Leslie's (LESL) Fiscal Q3 2026 Earnings Call: Guidance Withdrawn as Sales Fall 8.4%
Source Tradingkey
Key Takeaways
- Fiscal Q3 2026 sales fell 8.4% year over year to $458.5 million, while comparable sales declined 6.2%, primarily due to lower transactions and customer traffic.
- Adjusted EBITDA decreased to $55.7 million from $81.6 million, reflecting lower sales volume and gross margin pressure.
- Gross margin contracted to 36.5% from 39.6%, driven by weaker sales of higher-margin products, an unfavorable product mix, and higher distribution center and manufacturing costs.
- SG&A declined 17.9% to $106.4 million, including a $17.5 million one-time gain from a credit card interchange fee settlement. Net income improved by $26.1 million to $47.8 million.
- Leslie’s withdrew its previously issued full-year fiscal 2026 sales and adjusted EBITDA guidance because of the evolving macroeconomic environment and weaker-than-expected peak-season traffic.
- The company is exploring strategic alternatives with certain financial stakeholders to increase financial flexibility and reduce leverage. No transaction has been determined or assured.
Core Financial Data
| Metric | Fiscal Q3 2026 | Prior-year period / Change | Key driver or context |
|---|---|---|---|
| Sales | $458.5 million | Down 8.4% from $500.3 million | Softer retail demand and the closure of 80 underperforming stores |
| Comparable sales | — | Down 6.2% | Lower transactions and customer traffic |
| Gross margin | 36.5% | 39.6% a year earlier | Lower higher-margin product sales, product-mix shift, and increased distribution and manufacturing costs |
| SG&A | $106.4 million | Down $23.2 million, or 17.9% | Lower labor and store costs; included a $17.5 million one-time settlement gain |
| SG&A as a percentage of sales | 23.2% | Improved 270 basis points | Cost controls partially offset technology investments |
| Net income | $47.8 million | Improved by $26.1 million | Included the effect of lower SG&A and the one-time settlement gain |
| Adjusted net income | $37.8 million | Improved by $12.6 million | — |
| Adjusted EBITDA | $55.7 million | $81.6 million a year earlier | Lower volume and gross margin pressure |
| Inventory | $233.4 million | Down 15% from $273.2 million | Store closures and reduction of non-go-forward inventory |
| Net long-term debt | $753 million | — | Company is evaluating deleveraging alternatives |
| Revolving credit facility borrowings | $30 million | $20 million a year earlier | — |
| Liquidity availability | Approximately $207.1 million | — | Includes cash and available credit capacity |
Business and Operating Performance
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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