Shares of Leslie’s Inc. fell sharply on Friday after the pool supply retailer reported weaker-than-anticipated quarterly results and reduced its full-year outlook.
The Phoenix-based company, which operates a nationwide network of pool and spa retail stores, posted adjusted earnings per share of 59 cents for the quarter, missing the 68-cent consensus estimate compiled by Refinitiv. Revenue totaled $1.28 billion, also trailing forecasts of $1.32 billion.
Leslie’s downward revision included a cut to its full-year adjusted EPS guidance to a range of $2.70 to $2.90, down from the prior range of $3.10 to $3.30. The company cited softer consumer demand and higher inventory costs as key factors behind the adjustment.
Chief Executive Kim Whitley acknowledged in a statement that while core pool seasonality remains strong, macroeconomic pressures are weighing on discretionary spending. The company also flagged elevated freight and supply chain expenses as contributors to margin compression.
The stock, which had already declined 5% in premarket trading, extended losses to 15.8% by midday, erasing roughly $300 million in market capitalization. Investors appeared particularly concerned by the guidance cut, which suggests a broader slowdown in discretionary retail beyond the seasonal pool category.
Analysts at Truist Securities maintained a hold rating on the stock but trimmed their price target to $14 from $16, citing the weaker outlook. The shares now trade near $12, down from a 52-week high of $20.50 reached in March.
Leslie’s has been a beneficiary of the post-pandemic home improvement boom, but rising interest rates and inflation have begun to temper consumer spending on non-essential goods.
