Leslies 2025 Q4 Earnings 1540.6% Wider Net Loss Amid Store Closures

Leslie's (LESL) reported fiscal 2025 Q4 earnings on Dec 2, 2025, with revenue declining 2.2% to $389.21 million, though the figure exceeded high-end guidance. The company posted a net loss of $162.81 million, a 1540.6% increase year-over-year, as losses deepened to $17.54 per share. For fiscal 2026, Leslie’s provided sales guidance of $1.1–$1.25 billion and adjusted EBITDA of $55–$75 million, reflecting ongoing restructuring efforts.

Revenue

Leslie’s total revenue fell to $389.21 million in Q4 2025, a 2.2% decline from $397.86 million in the prior-year period. The drop was driven by a 6.5% decline in same-store sales, partially offset by $0.3 million in new store contributions.

Earnings/Net Income

The company’s net loss widened to $162.81 million, or $17.54 per share, in Q4 2025, compared to a $9.92 million, or $1.07 per share, loss in Q4 2024. This marked a 1540.6% increase in losses, underscoring persistent financial challenges despite operational restructuring. The significant deterioration in earnings highlights ongoing struggles to stabilize profitability.

Post-Earnings Price Action Review

The strategy of buying Leslie’s shares 30 days after its revenue-raising earnings report release date and holding for an additional 30 days resulted in no returns over the past three years. With a CAGR of 0.00%, total return, and excess return of 0.00%, the approach showed no volatility or Sharpe ratio data. The stock’s recent performance included an 18.54% surge on the latest trading day and a 21.36% weekly gain, though it dropped 4.02% month-to-date.

CEO Commentary

CEO Jason McDonell emphasized exceeding high-end guidance for Q4 sales and adjusted EBITDA, while announcing the closure of 80–90 underperforming stores and a distribution center to improve FY26 EBITDA. He highlighted a 10% year-over-year inventory reduction and a strategic focus on cost optimization and stakeholder confidence.

Guidance

Leslie’s outlined FY2026 targets of $1.1–$1.25 billion in sales, $55–$75 million in adjusted EBITDA, and $20–$25 million in capital expenditures. The guidance incorporates cost savings from store closures and inventory reductions, with earnings expected to concentrate in the second half due to seasonality.

Additional News

1. Strategic Restructuring: Leslie’s announced a $7–$12 million annualized EBITDA improvement plan through store closures, cost cuts, and inventory optimization, aiming to restore profitability by FY2026.

2. Inventory Efficiency: The company reduced year-over-year inventory by 10%, aligning with its cost-reduction strategy to reinvest savings into customer value propositions.

3. Liquidity Update: Leslie’s reported $64.3 million in cash and cash equivalents as of October 4, 2025, a $44.2 million decrease from the prior year, reflecting aggressive capital reallocation.

Financial Performance

Leslie’s Q4 2025 results reflect a challenging operating environment, with revenue declines and significant net losses contrasting with management’s optimism about restructuring. The company’s FY2026 guidance underscores a pivot toward operational efficiency, though execution risks remain high given sustained losses over six consecutive years. Investors will closely monitor the impact of store closures and inventory reductions on future earnings and cash flow.