Leslie’s Q1 Net Loss Widens to $83M, Gross Margin Falls to 18.4%
Leslie’s posted a Q1 net loss of $83 million versus $44.6 million a year earlier on a 16% decline in net sales and a drop in gross margin to 18.4% from 27.2%. The company closed 80 stores, targeting $4–10 million in annualized EBITDA improvement while maintaining full-year guidance.
1. Q1 Financial Performance
Leslie’s reported a net loss of $83 million in Q1 2026, compared with a $44.6 million loss a year earlier. Net sales declined 16% year-over-year, comparable sales fell 15.5%, and gross profit margin dropped to 18.4% from 27.2%.
2. Store Closures and Cost Savings
The company accelerated the closure of 80 underperforming locations, expecting annualized net EBITDA gains of $4–10 million. These closures are projected to trim annual sales by $25–35 million but enhance overall cost efficiency and profitability.
3. Pricing Strategy and Margin Outlook
Management is shifting to an everyday low pricing model, anticipating a 100–150 basis point drag on gross margin. Cost-cutting initiatives are expected to deliver a $7–10 million net benefit, supported by early increases in units per transaction and improved conversion rates.
4. Full-Year Guidance
Leslie’s reaffirmed its full-year net sales target of $1.1–1.25 billion and adjusted EBITDA range of $55–75 million, indicating confidence in the strategic shifts and cost savings measures despite current revenue and margin pressures.