Leslie's (LESL) Q4 2024 earnings summary

Executive summary

• Fiscal Q4 sales were $397.9 million, down 8% year-over-year, and full-year sales were $1,330.1 million, both in line with revised guidance.

• Adjusted EPS was $0.02 for Q4 and a loss of $0.01 for the year; adjusted EBITDA was $43.0 million for Q4 and $108.7 million for the year.

• Net loss was $9.9 million for Q4 and $23.4 million for the year, compared to net income in prior periods.

• Strategic focus is on customer centricity, convenience, and asset utilization to drive long-term profitable growth.

• Debt reduction is the top capital allocation priority, with $25 million targeted for paydown in Q1 2025.

Financial highlights

• Comparable sales declined 8.3% in Q4 and 8.8% for the year; non-comparable sales from acquisitions and new stores contributed $1.5 million in Q4 and $7.9 million for the year.

• Gross profit for Q4 was $143 million (down from $160 million), with gross margin at 36%, impacted by occupancy deleverage and a $5 million one-time vendor contract item.

• Excluding the one-time item, Q4 gross margin would have been 37.3%, up 20 basis points year-over-year.

• SG&A for Q4 was $117 million, down 4% year-over-year; full-year SG&A was $420 million (31.6% of sales).

• Operating income was $26.4 million in Q4 and $57.1 million for the year, both down from prior periods.

Outlook and guidance

• Q1 2025 sales expected between $169 million and $176 million, adjusted EBITDA of negative $29 million to negative $27 million, and adjusted net loss of $39 million to $37 million.

• Q1 adjusted diluted EPS expected to be a loss of $0.21 to $0.20.

• Only Q1 guidance provided due to CEO transition and dynamic macro environment; further updates expected next quarter.