Leslie's (LESL) Q4 2025 earnings summary

Executive summary

• Completed a smooth CFO transition, welcoming Jeff White to lead financial transformation and cost optimization.

• Implemented immediate actions to improve operations and accelerate profitability, focusing on price-value, cost structure, and customer-centricity.

• Strategic transformation includes closing 80–90 underperforming stores and one distribution center to improve EBITDA in FY26, with targeted marketing to retain affected customers.

• Launched restructuring of field teams and integrated market leadership model to drive multi-channel growth.

• Inventory efficiency improved with a 10% year-over-year reduction and expanded same-day delivery and pool maintenance services, with strong double-digit growth in new markets.

Financial highlights

• Q4 net sales: $389.2M, down 2.2% year-over-year; 53rd week added $18.3M in sales but negatively impacted EPS and EBITDA.

• Q4 gross margin rose to 38.6% from 36% prior year, driven by vendor rebates and lower freight costs; Q4 gross profit: $150.1M, up 4.8%.

• Q4 net loss: $162.8M (including $184M impairment), vs. $9.9M prior year; adjusted net income: $0.8M.

• Full-year sales: $1.24B, down 6.6%; adjusted net loss: $4.70/share; inventory reduced by $26M to $208M.

• Q4 adjusted EBITDA: $45.2M, up from $43M prior year; full-year adjusted EBITDA: $61.4M (down from $108.7M).

Outlook and guidance

• FY26 sales expected at $1.1B–$1.25B, Adjusted EBITDA $55M–$75M; includes store closures and pricing initiatives.

• CapEx for FY26 guided at $20M–$25M, with focus on maintenance and productivity.

• Free cash flow expected to be positive at midpoint of guidance.

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

• No increase in marketing spend; redeployment for higher efficiency.