Leslies Inc (LESL) delivered a challenging Q4 2024 with revenue of $397.9 million, an 8% year-over-year decline, and a full-year revenue of approximately $1.33 billion, down 8% from 2023. Gross margin compressed to 35.96% in the quarter (36.00% reported) due to occupancy deleverage and a one-time $5 million vendor rebate/warranty item, with adjusted gross margin ex-item at about 37.3% for the quarter. Net income for the quarter was negative at $9.92 million, or -$0.0537 per share, and the company posted an adjusted EBITDA of $43 million for the quarter and $109 million for the full year, underscoring the impact of softer demand and higher fixed-cost leverage. Management attributed the softness to weaker traffic and discretionary spend, with Pro Pool showing relative resilience; residential categories remained soft, and hot tub demand weakened through the year.
In response, Leslies unveiled a three-theme strategic framework—customer centricity, convenience, and asset utilization—designed to drive sustainable, profitable growth over time. Leadership emphasized near-term deleveraging as a capital priority, with a targeted debt repayment of about $25 million in the current quarter and a cautious approach to store openings and M&A until debt is reduced. The company is advancing inventory optimization (notably a 25% year-over-year reduction to $234 million) and introducing precision inventory and localized assortments to better serve DIY and pro customers. Early indicators from the first seven weeks of fiscal 2025 suggest traffic and e-commerce improvements, with Pro and online channels showing strength; however, the company cautions that the first two quarters traditionally carry higher operating leverage and guidance remains conservative.
Looking forward, LESL provided only Q1 2025 guidance (sales of $169–$176 million; adjusted EBITDA of -$29 to -$27 million; adjusted net loss of -$39 to -$37 million; adjusted diluted EPS of -$0.21 to -$0.20) and reiterated the plan to prioritize debt reduction while continuing to invest in initiatives that enhance customer experience and inventory precision. Management expects benefits to accrue later in fiscal 2025 as these initiatives mature. The near-term outlook remains challenging, but the strategic emphasis on asset utilization and omnichannel capabilities positions LESL for potential improvement as store density, proximity advantages, and data-driven merchandising translate into higher traffic and better top-line performance over time.