In it’s Fourth Quarter and Fiscal 2025 results report, Phoenix-based retailer/distributor Leslie’s announced plans to close locations.
“We delivered fourth quarter sales and adjusted EBITDA above the high end of our previously established guidance range and are today announcing the closure of 80 to 90 underperforming stores and one distribution center, as we work with speed and urgency to improve Leslie’s operations and establish a clear path to financial recovery,” said Leslie’s CEO Jason McDonell.
The locations, scheduled for closure this month, are scattered across the nation. The distribution center was in Illinois and used primarily for e-commerce fulfillment. The company reports having more than 1,000 retail locations.
Other plans include removing more than 2,000 slow-moving SKUs from the company’s inventory.
“In addition, we will continue to focus diligently on rightsizing the cost base of our business by reducing inventory 10% year over year and delivering direct cost reductions of $7 million to $12 million, which we will invest back into our customer price value proposition,” McDonell added.
The development likely comes as no surprise to observers of the company. Times have been challenging in terms of Leslie’s stock value, with share price steadily declining throughout last year from just under $45 in January, 2025, down to $1.65 at the beginning of this month.
In its conference call to discuss performance for Q4 and the year 2025, company officials also reported losing more than 160,000 residential customers, and experiencing a store-traffic decline of 8.6%. While weather may have played a small role, McDonell said, the company primarily lays the blame on its price-value equation – or perceived value of a product or service relative to its price.
For the fiscal year, the company saw a year-over-year decrease of 6.6% in sales, at $1.24 billion compared with $1.33 billion. When new stores were taken out of the equation, sales decreased 8.1% compared with 2024.
The company’s gross profit decreased by 7.8% to $440 million, compared with $477 million in 2024. Its net loss increased to $237 million compared to $23.4 the year before. Adjusted net loss was $43.7 million compared to $1.1 million in 2024.
Performance during the fourth quarter was comparatively better. Sales decreased 2.2% to $389.2 million, from 2024’s $397.9 million. Same-store sales decreased 6.5%. Gross profit rose 4.8% year over year, to $150.1 million from $143.2 million.
For Fiscal 2026, Leslie’s expects sales to fall somewhere between $1.1 billion and $1.25 billion.
To boost performance, the company reported a number of strategies to improve pricing, training, expertise and service, such as expanding its same-day delivery availability through a partnership with ridesharing company Uber. It also plans to expand its service business.
“We recognize the urgency of our situation and are committed to transparent communication as we execute these critical steps to restore Leslie’s to profitable growth,” said McDonell said.
