Leslie's Plunges 34.88% as Weather Woes and Guidance Withdrawal Trigger Sharp Selloff—Is This the Bottom?

Summary
• Leslie's (LESL) shares cratered 34.88% intraday, trading as low as $0.401 amid a 12% Q3 sales decline and guidance withdrawal.
• The stock now trades at 88% below its 52-week high of $3.63, with a 52-week low of $0.3821.
• Analysts at Telsey and Loop Capital slashed price targets, while retail sentiment on Stocktwits spiked 880%.

This dramatic selloff follows a summer of volatility for Leslie's, which had previously rallied 51% in a short squeeze amid a 32% short sale ratio. Today's collapse reflects a perfect storm of weather-driven sales weakness and eroded investor confidence, with key technical levels and options activity pointing to potential catalysts for a near-term reversal.

Weather Woes and Guidance Withdrawal Trigger Sharp Selloff
Leslie's (LESL) catastrophic 34.88% intraday drop stems from two compounding factors: a 12% Q3 sales decline driven by 'unusually wet and cool weather' in key markets, and the abrupt withdrawal of full-year 2025 guidance. CEO Jason McDonell explicitly tied the results to weather-disrupted pool season demand, while analysts flagged macro risks like tariffs and fiscal policy uncertainty. The move follows a 11.9% one-day rally last week as short sellers scrambled to cover, but today's collapse suggests renewed bearish conviction as analysts cut price targets and the stock retests 52-week lows.

Bullish Options Play and ETF Setup as Oversold Conditions Emerge
• 200-day average: $1.4886 (far above current price)
• RSI: 72.04 (overbought territory)
• MACD: 0.0030 (bullish divergence with signal line at -0.0298)
• Bollinger Bands: Price at $0.4194 (68% below upper band at $0.6031)
• Support/Resistance: 30D support at $0.4683, 200D resistance at $0.5800

The technical setup suggests a potential reversal as the stock trades near 52-week lows with RSI approaching overbought territory. Two options contracts stand out for aggressive bulls:

• LESL20251121C0.5:
- Call option, $0.5 strike, expiring Nov 21, 2025
- IV: 187.62% (high volatility)
- Delta: 0.6478 (moderate sensitivity)
- Theta: -0.000759 (slow time decay)
- Gamma: 0.8339 (high sensitivity to price moves)
- Turnover: 3267 (strong liquidity)
- Leverage ratio: 2.81%
- Payoff at 5% downside: $0.0405 (max(0, 0.4194 - 0.5) = $0)
- Why it stands out: High gamma and IV create explosive potential if the stock rallies above $0.5, with strong liquidity to manage entry/exit.

• LESL20260220C0.5:
- Call option, $0.5 strike, expiring Feb 20, 2026
- IV: 165.51% (moderate volatility)
- Delta: 0.6933 (moderate sensitivity)
- Theta: -0.000469 (slow time decay)
- Gamma: 0.6694 (strong sensitivity)
- Turnover: 12025 (exceptional liquidity)
- Leverage ratio: 2.34%
- Payoff at 5% downside: $0.0405 (max(0, 0.4194 - 0.5) = $0)
- Why it stands out: Long-dated expiry provides time for recovery, with high gamma and turnover making it ideal for a slow-burn bullish play.

Aggressive bulls should consider LESL20251121C0.5 into a bounce above $0.5, leveraging the high gamma and IV premium to capitalize on a potential short-covering rally.

Backtest Leslie's Stock Performance
The LEISL strategy has historically shown resilience after experiencing a significant intraday plunge of at least -35%. While the 3-day win rate is 46.14%, the 10-day win rate is slightly lower at 45.79%, indicating that short-term positive returns are not guaranteed but are likely.

Bullish Setup Emerge Amidst Oversold Conditions—Act on Key Levels
The 34.88% selloff has created a compelling technical setup as Leslie's trades near 52-week lows with RSI approaching overbought territory. While the fundamentals remain challenged by weather-driven weakness, the options market and technical indicators suggest a near-term reversal could materialize if the stock breaks above $0.5. With the Home Depot (HD) sector leader down 0.40% as of 7/29, investors should focus on LESL's 30D support at $0.4683 and 200D resistance at $0.5800. Aggressive bulls should consider LESL20251121C0.5 into a break above $0.5, while watching for a potential short-covering bounce in the coming days.