Thu, May 8, 9:07 PM (4 days ago)
**Summary of Leslie’s, Inc. (LESL) Q1 2025 Financial Performance** **Company Overview:** Leslie’s, Inc. (LESL) is a leading direct-to-consumer pool and spa care brand, operating over 1,000 locations in 39 states and e-commerce platforms. The company offers a wide range of products and services essential for pool and spa maintenance. **Financial Health and Performance:** **Revenue:** - Q1 2025: $177.1 million, down 6.1% from $188.7 million in Q1 2024. - Six months ended March 29, 2025: $352.4 million, down 2.8% from $362.6 million in the prior year period. **Profit Margins:** - Gross margin decreased to 24.8% in Q1 2025 from 28.8% in Q1 2024, primarily due to higher occupancy and distribution center costs. - Operating loss widened to $48.4 million in Q1 2025 from $30.5 million in Q1 2024. **Cash Flow:** - Net cash used in operating activities increased to $154.3 million in the six months ended March 29, 2025, from $115.1 million in the prior year period. - Cash used in investing activities decreased to $11.1 million from $24.0 million. - Cash provided by financing activities decreased to $74.2 million from $92.1 million. **Earnings:** - Net loss for Q1 2025 was $51.3 million, compared to $34.6 million in Q1 2024. - Adjusted EBITDA for Q1 2025 was $(36.1) million, compared to $(19.3) million in Q1 2024. **Key Metrics and Trends:** - Comparable sales growth was negative, indicating a decline in sales from existing locations. - The company faces challenges due to seasonality, with peak sales occurring in the third and fourth quarters. - Leslie’s is addressing material weaknesses in internal control over financial reporting, focusing on inventory and vendor rebates. **Uncertainties and Future Operations:** - The company is subject to legal proceedings and potential delisting from Nasdaq due to non-compliance with the minimum bid price requirement. - Leslie’s substantial indebtedness could adversely affect its financial condition and operational flexibility. - Supply chain disruptions and geopolitical events pose risks to the company's operations and financial performance. **Conclusion:** Leslie’s, Inc. faced significant challenges in Q1 2025, with declining revenue, widening losses, and increased cash usage. The company is working to address internal control weaknesses and navigate external uncertainties. Investors should monitor the company's progress in regaining compliance with Nasdaq listing standards and managing its debt obligations.