Leslie's, Inc. (LESL) delivered some tough news on Tuesday, reporting fourth-quarter results that sent analysts scrambling to revise their outlooks downward.
The pool supply retailer posted quarterly earnings of 9 cents per share—a miss so dramatic it came in more than 90% below the analyst consensus estimate of $1.29 per share. There was a bright spot, though: quarterly sales of $389.2 million managed to beat expectations of $370.6 million.
Looking ahead, Leslie's issued fiscal 2026 sales guidance of $1.100 billion to $1.250 billion, well below market estimates of $1.219 billion.
"We delivered fourth quarter sales and adjusted EBITDA above the high end of our previously established guidance range and are today announcing the closure of 80-90 underperforming stores and one distribution center as we work with speed and urgency to improve Leslie's operations and establish a clear path to financial recovery," said Jason McDonell, Chief Executive Officer of Leslie's. "In addition, we will continue to focus diligently on rightsizing the cost base of our business by reducing inventory 10% year over year and delivering direct cost reductions of $7-$12 million which we will invest back into our customer price value proposition."
The market's reaction was swift and brutal. Leslie's shares tumbled 14.3% to trade at $3.07 on Wednesday.
Analyst Responses
Wall Street analysts wasted no time adjusting their expectations following the earnings announcement.
Baird analyst Peter Benedict maintained Leslie's with a Neutral rating but slashed the price target from $6.50 to $3—more than cutting it in half.
Mizuho analyst David Bellinger also kept a Neutral rating while reducing the price target from $5 to $4.
Both moves reflect the challenging road ahead as the company works to restructure its operations and restore profitability through store closures, inventory reductions, and cost-cutting measures.
