted net income (loss), and Adjusted diluted earnings (loss) per share, to evaluate the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. These non-GAAP financial measures and other operating measures should not be considered in isolation or as substitutes for our results as reported under GAAP. In addition, these non-GAAP financial measures and other operating measures are not calculated in the same manner by all companies, and accordingly, are not necessarily comparable to similarly titled measures of other companies and may not be appropriate measures for performance relative to other companies. Comparable Sales Growth We measure comparable sales growth as the increase or decrease in sales recorded by the comparable base in any reporting period, compared to sales recorded by the comparable base in the prior reporting period. The comparable base includes sales through our locations and through our e-commerce websites and third-party marketplaces. Comparable sales growth is a key measure used by management and our board of directors to assess our financial performance. Adjusted EBITDA Adjusted EBITDA is defined as earnings before interest (including amortization of debt issuance costs), taxes, depreciation and amortization, equity-based compensation expense, executive transition costs, severance, strategic project costs, merger and acquisition costs, and other non-recurring, non-cash or discrete items. Adjusted EBITDA is a key measure used by management and our board of directors to assess our financial performance. Adjusted EBITDA is also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other companies using similar measures. Adjusted EBITDA is not a recognized measure of financial performance under GAAP but is used by some investors to determine a company’s ability to service or incur indebtedness. Adjusted EBITDA is not calculated in the same manner by all companies, and accordingly, is not necessarily comparable to similarly titled measures of other companies and may not be an appropriate measure for performance relative to other companies. Adjusted EBITDA should not be construed as an indicator of a company’s operating performance in isolation from, or as a substitute for, net loss, cash flows from operations or cash flow data, all of which are prepared in accordance with GAAP. We have presented Adjusted EBITDA solely as supplemental disclosure because we believe it allows for a more complete analysis of results of operations. Adjusted EBITDA is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with GAAP. In the future, we may incur expenses or charges such as those added back to calculate Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these items. Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss) per Share Adjusted net income (loss) and Adjusted diluted earnings (loss) per share are additional key measures used by management and our board of directors to assess our financial performance. Adjusted net income (loss) and Adjusted diluted earnings (loss) per share are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. Adjusted net income (loss) is defined as net income (loss) adjusted to exclude equity-based compensation expense, executive transition costs, severance, strategic project costs, merger and acquisition costs, and other non-recurring, non-cash, or discrete items. Adjusted diluted earnings (loss) per share is defined as Adjusted net income (loss) divided by the diluted weighted average number of common shares outstanding. Forward-Looking Statements This press release contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this press release, including statements regarding our future results of operations or financial condition, liquidity, business strategy, strategic transformation plan, our exploration of strategic alternatives and discussions with financial stakeholders, including potential results thereof, potential deleveraging or other balance sheet transactions, value proposition, dispositions, legal proceedings, competitive advantages, market size, growth opportunities, industry expectations, and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “deliver,” “well-positioned,” “should,” “target,” “will,” or “would,” or the negative of these words or other similar terms or expressions. Our actual results or outcomes, or the timing of our results or outcomes, could differ materially from those indicated in these forward-looking statements for a variety of reasons, including, among others: our ability to execute on our growth and cost optimization strategies, including our strategic pricing transformation, and any restructuring efforts; our expectations regarding our cash resources and cash generation from normal operations; our ability to continue as a going concern; our ability to timely service, pay off, refinance, restructure or extend our existing debt obligations and otherwise satisfy our liquidity requirements, including our Term Loan prior to its maturity, as well as our ability to incur additional debt on terms and at rates acceptable to us; our ability to enter into and successfully complete a deleveraging transaction or other balance sheet transaction and the terms thereof; our ability to obtain additional capital to finance operations and investment in growth; the impact of our indebtedness, debt service obligations and debt covenants, and our exposure to variable rate indebtedness; the impact of discussions and negotiations with our financial stakeholders, including our debtholders; the deterioration of our credit profile and credit rating, including its impact on our access to commercial credit; supply disruptions or increased costs, including as a result of trade policies, geopolitical conflicts and related impacts on commodity prices; our ability to maintain favorable relationships with suppliers and manufacturers; our ability to maintain the integrity of our supply chain without disruption; our ability to successfully streamline our operations and improve long-term profitability, including through the closure of underperforming U.S. stores; competition from mass merchants, online platforms and specialty retailers; successful reactivation of lapsed residential and commercial customers; potential demographic shifts, including a larger percentage of “do-it-for-me” pool owners vs. prior historical patterns; impacts from the sensitivity of our business to weather conditions, changes in the economy (including higher interest rates, economic contractions or recessions, inflationary pressures and changes in trade policies, including tariffs, other trade restrictions or the threat thereof, and our success or lack of success, as the case may be, in recouping funds from policies later deemed invalid), bifurcated consumer income and purchasing patterns, cost consciousness, geopolitical events or conflicts (including the ongoing conflict in Ukraine, the conflicts in the Middle East and the related impacts on commodity prices, including the price of oil), respective changes in new or existing pool construction and renovation, and the broader housing market; disruptions in the operations of our manufacturing facilities and distribution centers; our ability to implement technology initiatives that deliver anticipated benefits without disrupting our operations; our ability to execute on our management transition plans and to attract and retain senior management and other qualified personnel; regulatory changes and developments affecting our current and future products including evolving legal standards, regulations and stakeholder expectations concerning environmental, and sustainability matters; commodity price inflation and deflation, including volatility in the price of crude oil and associated commodities; impacts on our business from epidemics, pandemics, or natural disasters; impacts on our business from cyber incidents and other security threats or disruptions; our ability to maintain compliance with Nasdaq listing standards; our ability to remediate material weaknesses or other deficiencies in our internal control over financial reporting or to maintain effective disclosure controls and procedures and internal control over financial reporting; and other risks and uncertainties, including those listed in the section titled “Risk Factors” in our filings with the United States Securities and Exchange Commission (“SEC”). You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this press release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended October 4, 2025, subsequent Quarterly Reports on Form 10-Q, and in our other filings with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release The results, outcomes, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results or outcomes, or the timing of results and outcomes, could differ materially from those described in the forward-looking statements. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this press release, and, while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements. The forward-looking statements made in this press release are based on events or circumstances as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information, changed expectations, the occurrence of unanticipated events or otherwise, except as required by law. We may not actually achieve the plans, intentions, outcomes, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments. Contact Tom FilandroPartner, [email protected]

Pool products retailer Leslie’s (NASDAQ:LESL) fell short of the market’s revenue expectations in Q2 CY2026, with sales falling 8.4% year on year to $458.5 million. Its non-GAAP profit of $3.96 per share was 21.8% below analysts’ consensus estimates. Is now the time to buy Leslie's? Find out in our full research report. Revenue: $458.5 million vs analyst estimates of $520.4 million (8.4% year-on-year decline, 11.9% miss) Adjusted EPS: $3.96 vs analyst expectations of $5.06 (21.8% miss) Adjusted EBITDA: $55.7 million vs analyst estimates of $82.45 million (12.1% margin, 32.4% miss) Operating Margin: 13.4%, in line with the same quarter last year Free Cash Flow Margin: 21.4%, similar to the same quarter last year Locations: 900 at quarter end, down from 1,023 in the same quarter last year Same-Store Sales fell 6.2% year on year (-12.4% in the same quarter last year) Market Capitalization: $12.45 million "We continued to advance our strategic transformation in the third quarter, taking decisive action to right-size our cost structure and supply chain, realign our pricing strategy, and invest in omnichannel capabilities. Despite this progress, the macroenvironment remains challenging. We have begun exploring strategic alternatives with certain of our financial stakeholders to provide the incremental financial flexibility needed to continue to deliver on our strategic priorities and drive sustainable growth. Such strategic alternatives may include but are not limited to a deleveraging transaction, potentially combined with one or more financing transactions," said Jason McDonell, Chief Executive Officer. Named after founder Philip Leslie, who established the company in 1963, Leslie’s (NASDAQ:LESL) is a retailer that sells pool and spa supplies, equipment, and maintenance services. A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. With $1.18 billion in revenue over the past 12 months, Leslie's is a small retailer, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with suppliers. As you can see below, Leslie’s demand was weak over the last three years. Its sales fell by 7.6% annually as it closed stores and observed lower sales at existing, established locations. This quarter, Leslie's missed Wall Street’s estimates and reported a rather uninspiring 8.4% year-on-year revenue decline, generating $458.5 million of revenue. Looking ahead, sell-side analysts expect revenue to grow 5.4% over the next 12 months, an acceleration versus the last three years. This projection is healthy and implies its newer products will catalyze better top-line performance. ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable. These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE. A retailer’s store count influences how much it can sell and how quickly revenue can grow. Leslie's listed 900 locations in the latest quarter and has generally closed its stores over the last two years, averaging 2.8% annual declines. When a retailer shutters stores, it usually means that brick-and-mortar demand is less than supply, and it is responding by closing underperforming locations to improve profitability. The change in a company’s store base only tells one side of the story. The other is the performance of its existing locations and e-commerce sales, which informs management teams whether they should expand or downsize their physical footprints. Same-store sales is an industry measure of whether revenue is growing at those existing stores and is driven by customer visits (often called traffic) and the average spending per customer (ticket). Leslie’s demand has been shrinking over the last two years as its same-store sales have averaged 6.1% annual declines. This performance isn’t ideal, and Leslie's is attempting to boost same-store sales by closing stores (fewer locations sometimes lead to higher same-store sales). In the latest quarter, Leslie’s same-store sales fell by 6.2% year on year. This performance was more or less in line with its historical levels. We struggled to find many positives in these results. Its revenue missed and its EBITDA fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 42.9% to $0.75 immediately following the results. Leslie’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.

Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Leslie's (NASDAQ:LESL) and its peers. Consumer retail companies operate the brick-and-mortar stores where consumers have shopped for centuries. The way people shop is changing with increased penetration of technology, but these retailers are adapting and still very much a part of the consumer fabric. The 53 consumer retail stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 0.8% while next quarter’s revenue guidance was in line. Thankfully, share prices of the companies have been resilient as they are up 9.8% on average since the latest earnings results. Named after founder Philip Leslie, who established the company in 1963, Leslie’s (NASDAQ:LESL) is a retailer that sells pool and spa supplies, equipment, and maintenance services. Leslie's reported revenues of $184.7 million, up 4.3% year on year. This print exceeded analysts’ expectations by 12.9%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ gross margin and EBITDA estimates. “Our comprehensive transformation plan delivered measurable results in the second quarter as we position Leslie’s for sustainable profitable growth. Second quarter performance demonstrated the effectiveness of our strategic initiatives, with revenue growth of 4.3%, comparable sales increase of 6.6% and total customer count growth of 8% year-over-year. The early success of our ‘Price Drop’ initiative, launched in March, drove strong transaction growth and customer engagement in the quarter. Importantly, we have funded our price investments through controlled spending and successful cost optimization efforts supporting gross margin expansion in the quarter,” said Jason McDonell, Chief Executive Officer. Leslie's scored the biggest analyst estimate beat of the whole group. Unsurprisingly, the stock is up 386% since reporting and currently trades at $6.95. Is now the time to buy Leslie's? Access our full analysis of the earnings results here, it’s free. Known for its transparent, customer-centric approach and wide selection of vehicles, Carmax (NYSE:KMX) is the largest automotive retailer in the United States. CarMax reported revenues of $5.95 billion, flat year on year, outperforming analysts’ expectations by 3.9%. The business had a stunning quarter with a beat of analysts’ EPS and EBITDA estimates. The market seems happy with the results as the stock is up 5.4% since reporting. It currently trades at $51.71. Is now the time to buy CarMax? Access our full analysis of the earnings results here, it’s free. Started as a single location in Rochester, New York, Monro (NASDAQ:MNRO) provides common auto services such as brake repairs, tire replacements, and oil changes. Monro reported revenues of $273.8 million, down 7.2% year on year, falling short of analysts’ expectations by 3.5%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates. As expected, the stock is down 3.4% since the results and currently trades at $16. Read our full analysis of Monro’s results here. With an emphasis on skate and surf culture, Tilly’s (NYSE:TLYS) is a specialty retailer that sells clothing, footwear, and accessories geared towards fashion-forward teens and young adults. Tilly's reported revenues of $124.7 million, up 15.9% year on year. This print beat analysts’ expectations by 2.8%. Overall, it was an exceptional quarter as it also recorded EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ gross margin estimates. The stock is up 4.6% since reporting and currently trades at $4.65. Read our full, actionable report on Tilly's here, it’s free. Initially based on a strategy of buying excess inventory from manufacturers or other retailers, TJX (NYSE:TJX) is an off-price retailer that sells brand-name apparel and other goods at prices much lower than department stores. TJX reported revenues of $14.32 billion, up 9.2% year on year. This result topped analysts’ expectations by 2.4%. It was a very strong quarter as it also produced an impressive beat of analysts’ EBITDA and gross margin estimates. The stock is up 10.5% since reporting and currently trades at $166.46. Read our full, actionable report on TJX here, it’s free. Late in 2025 into early 2026, there was hand-wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure? These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. 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Leslie’s first quarter results were met positively by the market, reflecting management’s early success in executing its transformation plan. The company attributed revenue growth to initiatives such as customer reactivation, a new pricing strategy, and improved in-store experiences. CEO Jason McDonell highlighted the “broad-based customer growth” and noted that the launch of the Price Drop initiative, particularly in Sunbelt markets, led to a double-digit increase in store transactions and improved conversion rates. Is now the time to buy LESL? Find out in our full research report (it’s free). Revenue: $184.7 million vs analyst estimates of $162.8 million (4.3% year-on-year growth, 13.5% beat) Adjusted EPS: -$5.36 vs analyst expectations of -$4.41 (21.5% miss) Adjusted EBITDA: -$26.82 million (-14.5% margin, 25.6% year-on-year growth) The company reconfirmed its revenue guidance for the full year of $1.18 billion at the midpoint EBITDA guidance for the full year is $65 million at the midpoint, above analyst estimates of $60.03 million Operating Margin: -20.4%, up from -27.3% in the same quarter last year Locations: 944 at quarter end, down from 1,020 in the same quarter last year Same-Store Sales rose 6.6% year on year (-6.7% in the same quarter last year) Market Capitalization: $24.41 million While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Jonathan Matuszewski (Jefferies) asked about the sustainability of gross margin improvements and the impact of occupancy and distribution cost savings. CFO Jeffrey White explained that occupancy cost reductions are likely to persist, while some inventory reserve benefits were onetime in nature, but product margin improvements should continue. David Bellinger (Mizuho Securities) inquired about plans to expand the Price Drop investment and the impact on equipment categories. White said further price investments would depend on market conditions and explained that equipment pricing is constrained by vendor minimum advertised price (MAP) policies, limiting flexibility in that segment. In tracking Leslie’s progress, the StockStory team will monitor (1) the pace of customer growth—especially among reactivated and PRO segments, (2) the ongoing impact of the Price Drop initiative on both traffic and margins as the pool season peaks, and (3) execution of cost optimization efforts, including expense reductions and SKU rationalization. The effectiveness of omnichannel investments and network streamlining will also be key indicators of sustainable improvement. Leslie's currently trades at $2.63, up from $1.43 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it's flagging for this month - FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.

Sales increase of 4.3% and Comparable sales increase of 6.6% Achieved 8% customer count growth year-over-year Company reiterates full year guidance PHOENIX, May 13, 2026 (GLOBE NEWSWIRE) -- Leslie’s, Inc. (NASDAQ: LESL), the largest and most trusted direct-to-customer brand in the U.S. pool and spa care industry serving residential customers and pool professionals nationwide, today announced its financial results for the fiscal second quarter 2026. “Our comprehensive transformation plan delivered measurable results in the second quarter as we position Leslie’s for sustainable profitable growth. Second quarter performance demonstrated the effectiveness of our strategic initiatives, with revenue growth of 4.3%, comparable sales increase of 6.6% and total customer count growth of 8% year-over-year. The early success of our ‘Price Drop’ initiative, launched in March, drove strong transaction growth and customer engagement in the quarter. Importantly, we have funded our price investments through controlled spending and successful cost optimization efforts supporting gross margin expansion in the quarter,” said Jason McDonell, Chief Executive Officer. McDonell added, “We’re fundamentally reimagining how Leslie’s serves customers while creating a more efficient business model. The ‘Price Drop’ initiative, the targeted marketing and our consultative in-store approach is resonating with customers. Leslie’s is growing our active customer file by re-activating lapsed customers and attracting new customers.” Fiscal Second Quarter Ended April 4, 2026 Results Sales were $184.7 million, an increase of 4.3% compared to $177.1 million in the prior year period. Comparable sales increased 6.6%. Gross profit was $53.3 million, an increase of 21.4% compared to $43.9 million in the prior year period. Gross margin increased to 28.9% compared to 24.8% in the prior year period. Selling, general and administrative expenses (“SG&A”) were $92.2 million compared to $92.3 million in the prior year period. As a percentage of sales, SG&A decreased 220 basis points (“bps”). Non-cash impairment charge of $(1.2) million, comprised of non-cash lease gains due to lease terminations on stores that were closed and impaired during the first quarter of 2026. No impairment charges were recorded in the comparable prior year period. Net loss increased by $1.2 million to $52.5 million compared to $51.3 million in the prior year period. Adjusted net loss was $50.0 million compared to $48.3 million in the prior year period. Diluted loss per share was $5.63 compared to $5.54 in the prior year period. Adjusted diluted loss per share was $5.36 compared to $5.21 the prior year period. Adjusted EBITDA improved $9.2 million from $(36.1) million in the prior year period to $(26.8) million. Fiscal Six Months Ended April 4, 2026 Results Sales were $331.9 million, a decrease of 5.8% compared to $352.4 million in the prior year period. Comparable sales decreased 4.5%. Gross profit was $80.4 million, a decrease of 12.3% compared to $91.7 million in the prior year period. Gross margin decreased to 24.2% from 26.0% in the prior year. SG&A decreased $1.9 million to $177.9 million compared to $179.7 million in the prior year. As a percentage of sales, SG&A increased 259 bps. Non-cash impairment charge of $9.0 million, comprised of asset write-offs related to the closure of 80 underperforming stores and one distribution center. No impairment charges were recorded in the comparable prior year period. Net loss was $135.5 million compared to $95.9 million in the prior year. Adjusted net loss was $117.5 million compared to $91.2 million in the prior year period. Diluted loss per share was $14.55 compared to $10.36 in the prior year. Adjusted diluted loss per share was $12.62 compared to $9.86 in the prior year. Adjusted EBITDA was $(67.1) million compared to $(65.4) million in the prior year. Balance Sheet Highlights Capital expenditures totaled $9.5 million in the period ended April 4, 2026 compared to $11.2 million in the period ended March 29, 2025. Cash and cash equivalents totaled $16.9 million as of April 4, 2026, a decrease of $0.4 million, compared to $17.3 million as of March 29, 2025. Inventories totaled $262.4 million as of April 4, 2026, a decrease of $72.7 million or 21.7%, compared to $335.1 million as of March 29, 2025. Total liquidity of $97.1 million from cash on-hand and borrowings available under the credit facility. Full Year Fiscal 2026 Expectations The company reiterated its outlook for the full year fiscal 2026. As is typical of our business, we anticipate generating the majority of our sales and earnings during the second half of the year driven by the seasonal nature of our industry. The guide provided is for the 52-week period of Fiscal Year 2026 and includes the impact on revenue of the store closures noted above as well as the addback of expected costs incurred with these closures. *Note: A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future, although it is important to note that these factors could be material to our results computed in accordance with GAAP. Conference Call Details The company will host a conference call at 5:00 p.m. Eastern time on May 13, 2026 to discuss the financial results for the second quarter of fiscal 2026 as well as progress against the company’s strategic transformation initiatives. A live audio webcast of the conference call will be available online at https://ir.lesliespool.com/. A replay of the conference call will be available within approximately three hours of the conclusion of the call and will be available on the company’s Investor Relations website for 180 days. About Leslie’s Founded in 1963, Leslie’s is the largest and most trusted direct-to-customer brand in the U.S. pool and spa care industry serving residential consumers and pool professionals nationwide. The company serves the aftermarket needs of residential and professional consumers with an extensive and largely exclusive assortment of essential pool and spa care products. The company operates an integrated ecosystem of approximately 950 physical locations and a robust digital platform, enabling consumers to engage with Leslie’s whenever, wherever, and however they prefer to shop. Its dedicated team of associates, pool and spa care experts, and experienced service technicians are passionate about empowering every single Leslie’s customer with the knowledge, products, and solutions necessary to confidently maintain and thoroughly enjoy their pools and spas. Use of Non-GAAP Financial Measures and Other Operating Measures In addition to reporting financial results in accordance with accounting principles generally accepted in the United States (“GAAP”), we use certain non-GAAP financial measures and other operating measures, including comparable sales growth, Adjusted EBITDA, Adjusted net loss, and Adjusted diluted loss per share, to evaluate the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. These non-GAAP financial measures and other operating measures should not be considered in isolation or as substitutes for our results as reported under GAAP. In addition, these non-GAAP financial measures and other operating measures are not calculated in the same manner by all companies, and accordingly, are not necessarily comparable to similarly titled measures of other companies and may not be appropriate measures for performance relative to other companies. Comparable Sales Growth We measure comparable sales growth as the increase or decrease in sales recorded by the comparable base in any reporting period, compared to sales recorded by the comparable base in the prior reporting period. The comparable base includes sales through our locations and through our e-commerce websites and third-party marketplaces. Comparable sales growth is a key measure used by management and our board of directors to assess our financial performance. Adjusted EBITDA Adjusted EBITDA is defined as earnings before interest (including amortization of debt issuance costs), taxes, depreciation and amortization, equity-based compensation expense, executive transition costs, severance, strategic project costs, merger and acquisition costs, and other non-recurring, non-cash or discrete items. Adjusted EBITDA is a key measure used by management and our board of directors to assess our financial performance. Adjusted EBITDA is also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other companies using similar measures. Adjusted EBITDA is not a recognized measure of financial performance under GAAP but is used by some investors to determine a company’s ability to service or incur indebtedness. Adjusted EBITDA is not calculated in the same manner by all companies, and accordingly, is not necessarily comparable to similarly titled measures of other companies and may not be an appropriate measure for performance relative to other companies. Adjusted EBITDA should not be construed as an indicator of a company’s operating performance in isolation from, or as a substitute for, net loss, cash flows from operations or cash flow data, all of which are prepared in accordance with GAAP. We have presented Adjusted EBITDA solely as supplemental disclosure because we believe it allows for a more complete analysis of results of operations. Adjusted EBITDA is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with GAAP. In the future, we may incur expenses or charges such as those added back to calculate Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these items. Adjusted Net Loss and Adjusted Diluted Loss per Share Adjusted net loss and Adjusted diluted loss per share are additional key measures used by management and our board of directors to assess our financial performance. Adjusted net loss and Adjusted diluted loss per share are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. Adjusted net loss is defined as net loss adjusted to exclude equity-based compensation expense, executive transition costs, severance, strategic project costs, merger and acquisition costs, and other non-recurring, non-cash, or discrete items. Adjusted diluted loss per share is defined as Adjusted net loss divided by the diluted weighted average number of common shares outstanding. Forward-Looking Statements This press release contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this press release, including statements regarding our future results of operations or financial condition, business strategy, strategic transformation plan, value proposition, dispositions, legal proceedings, competitive advantages, market size, growth opportunities, industry expectations, and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “deliver,” “well-positioned,” “should,” “target,” “will,” or “would,” or the negative of these words or other similar terms or expressions. Our actual results or outcomes, or the timing of our results or outcomes, could differ materially from those indicated in these forward-looking statements for a variety of reasons, including, among others: our ability to execute on our growth and cost optimization strategies, including our strategic pricing transformation; our expectations regarding our cash resources and cash generation from normal operations; supply disruptions or increased costs, including as a result of trade policies, geopolitical conflicts and related impacts on commodity prices; our ability to maintain favorable relationships with suppliers and manufacturers; our ability to maintain the integrity of our supply chain without disruption; our ability to successfully streamline our operations and improve long-term profitability, including through the closure of underperforming U.S. stores; competition from mass merchants, online platforms and specialty retailers; impacts on our business from the sensitivity of our business to weather conditions, changes in the economy (including high interest rates, recession fears, inflationary pressures and changes in trade policies, including tariffs, other trade restrictions or the threat of such actions, and potential tariff refunds), consumer purchasing patterns and cost consciousness, geopolitical events or conflicts (including the ongoing conflict in Ukraine, the conflicts in the Middle East and the related impacts on commodity prices, including the price of oil), and the housing market; disruptions in the operations of our manufacturing facilities and distribution centers; our ability to implement technology initiatives that deliver the anticipated benefits, without disrupting our operations; our ability to execute on our management transition plans and to attract and retain senior management and other qualified personnel; regulatory changes and developments affecting our current and future products including evolving legal standards, regulations and stakeholder expectations concerning environmental, and sustainability matters; our ability to timely service, pay off or refinance existing debt and incur additional debt on terms and at rates acceptable to us; our ability to obtain additional capital to finance operations; commodity price inflation and deflation, including volatility in the price of oil; impacts on our business from epidemics, pandemics, or natural disasters; impacts on our business from cyber incidents and other security threats or disruptions; our ability to regain and maintain compliance with Nasdaq listing standards; our ability to remediate material weaknesses or other deficiencies in our internal control over financial reporting or to maintain effective disclosure controls and procedures and internal control over financial reporting; and other risks and uncertainties, including those listed in the section titled “Risk Factors” in our filings with the United States Securities and Exchange Commission (“SEC”). You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this press release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended October 4, 2025 and in our other filings with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release The results, outcomes, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results or outcomes, or the timing of results and outcomes, could differ materially from those described in the forward-looking statements. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this press release, and, while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements. The forward-looking statements made in this press release are based on events or circumstances as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information, changed expectations, the occurrence of unanticipated events or otherwise, except as required by law. We may not actually achieve the plans, intentions, outcomes, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments. CONTACT: Contact Tom Filandro Partner, ICR [email protected]

Pool products retailer Leslie’s (NASDAQ:LESL) will be reporting results this Wednesday afternoon. Here’s what investors should know. Leslie's missed analysts’ revenue expectations last quarter, reporting revenues of $147.1 million, down 16% year on year. It was a disappointing quarter for the company, with a significant miss of analysts’ revenue estimates and a significant miss of analysts’ EBITDA estimates. Is Leslie's a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting Leslie’s revenue to decline 8.1% year on year, a further deceleration from the 6.1% decrease it recorded in the same quarter last year. The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Leslie's has missed Wall Street’s revenue estimates multiple times over the last two years. Looking at Leslie’s peers in the consumer retail segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Tractor Supply delivered year-on-year revenue growth of 3.6%, missing analysts’ expectations by 1.1%, and CarMax reported flat revenue, topping estimates by 3.9%. Tractor Supply traded down 13.1% following the results while CarMax was also down 17.5%. Read our full analysis of Tractor Supply’s results here and CarMax’s results here. The market narrative shifted from AI-driven sector rotation in late 2025 to geopolitical shock as the US-Iran conflict dominated early 2026. While some of the consumer retail stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 3.4% on average over the last month. Leslie's is up 13.6% during the same time and is heading into earnings with an average analyst price target of $2.08 (compared to the current share price of $1.58). ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention. AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice.

Leslies (NASDAQ:LESL) reported second-quarter financial results on Wednesday. The transcript from the company's second-quarter earnings call has been provided below. This content is powered by Benzinga APIs. For comprehensive financial data and transcripts, visit https://www.benzinga.com/apis/. The full earnings call is available at https://viavid.webcasts.com/starthere.jsp?ei=1757778&tp_key=b75666384e Leslies reported a 4.3% increase in overall revenue and a 6.6% increase in comparable sales for Q2 2026, with adjusted EBITDA improving by 26% year-over-year. The company emphasized its strategic initiatives, including pricing strategies, customer reactivation, store operations enhancement, and asset utilization, aimed at driving margin expansion and sustainable growth. Leslies saw a significant increase in customer engagement, with a 25% growth in reactivated customers and strong feedback from its price drop initiative, particularly in the Sun Belt markets. Management highlighted operational achievements, such as the successful launch of the price drop campaign, network optimization with store closures, and a reduction in inventory by over 20%. Leslies maintained its fiscal 2026 guidance of $1.1 billion to $1.25 billion in sales and adjusted EBITDA of $55 million to $75 million, with a focus on capitalizing on seasonal demand and optimizing costs. The company reported positive sentiment towards its new pricing strategy and customer engagement efforts, suggesting strong potential for future growth and profitability. OPERATOR Good afternoon and welcome to the fiscal SECond quarter 2026 earnings conference. Call for Leslie's at this time, all participants are in a listen only mode. Following the prepared remarks, management will conduct a question and answer session. If you require any operator assistance during the call, please press Star0 on your telephone keypad. As a reminder, this conference call is being recorded and will be available for replay later today on the Company's website. I would like to remind everyone the comments made today may include forward looking statements which are subject to significant risks and uncertainties that could cause the Company's actual results to differ materially from Management's current expectations. These statements speak as of today and will not be updated in the future if circumstances change. Please review the cautionary statements and risk factors contained in the Company's earnings press release and recent filings with the SEC. During the call today, management will refer to certain non GAAP financial measures. A reconciliation between the GAAP and non GAAP financial measures can be found in the Company's earnings press release which was furnished to the SEC today and posted to the Investor Relations SECtion of Leslies [email protected] On the call today is Jason McDonnell, Chief Executive Officer and Jeff White, Chief Financial Officer. With that, I will turn the call over to Jason. Good afternoon and welcome to the fiscal SECond quarter 2026 earnings conference. Call for Leslies. At this time, all participants are in a listen only mode. Following the prepared remarks, management will conduct a question and answer session. If you require any operator assistance during the conference call, please press Star zero on the telephone keypad. As a reminder, this conference call is being recorded and will be available for replay later today on the Company's website. I would like to remind everyone that comments made today may include forward looking statements which are subject to significant risk and uncertainties that could cause the Company's actual results to differ materially from Management's current expectations. These statements speak as of today and will not be updated in the future if circumstances change. Please review the cautionary statements and risk factors contained in the Company's earnings press release and recent filings with the SEC. During the call today, management will refer to certain non GAAP financial measures. A reconciliation between the GAAP and non GAAP financial measures can be found in the Company's earnings press release which was furnished to the SEC today and posted to the Investor Relations SECtion of Leslies websiteir.lesliespool.com on the call today is Jason McDonnell, Chief Executive Officer and Jeff White, Chief Financial Officer. With that I will turn the call over to Jason Jason McDonnell (Chief Executive Officer) Good afternoon and thank you for joining us today to discuss our second quarter fiscal 2026 results. I'm pleased to report that our comprehensive transformation plan to position Leslie's for sustainable profitable growth delivered results and our Q2 performance demonstrates that the strategic actions we've implemented worked on multiple levels compared to last year. In the second quarter we delivered overall revenue growth of 4.3%, a comparable sales increase of 6.6%, improved year over year, adjusted EBITDA by 26% and registered total customer count growth of 8%. We have strong conviction in our long term business model and the strategic initiatives we have underway from executing our pricing strategy, reactivating customers, enhancing our store operations, continuing our cost optimization and improving our asset utilization, all of which we believe will drive meaningful margin expansion, sustainable revenue growth and enhanced shareholder value over time. We entered 2026 with a clear goal to reduce customer churn, which was a significant driver of a net loss of residential customers in 2025. I'm pleased to say we're off to a great start with broad based customer growth in the second quarter. What's particularly encouraging is the mid single digit growth we're seeing across both new and retained customers and greater than 25% growth in reactivated customers. Who are those that didn't shop with Lesley's last year but did shop with us in the periods between 2021 and 2024? These customer statistics became even more pronounced as we capitalized on favorable weather with the launch of our price drop initiative in the Sun Belt markets in March. While we have many critical weeks ahead as the peak pool selling season kicks into high gear, I'm very pleased with the customer feedback on our price drop initiative, our strong Q2 revenue and gross margin improvement, and our team's relentless focus on cost optimization to fund these customer facing investments. We are fundamentally reimagining how Lesley serves our customers and communities, creating a more efficient business model in the process. As we have mentioned for multiple quarters, customer centricity, convenience, asset utilization and cost optimization are the core strategic pillars supporting our comprehensive transformation plan. We're rebuilding Lesley's as America's one stop for pool care, leveraging our competitive advantages and taking decisive action in areas where performance has fallen short. We are focused on improving Lesley's value proposition through a combination of our price drop campaign, targeted marketing efforts to reactivate lapsed customers and enhanced service levels at our stores. These efforts successfully drove customer growth during the quarter and improved margins. Our new pricing strategy is designed to drive traffic increase conversion rates and build customer loyalty by improving our pricing on key items while maintaining the high quality our customers expect from Leslie's. These targeted objectives were achieved in quarter two. As we launched Price Drop in March, the response from customers was positive. Our retail stores experienced double digit increase in transactions and more than a 350 basis point improvement in our overall conversion rate. Customers also leveraged our proprietary 10 point water testing system. With double digit growth in water tests conducted in quarter two compared to a year ago. We are supporting the Price Drop launch with a comprehensive integrated marketing campaign. This campaign leverages our zero party data to target core Lesley's customers and bring back those that have lapsed. Leveraging marketing mix analytics, we then strategically prioritize the marketing mediums from digital media to targeted direct mail to engage our customer base and drive the best return on investment. Adding to our targeted marketing, we also elevated the in store value messaging and refreshed our category navigation signage for greater ease of shopping. The elevated value messaging includes prominent price drop signage strategically placed throughout the store to ensure customers immediately recognize the value we're delivering while the Refresh category navigation signage showcases our broad assortment. To further expand our value proposition beyond improved pricing on core chemicals, we've developed an exciting seasonal product line anchored on opening value price points. Launched late in Q2, this tiered value priced assortment across a broad range of our discretionary seasonal products is resonating strongly with customers and will help us build back baskets throughout the pool season to support our price investment and integrated marketing plan. We are pleased to share that our restructured field organization is now operational. This is a market leadership model integrating stores, service, commercial and trade operations under a unified local management. We also changed our compensation structure at the store level. This new monthly compensation plan is focused on their sales growth and incentivizes the team to take ownership of their zip code on sales across service, pro trade, commercial and retail stores. The restructuring also accelerates our customer centric strategy by combining our customer data with local market leadership, giving managers the tools and authority to capture growth opportunities among thousands of pool owners. To further support the field organization, we've also implemented extensive training to strengthen customer engagement and organization success. In partnership with select vendors, we've rolled out localized in person training programs across key markets, elevating product expertise and enabling more effective consultative selling experience. In Q2, we continue to see strong NPS scores as our store associates are supporting and representing the compelling customer value proposition at Lesley's. This new program is designed to build local customer relationships, drive transaction growth while maintaining our consultative selling approach going into peak season, our field teams are aligned, accountable and ready to continue to help customers with all their pool care needs. As part of our integrated customer centric approach, we continue to focus on convenience. At Leslie's, we offer buy online pickup in store or BOPIS and same day delivery through Uber. We're seeing strong growth in adoption of our BOPIS service which serves as a key traffic driver to our stores and creates a valuable opportunity to engage with our customers. In quarter two, we also completed the nationwide rollout of our Uber delivery platform, providing same day delivery on a wide range of products. We are pleased with the initial results and look forward to being more convenient for customers for this pool season. In addition to our residential customers, we're also seeing success growing our Pearl business which increased approximately 5% during the quarter. Our pro customers are responding to our improved value offerings on core items as well as the availability of the products they need. In Q2, we simplified our trade program by refining pricing across all categories and streamlining enrollment, which is improving the pro customer experience. In parallel, we enhanced our internal processes and targeted outreach to drive improved customer engagement with our pro customers. Now an update on our network optimization initiatives. We remain confident in an annualized net EBITDA benefit of $4 million to $10 million despite an annual sales impact of approximately $25 million to $35 million from the 80 stores that we have closed in fiscal 2026. What's particularly encouraging is the favorable customer transfer rates we're seeing to both existing stores and our digital channels which are exceeding our expectations. We have valuable zero party data with over 85% of our customers information that has enabled us to reach out to customers of closed stores and invite them to visit another nearby store or our digital assets. We are leveraging precision marketing to re engage LAPS customers and deepen loyalty with our core base while educating both of them on the full breadth of our product and our service portfolio. Available through leslie's.com and our mobile app, this local multi channel outreach spanning digital marketing, direct mail and outbound calling ensures customers remain connected to our brand and aware that nearby stores stand ready to meet all their pool care needs. Turning to our distribution network, we have largely ceased operations at our Illinois facility and have successfully transitioned to a 5 distribution center network for the 2026 pool season. We now operate distribution centers in Texas, Florida, Kentucky, California and New Jersey. Our network optimization is yielding annualized savings and inventory efficiencies and we will continue evaluating future opportunities to drive further network improvements. As mentioned we have continued our focus on inventory optimization and improving inventory turns. In Q2, we reduced inventory by greater than 20% in the quarter and are still delivering above target in stock performance overall and on our never out SKUs. In another part of our focus on asset utilization, our SKU rationalization strategy is on track and goes beyond simple SKU elimination. We're strategically reshaping our assortment to maximize profitability and customer value. By removing 2000 long tail SKUs from our E commerce and marketplace offerings fulfilled through our distribution centers, we are confident we can deliver approximately 4 to 5 million dollars in annualized EBITDA improvement while simultaneously strengthening our product portfolio. In summary, our Q2 results demonstrate the strategic actions we're taking are working on multiple levels revenue growth, EBITDA improvement and broad based customer growth. By delivering greater value while managing costs effectively, we believe we are fundamentally transforming Lesley's operations for long term profitable growth grounded in our four strategic pillars customer centricity, convenience, asset utilization and cost optimization. Jeff White (Chief Financial Officer) We are restoring Leslie's as America's trusted one stop destination for pool care. With that, I will turn it to Jeff for a more detailed review of our second quarter results. Thank you, Jason. I'll begin my remarks today with a review of our second quarter financial results, then move to our liquidity and capital allocation plans and finally review our outlook for 2026. Net sales for the second quarter increased 4.3% to $184.7 million compared to $177.1 million in the second quarter of the prior year and ahead of our expectations. Sales through our retail stores were strong with notable strength in residential and pro, especially in March and across the western United States. Comparable total company sales which removes closed stores increased 6.6% in the second quarter compared with the same time period of fiscal year 2025. We saw strength in sanitizers and shock and specialty chemicals in conjunction with the launch of our price drop campaign, slightly offset by softness in equipment, cleaning and maintenance. We also saw expected softness in safety and solar as we anniversaried a clearance event in the second quarter of last year. Gross profit margin for the second quarter was 28.9% versus 24.8% in the prior year period driven by leverage of higher sales volumes. Margin expansion was also supported by favorable distribution and occupancy costs as well as reductions in inventory reserves reflecting continued improvement in overall inventory health. SGA for the second quarter decreased 0.1 million or 0.1% to 92.2 million compared to 92.3 million in the second quarter of the prior year due to lower labor costs and store costs partially offset by higher technology and marketing spend as we invested incremental dollars on a year over year basis in conjunction with the launch of our price drop campaign. While the year over year difference is small, this represents an over 220 basis point improvement as a percentage of sales. Net loss for the second quarter was $52.5 million compared with a net loss of $51.3 million in the second quarter of the prior year. Adjusted net loss in the second quarter was $50 million compared with an adjusted net loss of $48.3 million in the second quarter of the prior year. Adjusted EBITDA for the second quarter improved $9.2 million to negative $26.8 million compared with negative $36.1 million in the second quarter of 2025. This improvement was driven primarily by higher sales volumes and improved pricing during the quarter as well as lower distribution and occupancy costs and lower SG&A expenses. Inventory at the end of the quarter was $262.4 million compared to $335.1 million at the end of the second quarter of 2025 due to inventory optimization initiatives and store closures. Despite a favorable year over year inventory reduction of 22% in stocks on key products remain at all time highs. Capital expenditures for the second quarter were $9.5 million compared to $11.2 million in the second quarter of the prior year, primarily relating to maintenance of our stores and distribution centers. Regarding liquidity, we ended the quarter with $99 million of outstanding borrowings on our line of credit for versus $101.5 million in the prior year. We also had $753 million of long term debt as of quarter end. We had approximately $97.1 million of availability from cash on hand borrowings available under our line of credit facility. We remain focused on executing and delivering on our initiatives and continue to expect our pricing strategy to impact annual gross margins by 100 to 150 basis points. Our store optimization strategy to have an annual net sales impact of 25 to 35 million dollars and generate a net EBITDA improvement of 4 to 10 million dollars annually. As of note, we have completed our store closure plans for the year and do not anticipate any additional closures for the balance of fiscal 2026. We continue to expect our expense reduction initiative to drive seven to twelve million of annualized savings with benefits starting to be realized in the second half of 2026. Furthermore, we anticipate our inventory optimization strategy to result in a one time reduction of approximately 100 to 200 basis points to annualized gross margins. We expect this impact to occur in our Q3 and Q4 periods and finally, our SKU rationalization initiative to generate four to five million dollars in EBITDA savings by optimizing our product assortment over time. Combined, these initiatives should drive a five to ten million improvement to EBITDA in fiscal 2026. As we reinvest some of the savings back into our price drop strategy, we remain confident in our ability to drive sales and traffic by delivering the right product in the right place, at the right time and at the right price for our customers. We have identified significant cost savings opportunities across our operations that will strengthen our financial position. Consistent with our historical performance. We expect to generate the large majority of our sales and earnings in the second half of the year due to the seasonal nature of the business in fiscal 2026, which is a 52 week year compared to a 53 week year in fiscal 2025. We are reiterating our guidance of sales of $1.1 billion to $1.25 billion and adjusted EBITDA of $55 million to $75 million. We continue to expect CapEx to be in the range of $20 million to $25 million in 2026 as we focus on maintenance and productivity investments as well as providing positive free cash flow for fiscal year 2026. We continue to evaluate capital structure opportunities and are actively working with our incumbent lenders as well as third party capital providers to finance a series of incremental initiatives that could further accelerate our growth and shorten the path to profitability. The company has ample liquidity and is well positioned to capitalize on the 2026 pool season. In closing, we are executing with focus growing sales, driving transaction volume, expanding profitability and preserving financial flexibility. Our priorities are clear and we believe these actions will support shareholder value over the long term. I will now turn the call back over to Jason for closing remarks. Jason McDonnell (Chief Executive Officer) Thanks Jeff. Our comprehensive transformation plan is delivering measurable results. Q2 performance demonstrates that our strategic actions are working. We delivered revenue growth significantly, improved adjusted ebitda, and achieved total customer count growth with particularly strong momentum in reactivated customers. Our strategic initiatives advance with both urgency and discipline. In Q2, the price drop initiative launch drove traffic and customer growth along with improved gross profit performance while our cost optimization and asset utilization actions continue on schedule. We've completed our store Optimization optimized our DC network and our SKU rationalization is strengthening both profitability and inventory productivity. Most importantly, we're rebuilding customer relationships through improved value, enhanced convenience and the consultative expertise that has always been Lesley's competitive advantage. While we have many critical weeks ahead as peak season accelerates, the early Q2 success of our customer facing investments funded by operational efficiencies validates our strategic direction. We remain committed to transparent communication as we execute Lesley's transformation, restore sustainable, profitable growth, and rebuild stakeholder confidence through disciplined execution and measurable results. Before we open the call to your questions, I want to express my sincere appreciation to our Lesley team members across the country for their outstanding commitment during this transformational period. Your adaptability and determination in executing our strategic initiatives have been exceptional. The progress we're making from the successful launch of our price drop initiative to the completion of our store optimization program is a direct result of your hard work and dedication to serving our customers. I also want to thank our vendor partners for their continued collaboration and support as we strengthen Lesley's competitive position. Finally, to all our stakeholders, thank you for your ongoing support and confidence in our team's ability to execute this transformation. Together we are building a stronger, more customer focused Leslie's positioned for sustainable growth. Operator we're now ready to open the lines for questions. OPERATOR Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that participants limit themselves to one question and re queue for additional questions. One moment please, while we poll. Thank you. Our first question is from Jonathan Matazzewski with Jefferies. Jonathan Matazzewski (Equity Analyst) Great. Good afternoon Jason and Jeff, and thanks for the update and nice to see the comp inflection. I guess My question is on gross margins. So this result puts you at the highest gross margin for a second quarter since 2Q of 23, I believe, which is impressive. Can you talk to the sustainability of some of these drivers like savings and occupancy and DC costs and then the inventory reserve adjustment. A lot of moving pieces here. So as we put them all together, just hoping for a clearer view of how you see gross margin trending in the second half. And I guess looking beyond the second half, maybe if you could just talk to some of the levers for gross margin expansion into 2027 that you're excited about beyond potential leverage from higher sales volume. Thanks so much Jonathan. Jeff White (Chief Financial Officer) This is Jeff. I'll take that. It's a good question. As we look at what really contributed to gross margin, I would say one of the large drivers was the improvement in occupancy costs. So as I think about that, that is something that we can continue to leverage and make sure that helps gross margin going forward. We did have some one time adjustments, the difference in the inventory reserve that as we continue to get healthier and more productive with our inventory, those types of adjustments are going to be one timers. So while not tremendously material for the quarter, it is something that contributed overall. We did see overall improvement though in our product margin and those are as we think about some of the cost initiatives that we undertook going through the direct cost process, making sure that we're really working with our vendors to optimize our cost portfolio there. As we continue to work through the flow of goods and on an average cost basis we see those efforts flow through. There's room for continued improvement as we move through the back half of 26 and continually move into 27. Jonathan Matazzewski (Equity Analyst) Thank you. OPERATOR Our next question is from David Bellinger with Mizuho Securities. David Bellinger (Equity Analyst) Everyone. Thank you for the question. I apologize if I missed this earlier, but maybe two questions together. You talk about the price of drops. I think you marked about $25 million for price investments earlier in the year. Is there any thinking of increasing that number just given the performance you've seen to date? And then second, is there any way you talk about the equipment category where there are price drops there? Is that a business that's picked up both some of these storms that affected parts of the south and Southeast? Thank you. Yeah, great question. As we think about the price drop, we're going to continue to look at areas of opportunity for us to expand the everyday value pricing and what categories we can move that into. As we rolled it out in March, it was heavily primarily focused on our core chemicals and our chemical categories which is where we saw really good strength. As we continue to move through and find opportunities depending on market conditions, we'll look at other areas of opportunity. In terms of equipment. The one thing I'll note there is a lot of that product is mapped protected so it's hard to move on price there because you do have that map protection and ultimately the price in the market is set by the vendor. So we'll look for areas of opportunities in other parts of the business where we can be competitive, but still be margin accretive as we further progress down the path on our price drop initiative. Great. Thank you. OPERATOR Thank you. This does conclude our question and answer session as well as today's conference. We thank you again for your participation and you may now disconnect your lines. Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice. UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga: LESLIES (LESL): Free Stock Analysis Report This article Full Transcript: Leslies Q2 2026 Earnings Call originally appeared on Benzinga.com ﾩ 2026 Benzinga.com. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance improvement was driven by a comprehensive transformation plan focused on customer centricity, convenience, asset utilization, and cost optimization. The 'Price Drop' initiative launched in March successfully reversed customer churn, yielding a 350 basis point improvement in conversion rates and double-digit transaction growth. Management attributed the 6.6% comparable sales increase to a strategic focus on reactivating lapsed customers, which saw greater than 25% growth during the quarter. Operational efficiency was enhanced by transitioning to a unified local management model that integrates retail, service, and commercial operations under a single leadership structure. Inventory levels were reduced by over 20% through optimization efforts while maintaining high in-stock levels for 'Never Out' SKUs to ensure service reliability. The company successfully transitioned to a streamlined 5-distribution-center network, exiting its Illinois facility to drive annualized savings and inventory efficiencies. Management reiterated full-year 2026 guidance, assuming the large majority of sales and earnings will occur in the second half due to peak pool season seasonality. The pricing strategy is expected to impact annual gross margins by 100 to 150 basis points, which management intends to offset through cost-saving initiatives. Inventory optimization is projected to result in a one-time reduction of 100 to 200 basis points to annualized gross margins during the Q3 and Q4 periods. Expense reduction initiatives are forecasted to deliver $7 million to $12 million in annualized savings, with benefits beginning to materialize in the second half of 2026. The company is actively working with lenders and third-party providers to evaluate capital structure opportunities that could accelerate the path to profitability. Completed the closure of 80 stores in fiscal 2026, with management noting that customer transfer rates to remaining stores and digital channels are exceeding expectations. SKU rationalization involved removing 2,000 long-tail SKUs from e-commerce and marketplace offerings to deliver an estimated $4 million to $5 million in annualized EBITDA improvement. Gross margin expansion in Q2 was partially supported by non-recurring reductions in inventory reserves as overall inventory health improved. The transition to a 52-week fiscal year in 2026 compared to a 53-week year in 2025 remains a headwind for year-over-year total revenue comparisons. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management identified occupancy cost leverage as a sustainable driver for future margins, while noting that inventory reserve adjustments were largely one-time events. Future margin expansion is expected to come from ongoing direct cost negotiations with vendors and optimizing the flow of goods on an average cost basis. The Price Drop strategy is currently focused on core chemicals, but management is evaluating opportunities to expand value pricing into other categories based on market conditions. Equipment pricing remains constrained by Minimum Advertised Price (MAP) protections set by vendors, limiting the company's ability to use price as a lever in that specific category.