Leslie's, Inc. (LESL) Q3 2026 Earnings Call

Concluded Aug 12, 2026

Aug 12, 2026 0 turns

Period: FY2026 Q3
Runtime: —
Sources: 2 artifacts

8-K 10-Q

Executive readout · one minute

What matters this quarter

Leslie's posted an 8.4% Q3 sales decline and a 31.7% drop in adjusted EBITDA on softer consumer demand, and withdrew its previously issued full-year sales and adjusted EBITDA guidance without updating it, while continuing to explore a potential deleveraging transaction with financial stakeholders.

Debt and balance sheet 6 Consumer demand and traffic weakness 5 Pricing strategy and competitive pressure 5 Store closures and cost management 5 Strategic transformation plan 5 Withdrawn guidance 5

Management tone

Cautious

Net tone -45 · moderate hedging

Grounding quotes

“we continued to execute our comprehensive transformation plan in a challenging operating environment, marked by softer consumer demand, heightened promotional activity, and evolving customer purchase behaviors”
“While these dynamics continue to weigh on our financial performance this quarter, we remain focused on making progress on our strategic initiatives”
“given the evolving macroeconomic environment and lower than anticipated customer traffic during our peak season, we are withdrawing our previously issued full year sales and adjusted EBITDA guidance and are not providing an updated outlook at this time”
“No determinations have been made at this stage, and there is no assurance any such transaction will result.”

Research coverage

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Revenue $458.49M -8.4% YoY

Diluted EPS $5.01 +114.1% YoY

Gross margin 36.5% -3.1 pp YoY

Net income $47.79M +119.9% YoY

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8-K earnings release Filed Aug 12, 2026 10-Q report Filed Aug 12, 2026 Company webcastOpen the original investor-relations page

Key takeaways

What improved, and what deserves a closer read.

↑ Constructive signals

Q3 net income rose $26.1 million year-over-year to $47.8 million, helped by a $17.5 million credit card interchange settlement gain.
SG&A improved 270 bps to 23.2% of sales on disciplined cost management and lower store operating costs.
Inventory fell 15% to $233.4 million, reflecting progress on inventory optimization.
Company has $207 million of total liquidity and is actively exploring strategic alternatives, including a deleveraging transaction, to strengthen the balance sheet.

↓ Risks & pressure points

Q3 sales fell 8.4% to $458.5 million with comparable sales down 6.2% on lower traffic and softer demand.
Q3 adjusted EBITDA dropped to $55.7 million from $81.6 million on volume and gross margin pressure.
Gross margin contracted to 36.5% from 39.6% on unfavorable mix and higher distribution costs.
Company withdrew its previously issued full-year fiscal 2026 sales and adjusted EBITDA guidance and is not providing an updated outlook.
Net long-term debt of $753 million and stockholders' deficit of $492.7 million underscore the balance sheet stress driving the strategic review.

Key moments

Read the management remarks selected from the transcript.

“we have begun exploring strategic alternatives with certain of our financial stakeholders to provide the incremental financial flexibility needed to continue delivering on our strategic priorities and drive sustainable growth. Such strategic alternatives may include, but are not limited to, a deleveraging transaction, potentially combined with one or more financing transactions.” Jason McDonell, CEO

“given the evolving macroeconomic environment and lower than anticipated customer traffic during our peak season, we are withdrawing our previously issued full year sales and adjusted EBITDA guidance and are not providing an updated outlook at this time.” Jeff White, CFO

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