Leslie's, Inc.

Second-quarter net sales increased 4.3% to $184.7 million from $177.1 million a year ago. Comparable total company sales rose 6.6%. Gross profit margin was 28.9% versus 24.8% in the prior-year period. Net loss was $52.5 million versus $51.3 million, and adjusted net loss was $50 million versus $48.3 million. Adjusted EBITDA improved to negative $26.8 million from negative $36.1 million, a $9.2 million improvement. Inventory ended the quarter at $262.4 million versus $335.1 million a year ago, a 22% year-over-year reduction. Capex was $9.5 million versus $11.2 million. For fiscal 2026, the company reiterated sales guidance of $1.1 billion to $1.25 billion and adjusted EBITDA of $55 million to $75 million, with capex expected at $20 million to $25 million.

Jason McDonell framed the quarter as evidence that Leslie’s transformation plan is working across multiple dimensions, especially customer growth, margin improvement, and operational discipline. He emphasized the Price Drop initiative, customer reactivation, and a more local, market-leader operating model as key pillars of the reset. His tone was optimistic but measured, noting that peak season still lies ahead and that the early results validate the company’s strategy.

Jeff White focused on the financial lift from sales leverage and cost actions. He said gross margin improved to 28.9% from 24.8%, SG&A was essentially flat at $92.2 million versus $92.3 million, and adjusted EBITDA improved by $9.2 million to negative $26.8 million. He also noted inventory fell to $262.4 million, capex was $9.5 million, liquidity included $99 million of line-of-credit borrowings and $97.1 million of availability, and the company still expects Price Drop to pressure annual gross margin by 100 to 150 basis points while store optimization, expense cuts, inventory actions, and SKU rationalization together should improve EBITDA by $5 million to $10 million in fiscal 2026.

Analysts focused mainly on gross margin sustainability and the Price Drop investment. In response, management said occupancy-cost leverage is a durable driver, some inventory reserve benefits are one-time, and there is room for further improvement into the back half of 2026 and 2027. On Price Drop, Jeff White said the company will keep expanding everyday value pricing where it makes sense, but equipment is harder to discount because much of it is MAP protected and vendor-set, so future pricing actions will likely stay focused on categories where the company can remain margin accretive.