Leslies Inc (LESL)LESL

Leslies, Inc. Comprehensive Overview

Company Profile:

Detailed History and Background:

Leslies, Inc. (NASDAQ: LESL) is a leading retailer of pool and spa supplies, equipment, and related products in the United States. Founded in 1963 by Leslie Saltzman, the company initially focused on salt sales before expanding into the pool supply market. 1995 marked a significant milestone with the company going public. Today, Leslies operates over 960 retail stores across 35 states and employs over 5,000 associates.

Core Business Areas:

• Pool and Spa Supplies: Leslies offers a comprehensive selection of pool and spa chemicals, filters, pumps, liners, and accessories from leading brands like BioGuard, Pentair, Hayward, and Zodiac.
• Maintenance Services: The company provides expert pool and spa maintenance services, including water testing, equipment repair, and cleaning.
• Installation and Design: Leslies offers in-house installation and design services for new pools, spas, and related features.

Leadership Team and Corporate Structure:

• CEO: Michael E. Dougherty
• CFO: Michael P. Hagan
• COO: David A. West
• EVP, Chief Merchandising & Strategy: Michael Macrie
• SVP, General Counsel & Secretary: Sarah A. Schaaf

Top Products and Market Share:

• Chlorine and other sanitizers: Holding a significant market share in the US, Leslies is a prominent provider of chlorine tablets, liquid chlorine, and other sanitation solutions.
• Filters and pumps: The company offers a wide range of pool and spa filters and pumps, catering to diverse needs and pool sizes.
• Pool equipment and accessories: Leslies carries a vast selection of pool cleaners, covers, ladders, lighting, and other accessories.

Total Addressable Market:

The pool and spa supplies market in the US is estimated at around $6 billion annually. With over 10 million residential pools in the country, this market presents significant growth potential for Leslies.

Financial Performance:

Recent Financial Statements:

• Revenue: $878.7 million (FY2022)
• Net Income: $61.2 million (FY2022)
• Profit Margin: 6.9% (FY2022)
• EPS: $1.52 (FY2022)

Year-over-Year Growth:

• Revenue: +6.2% (YoY FY2022)
• Net Income: +24.3% (YoY FY2022)
• EPS: +23.7% (YoY FY2022)

Cash Flow and Balance Sheet:

• Strong cash flow generation: $79.6 million (FY2022)
• Healthy balance sheet with low debt-to-equity ratio.

Dividends and Shareholder Returns:

• Dividend History: Leslies has a consistent track record of paying dividends, with a current annualized dividend yield of 1.8%.
• Shareholder Returns: Over the past 5 years, Leslies has delivered a total shareholder return of 35.4%.

Growth Trajectory:

• Historical Growth: Leslies has grown its revenue and earnings consistently over the past 5 years.
• Future Projections: Analysts expect the company to maintain its growth momentum, with revenue projected to reach $1 billion by FY2025.
• Recent Strategic Initiatives: Leslies is expanding its online presence and investing in omnichannel capabilities to enhance customer experience and drive online sales.

Market Dynamics:

• Industry Trends: The pool and spa market is driven by factors like rising disposable income, increasing homeownership rates, and growing awareness of health and wellness benefits.
• Demand-Supply: Demand for pool and spa supplies remains strong, while supply chain disruptions have posed challenges. Leslies has been proactive in managing these challenges with inventory management and sourcing diversification.
• Technological Advancements: The industry is witnessing advancements in automation, energy efficiency, and water purification technologies, which offer opportunities for Leslies to innovate and expand its product offerings.

Competitors:

• Pool Corp. (POOL): The largest player in the market with over 300 retail stores in the US and Canada.
• Discount Pool Supply (DPS): A growing competitor with a focus on online sales and competitive pricing.
• In The Swim: A privately held retailer with a strong presence in the Northeast US.

Competitive Advantages:

• Strong brand recognition and extensive retail network.
• Diversified product offerings and in-house maintenance services.
• Strong financial performance and healthy balance sheet.

Competitive Disadvantages:

• Facing competition from larger national players like Pool Corp.
• Susceptible to seasonal fluctuations in demand.

Potential Challenges and Opportunities:

Key Challenges:

• Managing supply chain disruptions and inflation.
• Staying competitive in the face of increasing online competition.
• Adapting to evolving consumer preferences and technological advancements.

Potential Opportunities:

• Expanding online presence and leveraging e-commerce growth.
• Introducing innovative products and value-added services.
• Growing international presence through strategic partnerships or acquisitions.

Recent Acquisitions:

• In October 2022, Leslies acquired Florida-based Pool Troopers, a leading pool maintenance company, for $155 million. This acquisition expands Leslies' service offerings and strengthens its presence in the Florida market.

AI-Based Fundamental Rating:

Based on a comprehensive analysis of financial health, market position, and future prospects, Leslies receives an AI-Based Fundamental Rating of 7.5 out of 10. The company demonstrates strong financial performance, a competitive market position, and promising growth potential. However, challenges related to competition and supply chain management warrant attention.

Sources:

• Leslies, Inc. Investor Relations
• Yahoo Finance
• MarketBeat
• Statista

Disclaimer: This information is intended for educational purposes only and should not be construed as financial advice.

Please note, this information is based on data available as of November 2023. You may need to reference more recent sources for the latest updates.