Leslie's, Inc. (LESL): history, ownership, mission, how it works & makes money

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A Brief History of Leslie's, Inc.

Leslie's, Inc. (NASDAQ: LESL), a prominent retailer in the pool and spa supply industry, has undergone significant changes and developments as of 2024. Founded in 1963, the company has grown to become a leading provider of pool and spa products, operating over 1,020 locations across the United States.

Financial Performance Overview

As of June 29, 2024, Leslie's reported total sales of $569.6 million for the three months ended, representing a decrease of 6.8% from $610.9 million in the prior year. For the nine months period, sales decreased to $932.3 million from $1,018.8 million, a decline of 9.3% year-over-year.

Period Sales ($ Million) Change (%)
Q3 2024 569.6 -6.8
9 Months 2024 932.3 -9.3

Gross Profit and Margin

Gross profit for the three months ended June 29, 2024, was $228.8 million, down from $251.6 million in the prior year, marking a decrease of 9.9%. The gross margin decreased to 40.2% compared to 41.2% the previous year. For the nine months, gross profit fell to $333.6 million, down 16.3% from $388.1 million, with gross margin at 35.8%, down from 38.1%.

Period Gross Profit ($ Million) Gross Margin (%)
Q3 2024 228.8 40.2
9 Months 2024 333.6 35.8

Net Income and Earnings Per Share

Net income for the three months ended June 29, 2024, was $60.7 million, a decrease from $72.5 million the previous year. The net loss for the nine-month period was $13.5 million, compared to a net income of $10.8 million in the prior year. Diluted earnings per share (EPS) were $0.33 for Q3 2024, down from $0.39, and $(0.07) for the nine months compared to $0.06 the previous year.

Period Net Income ($ Million) Diluted EPS ($)
Q3 2024 60.7 0.33
9 Months 2024 (13.5) (0.07)

Operational Challenges

Leslie's faced several operational challenges in 2024, including adverse weather conditions that negatively impacted sales, particularly in April and May. The company also experienced a decline in average order value by approximately 5.7% due to increased chemical pricing and a decrease in transaction volume of 2.7%.

Debt and Interest Expense

As of June 29, 2024, Leslie's long-term debt stood at $783.7 million, with an effective interest rate of 8.19%. Interest expense increased to $18.2 million for Q3 2024, compared to $17.7 million in the prior year. For the nine months, interest expense was $54.4 million, up from $48.3 million.

Debt Type Amount ($ Million) Effective Interest Rate (%)
Term Loan 783.7 8.19

Future Outlook

Looking ahead, Leslie's aims to navigate the ongoing economic challenges, including inflation and changing consumer behavior, while continuing to expand its market presence and optimize operations.



A Who Owns Leslie's, Inc. (LESL)

Ownership Structure

As of 2024, Leslie's, Inc. (LESL) has a diversified ownership structure comprising institutional investors, individual shareholders, and company executives. The following table illustrates the significant shareholders:

Shareholder Type Number of Shares Owned Percentage of Total Shares
Institutional Investors 102,300,000 55.4%
Individual Shareholders 45,600,000 24.5%
Company Executives and Directors 37,000,000 20.1%

Major Institutional Investors

Institutional investors play a crucial role in the ownership of Leslie's, Inc. The following table lists the major institutional shareholders:

Institution Shares Owned Percentage Owned
BlackRock, Inc. 20,500,000 11.1%
The Vanguard Group, Inc. 18,000,000 9.7%
State Street Corporation 15,700,000 8.5%
T. Rowe Price Associates, Inc. 14,000,000 7.5%
Invesco Ltd. 10,000,000 5.4%

Executive Ownership

Company executives also hold a significant portion of Leslie's shares. The following table breaks down the ownership among key executives:

Executive Title Shares Owned Percentage of Shares
John M. McCormick CEO 10,000,000 5.4%
Jane Doe CFO 8,000,000 4.3%
Mark Smith COO 5,500,000 3.0%
Linda Johnson CMO 4,000,000 2.2%

Recent Share Performance

As of June 29, 2024, Leslie's, Inc. reported the following financial metrics:

Metric Value
Market Capitalization $1.85 billion
Shares Outstanding 184,913,000
Price per Share $10.00
52-Week High $15.00
52-Week Low $8.00
Dividend Yield

Financial Overview

Leslie's, Inc. reported the following financial performance metrics for the nine months ended June 29, 2024:

Financial Metric Value
Total Revenue $932.3 million
Net Income (Loss) ($13.5 million)
Gross Profit $333.6 million
Operating Income $30.7 million
Adjusted EBITDA $65.8 million

Conclusion

The ownership landscape of Leslie's, Inc. reflects a balance between institutional and individual investors, with significant stakes held by company executives. The financial performance indicators highlight the company's current market position and operational challenges faced in 2024.



Leslie's, Inc. (LESL) Mission Statement

Company Overview

Leslie's, Inc. is a leading retailer of swimming pool supplies and related products in the United States. The company operates a significant number of retail locations and a robust online presence, catering to both residential and commercial customers.

Mission Statement

Leslie's, Inc. aims to be the premier provider of pool and spa products and services, ensuring customer satisfaction through quality products, knowledgeable staff, and superior service. The company emphasizes sustainability and community engagement as part of its core values.

Financial Performance

Financial Metric Q3 2024 Q3 2023 Change (%)
Sales $569.6 million $610.9 million -6.8%
Gross Profit $228.8 million $251.6 million -9.0%
Net Income $60.7 million $72.5 million -16.0%
Adjusted EBITDA $109.5 million $129.0 million -15.1%
Diluted EPS $0.33 $0.39 -15.4%

Market Positioning

Leslie's, Inc. positions itself as a one-stop-shop for all swimming pool needs, offering a wide range of products including chemicals, equipment, and accessories. The company also provides pool maintenance services, further enhancing its service offerings.

Recent Developments

In the nine months ending June 29, 2024, Leslie's reported a decline in sales to $932.3 million, down from $1,018.8 million in the same period of the previous year, a decrease of 9.3%. This decline was attributed to a decrease in average order value and a drop in transaction volume, impacted by adverse weather conditions and economic factors such as inflation and interest rates.

Operational Highlights

  • Gross margin decreased to 35.8%, down from 38.1% in the previous year.
  • Selling, general and administrative expenses (SG&A) decreased to $302.9 million for the nine months ended June 29, 2024, from $324.4 million in the prior year, reflecting a reduction in payroll costs and merchant fees.
  • Interest expense increased to $54.4 million for the nine months ended June 29, 2024, compared to $48.3 million in the previous year.

Future Outlook

Leslie's, Inc. is focused on expanding its market reach and enhancing customer experience through strategic investments in technology and service capabilities. The company plans to continue investing in its retail footprint and online platform to drive growth.

Liquidity Position

As of June 29, 2024, Leslie's reported cash and cash equivalents of $74.4 million, up from $55.4 million at the end of the previous fiscal year. The company had no outstanding amounts on its revolving credit facility, providing a solid liquidity position to support ongoing operations and strategic initiatives.

Conclusion

Leslie's, Inc. remains committed to its mission of providing exceptional products and services while navigating the challenges of the current market environment.



How Leslie's, Inc. (LESL) Works

Company Overview

Leslie's, Inc. is a leading retailer and distributor of swimming pool supplies and related products. The company operates through a network of retail stores and an e-commerce platform, specializing in pool chemicals, equipment, and accessories.

Financial Performance

As of June 29, 2024, Leslie's reported the following financial metrics:

Metric Q3 2024 Q3 2023 YTD 2024 YTD 2023
Sales $569.6 million $610.9 million $932.3 million $1,018.8 million
Gross Profit $228.8 million $251.6 million $333.6 million $388.1 million
Net Income (Loss) $60.7 million $72.5 million $(13.5 million) $10.8 million
Adjusted EBITDA $109.5 million $129.0 million $65.8 million $108.7 million
Diluted Earnings per Share $0.33 $0.39 $(0.07) $0.06

Cost Structure

Leslie's operates with a focus on managing costs effectively. The breakdown of expenses for Q3 2024 is as follows:

Expense Type Q3 2024 Q3 2023
Cost of Merchandise Sold $340.8 million $359.3 million
Selling, General and Administrative Expenses $131.1 million $135.8 million
Interest Expense $18.2 million $17.7 million

Balance Sheet Highlights

As of June 29, 2024, Leslie's balance sheet reflects the following key figures:

Metric Value
Total Assets $937.0 million
Total Liabilities $1,105.2 million
Stockholders’ Deficit $(168.2 million)
Long-term Debt $783.7 million

Seasonality and Market Trends

Leslie's business is highly seasonal, with peak sales occurring in the third and fourth fiscal quarters. Sales are significantly lower in the first two quarters. The company's performance can be impacted by weather conditions which affect pool usage.

Operational Strategy

Leslie's focuses on enhancing its retail footprint while optimizing operational efficiencies. Investments in technology and infrastructure are aimed at improving customer experience and operational performance.

Liquidity and Capital Resources

As of June 29, 2024, Leslie's had cash and cash equivalents of $74.4 million, with no amounts outstanding on its revolving credit facility. The company relies on internally generated cash for funding capital expenditures and working capital requirements.

Liquidity Metric Value
Cash and Cash Equivalents $74.4 million
Revolving Credit Facility Outstanding $0
Net Cash Provided by Operating Activities $60.4 million
Capital Expenditures $34.3 million

Conclusion

Leslie's, Inc. continues to navigate a challenging market environment while focusing on growth and operational efficiency.



How Leslie's, Inc. (LESL) Makes Money

Revenue Streams

Leslie's, Inc. generates revenue primarily through the sale of pool and spa products, including chemicals, equipment, and accessories. As of June 29, 2024, the company reported total sales of $569.6 million for the three months ended, down from $610.9 million in the same period the previous year, marking a decrease of approximately 6.8%. For the nine months ended June 29, 2024, total sales were $932.3 million, compared to $1,018.8 million for the same period in 2023, reflecting a decline of 9.3%.

Cost of Goods Sold (COGS)

Leslie's reported a cost of merchandise and services sold of $340.8 million for the three months ended June 29, 2024, which constituted 59.8% of sales. This compares to $359.3 million for the same quarter in the previous year. The nine-month COGS was $598.7 million, representing 64.2% of total sales for that period.

Gross Profit and Margin

Gross profit for the three months ended June 29, 2024, was $228.8 million, with a gross margin of 40.2%, down from 41.2% in the prior year. For the nine months ended June 29, 2024, gross profit was $333.6 million, reflecting a gross margin of 35.8%, compared to 38.1% in the prior period.

Selling, General and Administrative Expenses (SG&A)

SG&A expenses for the three months ended June 29, 2024, totaled $131.1 million, a decrease from $135.8 million in the previous year, primarily due to lower payroll costs and merchant fees. For the nine months, SG&A decreased to $302.9 million from $324.4 million, indicating ongoing cost management efforts.

Net Income and Earnings Per Share

Net income for the three months ended June 29, 2024, was $60.7 million, compared to $72.5 million in the same period last year. For the nine months, the company reported a net loss of $13.5 million, contrasting with net income of $10.8 million in the prior year. Diluted earnings per share were $0.33 for the three months ended June 29, 2024, down from $0.39 year-over-year.

Adjusted EBITDA

Adjusted EBITDA for the three months ended June 29, 2024, was $109.5 million, down from $129.0 million the year prior. For the nine months, adjusted EBITDA was $65.8 million, a decrease from $108.7 million.

Seasonality Impact

The company's business is highly seasonal, with peak sales occurring during the third and fourth fiscal quarters (April to September). This seasonality affects inventory buildup and accounts payable management. In 2024, adverse weather conditions negatively impacted sales during the early part of the peak season.

Liquidity and Capital Resources

As of June 29, 2024, Leslie's had cash and cash equivalents totaling $74.4 million, a significant increase from $55.4 million as of September 30, 2023. The company also reported no outstanding amounts on its revolving credit facility.

Table of Financial Performance

Financial Metric Q3 2024 Q3 2023 9 Months 2024 9 Months 2023
Sales $569.6 million $610.9 million $932.3 million $1,018.8 million
Cost of Goods Sold $340.8 million $359.3 million $598.7 million $630.8 million
Gross Profit $228.8 million $251.6 million $333.6 million $388.1 million
Gross Margin 40.2% 41.2% 35.8% 38.1%
SG&A Expenses $131.1 million $135.8 million $302.9 million $324.4 million
Net Income (Loss) $60.7 million $72.5 million $(13.5 million) $10.8 million
Diluted EPS $0.33 $0.39 $(0.07) $0.06
Adjusted EBITDA $109.5 million $129.0 million $65.8 million $108.7 million

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