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Leslies Inc

LESL

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Leslies Inc AI Insights

Informational only. Not investment advice.
As of 2025-12-31

Snapshot

  • Negative equity of -408M with 1.0B total debt creates existential balance sheet risk; debt is 2.9x total assets TTM.[Common Stockholders Equity]
  • Interest expense of 62.9M TTM exceeds operating income of 14M by 4.5x - cannot service debt from operations.[Interest Expense]
  • Revenue declined -6.5% 3Y CAGR while inventory rose 65.2M - demand destruction with rising obsolescence risk.[Change in Inventory]

Watch Triggers

  • Cash and Equivalents: Falls below 40MCurrent 64M provides ~4 quarters runway at -16.7M FCF burn; breach signals imminent liquidity crisis.
  • Operating Income: Turns negative for 2+ consecutive quartersCurrently 14M TTM barely positive; negative would eliminate any debt refinancing optionality.
  • Inventory: Exceeds 250M or days inventory rises 20%+208M inventory already elevated vs declining revenue; further build signals demand collapse.

Bull Case

Gross margin 35.4% TTM near industry median 42.6% shows core business viability if SG&A rationalized; 48.2M operating cash flow provides runway.

Gross MarginCash Flow from Continuing Operating Activities

Asset turnover 1.39x TTM at industry median suggests efficient capital deployment; turnaround could unlock operating leverage.

Asset Turnover

Bear Case

Negative equity -408M and tangible book -439M means shareholders wiped out in any liquidation; debt holders own the company.

Common Stockholders EquityTangible Book Value

Revenue -6.5% 3Y CAGR with -237M net loss TTM indicates secular decline, not cyclical - no path to debt service.

Total Revenue 3yr GrowthNet Income

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
20%

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Forward Thesis

Balance sheet restructuring or dilutive equity raise likely within 12-18 months absent turnaround.

3-12mhigh
  • Negative equity -408M with 1.0B debt
  • FCF negative -16.7M TTM
  • Interest coverage below 1x
Operating income 14M vs interest 62.9M TTMNet debt 688M on 741M assetsNet margin -19.1% TTM

Valuation Context

Caveats

Public Strategies Rankings

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Fundamental company data provided by Morningstar, updated daily.

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