Q3 2026 Leslie's Inc Earnings Call Transcript
Key Points
- Leslies Inc (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 customers—those who did not shop with Leslies Inc (LESL) last year but did between 2021 and 2024—demonstrating the effectiveness of its targeted marketing and value proposition.
- Leslies Inc (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 (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 (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 (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.
Good afternoon and welcome to the fiscal third-quarter 2026 earnings conference call for Leslie's. (Operator Instructions) This call will consist of management's prepared remarks. (Operator Instructions) 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 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 as 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
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