Leslie's (LESL) Stock Forecast & Price Target

Leslies Inc reported a 5.1% year-over-year increase in 4QF25 adjusted EBITDA, reaching $45.2 million, significantly surpassing projections due to a gross margin increase of 257 basis points to 38.6%, attributed to favorable vendor rebates and freight costs. The company successfully reduced inventory by $26 million while improving in-stock levels for top-selling SKUs by over 400 basis points, demonstrating effective inventory management and a commitment to customer satisfaction through enhanced product availability. Strategic initiatives, including the rollout of local fulfillment centers and enhancements to the loyalty program, are expected to drive customer engagement and operational efficiency, further solidifying Leslies’ position in the market.

Leslies Inc. is experiencing a challenging financial environment, with guidance indicating a high single-digit sales decline in 4QF25 and contraction in adjusted EBITDA margins. The company is also facing macroeconomic pressures, evidenced by a significant loss of 160,000 customers this year, declining traffic, and substantial decreases in key product categories, including 7.1% for chemicals and 7.6% for equipment. Furthermore, the fiscal year 2025 projections suggest a year-over-year sales decrease of 7.2% to 9.0%, with adjusted EBITDA estimates for fiscal year 2026 being revised downward due to continued headwinds, highlighting ongoing operational difficulties and weakened demand.