Leslie's (LESL) Q3 2026 earnings summary

Executive summary

• Third quarter fiscal 2026 sales were $458.5 million, down 8.4% year-over-year, with comparable sales declining 6.2% due to softer demand, increased promotions, and store closures.

• Net income for the quarter was $47.8 million, up from $21.7 million in the prior year, driven by a $17.5 million credit card interchange fee settlement and lower SG&A expenses.

• Transformation plan execution continued, focusing on pricing, customer reactivation, store operations, and cost optimization.

• Strategic alternatives, including potential deleveraging, refinancing, and financing transactions, are being explored to strengthen the balance sheet.

• For the nine months ended July 4, 2026, sales were $790.4 million, down 7.3% year-over-year, and net loss was $87.7 million, compared to a $74.2 million loss in the prior year.

Financial highlights

• Q3 2026 sales were $458.5 million, down 8.4% year-over-year; comparable sales decreased 6.2%.

• Q3 gross profit was $167.1 million, down 15.5% year-over-year; gross margin declined to 36.5% from 39.6%.

• Q3 adjusted EBITDA was $55.7 million, down from $81.6 million in the prior year.

• SG&A expenses for the quarter were $106.4 million, down 17.9% year-over-year, aided by a $17.5 million one-time credit card fee settlement.

• Q3 net income was $47.8 million, up from $21.7 million; adjusted net income was $37.8 million vs. $25.2 million prior year.

Outlook and guidance

• Previously issued full-year sales and adjusted EBITDA guidance withdrawn due to macroeconomic uncertainty and lower peak season traffic.

• Management is pursuing strategic initiatives on pricing, customer reactivation, cost optimization, and asset utilization, but substantial doubt remains about the ability to continue as a going concern.