Leslies 2025 Q3 Earnings Sharp Earnings Drop Amid Revenue Decline

Leslie's (LESL) reported fiscal 2025 Q3 earnings on August 7, 2025. The results were largely in line with the company's ongoing challenges, with both revenue and earnings falling significantly compared to the prior year. The company has now recorded earnings declines for six consecutive years in the same quarter.

Leslie's total revenue for Q3 2025 declined by 12.2% year-over-year to $500.35 million, driven primarily by softer demand and operational headwinds. The company’s revenue is consolidated under a single business line, with no distinct segment breakdown beyond the total revenue figure.

Net income for the quarter contracted sharply to $21.73 million, representing a 64.2% drop from $60.65 million in Q3 2024. Earnings per share (EPS) also fell dramatically to $0.12, a 63.6% decrease from $0.33 in the prior year. These declines reflect ongoing financial difficulties, with the company continuing to report losses in the same quarter for six consecutive years.

The stock price of Leslie's has experienced significant volatility in the wake of the earnings report. Over the past trading day alone, the stock plummeted 16.92%. The downward trend has persisted throughout the month, with a 19.38% loss recorded over the last full trading week and a 36.75% drop month-to-date. This steep sell-off highlights the market’s disappointment with the company's performance.

Investors considering a post-earnings buy-and-hold strategy for Leslie's should proceed with caution. The company has missed revenue and earnings estimates in recent quarters, and its latest report showed a 12.4% drop in comparable sales and negative net operating cash flow. Market analysts have responded by cutting their EPS estimates for the upcoming quarter by 50%, and the average consensus recommendation remains a neutral "hold," with some analysts leaning toward "sell." Historically, Leslie's has struggled to meet expectations, and while the company is investing in digital transformation and customer initiatives, the impact of these efforts is not yet evident. Given the uncertain trajectory and current market sentiment, a 30-day holding period may not offer sufficient upside, with the risk of further declines remaining high.

Jason McDonell, Leslie's CEO, attributed the Q3 underperformance to challenging weather, compressed demand, and competitive pricing pressures. In response, the company has reduced labor hours and is accelerating strategic initiatives to drive long-term growth. The leadership team remains focused on stabilizing operations and improving profitability.

For the full fiscal 2025 year, the company expects sales in the range of $1,210 million to $1,235 million. However, it projects a net loss of $57 million to $65 million and an adjusted net loss of $31 million to $39 million. Adjusted EBITDA is forecasted between $50 million and $60 million. The CFO expressed confidence that existing cash, debt repayment schedules, and expected fourth-quarter performance will be sufficient to cover liabilities.

Additional News
While there were no major M&A activities, C-level changes, or buyback announcements reported in the three weeks following Leslie's earnings release, several broader market and political developments impacted investor sentiment. In Nigeria, kidnappers demanded a N7 million ransom for the release of an Ondo State university staff member, adding to regional security concerns. Meanwhile, global events, including a high-profile terrorist attack foiled by the Nigerian Air Force in Borno, underscored ongoing geopolitical tensions. In business, Stanbic IBTC announced a savings promotion that awarded 148 customers a combined N23 million in prizes. African leaders also unveiled a three-year plan aimed at reducing capital costs across the continent, signaling potential economic reforms.