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Leslie’s, Inc. Announces Third Quarter Fiscal 2024 Financial Results

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Leslie's, Inc. (NASDAQ: LESL), the largest direct-to-consumer brand in the U.S. pool and spa care industry, reported its Q3 fiscal 2024 financial results. Key highlights include:

- Sales decreased 6.8% to $569.6 million
- Net income fell to $60.7 million
- Adjusted EBITDA was $109.5 million
- Diluted EPS was $0.33; Adjusted diluted EPS was $0.34

The company faced challenges due to a cold, wet start to the pool season and weak discretionary product sales. However, positive trends emerged in June, including improvements in total sales, chemical sales, and Pro and Hot Tub sales. Leslie's reaffirmed its fiscal 2024 outlook, projecting sales between $1,321 to $1,347 million and adjusted EBITDA of $117 to $131 million.

Leslie's, Inc. (NASDAQ: LESL), il più grande marchio diretto al consumatore nell'industria della cura di piscine e spa negli Stati Uniti, ha riportato i suoi risultati finanziari del Q3 dell'anno fiscale 2024. I punti salienti includono:

- Le vendite sono diminuite del 6,8% a 569,6 milioni di dollari
- L'utile netto è sceso a 60,7 milioni di dollari
- L'EBITDA rettificato è stato di 109,5 milioni di dollari
- L'EPS diluito è stato di 0,33 dollari; l'EPS diluito rettificato è stato di 0,34 dollari

La società ha affrontato sfide a causa di un inizio di stagione per le piscine freddo e umido e vendite deboli di prodotti discrezionali. Tuttavia, sono emersi segnali positivi a giugno, inclusi miglioramenti nelle vendite totali, nelle vendite di prodotti chimici e nelle vendite di pro e vasche idromassaggio. Leslie's ha confermato le sue previsioni fiscali per il 2024, prevedendo vendite tra 1.321 e 1.347 milioni di dollari e un EBITDA rettificato di 117 a 131 milioni di dollari.

Leslie's, Inc. (NASDAQ: LESL), la mayor marca de venta directa al consumidor en la industria del cuidado de piscinas y spas en EE. UU., reportó sus resultados financieros del Q3 del año fiscal 2024. Los aspectos más destacados incluyen:

- Las ventas disminuyeron un 6.8% a 569.6 millones de dólares
- El ingreso neto cayó a 60.7 millones de dólares
- El EBITDA ajustado fue de 109.5 millones de dólares
- El EPS diluido fue de 0.33 dólares; el EPS diluido ajustado fue de 0.34 dólares

La empresa enfrentó desafíos debido a un comienzo frío y húmedo de la temporada de piscinas y ventas débiles de productos discrecionales. Sin embargo, surgieron tendencias positivas en junio, incluyendo mejoras en las ventas totales, las ventas de productos químicos y las ventas de Pro y jacuzzis. Leslie's reafirmó su perspectiva fiscal 2024, proyectando ventas entre 1,321 y 1,347 millones de dólares y un EBITDA ajustado de 117 a 131 millones de dólares.

Leslie's, Inc. (NASDAQ: LESL), 미국 수영장 및 스파 관리 산업에서 가장 큰 직접 소비자 브랜드, 2024 회계연도 3분기 재무 결과를 보고했습니다. 주요 내용은 다음과 같습니다:

- 매출이 6.8% 감소하여 5억 6천 96만 달러에 달함
- 순이익이 6천 7백만 달러로 감소함
- 조정된 EBITDA는 1억 9천 5백만 달러였습니다.
- 희석 EPS는 0.33달러; 조정 희석 EPS는 0.34달러였습니다.

회사는 차가운 비가 내리는 수영 시즌 시작과 저조한 선택 품목 판매로 인해 어려움에 직면했습니다. 그러나 6월에는 전체 매출, 화학 제품 판매, Pro 및 핫텁 판매에서 개선과 같은 긍정적인 추세가 나타났습니다. Leslie's는 2024 회계연도 전망을 재확인하며, 13억 2,100만에서 13억 4,700만 달러 사이의 매출과 1억 1,700만에서 1억 3,100만 달러 사이의 조정 EBITDA를 예상했습니다.

Leslie's, Inc. (NASDAQ: LESL), la plus grande marque de vente directe aux consommateurs dans l'industrie des piscines et des spas aux États-Unis, a publié ses résultats financiers du T3 de l'exercice 2024. Les points clés incluent :

- Les ventes ont diminué de 6,8 % pour atteindre 569,6 millions de dollars
- Le résultat net est tombé à 60,7 millions de dollars
- L'EBITDA ajusté était de 109,5 millions de dollars
- Le BPA dilué était de 0,33 dollar; le BPA dilué ajusté était de 0,34 dollar

L'entreprise a rencontré des défis en raison d'un début de saison froide et humide pour les piscines et de faibles ventes de produits discrétionnaires. Cependant, des tendances positives sont apparues en juin, notamment des améliorations des ventes totales, des ventes de produits chimiques et des ventes de Pro et de spas. Leslie's a confirmé ses prévisions fiscales pour 2024, projetant des ventes comprises entre 1.321 et 1.347 millions de dollars et un EBITDA ajusté de 117 à 131 millions de dollars.

Leslie's, Inc. (NASDAQ: LESL), die größte Direktverbrauchermarke in der US-Pool- und Spa-Pflegebranche, hat ihre finanziellen Ergebnisse für das 3. Quartal des Geschäftsjahres 2024 veröffentlicht. Zu den wichtigsten Punkten gehören:

- Der Umsatz ging um 6,8 % auf 569,6 Millionen US-Dollar zurück
- Der Nettogewinn fiel auf 60,7 Millionen US-Dollar
- Das bereinigte EBITDA betrug 109,5 Millionen US-Dollar
- Der verwässerte EPS betrug 0,33 US-Dollar; der bereinigte verwässerte EPS betrug 0,34 US-Dollar

Das Unternehmen sah sich Herausforderungen aufgrund eines kalten, nassen Saisonstarts für Pools und schwacher Umsätze bei nicht notwendigen Produkten gegenüber. Im Juni traten jedoch positive Trends auf, darunter Verbesserungen bei den Gesamtverkäufen, Chemikalienverkäufen sowie beim Verkauf von Pro- und Whirlpools. Leslie's hat seine Prognose für das Geschäftsjahr 2024 bekräftigt und einen Umsatz zwischen 1.321 und 1.347 Millionen US-Dollar sowie ein bereinigtes EBITDA von 117 bis 131 Millionen US-Dollar in Aussicht gestellt.

Positive
  • Positive sales trends observed in June, indicating potential recovery
  • Market share gains reported in June based on third-party credit card data
  • Inventory reduced by 30.8% year-over-year, improving working capital
  • Net cash provided by operating activities improved to $60.4 million from -$74.8 million in Q3 2023
  • No outstanding borrowings on revolving credit facility compared to $31.0 million in Q3 2023
Negative
  • Sales decreased 6.8% year-over-year to $569.6 million
  • Comparable sales declined 7.0% compared to the prior year period
  • Gross profit decreased 9.0% to $228.8 million
  • Gross margin contracted to 40.2% from 41.2% in the prior year period
  • Net income fell to $60.7 million from $72.5 million in Q3 2023
  • Adjusted EBITDA decreased to $109.5 million from $129.0 million in Q3 2023
  • Full-year guidance projects potential net loss of up to $5 million

Insights

Leslie's Q3 FY2024 results reveal a challenging quarter with sales down 6.8% to $569.6 million and net income dropping 16.3% to $60.7 million. The decline is attributed to unfavorable weather and weak discretionary spending. However, there are some positive signs:

  • Improved performance in June
  • Market share gains
  • Inventory reduction of 30.8%
  • Strong cash position, up $55 million YoY

The reaffirmed full-year guidance suggests management's confidence in navigating challenges. Investors should monitor margin trends and the effectiveness of cost-control measures in the coming quarters.

Leslie's Q3 results reflect broader industry trends impacting the pool and spa care sector. The company's performance, while down, appears to be outpacing the overall industry, indicating resilience in a tough market. Key observations:

  • Weather-dependent nature of the business highlighted
  • Inflationary pressures and high interest rates affecting discretionary spending
  • Positive trends in chemical sales and Pro and Hot Tub segments as weather improved

The company's focus on customer service and margin improvement initiatives could position it well for market share gains when conditions normalize. Investors should watch for signs of industry recovery and Leslie's ability to capitalize on potential consolidation opportunities.

Leslie's Q3 results underscore the challenges facing specialty retailers in the current economic climate. Despite headwinds, the company demonstrates strategic resilience:

  • Effective inventory management, reducing stock by 30.8%
  • Improved cash position, up $55 million YoY
  • SG&A expenses down 3.5%, showing cost control efforts

The decrease in gross margin from 41.2% to 40.2% warrants attention. Leslie's ability to maintain pricing power while managing costs will be crucial. The company's direct-to-consumer model and market leadership position it well for recovery, but investors should monitor the pace of discretionary spending rebound and Leslie's ability to drive profitable growth.

  • Sales of $569.6 million
  • Net Income of $60.7 million
  • Adjusted EBITDA of $109.5 million
  • Diluted earnings per share of $0.33; Adjusted diluted earnings per share of $0.34

PHOENIX, Aug. 07, 2024 (GLOBE NEWSWIRE) -- Leslie’s, Inc. (“Leslie’s”, “we”, “our”, “its”, or “Company”; NASDAQ: LESL), the largest and most trusted direct-to-consumer brand in the U.S. pool and spa care industry, today announced its financial results for the third quarter of fiscal 2024.

Mike Egeck, Chief Executive Officer, said, “As we noted in our preliminary results on July 17, our fiscal third quarter results were impacted by a cold and wet start to the pool season, as well as continued weakness in discretionary product sales due to persistent inflation and high interest rates. As weather improved in June, we saw positive trends relative to the overall quarter, including improvements in total sales, chemical sales, and Pro and Hot Tub sales. The combination of these improvements, together with third-party credit card data indicating that our sales performance was better than the industry for the quarter, and that we gained market share in June, are encouraging signs for the business.”

Mr. Egeck continued, “With fiscal 2024 being another year of post-pandemic normalization, our skilled and passionate team remains focused on controlling what we can by delivering superior customer service while advancing our margin, cost, and inventory improvement initiatives. Taken together, we anticipate these actions will help to drive long-term market share gains and increased profitability when industry conditions normalize, and I feel very confident in the work we are doing to position Leslie’s for long-term success.”

Three Months Ended June 29, 2024 Highlights

  • Sales were $569.6 million, a decrease of 6.8% compared to $610.9 million in the prior year period. Comparable sales decreased 7.0% compared to the prior year period. Non-comparable sales from acquisitions and new stores contributed $2.6 million in the period.
  • Gross profit was $228.8 million, a decrease of 9.0% compared to $251.6 million in the prior year period. Gross margin was 40.2% compared to 41.2% in the prior year period.
  • Selling, general and administrative expenses (“SG&A”) were $131.1 million, a decrease of 3.5% compared to $135.8 million in the prior year period.
  • Operating income was $97.7 million compared to $115.8 million in the prior year period.
  • Interest expense was $18.2 million compared to $17.7 million in the prior year period.
  • Net income was $60.7 million compared to $72.5 million in the prior year period.
  • Adjusted net income was $63.3 million compared to $76.4 million in the prior year period.
  • Diluted earnings per share was $0.33 compared to $0.39 in the prior year period. Adjusted diluted earnings per share was $0.34 compared to $0.41 in the prior year period.
  • Adjusted EBITDA was $109.5 million compared to $129.0 million in the prior year period.

Balance Sheet and Cash Flow Highlights

  • Cash and cash equivalents totaled $74.4 million as of June 29, 2024, an increase of $55.0 million, compared to $19.4 million as of July 1, 2023.
  • Inventories totaled $302.2 million as of June 29, 2024, a decrease of $134.4 million or 30.8%, compared to $436.6 million as of July 1, 2023.
  • Funded debt totaled $783.7 million as of June 29, 2024 compared to $822.8 million as of July 1, 2023. As of June 29, 2024 there was no outstanding borrowings on our revolving credit facility compared to $31.0 million as of July 1, 2023.
  • The effective rate on our term loan during the third quarter of fiscal 2024 was 8.2% compared to 8.0% during the third quarter of fiscal 2023.
  • Net cash provided by operating activities totaled $60.4 million in the third quarter of fiscal 2024 compared to net cash used in operating activities of $74.8 million in the third quarter of fiscal 2023.
  • Capital expenditures totaled $34.3 million in the third quarter of fiscal 2024 compared to $26.7 million in the third quarter of fiscal 2023.

Fiscal 2024 Outlook

The Company has reaffirmed its outlook for the full year of fiscal 2024 consistent with the Company’s update on July 17, 2024:

Sales$1,321 to $1,347 million
Gross profit$483 to $499 million
Net income (loss)($5) to $6 million
Adjusted net income$5 to $16 million
Adjusted EBITDA$117 to $131 million
Adjusted diluted earnings per share$0.03 to $0.09
Diluted weighted average shares outstanding185 million
  

*Note: A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future, although it is important to note that these factors could be material to our results computed in accordance with GAAP.

Conference Call Details

A conference call to discuss the Company’s financial results for the third quarter of fiscal 2024 is scheduled for today, Wednesday, August 7, 2024 at 4:30 p.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 877-407-0784 (international callers please dial 1-201-689-8560) approximately 10 minutes prior to the start of the call. A quarterly earnings presentation and a live audio webcast of the conference call will be available online at https://ir.lesliespool.com/.

A recorded replay of the conference call will be available within approximately three hours of the conclusion of the call and can be accessed, along with the associated slides, online at https://ir.lesliespool.com/ for 90 days.

About Leslie’s

Founded in 1963, Leslie’s is the largest and most trusted direct-to-consumer brand in the U.S. pool and spa care industry. The Company serves the aftermarket needs of residential and professional consumers with an extensive and largely exclusive assortment of essential pool and spa care products. The Company operates an integrated ecosystem of over 1,000 physical locations and a robust digital platform, enabling consumers to engage with Leslie’s whenever, wherever, and however they prefer to shop. Its dedicated team of associates, pool and spa care experts, and experienced service technicians are passionate about empowering Leslie’s consumers with the knowledge, products, and solutions necessary to confidently maintain and enjoy their pools and spas.

Use of Non-GAAP Financial Measures and Other Operating Measures

In addition to reporting financial results in accordance with accounting principles generally accepted in the United States (“GAAP”), we use certain non-GAAP financial measures and other operating measures, including comparable sales growth, Adjusted EBITDA, Adjusted net income (loss), and Adjusted earnings per share, to evaluate the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other peer companies using similar measures. These non-GAAP financial measures and other operating measures should not be considered in isolation or as substitutes for our results as reported under GAAP. In addition, these non-GAAP financial measures and other operating measures are not calculated in the same manner by all companies, and accordingly, are not necessarily comparable to similarly titled measures of other companies and may not be appropriate measures for performance relative to other companies.

Comparable Sales Growth

We measure comparable sales growth as the increase or decrease in sales recorded by the comparable base in any reporting period, compared to sales recorded by the comparable base in the prior reporting period. The comparable base includes sales through our locations and through our e-commerce websites and third-party marketplaces. Comparable sales growth is a key measure used by management and our board of directors to assess our financial performance.

Adjusted EBITDA

Adjusted EBITDA is defined as earnings before interest (including amortization of debt issuance costs), taxes, depreciation and amortization, management fees, equity-based compensation expense, loss (gain) on debt extinguishment, loss (gain) on asset and contract dispositions, executive transition costs, severance, costs related to equity offerings, strategic project costs, merger and acquisition costs, and other non-recurring, non-cash or discrete items. Adjusted EBITDA is a key measure used by management and our board of directors to assess our financial performance. Adjusted EBITDA is also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other companies using similar measures.

Adjusted EBITDA is not a recognized measure of financial performance under GAAP but is used by some investors to determine a company’s ability to service or incur indebtedness. Adjusted EBITDA is not calculated in the same manner by all companies, and accordingly, is not necessarily comparable to similarly titled measures of other companies and may not be an appropriate measure for performance relative to other companies. Adjusted EBITDA should not be construed as an indicator of a company’s operating performance in isolation from, or as a substitute for, net income (loss), cash flows from operations or cash flow data, all of which are prepared in accordance with GAAP. We have presented Adjusted EBITDA solely as supplemental disclosure because we believe it allows for a more complete analysis of results of operations. Adjusted EBITDA is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with GAAP. In the future, we may incur expenses or charges such as those added back to calculate Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these items.

Adjusted Net Income (Loss) and Adjusted Diluted Earnings per Share

Adjusted net income (loss) and Adjusted diluted earnings per share are additional key measures used by management and our board of directors to assess our financial performance. Adjusted net income (loss) and Adjusted diluted earnings per share are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures.

Adjusted net income (loss) is defined as net income (loss) adjusted to exclude management fees, equity-based compensation expense, loss (gain) on debt extinguishment, loss (gain) on asset and contract dispositions, executive transition costs, severance, costs related to equity offerings, strategic project costs, merger and acquisition costs, and other non-recurring, non-cash, or discrete items. Adjusted diluted earnings per share is defined as Adjusted net income (loss) divided by the diluted weighted average number of common shares outstanding.

Forward-Looking Statements

This press release contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this press release, including statements regarding our future results of operations or financial condition, business strategy, value proposition, legal proceedings, competitive advantages, market size, growth opportunities, industry expectations, and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or the negative of these words or other similar terms or expressions. Our actual results or outcomes could differ materially from those indicated in these forward-looking statements for a variety of reasons, including, among others:

  • our ability to execute on our growth strategies;
  • supply disruptions;
  • our ability to maintain favorable relationships with suppliers and manufacturers;
  • competition from mass merchants and specialty retailers;
  • impacts on our business from the sensitivity of our business to weather conditions, changes in the economy (including rising interest rates, recession fears, and inflationary pressures), geopolitical events or conflicts, and the housing market;
  • disruptions in the operations of our distribution centers;
  • our ability to implement technology initiatives that deliver the anticipated benefits, without disrupting our operations;
  • our ability to attract and retain senior management and other qualified personnel;
  • regulatory changes and development affecting our current and future products, including evolving legal standards and regulations concerning environmental, social and governance (“ESG”) matters;
  • our ability to obtain additional capital to finance operations;
  • commodity price inflation and deflation;
  • impacts on our business from epidemics, pandemics, or natural disasters;
  • impacts on our business from cyber incidents and other security threats or disruptions;
  • our ability to remediate material weaknesses or other deficiencies in our internal control over financial reporting or to maintain effective disclosure controls and procedures and internal control over financial reporting; and
  • other risks and uncertainties, including those listed in the section titled “Risk Factors” in our filings with the United States Securities and Exchange Commission (“SEC”).

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this press release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2023 and in our other filings with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time-to-time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this press release. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results or outcomes could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this press release, and while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this press release are based on events or circumstances as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information, changed expectations, the occurrence of unanticipated events or otherwise, except as required by law. We may not actually achieve the plans, intentions, outcomes or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

Contact

Matthew Skelly
Vice President, Investor Relations
Leslie’s, Inc.
investorrelations@lesl.com

 
Condensed Consolidated Statements of Operations
(Amounts in thousands, except per share amounts)
 
 Three Months Ended  Nine Months Ended 
 June 29, 2024  July 1, 2023  June 29, 2024  July 1, 2023 
 (Unaudited)  (Unaudited)  (Unaudited)  (Audited) 
Sales$569,638  $610,891  $932,262  $1,018,839 
Cost of merchandise and services sold 340,798   359,295   598,686   630,777 
Gross profit 228,840   251,596   333,576   388,062 
Selling, general and administrative expenses 131,145   135,789   302,879   324,427 
Operating income 97,695   115,807   30,697   63,635 
Other expense:               
Interest expense 18,156   17,675   53,380   48,282 
Total other expense 18,156   17,675   53,380   48,282 
Income (loss) before taxes 79,539   98,132   (22,683)  15,353 
Income tax expense (benefit) 18,889   25,585   (9,227)  4,592 
Net income (loss)$60,650  $72,547  $(13,456) $10,761 
Earnings per share:           
Basic$0.33  $0.39  $(0.07) $0.06 
Diluted$0.33  $0.39  $(0.07) $0.06 
Weighted average shares outstanding:           
Basic 184,834   183,932   184,614   183,725 
Diluted 184,861   184,760   184,614   184,752 
                


Other Financial Data (1)
(Amounts in thousands, except per share amounts)
(Unaudited)
 
 Three Months Ended  Nine Months Ended 
 June 29, 2024  July 1, 2023  June 29, 2024  July 1, 2023 
Adjusted EBITDA$109,469  $129,038  $65,771  $108,683 
Adjusted net income (loss)$63,297  $76,362  $(5,465) $25,370 
Adjusted diluted earnings per share$0.34  $0.41  $(0.03) $0.14 

(1) See section titled “GAAP to Non-GAAP Reconciliation.”

 
Condensed Consolidated Balance Sheets
(Amounts in thousands, except share and per share amounts)
 
 June 29, 2024  September 30,
2023
  July 1, 2023 
Assets(Unaudited)  (Audited)  (Unaudited) 
Current assets        
Cash and cash equivalents$74,438  $55,420  $19,430 
Accounts and other receivables, net 45,817   29,396   49,263 
Inventories 302,209   311,837   436,557 
Prepaid expenses and other current assets 34,545   23,633   31,454 
Total current assets 457,009   420,286   536,704 
Property and equipment, net 94,135   90,285   85,396 
Operating lease right-of-use assets 282,556   251,460   250,378 
Goodwill and other intangibles, net 216,041   218,855   219,835 
Deferred tax assets 15,409   7,598   194 
Other assets 40,038   45,951   44,918 
Total assets$1,105,188  $1,034,435  $1,137,425 
Liabilities and stockholders’ deficit        
Current liabilities        
Accounts payable$108,935  $58,556  $147,436 
Accrued expenses and other current liabilities 107,208   90,598   95,074 
Operating lease liabilities 61,638   62,794   61,342 
Income taxes payable -   5,782   3,345 
Current portion of long-term debt 8,100   8,100   8,100 
Total current liabilities 285,881   225,830   315,297 
Operating lease liabilities, noncurrent 216,756   193,222   193,004 
Revolving Credit Facility -   -   31,000 
Long-term debt, net 768,598   773,276   774,884 
Other long-term liabilities 2,110   3,469   3,050 
Total liabilities 1,273,345   1,195,797   1,317,235 
Commitments and contingencies        
Stockholders’ deficit        
Common stock, $0.001 par value, 1,000,000,000 shares authorized and 184,912,804, 184,333,670, and 184,004,936 issued and outstanding as of June 29, 2024, September 30, 2023, and July 1, 2023, respectively. 185   184   184 
Additional paid in capital 105,940   99,280   97,313 
Retained deficit (274,282)  (260,826)  (277,307)
Total stockholders’ deficit (168,157)  (161,362)  (179,810)
Total liabilities and stockholders’ deficit$1,105,188  $1,034,435  $1,137,425 
            


Condensed Consolidated Statements of Cash Flows
(Amounts in thousands)
 
 Nine Months Ended 
 June 29, 2024  July 1, 2023 
 (Unaudited)  (Unaudited) 
Operating Activities     
Net (loss) income$(13,456) $10,761 
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:     
Depreciation and amortization 24,420   25,569 
Equity-based compensation 7,629   9,159 
Amortization of deferred financing costs and debt discounts 1,647   1,541 
Provision for doubtful accounts 1,007   25 
Deferred income taxes (7,811)  1,074 
Loss on asset dispositions 52   103 
Changes in operating assets and liabilities:       
Accounts and other receivables (17,428)  (3,399)
Inventories 9,628   (70,393)
Prepaid expenses and other current assets (10,912)  (9,614)
Other assets 6,561   (8,864)
Accounts payable 50,379   (9,019)
Accrued expenses and other current liabilities 14,428   (12,827)
Income taxes payable (5,782)  (9,166)
Operating lease assets and liabilities, net 48.00   237 
Net cash provided by (used in) operating activities 60,410   (74,813)
Investing Activities     
Purchases of property and equipment (34,324)  (26,733)
Business acquisitions, net of cash acquired    (15,549)
Proceeds from asset dispositions 77   1,384 
Net cash used in investing activities (34,247)  (40,898)
Financing Activities     
Borrowings on Revolving Credit Facility 140,500   264,000 
Payments on Revolving Credit Facility (140,500)  (233,000)
Repayment of long-term debt (6,075)  (6,075)
Payment of deferred financing costs (101)  (297)
Payments of employee tax withholdings related to restricted stock vesting (969)  (1,780)
Net cash (used in) provided by financing activities (7,145)  22,848 
Net increase (decrease) in cash and cash equivalents 19,018   (92,863)
Cash and cash equivalents, beginning of period 55,420   112,293 
Cash and cash equivalents, end of period$74,438  $19,430 
Supplemental Information:     
Cash paid for interest$51,762  $28,339 
Cash paid for income taxes, net of refunds received$6,702  $11,932 
        


GAAP to Non-GAAP Reconciliation
(Amounts in thousands except per share amounts)
(Unaudited)
 
 Three Months Ended  Nine Months Ended 
 June 29, 2024  July 1, 2023  June 29, 2024  July 1, 2023 
Net income (loss)$60,650  $72,547  $(13,456) $10,761 
Interest expense 18,156   17,675   53,380   48,282 
Income tax expense (benefit) 18,889   25,585   (9,227)  4,592 
Depreciation and amortization expense(1) 8,246   8,144   24,419   25,569 
Equity-based compensation expense(2) 2,246   2,754   7,683   9,460 
Strategic project costs(3) 395   749   1,058   2,763 
Executive transition costs and other(4) 887   1,584   1,914   7,256 
Adjusted EBITDA$109,469  $129,038  $65,771  $108,683 
            
 Three Months Ended  Nine Months Ended 
 June 29, 2024  July 1, 2023  June 29, 2024  July 1, 2023 
Net income (loss)$60,650  $72,547  $(13,456) $10,761 
Equity-based compensation expense(2) 2,246   2,754   7,683   9,460 
Strategic project costs(3) 395   749   1,058   2,763 
Executive transition costs and other(4) 887   1,584   1,914   7,256 
Tax effects of these adjustments(5) (881)  (1,272)  (2,664)  (4,870)
Adjusted net income (loss)$63,297  $76,362  $(5,465) $25,370 
            
Diluted earnings per share$0.33  $0.39  $(0.07) $0.06 
Adjusted diluted earnings per share$0.34  $0.41  $(0.03) $0.14 
Weighted average shares outstanding           
Basic 184,834   183,932   184,614   183,725 
Diluted 184,861   184,760   184,614   184,752 


(1)Includes depreciation related to our distribution centers and store locations, which is reported in cost of merchandise and services sold and SG&A in our condensed consolidated statements of operations.
(2)Represents charges related to equity-based compensation and our related payroll tax expense, which are reported in SG&A in our condensed consolidated statements of operations.
(3)Represents non-recurring costs, such as third-party consulting costs related to first-generation technology initiatives, replacements of systems that have been no longer supported by our vendors, investment in and development of new products outside of the course of continuing operations, or other discrete strategic projects that are infrequent or unusual in nature and potentially distortive to continuing operations. These items are reported in SG&A in our condensed consolidated statements of operations.
(4)Includes certain senior executive transition costs and severance associated with completed corporate restructuring activities across the organization, losses (gains) on asset dispositions, merger and acquisition costs, and other non-recurring, non-cash, or discrete items as determined by management. Amounts are reported in SG&A in our condensed consolidated statements of operations.
(5)Represents the tax effect of the total adjustments based on our combined U.S. federal and state statutory tax rates. Amounts are reported in income tax expense (benefit) in our condensed consolidated statements of operations.

FAQ

What were Leslie's (LESL) Q3 2024 sales figures?

Leslie's reported sales of $569.6 million for Q3 2024, representing a 6.8% decrease compared to the same period last year.

How did Leslie's (LESL) earnings per share (EPS) perform in Q3 2024?

Leslie's reported diluted earnings per share of $0.33 and adjusted diluted earnings per share of $0.34 for Q3 2024.

What factors impacted Leslie's (LESL) Q3 2024 performance?

Leslie's Q3 2024 performance was impacted by a cold and wet start to the pool season, as well as continued weakness in discretionary product sales due to persistent inflation and high interest rates.

What is Leslie's (LESL) sales outlook for fiscal 2024?

Leslie's reaffirmed its fiscal 2024 outlook, projecting sales between $1,321 to $1,347 million.

Leslie's, Inc.

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563.98M
184.91M
4.97%
116.29%
12.09%
Specialty Retail
Retail-retail Stores, Nec
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United States of America
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