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Jan 03
Leslie's Q1 2026 Earnings Report
Leslie's Q1 2026 earnings report was released on February 17, 2026, detailing financial results for the fiscal first quarter ended January 3, 2026.
Key Takeaways
Leslie's reported a challenging first quarter for fiscal year 2026, with significant decreases in sales, gross profit, and net income compared to the prior year. The company incurred substantial non-cash impairment charges related to the closure of 80 underperforming stores and one distribution center, which heavily impacted profitability. Despite the declines, sales and adjusted EBITDA were in line with company expectations, and management expressed conviction in delivering full-year commitments due to encouraging momentum in Q2 and ongoing transformation initiatives.
Sales decreased by 16.0% to $147.1 million, with comparable sales declining by 15.5% compared to the prior year period.
The company reported a net loss of $83.0 million, significantly wider than the $44.6 million loss in the prior year, primarily due to $10.1 million in non-cash impairment charges.
Gross profit fell by 43.3% to $27.1 million, and gross margin decreased to 18.4% from 27.2% in the prior year, impacted by impairment and lower product margins.
Adjusted EBITDA decreased to $(40.3) million from $(29.3) million in the prior year period, while adjusted net loss was $48.7 million.
Forward Guidance
Leslie's reiterated its full-year fiscal 2026 outlook, anticipating the majority of sales and earnings to be generated in the second half of the year due to the seasonal nature of the industry. The guidance includes the impact of store closures and associated costs.
Positive Outlook
- Reiterated full-year fiscal 2026 sales guidance of $1,100 million to $1,250 million.
- Reiterated full-year fiscal 2026 Adjusted EBITDA guidance of $55 million to $75 million.
- Anticipates generating the majority of sales and earnings during the second half of the year.
- Encouraging momentum with positive comparable store sales in January 2026 (start of Q2).
- Strategic pricing transformation and 'New Low Prices, Same Great Quality' campaign expected to drive customer engagement and growth.
Challenges Ahead
- Q1 and Q2 historically represent approximately 25% of annual revenue, indicating continued seasonality.
- The full-year guidance includes the impact of store closures on revenue.
Historical Earnings Impact
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