LESL - Leslie's Inc. Announces Preliminary Third Quarter Fiscal 2024 Financial Results and Provides Updated Full-Year Outlook | Benzinga

• Fiscal third quarter results impacted by unfavorable April and May weather resulting in a delayed start to the pool season; Company performance improved in June with warmer weather
• Continued weakness in discretionary product categories due to persistent inflation and high interest rates
• Company updates fiscal 2024 outlook based on year-to-date performance and current trends
  

PHOENIX, July 17, 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 preliminary financial results for the third quarter of fiscal 2024 and updated its fiscal 2024 outlook. The preliminary third quarter results are unaudited and subject to quarter-end adjustments and finalization by the Company.

The Company expects preliminary sales for the fiscal third quarter of approximately $570 million. Gross profit is expected to be $228 to $229 million and gross margin is expected to be approximately 40%. Net income is expected to be $56 to $58 million. Adjusted EBITDA is expected to be $108 to $109 million, adjusted net income is expected to be $59 to $60 million, and adjusted diluted earnings per share are expected to be $0.32 to $0.33.

Considering these preliminary results and expectations for the fourth quarter of fiscal 2024, the Company is revising its full year fiscal 2024 outlook. Sales are now expected to be $1,321 to $1,347 million, gross profit is expected to be $483 to $499 million, and net income (loss) is expected to be ($5) to $6 million. Adjusted EBITDA is expected to be $117 to $131 million, adjusted net income is expected to be $5 to $16 million, and adjusted diluted earnings per share are expected to be $0.03 to $0.09. The Company expects to end the fiscal year with approximately 20% less inventory than at fiscal 2023 year-end and is expected to have more cash on hand at the end of the fiscal year compared to the end of fiscal 2023.

Mike Egeck, Chief Executive Officer, said, "The cold and wet spring weather we experienced during the fiscal second quarter extended through May, reducing the number of pool days in non-seasonal markets and delaying the start of pool season in seasonal markets. We also continued to see weakness in large ticket discretionary categories as persistent inflation and high interest rates pressure pool owners' wallets. We experienced improved sales trends in June, but the April and May revenue impact created negative operating leverage and gross margin headwinds. While we are encouraged by improved June trends, our revised full year outlook at the midpoint assumes third quarter sales performance continues through the fourth quarter."

During the fiscal third quarter, year-over-year sales growth improved each month, with June sales down 2%. By consumer group, Residential sales decreased approximately 8%. PRO sales, the closest comparable measure to the pool industry distribution channel, were down 2%. Hot Tub sales were down 3%. Chemical sales were down 1% for the quarter and showed mid-single digit positive growth in June. Equipment sales were down mid-teens for the quarter and discretionary product sales were down 9%. Total transactions were down 2% during the quarter and average order value was down 5% during the quarter. Our customer file was flat for the quarter, showing sequential improvement in each quarter of this fiscal year.

Mr. Egeck continued, "While the industry continues to unwind pandemic spending patterns after years of record growth, we continue to invest in and optimize our business. Over the past 18 months we have made significant operational improvements to drive efficiency and reduce cost while improving our ability to serve customers with our advantaged omnichannel platform. Taken together, we anticipate these actions will help drive significant operating margin expansion when demand patterns normalize and temporary gross margin headwinds subside. As the industry returns to more normalized growth patterns, we believe we are well prepared to meet customer demand and capture an increased share of a growing market with improved profitability."   

Fiscal 2024 Outlook
The Company has updated its outlook for the full year of fiscal 2024:

*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 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 180 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, ...

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