Leslie's (LESL) Stock Forecast & Price Target

Leslie's Inc. has made significant advancements in its strategic initiatives, particularly with the rollout of 26 Local Fulfillment Centers, resulting in improved in-stock rates, which rose approximately 140 basis points year-over-year to around 99%, and enhanced inventory turns. The relaunch of the Pool Perks loyalty program has successfully introduced new tiers and personalized offers, effectively boosting customer engagement in the DIY segment. Additionally, the expansion of the AccuBlue Home water testing system and the introduction of same-day delivery through Uber are expected to further elevate customer convenience and strengthen relationships with both professional and DIY customers, contributing positively to sales growth.

Leslies Inc is facing a challenging financial outlook, as evidenced by the projected high single-digit sales decline in 4QF25 and a reduction in adjusted EBITDA margins to approximately 10.7%. The company's sales forecast indicates a year-over-year decrease of 7.2% to 9.0%, with total sales expected to fall between $1.210 billion and $1.235 billion, further highlighting the adverse impact of unfavorable weather conditions that have hindered peak season demand. Additionally, a significant reduction in capital expenditures, down to $30 million from $47 million in FY24, reflects a prioritization of debt repayment over growth initiatives, signaling potential concerns regarding the overall financial health and future growth prospects of the company.