Leslie's Swings to $83M Net Loss as Q1 Revenue Drops 16% to $147M

Leslie's, Inc. (NASDAQ: LESL), a pool supplies retailer, reported a net loss of $83.0 million for the quarter ended January 3, 2026, nearly double the $44.6 million loss recorded in the same period a year earlier. The company's revenue fell 16% to $147.1 million from $175.2 million in the prior-year quarter. Read more earnings reports.

The loss per share widened to $8.92 from $4.82 a year earlier. Operating losses deepened to $68.7 million from $39.7 million in the quarter ended December 28, 2024.

Gross profit collapsed 43% to $27.1 million from $47.7 million, reflecting compressed margins as cost of goods sold reached $120.1 million, down only modestly from $127.5 million despite the sharp revenue decline. The company's gross margin fell to 18.4% from 27.2% in the year-ago period.

Selling, general and administrative expenses declined to $85.7 million from $87.4 million. Labor and related expenses edged down to $25.9 million from $27.0 million.

Cash burned through operations totaled $81.1 million for the quarter, an improvement from the $105.1 million cash outflow in the prior-year period. The company ended the quarter with $3.6 million in cash and cash equivalents, down sharply from $64.3 million at the end of the prior fiscal quarter and $11.6 million a year earlier.

Total assets fell to $649.4 million from $741.5 million at the end of the prior quarter and $967.0 million a year earlier. The company's goodwill balance dropped to zero from $180.7 million in the year-ago period.

Long-term debt stood at $752.4 million as of January 3, 2026, up slightly from $752.1 million at the end of the prior quarter. Total debt obligations including current portions reached $781.7 million.

Stockholders' deficit widened to negative $489.9 million from negative $408.0 million at the end of the prior quarter and negative $220.0 million a year earlier. Retained deficit expanded to $604.1 million from $521.2 million in the prior quarter.

Inventory levels increased to $210.0 million from $208.0 million at the end of the prior quarter, though down from $271.1 million a year earlier. Accounts receivable fell to $15.9 million from $23.2 million in the prior quarter and $29.8 million in the year-ago period.

The company operated with 9.3 million shares outstanding as of January 3, 2026, up from 9.3 million at the end of the prior quarter and 9.3 million a year earlier.