The spa and pool supplies retailer, Leslie’s Inc., experienced a significant setback as its preliminary quarterly results failed to meet Wall Street expectations. As a result, the company’s shares plunged over 18% in the extended session on Thursday. The disappointing performance has also led to a downward revision of Leslie’s outlook for the year. Additionally, the company announced that its Chief Financial Officer will be stepping down.
Quarterly Sales and Earnings Below Expectations
For the fiscal third quarter, Leslie’s anticipates sales of $611 million, alongside a decline of 12% in same-store sales. The company expects adjusted earnings per share to range between 39 cents and 41 cents. However, this projection falls short of the FactSet consensus, which calls for adjusted EPS of 69 cents on sales amounting to $701 million. Chief Executive Mike Egeck acknowledged that the third-quarter results were well below their expectations. He highlighted the challenges faced by the company, including double-digit traffic declines in both residential and professional businesses. Internal surveys revealed that consumers were deterred by higher prices and many still had a surplus of leftover pool chemicals from the previous year.
Revised Outlook for 2023
As a response to these setbacks, Leslie’s has adjusted its outlook for 2023. The revised forecast now places projected sales between $1.43 billion and $1.45 billion, with adjusted EPS estimated to range from 28 cents to 32 cents. While the company has recognized the need for adjustments, it remains determined to overcome these challenges and return to a path of growth.
Change in Leadership
Alongside the disappointing results and lowered outlook, Leslie’s has announced a change in leadership. Scott Bowman has been appointed as the new Chief Financial Officer, effective August 7th. Bowman will join the company next week and serve as the CFO-designate until then. Meanwhile, Steve Weddell, the current CFO, will step down on the aforementioned date but will continue to support the company as an advisor until December. With this transitional arrangement in place, Leslie’s aims to ensure a smooth and seamless shift in financial leadership.
The shares of Leslie’s closed the regular trading day with a decrease of 2.6%. The company now faces a critical juncture, emphasizing the need for strategic initiatives and renewed focus to regain investor confidence and drive future growth.