Q2 2024 Leslie's Inc Earnings Call Transcript
Key Points
- Leslies Inc (LESL) executed well against controllable factors, improving customer conversion despite decreased traffic.
- Inventory goals were met, contributing to strong in-stock levels and competitive pricing across channels.
- Despite a decrease in sales, Leslies Inc (LESL) maintained disciplined expense management, reducing SG&A by 12% compared to the previous year.
- The company continues to expand its Pro customer segment, increasing Pro contracts and locations year-over-year.
- Leslies Inc (LESL) is on track with its strategic growth initiatives, including new store openings and the development of its smart tech water testing device, which is resonating well with customers.
- Second quarter sales were down 11% year-over-year, influenced by unfavorable weather and a shift in the consumer spending pattern post-pandemic.
- Traffic decreased by 10% during the quarter, significantly impacting transaction volumes and sales performance.
- Average order value declined by 5% year-over-year, affected by lower sales of high-ticket discretionary products and previous price adjustments.
- Gross margin decreased by 464 basis points, primarily due to chemical price reductions and occupancy deleverage.
- Adjusted EBITDA and diluted earnings per share were negative, reflecting the challenging operational environment and lower sales.
Good afternoon and welcome to the Second Quarter of Fiscal 2024 Conference Call for Leslie's. (Operator Instructions) I will now turn the call over to Matt Skelly, Vice President of Investor Relations.
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So thank you and good afternoon. I would like to remind everyone that comments made today may include forward-looking statements, which are subject to significant risks and uncertainties that could cause the Company's actual results to differ materially from management's current expectations. These statements speak as of today and will not be updated in the future. If circumstances change, please review the cautionary statements and risk factors contained in the Company's earnings press release and recent filings with the SEC.
During the call today, management will refer to certain non-GAAP financial measures. A reconciliation between the GAAP and non-GAAP financial measures can be found in the company's earnings press release, which was furnished
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