Q1 2025 Leslie's Inc Earnings Call Transcript
Key Points
- Leslies Inc (LESL) reported revenue at the top end of guidance with sales of $175 million, marking a 0.7% increase compared to the first fiscal quarter of 2024.
- Pro pool sales grew by 9%, driven by better in-stock positions and a double-digit increase in pro partner contracts.
- The company achieved a 300 basis point improvement in in-stock levels for key categories, enhancing customer conversion rates.
- Leslies Inc (LESL) successfully reduced overall inventory by $63 million or 19% year-over-year, improving working capital and enabling debt reduction.
- The company is establishing local fulfillment centers (LFCS) to improve inventory management and customer service, leveraging existing store networks with minimal capital expenditure.
- Adjusted EBITDA was at the bottom end of guidance, with a loss of $29 million, impacted by inventory optimization decisions and additional professional fees.
- Residential pool sales declined by 1% and residential hot tub sales declined by 5%, indicating challenges in these segments.
- Gross margin rate decreased by 180 basis points to 27.2%, primarily due to increased inventory adjustments and deleverage on occupancy and distribution costs.
- The company reported an adjusted net loss of $41 million, compared to a loss of $37 million in the same period last year.
- Leslies Inc (LESL) faces challenges in improving DIY customer traffic, despite a 160 basis point increase in conversion rates.
Good afternoon and welcome to the fiscal first quarter 2025 earnings conference call for Leslie's. (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 will now turn the call over to Matt Skelly, Vice President of Investor Relations.
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Thank you and good afternoon. 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. 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
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