Q2 2026 Leslie's Inc Earnings Call Transcript
Key Points
- Leslies Inc (LESL) reported a 4.3% increase in overall revenue and a 6.6% rise in comparable sales for the second quarter.
- The company achieved a 26% year-over-year improvement in adjusted EBITDA, indicating enhanced profitability.
- Customer count grew by 8%, with significant growth in reactivated customers, demonstrating successful customer retention strategies.
- The price drop initiative led to a double-digit increase in retail transactions and a 350 basis points improvement in conversion rates.
- Leslies Inc (LESL) successfully reduced inventory by over 20% while maintaining high in-stock performance, showcasing effective inventory management.
- Despite improvements, Leslies Inc (LESL) reported a net loss of $52.5 million for the second quarter, slightly higher than the previous year's loss.
- The company experienced softness in equipment, cleaning, and maintenance sales, which offset gains in other areas.
- Leslies Inc (LESL) closed 80 stores in fiscal 2026, resulting in an annual sales impact of approximately $25 million to $35 million.
- The company anticipates a one-time reduction of 100 to 200 basis points in annualized gross margins due to inventory optimization strategies.
- Leslies Inc (LESL) continues to face challenges in the equipment category due to MAP (Minimum Advertised Price) protection, limiting pricing flexibility.
Good afternoon, and welcome to the fiscal second-quarter 2026 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 would like to remind everyone the comments made today may include forward-looking statements, which are subject to significant risks and uncertainties that could cause a 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 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 Relations section of Leslie's website at ir.lesliespool.com.
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