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Leslie's, Inc. (LESL) Q1 2024 Earnings Call Transcript

Leslie's, Inc. (LESL) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Leslie's (NASDAQ: LESL ) stock is taking a beating on Wednesday after the pool and spa care company released its earnings report for its fiscal fourth quarter of 2023. The bad news for investors in LESL stock comes from Leslie's adjusted earnings per share of 14 cents during the quarter.

Leslie's, Inc. (NASDAQ:LESL ) Q4 2023 Earnings Conference Call November 28, 2023 4:30 PM ET Company Participants Caitlin Churchill - Investor Relations Michael Egeck - Chief Executive Officer Scott Bowman - Chief Financial Officer and Treasurer Conference Call Participants Ryan Merkel - William Blair Simeon Gutman - Morgan Stanley Steven Forbes - Guggenheim Securities Peter Benedict - Baird Kate McShane - Goldman Sachs Garik Shmois - Loop Capital Markets Jonathan Matuszewski - Jefferies Peter Keith - Piper Sandler Dana Telsey - Telsey Advisory Group Operator Good afternoon and welcome to the Fourth Quarter of Fiscal 2023 Conference Call for Leslie's, Inc. At this time, all participants are in a listen-only mode. Following the prepared remarks, management will conduct a question-and-answer session.

Shares of Leslie's Inc. LESL fell 15% in the extended session Tuesday after the supplier of spa and pool products reported fourth-quarter earnings below expectations and called for 2024 revenue and profit also below Wall Street forecasts. Leslie's earned $16.5 million, or 9 cents a share, in the quarter, compared with $57.9 million, or 31 cents a share, in the year-ago period.

Leslie's, a pool accessories retailer, had an IPO in 2020 but has seen a stock crash as the pandemic-boosted market has subsided. I believe that investors have limited visibility into Leslie's long-term financials - after a few quarters, the company should have normalized comparison figures, giving better visibility. The stock seems to be priced for a mostly poor organic growth, which is mostly in line with my baseline.

Leslie's, Inc. (LESL) came out with quarterly earnings of $0.41 per share, beating the Zacks Consensus Estimate of $0.40 per share. This compares to earnings of $0.68 per share a year ago.

The pool industry is experiencing a slowdown, negatively impacting Leslie's revenue and profit. Considering the company's ongoing strengths, the stock may appeal to value investors at these levels.

Shares of Leslie's have imploded after a post IPO run higher. Shares are down 80% from their peak as 2023 sales, but mostly margins, are set to fall.

Leslies (NASDAQ: LESL ) stock is falling on Friday after the company released its preliminary earnings report for the third quarter of 2023. What's disappointing investors today is the company's estimate that Q3 adjusted earnings per share will range from 39 cents to 41 cents.