Leslie's (LESL) Q2 2026 earnings summary

Executive summary

• Q2 2026 sales rose 4.3% year-over-year to $184.7 million, with comparable sales up 6.6% and gross margin expanding to 28.9%, driven by retail strength, pricing initiatives, and customer reactivation.

• Adjusted EBITDA improved to -$26.8 million from -$36.1 million year-over-year, while net loss was $52.5 million, slightly higher than the prior year; adjusted net loss was $50 million.

• Customer count grew 8%, supported by the Price Drop initiative and targeted marketing.

• Strategic transformation efforts in pricing, customer reactivation, store operations, and cost optimization are delivering measurable results.

• Store optimization, network restructuring, and SKU rationalization are on track, supporting profitability and operational efficiency.

Financial highlights

• Net sales for Q2 increased to $184.7 million from $177.1 million year-over-year; six-month sales declined 5.8% to $331.9 million.

• Gross profit for Q2 increased 21.4% to $53.3 million; gross margin rose to 28.9% from 24.8% in the prior year.

• Net loss per diluted share was $5.63 for the quarter and $14.55 for the six months.

• Inventory reduced by 21.7% to $262.4 million, with in-stock levels at all-time highs.

• Total liquidity at quarter-end was $97.1 million, with $16.9 million in cash and $99 million in outstanding borrowings.

Outlook and guidance

• Fiscal 2026 guidance reiterated: sales of $1.1 billion–$1.25 billion, adjusted EBITDA of $55 million–$75 million, and CapEx of $20 million–$25 million.

• Positive free cash flow anticipated, with no further store closures planned for 2026.

• Most sales and earnings expected in the second half due to seasonality.

• Management expects cash, operating activities, and borrowing capacity to be sufficient for the next 12 months and beyond.