Leslie's (LESL) investor relations material

Executive summary

• Transformation plan underway to drive sustainable, profitable growth, focusing on customer value, cost optimization, and asset utilization.

• First quarter 2026 sales and adjusted EBITDA were in line with expectations, with full-year guidance reiterated.

• 80 underperforming stores were closed, and inventory efficiency improved with a 23% year-over-year reduction.

• Strategic pricing transformation and revitalized marketing initiatives launched to drive customer engagement and growth.

• Net loss widened to $83.0 million from $44.6 million in the prior year, driven by lower sales, impairment charges, and lack of prior year tax benefit.

Financial highlights

• Q1 net sales were $147.1M, down 16% year-over-year from $175.2M, with comparable sales down 15.5%.

• Gross profit fell to $27.1M from $47.7M, with gross margin dropping to 18.4% from 27.2%.

• Net loss was $83M (vs. $44.6M prior year); adjusted net loss was $48.7M (vs. $40.7M prior year).

• Adjusted EBITDA was negative $40.3M, compared to negative $29.3M a year ago.

• Inventory reduced 23% year-over-year to $210M, reflecting optimization and store closures.

Outlook and guidance

• Full-year fiscal 2026 guidance reiterated: sales of $1.1B–$1.25B, adjusted EBITDA of $55M–$75M, and CapEx of $20M–$25M.

• Majority of sales and earnings expected in the second half due to seasonality.

• Management expects liquidity from cash, operations, and credit facility to be adequate for the next 12 months and beyond.

• The company is focused on cost reduction, operational efficiency, and strategic initiatives to improve profitability.