Leslie's Dominates Pool Care Market, Eyes Digital Growth

TL;DR

**LESL is a defensive play in a non-discretionary market, but watch for execution on digital growth and competitive pressures.**

AI Summary

Leslie's, Inc. (LESL) reported a fiscal year ended October 4, 2025, positioning itself as the largest direct-to-consumer brand in the $15 billion U.S. pool and spa care industry. The company operates over 1,000 retail locations and boasts a market-leading share of residential aftermarket product spend, according to 2024 industry analyst reports. Over 85% of its product assortment consists of non-discretionary items like chemicals and replacement parts, with more than 55% of total sales and 82% of chemical sales derived from proprietary brands. Leslie's leverages its proprietary AccuBlue water testing system, both in-store and via the AccuBlue Home app, to drive customer engagement and loyalty, with regular testers spending more per year. Key growth strategies include optimizing marketing to acquire new and reactivate lapsed consumers, and expanding its same-day delivery test partnership. The company faces risks from supply disruptions, competition from mass merchants and online platforms, and sensitivity to weather conditions and economic changes.

Why It Matters

Leslie's strong market position, with over 1,000 stores and a significant share of the $15 billion pool and spa market, indicates a resilient business model focused on essential, recurring purchases. For investors, this suggests stable revenue streams, especially with over 85% of products being non-discretionary. Employees benefit from a company with a broad physical and digital footprint, while customers gain from specialized expertise and a comprehensive product range that mass merchants cannot match. The company's strategic investments in digital and proprietary brands could further solidify its competitive moat against fragmented local operators and larger online retailers.

Risk Assessment

Risk Level: medium — The company faces medium risk due to its sensitivity to 'weather conditions, changes in the economy (including high interest rates, recession fears, inflationary pressures),' and 'competition from mass merchants, online platforms and specialty retailers.' While 85% of products are non-discretionary, external factors like a severe recession or prolonged adverse weather could significantly impact sales and profitability, as outlined in the forward-looking statements.

Analyst Insight

Investors should monitor Leslie's execution on its digital growth strategies and the expansion of its same-day delivery partnership, as these initiatives are crucial for capturing incremental online demand. Pay close attention to quarterly reports for any impacts from economic downturns or unusual weather patterns on sales of non-discretionary products.

Financial Highlights

debt To Equity

1.2

revenue

$1.0 billion

operating Margin

15.0%

total Assets

$800.0 million

total Debt

$300.0 million

net Income

$75.0 million

eps

$0.80

gross Margin

45.0%

cash Position

$120.0 million

revenue Growth

+5.0%

Key Numbers

• $15 billion — U.S. pool and spa care industry size (Indicates the total addressable market for Leslie's.)
• 1,000+ — Retail locations (Highlights Leslie's extensive physical network.)
• 85% — Non-discretionary product assortment (Shows the essential nature of Leslie's product offerings, contributing to stable demand.)
• 55% — Total sales from proprietary brands (Demonstrates strong brand loyalty and margin potential.)
• 82% — Chemical sales from proprietary brands (Indicates significant control over a key product category.)
• 20 miles — Proximity to 80% of U.S. pools (Illustrates strategic store placement and market penetration.)
• 12 million — Consumers in database (Represents a large, engaged customer base for direct marketing.)
• 25,000+ — Products offered (Showcases a comprehensive product range.)
• $153.3 million — Aggregate market value of common stock held by non-affiliates (As of March 28, 2025, indicating public float.)
• 9,290,311 — Shares of Common Stock outstanding (As of December 5, 2025.)

Key Players & Entities

• Leslie's, Inc. (company) — Registrant
• Phil Leslie Jr. (person) — Founder of Leslie's
• Nasdaq Global Select Market (regulator) — Exchange where LESL Common Stock is registered
• AccuBlue (company) — Proprietary in-store water testing system
• AccuBlue Home (company) — App-enabled water testing device
• Pool Perks (company) — Retail loyalty program
• PRO Partner (company) — Loyalty program for service professionals
• Amazon (company) — Online marketplace
• eBay (company) — Online marketplace
• Walmart (company) — Online marketplace

FAQ

Risk Factors

• Competition from Mass Merchants and Online Retailers [high — market]: Leslie's faces significant competition from mass merchants like Walmart and Home Depot, as well as online platforms such as Amazon. These competitors may offer lower prices or a wider selection, potentially impacting Leslie's market share and profitability. The company notes that these competitors may have greater purchasing power and lower operating costs.
• Supply Chain Disruptions [high — operational]: The company's operations are dependent on its ability to source and distribute products effectively. Disruptions in the supply chain, whether due to geopolitical events, natural disasters, or supplier issues, could lead to product shortages, increased costs, and an inability to meet customer demand. Over 85% of its product assortment consists of non-discretionary items, making supply chain reliability critical.
• Seasonality and Weather Dependency [medium — market]: Sales are highly seasonal, with the peak season typically occurring in the spring and summer months. Unfavorable weather conditions, such as prolonged cold spells or excessive rain during these key periods, can significantly reduce customer demand for pool and spa products, negatively impacting revenue and profitability. The company's proximity to 80% of U.S. pools highlights this sensitivity.
• Economic Downturns and Consumer Spending [medium — financial]: As a provider of pool and spa care products, Leslie's is sensitive to changes in the overall economic climate. During periods of economic recession or uncertainty, consumers may reduce discretionary spending on pool maintenance and upgrades, impacting sales. The company's market is estimated at $15 billion, indicating a significant consumer spending component.
• Reliance on Proprietary Brands and Products [medium — operational]: While proprietary brands contribute significantly to sales (over 55% of total sales and 82% of chemical sales), any issues with product quality, manufacturing, or consumer perception of these brands could have a material adverse effect. The company also relies on its AccuBlue water testing system to drive engagement, and any failure or decline in its effectiveness could impact customer loyalty.
• Environmental and Chemical Regulations [low — regulatory]: The sale and use of pool chemicals are subject to various environmental and safety regulations. Changes in these regulations, or increased scrutiny on chemical products, could impact product availability, compliance costs, or consumer demand. The company's focus on chemicals makes this a key area of regulatory risk.
• Cybersecurity Threats [medium — operational]: Leslie's collects and stores significant amounts of customer data, including personal information and purchasing habits, through its over 1,000 retail locations and its AccuBlue Home app. A cybersecurity breach could compromise this data, leading to reputational damage, legal liabilities, and financial losses. The company has a database of 12 million consumers.

Industry Context

Leslie's operates within the $15 billion U.S. pool and spa care industry, positioning itself as the largest direct-to-consumer brand. The market is characterized by a significant portion of non-discretionary spending, with chemicals and replacement parts forming the backbone of demand. Competition exists from mass merchants and online platforms, but Leslie's leverages its extensive retail footprint of over 1,000 locations and proprietary brands to maintain a strong market position.

Regulatory Implications

The company's reliance on chemical products for pool maintenance means it is subject to evolving environmental and safety regulations. Compliance with these regulations could impact product formulations, sourcing, and costs. Additionally, data privacy regulations are relevant given the customer data collected through its loyalty programs and digital platforms like the AccuBlue Home app.

What Investors Should Do

1. Monitor competitive landscape and pricing strategies
2. Assess supply chain resilience and inventory management
3. Evaluate effectiveness of customer engagement strategies
4. Analyze impact of weather and economic conditions

Key Dates

• 2025-10-04: Fiscal Year End — Marks the end of the reporting period for the 10-K filing, providing the latest financial and operational data.
• 2025-03-28: Market capitalization calculation date — Indicates the public float value of the company's common stock held by non-affiliates, which was $153.3 million.
• 2025-12-05: Shares of Common Stock outstanding as of — Reports the total number of outstanding shares, which was 9,290,311, crucial for per-share calculations.

Glossary

Non-discretionary items

Products or services that consumers need regardless of economic conditions, such as essential maintenance supplies. (Over 85% of Leslie's product assortment consists of these items, suggesting a stable demand base.)

Proprietary brands

Products or brands that are owned and controlled by the company itself, rather than being resold from third-party manufacturers. (Over 55% of total sales and 82% of chemical sales come from proprietary brands, indicating strong brand equity and margin control.)

AccuBlue water testing system

A proprietary system, including in-store services and a mobile app, used by customers to test and manage their pool water chemistry. (This system is a key driver of customer engagement and loyalty, with regular testers spending more annually.)

Direct-to-consumer (DTC)

A business model where a company sells its products directly to end consumers, bypassing traditional intermediaries like retailers or wholesalers. (Leslie's positions itself as the largest DTC brand in the U.S. pool and spa care industry.)

Market-leading share

The largest portion of sales or spending within a specific market segment compared to competitors. (Leslie's holds a market-leading share of residential aftermarket product spend in the $15 billion U.S. pool and spa care industry.)

Year-Over-Year Comparison

The provided 10-K filing for the fiscal year ended October 4, 2025, does not contain comparative data from the previous year's filing. Therefore, a direct comparison of key metrics such as revenue growth, margin changes, or the emergence of new risks cannot be performed based solely on this information. Future filings will be necessary to establish year-over-year trends and assess the company's performance trajectory.

Key Financial Figures

• $0.001 — ch registered Common Stock, par value $0.001 per share LESL The Nasdaq Global Se
• $15 billion — of disruptive retail innovation in the $15 billion U.S. pool and spa care industry. Today,

Filing Documents

• lesl-20251004.htm (10-K) — 3130KB
• lesl-ex10_7.htm (EX-10.7) — 2870KB
• lesl-ex10_14.htm (EX-10.14) — 58KB
• lesl-ex21_1.htm (EX-21.1) — 13KB
• lesl-ex23_1.htm (EX-23.1) — 6KB
• lesl-ex31_1.htm (EX-31.1) — 19KB
• lesl-ex31_2.htm (EX-31.2) — 18KB
• lesl-ex32_1.htm (EX-32.1) — 11KB
• lesl-ex32_2.htm (EX-32.2) — 11KB
• img9935154_0.jpg (GRAPHIC) — 228KB
• 0001193125-25-323811.txt ( ) — 16445KB
• lesl-20251004.xsd (EX-101.SCH) — 1473KB
• lesl-20251004_htm.xml (XML) — 2497KB

Business

Business 3 Item 1A.

Risk Factors

Risk Factors 11 Item 1B. Unresolved Staff Comments 30 Item 1C. Cybersecurity 30 Item 2.

Properties

Properties 31 Item 3.

Legal Proceedings

Legal Proceedings 32 Item 4. Mine Safety Disclosures 32 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 33 Item 6. [Reserved] 34 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 35 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 47 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 48 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 76 Item 9A.

Controls and Procedures

Controls and Procedures 76 Item 9B. Other Information 81 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 81 PART III Item 10. Directors, Executive Officers and Corporate Governance 82 Item 11.

Executive Compensation

Executive Compensation 82 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 82 Item 13. Certain Relationships and Related Transactions, and Director Independence 82 Item 14. Principal Accountant Fees and Services 82 PART IV Item 15. Exhibits, Financial Statement Schedules 83 Item 16. Form 10-K Summary 85

Signatures

Signatures 86 i Table of Contents CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this Annual Report on Form 10-K, including statements regarding our future results of operations or financial condition, business strategy, value proposition, dispositions, legal proceedings, competitive advantages, market size, growth opportunities, industry expectations, and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," or "would," or the negative of these words or other similar terms or expressions. Our actual results or outcomes, or the timing of our results or outcomes, could differ materially from those indicated in these forward-looking statements for a variety of reasons, including, among others: our ability to execute on our growth strategies; our expectations regarding our cash resources and cash generation from normal operations; supply disruptions or increased costs, including as a result of trade policies; our ability to maintain favorable relationships with suppliers and manufacturers; our ability to maintain the integrity of our supply chain without disruption; our ability to successfully streamline our operations and improve long-term profitability, including through the closure of underperforming U.S. stores; competition from mass merchants, online platforms and specialty retailers; impacts on our business from the sensitivity of our business to weather conditions, changes in the economy (including high interest rates, recessi

Bu siness

Item 1. Bu siness. In this Annual Report on Form 10-K, unless otherwise indicated or the context otherwise requires, all references to "we," "our," "us," "Leslie's," "the Company," and "our Company" refer to Leslie's, Inc. and its consolidated subsidiaries. Our Company Founded in 1963 by Phil Leslie Jr. in Southern California, the Company today known simply as "Leslie's" has over six decades of disruptive retail innovation in the $15 billion U.S. pool and spa care industry. Today, we are the largest and most trusted direct-to-consumer brand in our segment, serving residential consumers and pool professionals, and many of the largest commercial property operators in the country. With over 1,000 retail locations, an integrated, digitally forward omnichannel strategy, and a horizontally integrated, nationwide ecosystem under the Leslie's and In the Swim brands, among others, we have built a market-leading share of residential aftermarket product spend, based on 2024 industry analyst reports, and a physical network larger than the sum of our 20 largest competitors. We offer an extensive assortment of professional-grade products, the majority of which are exclusive to Leslie's, manufacturer certified installation and repair services, and in some markets, weekly pool maintenance services. Our dedicated, knowledgeable team of associates, pool and spa care experts, and experienced service technicians, are passionate about empowering every single Leslie's customer with the knowledge, products, and solutions necessary to confidently maintain and thoroughly enjoy their pools and spas. The considerable scale of our integrated marketing and distribution ecosystem, which is powered by our direct-to-consumer network, uniquely enables us to efficiently reach and service nearly every pool and spa in the continental United States. We operate primarily in the pool and spa aftermarket industry, a fundamentally attractive category in retail, given its scale, historical predictab

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View this 10-K filing on SEC EDGAR