Leslie's (LESL) Stock Forecast & Price Target

Leslies Inc. has demonstrated a positive trajectory in its sales performance, achieving a net sales beat of approximately 1.0% in the first quarter, supported by improved traffic trends and notable growth in both chemical and professional sales. The company anticipates gross margin expansion ranging from 50 to 110 basis points, indicating potential profitability improvements driven by favorable dynamics in the second half of the fiscal year. Additionally, the rise in chemical sales by mid-single digits suggests a strong demand, providing a solid foundation for the company's sales guidance and reinforcing a constructive outlook despite some operational challenges.

Leslies Inc. has reported a slight revenue outperformance in F1Q25; however, its EBITDA loss fell short of expectations and guidance, indicating financial challenges. The company faces significant margin pressure due to inventory adjustments and transformation-related expenses, coupled with a weak sales outlook driven by declining consumer demand for large-ticket items. Furthermore, ongoing risks such as deflation in key product categories, susceptibility to adverse weather events, and macroeconomic uncertainties significantly contribute to a negative outlook for the stock's performance.