9184

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~January 283, ~~2025~~2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 001-39667

LESLIE’S, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	20-8397425
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2005 East Indian School Road Phoenix, AZ	85016
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (602) 366-3999

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Common Stock, par value $0.001 per share

     LESL

     The Nasdaq Global Select Market

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒☐ Accelerated filer ☐☒ Non-accelerated filer ☐ Smaller reporting company ☐☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~August~~February 112, ~~2025,~~2026 the Registrant had ~~185~~9,~~608~~316,~~308,~~575 shares of common stock, $0.001 par value per share, outstanding.

Table of Contents

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets	3
	Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Stockholders’ Deficit	5
	Consolidated Statements of Stockholders’ Deficit	5
	Condensed Consolidated Statements of Cash Flows	6
	Consolidated Statements of Cash Flows	6
	Notes to the Unaudited Condensed Consolidated Financial Statements	7
	Notes to the Unaudited Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1817
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2725
Item 4.	Controls and Procedures	2725
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	2927
Item 1A.	Risk Factors	2927
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2927
Item 3.	Defaults Upon Senior Securities	2927
Item 4.	Mine Safety Disclosures	2927
Item 5.	Other Information	2927
Item 6.	Exhibits	3029
Signatures		3130

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q 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 Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy, strategic transformation plan, 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~~deliver,” “well-positioned,” “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 and cost optimization strategies, including our strategic pricing transformation;

•

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;

•

~~competition~~our ~~from~~ability ~~mass~~to ~~merchants~~maintain ~~and~~the ~~specialty~~integrity ~~retailers;~~of our supply chain without disruption;

•

~~impacts on~~ our ~~business~~ability ~~from~~to ~~the~~successfully ~~sensitivity~~streamline of our ~~business~~operations ~~to weather conditions, changes in the economy (including high interest rates, recession fears, inflationary pressures~~ and ~~changes~~improve inlong-term ~~trade policies~~profitability, including ~~tariffs~~through ~~or other trade restrictions or~~ the ~~threat~~closure of ~~such~~underperforming ~~actions),~~U.S. ~~geopolitical events or conflicts, and the housing market~~stores;

•

~~disruptions~~competition infrom ~~the~~mass ~~operations~~merchants, ofonline ~~our~~platforms ~~distribution~~and ~~centers~~specialty retailers;

•

impacts on our business from the sensitivity of our business to weather conditions, changes in the economy (including high interest rates, recession fears, inflationary pressures and changes in trade policies, including tariffs or other trade restrictions or the threat of such actions), consumer purchasing patterns and cost consciousness, geopolitical events or conflicts, and the housing market;

•

disruptions in the operations of our manufacturing facilities and distribution centers;

•

our ability to implement technology initiatives that deliver the anticipated benefits, without disrupting our operations;

•

our ability to execute on our management transition plans and to attract and retain senior management and other qualified personnel;

•

regulatory changes and developments affecting our current and future products including evolving legal standards, regulations and stakeholder expectations concerning environmental, ~~social~~ and ~~governance~~sustainability ~~(“ESG”)~~ matters;

•

our ability to timely service, pay off or refinance existing debt and incur additional debt on terms and at rates acceptable to us;

•

our ability to obtain additional capital to finance operations;

•

commodity price inflation and deflation;

•

impacts on our business from epidemics, pandemics, or natural disasters;

•

impacts on our business from cyber incidents and other security threats or disruptions;

•

our ability to regain and maintain compliance or comply with Nasdaq listing standards;

•

our ability to implement the proposed reverse stock split in a timely manner, if at all and the anticipated effects of the proposed reverse stock split on the price of shares of our common stock;

our ability to remediate material weaknesses or other deficiencies in our internal control over financial reporting or to maintain effective disclosure controls and procedures and internal control over financial reporting; and

•

other risks and uncertainties, including those listed in the section titled “Risk Factors” in our filings with the United States Securities and Exchange Commission (“SEC”).

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended September 28, 2024, in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 29, 2025, elsewhere in this Quarterly Report on Form 10-Q and in our other filings with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, outcomes, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results or outcomes could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q, and, while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

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You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended October 4, 2025, elsewhere in this Quarterly Report on Form 10-Q and in our other filings with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, outcomes, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results or outcomes, or the timing of results and outcomes, could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q are based on events or circumstances as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information, changed expectations, the occurrence of unanticipated events or otherwise, except as required by law. We may not actually achieve the plans, intentions, outcomes, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

LESLIE’S, INC.

~~CONDENSED~~ Consolidated Balance Sheets

(Amounts in Thousands, Except Share and Per Share Amounts)

	June 28, 2025			September 28, 2024			June 29, 2024
	January 3, 2026			October 4, 2025			December 28, 2024
	(Unaudited)			(Audited)			(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	423,~~684~~622		$	~~108~~64,~~505~~340		$	7411,~~438~~615
Accounts and other receivables, net		3415,~~794~~855			4523,~~467~~217			4529,~~817~~803
Inventories		273,192			234,283			302,209
Inventories, net		210,006			207,983			271,087
Prepaid expenses and other current assets		3437,~~460~~548			3433,~~179~~249			3429,~~545~~117
Total current assets		~~385~~267,~~130~~031			~~422~~328,~~434~~789			~~457~~341,~~009~~622
Property and equipment, net		9482,~~143~~394			9892,~~447~~544			9496,~~135~~045
Operating lease right-of-use assets		~~260~~233,~~925~~979			~~270~~252,~~488~~988			~~282~~260,~~556~~835
Goodwill and other intangibles, net		~~212~~29,~~407~~871			~~215~~30,~~127~~732			~~216~~214,~~041~~219
Deferred tax assets		—			~~4,168~~—			1516,~~409~~121
Other assets		36,~~888~~164			3936,~~661~~422			4038,~~038~~151
Total assets	$	~~989~~649,~~493~~439		$	1741,~~050,325~~475		$	1966,~~105,188~~993
Liabilities and stockholders’ deficit
Current liabilities
Accounts payable	$	9145,~~587~~227		$	6751,~~622~~894		$	~~108~~56,~~935~~208
Accrued expenses and other current liabilities		~~104~~68,~~629~~952			~~106~~82,~~713~~447			~~107~~71,~~208~~528
Operating lease liabilities		6573,~~755~~860			6374,~~357~~720			6165,~~638~~063
Income taxes payable		—			~~1,127~~—			—1,180
Current portion of long-term debt		—			8,100			8,100
Total current liabilities		188,039			209,061			193,979
Total current liabilities		261,971			246,919			285,881
Deferred tax liabilities		296			287			—
Deferred tax liabilities		1,549			—			—
Operating lease liabilities, noncurrent		170,617			185,076			197,853
Operating lease liabilities, noncurrent		197,375			209,067			216,756
Revolving Credit Facility		25,000			—			40,000
Revolving credit facility		20,000			—			—
Long-term debt, net		752,389			752,055			750,610
Long-term debt, net		751,547			769,065			768,598
Other long-term liabilities		2,948			2,988			4,589
Other long-term liabilities		3,218			2,423			2,110
Total liabilities		1,139,289			1,149,467			1,187,031
Total liabilities		1,235,660			1,227,474			1,273,345
Commitments and contingencies
Stockholders’ deficit
Common stock, $0.001 par value, 1,000,000,000 shares authorized and 185,578,489, 184,969,296, and 184,912,804 issued and outstanding as of June 28, 2025, September 28, 2024, and June 29, 2024.		186			185			185
Common stock, $0.001 par value, 50,000,000 shares authorized and 9,315,970, 9,290,311, and 9,260,400 issued and outstanding as of January 3, 2026, October 4, 2025, and December 28, 2024.		9			9			9
Additional paid-in capital		~~112~~114,~~006~~287			~~106~~113,~~871~~174			~~105~~108,~~940~~722
Retained deficit		(~~358~~604,~~359~~146	)		(~~284~~521,~~205~~175	)		(~~274~~328,~~282~~769	)
Total stockholders’ deficit		(~~246~~489,~~167~~850	)		(~~177~~407,~~149~~992	)		(~~168~~220,~~157~~038	)
Total liabilities and stockholders’ deficit	$	~~989~~649,~~493~~439		$	1741,~~050,325~~475		$	1966,~~105,188~~993

See accompanying notes which are an integral part of these ~~condensed~~ consolidated financial statements.

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LESLIE’S, INC.

~~CONDENSED~~ Consolidated Statements of Operations

(Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

	Three Months Ended						~~Nine Months Ended~~
	June 28, 2025			June 29, 2024			June 28, 2025			June 29, 2024
	January 3, 2026			December 28, 2024
Sales	$	~~500~~147,~~347~~128		$	~~569~~175,~~638~~228		$	~~852,709~~		$	~~932,262~~
Cost of merchandise and services sold		~~302~~120,~~457~~059			~~340~~127,~~798~~511			~~563,156~~			~~598,686~~
Gross profit		~~197~~27,~~890~~069			~~228~~47,~~840~~717			~~289,553~~			~~333,576~~
Selling, general and administrative expenses		~~129~~85,~~572~~669			~~131~~87,~~145~~417			~~309,313~~			~~302,879~~
Operating income (loss)		68,318			97,695			(19,760	)		30,697
Impairment		10,148			—
Interest expense		15,764			18,156			47,425			53,380
Operating loss		(68,748	)		(39,700	)
Net income (loss) before taxes		52,554			79,539			(67,185	)		(22,683	)
Interest expense		13,536			15,763
Income tax expense (benefit)		30,824			18,889			6,969			(9,227	)
Net loss before taxes		(82,284	)		(55,463	)
Net income (loss)	$	21,730		$	60,650		$	(74,154	)	$	(13,456	)
Income tax expense (benefit)		687			(10,899	)
Earnings (loss) per share:
Net loss	$	(82,971	)	$	(44,564	)
Basic	$	0.12		$	0.33		$	(0.40	)	$	(0.07	)
Loss per share:
Diluted	$	0.12		$	0.33		$	(0.40	)	$	(0.07	)
Basic	$	(8.92	)	$	(4.82	)
Weighted average shares outstanding:
Diluted	$	(8.92	)	$	(4.82	)
Basic		185,490			184,834			185,256			184,614
Weighted average shares outstanding:
Diluted		185,490			184,861			185,256			184,614
Basic		9,297			9,251
Diluted		9,297			9,251

See accompanying notes which are an integral part of these ~~condensed~~ consolidated financial statements.

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LESLIE’S, INC.

~~CONDENSED~~ Consolidated Statements of Stockholders’ Deficit

(Amounts in Thousands)

(Unaudited)

	Common Stock					Additional						Total
	Shares			Amount		Paid in Capital			Retained Deficit			Stockholders’ Deficit
Balance, March 31, 2024		184,743		$	185	$	103,775		$	(334,932	)	$	(230,972	)
Balance, September 28, 2024		9,248		$	9	$	107,047		$	(284,205	)	$	(177,149	)
Issuance of common stock under the Plan		186			—		—			—			—
Issuance of common stock under the Incentive Plan		13			—		—			—			—
Equity-based compensation		—			—		21,~~246~~709			—			21,~~246~~709
Restricted stock units surrendered in lieu of withholding taxes		(161	)		—		(8134	)		—			(8134	)
Net income		—			—		—			60,650			60,650
Net loss		—			—		—			(44,564	)		(44,564	)
Balance, June 29, 2024		184,913		$	185	$	105,940		$	(274,282	)	$	(168,157	)
Balance, December 28, 2024		9,260		$	9	$	108,722		$	(328,769	)	$	(220,038	)
Balance, March 30, 2025		185,402			185		110,445			(380,089	)		(269,459	)
Balance, October 4, 2025		9,290		$	9	$	113,174		$	(521,175	)	$	(407,992	)
Issuance of common stock under the Plan		188			1		—			—			1
Issuance of common stock under the Incentive Plan		26			—		—			—			—
Equity-based compensation		—			—		1,~~571~~115			—			1,~~571~~115
Restricted stock units surrendered in lieu of withholding taxes		~~(12~~—	)		—		(102	)		—			(102	)
Net income		—			—		—			21,730			21,730
Net loss		—			—		—			(82,971	)		(82,971	)
Balance, June 28, 2025		185,578		$	186	$	112,006		$	(358,359	)	$	(246,167	)
Balance, January 3, 2026		9,316		$	9	$	114,287		$	(604,146	)	$	(489,850	)
	Common Stock					Additional						Total
	Shares			Amount		Paid in Capital			Retained Deficit			Stockholders’ Deficit
Balance, September 30, 2023		184,334		$	184	$	99,280		$	(260,826	)	$	(161,362	)
Issuance of common stock under the Plan		727			1		—			—			1
Equity-based compensation		—			—		7,629			—			7,629
Repurchase and retirement of common stock		(148	)		—		(969	)		—			(969	)
Net loss		—			—		—			(13,456	)		(13,456	)
Balance, June 29, 2024		184,913		$	185	$	105,940		$	(274,282	)	$	(168,157	)
Balance, September 28, 2024		184,969		$	185	$	106,871		$	(284,205	)	$	(177,149	)
Issuance of common stock under the Plan		650			1		—			—			1
Equity-based compensation		—			—		5,194			—			5,194
Restricted stock units surrendered in lieu of withholding taxes		(41	)		—		(59	)		—			(59	)
Net loss		—			—		—			(74,154	)		(74,154	)
Balance, June 28, 2025		185,578		$	186	$	112,006		$	(358,359	)	$	(246,167	)

See accompanying notes which are an integral part of these ~~condensed~~ consolidated financial statements.

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LESLIE’S, INC.

~~CONDENSED~~ Consolidated Statements of Cash Flows

(Amounts in Thousands)

(Unaudited)

	Nine Months Ended
	Three Months Ended
	June 28, 2025			June 29, 2024
	January 3, 2026				December 28, 2024
Operating Activities
Net loss	$	(7482,~~154~~971	)	$	~~(13,456~~$	)(44,564	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		257,~~080~~840			~~24,420~~	8,237
Equity-based compensation		51,~~194~~115			~~7,629~~	1,709
Amortization of deferred financing costs and debt discounts		~~1,619~~551			~~1,647~~	541
Provision for credit losses		574			1,007
Impairment		10,148				—
Deferred income taxes		5,717			(7,811	)
Inventory impairment		6,371				—
Loss on asset dispositions		1,044			52
Provision for credit losses		25				284
Changes in operating assets and liabilities:
Deferred income taxes		9				(11,953	)
Accounts and other receivables		10,099			(17,428	)
Loss on asset dispositions		(10	)			(45	)
Inventories		(38,909	)		9,628
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(281	)		(10,912	)
Accounts and other receivables		7,337				15,380
Other assets		2,561			6,561
Inventories, net		(8,394	)			(36,804	)
Accounts payable		23,965			50,379
Prepaid expenses and other current assets		(4,289	)			5,062
Accrued expenses and other current liabilities		(1,049	)		14,428
Other assets		186				1,439
Income taxes payable		(1,127	)		(5,782	)
Accounts payable		(6,667	)			(11,414	)
Operating lease assets and liabilities, net		269			48
Accrued expenses and other current liabilities		(11,280	)			(33,148	)
Net cash (used in) provided by operating activities		(39,398	)		60,410
Income taxes payable		—				53
Investing Activities
Operating lease assets and liabilities, net		(1,105	)			145
Purchases of property and equipment		(19,064	)		(34,324	)
Net cash used in operating activities		(81,134	)			(105,078	)
Proceeds from asset dispositions		117			77
Investing Activities
Net cash used in investing activities		(18,947	)		(34,247	)
Purchases of property and equipment		(4,327	)			(4,678	)
Financing Activities
Proceeds from asset dispositions		—				30
Borrowings on revolving credit facility		159,500			140,500
Net cash used in investing activities		(4,327	)			(4,648	)
Payments on revolving credit facility		(139,500	)		(140,500	)
Financing Activities
Repayment of long-term debt		(27,025	)		(6,075	)
Borrowings on revolving credit facility		25,000				40,000
Payments on finance leases		(392	)		—
Repayment of long-term debt		—				(27,025	)
Payment of deferred financing costs		—			(101	)
Payments on finance leases		(110	)			(105	)
Payments of employee tax withholdings related to restricted stock vesting		(59	)		(969	)
Payment of deferred financing costs		(145	)			—
Net cash used in financing activities		(7,476	)		(7,145	)
Payments of employee tax withholdings related to restricted stock vesting		(2	)			(34	)
Net (decrease) increase in cash and cash equivalents		(65,821	)		19,018
Net cash provided by financing activities		24,743				12,836
Cash and cash equivalents, beginning of period		108,505			55,420
Net decrease in cash and cash equivalents		(60,718	)			(96,890	)
Cash and cash equivalents, end of period	$	42,684		$	74,438
Cash and cash equivalents, beginning of period		64,340				108,505
Supplemental Information:
Cash and cash equivalents, end of period	$	3,622			$	11,615
Cash paid for interest	$	46,462		$	51,762
Supplemental Information:
Cash paid for income taxes, net of refunds received		3,556			6,702
Cash paid for interest	$	13,553			$	15,694
Cash paid for income taxes, net of refunds received		3				—

See accompanying notes which are an integral part of these ~~condensed~~ consolidated financial statements.

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LESLIE’S, INC.

NOTES TO THE UNAUDITED ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Business and Operations

Leslie’s, Inc. (“Leslie’s,” “we,” “our,” “us,” “its,” or the “Company”) is the leading direct-to-consumer pool and spa care brand. We market and sell pool and spa supplies and related products and services, which primarily consist of maintenance items such as chemicals, equipment and parts, and cleaning accessories, as well as safety, recreational, and fitness-related products. We currently market our products through ~~over~~approximately ~~1,000~~950 company-operated locations in 3938 states and e-commerce websites.

Reverse Stock Split

On September 10, 2025, our shareholders approved a series of amendments to our Seventh Amended and Restated Certificate of Incorporation (the “Certificate of Amendment”). On September 26, 2025, we filed a Certificate of Amendment with the Secretary of State of the State of Delaware to effect a reverse stock split of our comment stock at a ratio of 1-for-20 (the “Reverse Stock Split”) and proportionately decrease the number of authorized shares of the Company’s common stock, which became effective upon filing (the “Effective Time”). The Company’s common stock began trading on a Reverse Stock Split-adjusted basis on the Nasdaq Global Select Market (“Nasdaq”) as of the open of trading on September 29, 2025 under the existing ticker symbol “LESL”. The Company’s common stock is now represented by a new CUSIP number, 527064 208.

As a result of the Reverse Stock Split, every 20 shares of our common stock issued and outstanding as of the Effective Time of the Reverse Stock Split was automatically converted into one share of common stock. No fractional shares were issued as a result of the Reverse Stock Split. The Company’s transfer agent aggregated all fractional shares of common stock that would otherwise have been issuable as a result of the Reverse Stock Split and sold them at the then prevailing prices on the open market on behalf of those shareholders who would otherwise be entitled to receive such fractional shares. Shareholders who otherwise would be entitled to receive fractional shares received their respective pro rata share of the total proceeds of such sale.

In addition, as of the Effective Time and as a result of the Reverse Stock Split, proportionate adjustments were made in accordance with the terms of the Company’s 2020 Omnibus Incentive Plan (the “Incentive Plan”), with respect to the number of shares of common stock issuable under outstanding stock options, restricted stock units and performance units, and any other equity-based awards, the per-share exercise price with respect to such awards, and the number of shares of common stock reserved for future issuance under the Incentive Plan.

All share and per share amounts in the accompanying consolidated financial statements and notes to the financial statements have been retroactively adjusted to reflect the Reverse Stock Split for all periods.

Note 2—Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

We prepared the accompanying interim ~~condensed~~ consolidated financial statements following United States generally accepted accounting principles (“GAAP”). The financial statements include all normal and recurring adjustments that are necessary for a fair presentation of our financial position and operating results. The interim ~~condensed~~ consolidated financial statements include the accounts of Leslie’s, Inc. and our subsidiaries. All significant intercompany accounts and transactions have been eliminated. These interim ~~condensed~~ consolidated financial statements and the related notes should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended ~~September~~October 284, ~~2024~~2025.

Reclassification

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on our results of operations.

Fiscal Periods

We operate on a fiscal calendar that results in a fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to September 30th ~~as approved by the board~~. In a 52-week fiscal year, each quarter contains 13 weeks of operations; in a 53-week fiscal year, each of the first, second, and third quarters includes 13 weeks of operations and the fourth quarter includes 14 weeks of operations. References to the three months ended ~~June~~January 283, ~~2025~~2026 and ~~June~~December 2928, 2024 refer to the 13 weeks ended ~~June~~January 283, ~~2025~~2026 and ~~June~~December ~~29, 2024. Reference to the nine months ended June~~ 28, ~~2025 and June 29,~~ 2024 ~~refer to the 39 weeks ended June 28, 2025 and June 29, 2024~~.

Use of Estimates

Management is required to make certain estimates and assumptions during the preparation of the ~~condensed~~ consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amount of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the ~~condensed~~ consolidated financial statements. They also impact the reported amount of net ~~income (~~loss) during any period. Actual results could differ from those estimates.

Significant estimates underlying the accompanying ~~condensed~~ consolidated financial statements include inventory reserves, lease assumptions, vendor rebate programs, ~~our loyalty program, the determination of income taxes payable and deferred income taxes,~~ sales returns ~~reserves~~reserve, self-insurance liabilities, and the recoverability of intangible assets and ~~goodwill,~~long-lived ~~and contingent consideration related to business combinations~~assets.

Seasonality

Our business is highly seasonal. Sales and earnings are highest during our third and fourth fiscal quarters, April through September, which represent the peak months of swimming pool use. Sales are substantially lower during our first and second fiscal quarters.

Summary of Other Significant Accounting Policies

There have been no changes to our Significant Accounting Policies since our Annual Report on Form 10-K for the year ended September 28, 2024. For more information regarding our Significant Accounting Policies and Estimates, see Note 2—Summary of Significant Accounting Policies included in our Annual Report on Form 10-K for the year ended September 28, 2024.

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Seasonality

Our business is highly seasonal. Sales and earnings are highest during our third and fourth fiscal quarters, which include April through September, which represent the peak months of swimming pool use. Sales are substantially lower during our first and second fiscal quarters, when we typically generate net losses and we realize negative operating cash flow.

Summary of Other Significant Accounting Policies

There have been no changes to our Significant Accounting Policies since our Annual Report on Form 10-K for the year ended October 4, 2025. For more information regarding our Significant Accounting Policies and Estimates, see Note 2—Summary of Significant Accounting Policies included in our Annual Report on Form 10-K for the year ended October 4, 2025.

Recent Accounting Pronouncements

In ~~January~~December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~No.~~ 2025-0112, ~~Income~~Codification ~~Statement-Reporting~~Improvements. ~~Comprehensive~~The ~~Income-Expense~~guidance ~~Disaggregation~~addresses ~~Disclosures~~suggestions ~~(Subtopic~~received ~~2020-40):~~from ~~Disaggregation~~stakeholders ofregarding ~~Income~~the ~~Statement~~Accounting ~~Expenses~~Standards Codification and makes other incremental improvements to U.S. ~~This~~GAAP. The update ~~clarifies~~represents changes to the ~~initial~~Codification ~~effective~~that ~~date~~(1) ~~for~~clarify, ~~entities~~(2) ~~that~~correct doerrors, ~~not~~or ~~have~~(3) anmake ~~annual~~minor ~~reporting~~improvements. ~~period~~The ~~that~~amendments ~~ends~~make onthe ~~December~~Codification 31easier to beunderstand ~~the~~and ~~first~~apply. ~~annual~~ASU ~~reporting~~2025-12 ~~period~~is effective for fiscal years beginning after December 15, 2026, and interim ~~reporting~~ periods ~~beginning~~within ~~after~~those ~~December~~fiscal ~~15, 2027~~years. We are currently evaluating the ASU to determine its impact on our disclosures; however, we do not expect there to be a material impact.

In ~~November~~December ~~2024~~2025, the FASB issued ASU ~~No. 2024~~2025-~~03,~~11 ~~Income~~to ~~Statement-Reporting~~amend ~~Comprehensive~~the ~~Income-Expense~~guidance ~~Disaggregation~~in ~~Disclosures~~Interim Reporting (~~Subtopic~~Topic ~~220-40~~270):. ~~Disaggregation~~The ofupdate ~~Income~~provides ~~Statement~~clarifications ~~Expenses.~~intended ~~This~~to ~~update~~improve ~~requires~~the ~~additional~~consistency ~~disclosures~~and ~~over~~usability ~~certain~~of ~~expenses~~interim disclosure requirements, including ~~purchases~~a comprehensive listing of ~~inventory,~~required ~~employee~~interim ~~compensation,~~disclosures ~~depreciation,~~and ~~intangible~~a ~~asset~~new ~~amortization,~~disclosure ~~and~~principle ~~other~~for ~~specific~~reporting ~~expense~~material ~~categories.~~events ~~This~~occurring ~~standard~~after ~~also~~the ~~requires~~most ~~disclosure~~recent ofannual period. The amendments do not change the ~~total~~underlying ~~amount~~objectives of ~~selling~~interim ~~expenses~~reporting ~~and~~but ~~the~~are ~~Company's~~designed ~~definition~~to ofenhance ~~selling~~clarity ~~expenses~~in application. ~~This~~The ~~update~~guidance is effective for fiscal years beginning after December 15, ~~2026~~2027, ~~and~~including interim periods within those fiscal years ~~beginning after December 15, 2027~~. ~~Early adoption is permitted.~~ We are currently evaluating the ASU to determine its impact on our disclosures; however, we do not expect there to be a material impact.

In ~~December~~September ~~2023~~2025, the FASB issued ASU ~~No. 2023~~2025-0906, ~~Income~~Intangibles ~~Taxes~~- Goodwill and Other - Internal-Use Software (~~Topic~~Subtopic ~~740~~335-40): Targeted Improvements to ~~Income~~the ~~Tax~~Accounting ~~Disclosures,~~for ~~which~~Internal-Use ~~includes~~Software. ~~amendments~~The ~~that~~guidance ~~further~~modernizes ~~enhance~~and ~~income~~clarifies ~~tax~~the ~~disclosures,~~threshold ~~primarily~~for ~~through~~when ~~standardization~~an entity is required to start capitalizing software costs and ~~disaggregation~~is ofbased ~~rate~~on ~~reconciliation~~when ~~categories~~(i) management has authorized and ~~income~~committed ~~taxes~~to ~~paid~~funding bythe ~~jurisdiction.~~software ~~This~~project ~~update~~and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in ASU 2025-06 are effective for ~~annual~~fiscal ~~periods~~years beginning after December 15, ~~2024~~2027, ~~though~~and ~~early~~interim ~~adoption~~reporting isperiods ~~permitted~~within those annual reporting periods. We are currently evaluating the ASU to determine its impact on our consolidated financial statements and disclosures; however, we do not expect there to be a material impact.

In ~~November~~January ~~2023~~2025, the FASB issued ASU ~~No. 2023~~2025-0701, ~~Segment~~Income Statement-Reporting ~~(Topic~~Comprehensive ~~280):~~Income-Expense ~~Improvements~~Disaggregation ~~to Reportable Segment~~ Disclosures, ~~which~~(Subtopic ~~require~~2020-40): anDisaggregation ~~entity~~of toIncome ~~disclose~~Statement ~~the~~Expenses. ~~title~~This ~~and~~update ~~position~~clarifies of the ~~Chief~~initial ~~Operating~~effective ~~Decision~~date ~~Maker~~for ~~(“CODM”)~~entities ~~and the significant segment expenses~~ that ~~are~~do ~~regularly~~not ~~provided~~have toan ~~the~~annual ~~CODM~~reporting ~~and~~period ~~included~~that ~~within~~ends ~~each~~on ~~reported~~December ~~measure~~31 ofto ~~segment~~be ~~profit~~the orfirst ~~loss. This update is effective for~~ annual ~~periods~~reporting period beginning after December 15, ~~2023~~2026, and interim ~~disclosures~~reporting periods beginning after December 15, ~~2024, though early adoption is permitted~~2027. ~~This update is effective retrospectively upon adoption to all periods presented in the financial statements.~~ We are currently evaluating the ASU to determine its impact on our disclosures; however, we do not expect there to be a material impact.

~~Note~~In 3November ~~—Goodwill~~2024, FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 2020-40): Disaggregation of Income Statement Expenses. This update requires additional disclosures over certain expenses, including purchases of inventory, employee compensation, depreciation, intangible asset amortization, and ~~Other~~other ~~Intangibles~~specific expense categories. This standard also requires disclosure of the total amount of selling expenses and the Company's definition of selling expenses. This update is effective for fiscal years beginning after December 15, ~~Net~~2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the ASU to determine its impact on our disclosures; however, we do not expect there to be a material impact.

~~Goodwill~~In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This update is effective for annual periods beginning after December 15, 2024, though early adoption is permitted. We are currently evaluating the ASU to determine its impact on our disclosures; however, we do not expect there to be a material impact.

~~The~~There ~~following~~are ~~table~~other ~~details~~new ~~goodwill~~accounting ~~(in~~pronouncements ~~thousands):~~issued by the FASB that we have adopted or will adopt, as applicable. We do not believe any of these new accounting pronouncements have had, or will have, a material impact on our consolidated financial statements or disclosures.

	June 28, 2025		September 28, 2024		June 29, 2024
Balance at beginning of the period	$	180,698	$	180,698	$	180,698
Acquisitions, net of measurement period adjustments		-		-		-
Balance at the end of the period	$	180,698	$	180,698	$	180,698

Goodwill and Intangibles Impairment Valuation

We review goodwill and indefinite-lived intangible assets for impairment annually (in the fourth quarter) or more frequently if impairment indicators arise. During the three months ended June 28, 2025, management identified certain indicators (i.e., decline in market capitalization and reduced operating performance), which required an interim goodwill and indefinite-lived intangible asset impairment evaluation.

As a result, we performed a quantitative impairment test for our only reporting unit under ASC 350, Intangibles - Goodwill and Other. The fair value of the reporting unit was estimated using a combined discounted cash flow model and market approach, consistent with valuation methodologies used historically.

Key assumptions of the analysis included:

Discount rate: 16%

Long-term growth rate: 3%

Based on the results of this analysis, we determined that the fair value of the reporting unit exceeded its carrying amount, and therefore no impairment loss needed to be recognized.

Our indefinite-lived intangible assets were tested for impairment using the relief of royalty method consistent with standard valuation methodologies used in prior acquisitions. These same key assumptions were used in the impairment evaluation of our

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~~indefinite-lived~~Note ~~intangible~~3 ~~assets.~~—Goodwill ~~Based on the analysis performed it was determined that the fair value of the indefinite-lived intangibles was greater than the carrying value~~ and ~~thus~~Other noIntangibles, ~~impairment~~Net ~~charge was recognized.~~

Goodwill

The following table details the changes in goodwill (in thousands):


	January 3, 2026		October 4, 2025			December 28, 2024
Balance at beginning of the period	$	—	$	180,698		$	180,698
Acquisitions, net of measurement period adjustments		—		—			—
Impairment		—		(180,698	)		—
Balance at the end of the period	$	—	$	—		$	180,698

Other Intangibles

Other intangible assets consisted of the following as of ~~June~~January 283, ~~2025~~2026 (in thousands, except weighted average remaining useful life):

	WeightedAverageRemainingUseful Life (in Years)		GrossCarryingValue		AccumulatedAmortization			NetCarryingAmount
Trade name and trademarks (finite life)		87.27	$	22,100	$	(67,~~834~~859	)	$	1514,~~266~~241
Trade name and trademarks (indefinite life)	Indefinite			9,350		—			9,350
Non-compete agreements		3.72		2,260		(1,~~523~~629	)		~~737~~631
Consumer relationships		65.17		15,400		(9,~~097~~788	)		65,~~303~~612
Other intangibles		32.38		4,000		(3,~~947~~963	)		5337
Total			$	53,110	$	(2123,~~401~~239	)	$	3129,~~709~~871

Other intangible assets consisted of the following as of ~~September~~October 284, ~~2024~~2025 (in thousands, except weighted average remaining useful life):

	WeightedAverageRemainingUseful Life (in Years)		GrossCarryingValue		AccumulatedAmortization			NetCarryingAmount
Trade name and trademarks (finite life)		8.90	$	22,100	$	(57,~~355~~366	)	$	1614,~~745~~734
Trade name and trademarks (indefinite life)	Indefinite			9,350		—			9,350
Non-compete agreements		43.4		2,260		(1,~~368~~578	)		~~892~~682
Consumer relationships		65.69		15,400		(89,~~038~~477	)		75,~~362~~923
Other intangibles		43.1		4,000		(3,~~920~~957	)		8043
Total			$	53,110	$	(1822,~~681~~378	)	$	3430,~~429~~732

Other intangible assets consisted of the following as of ~~June~~December 2928, 2024 (in thousands, except weighted average remaining useful life):

	WeightedAverageRemainingUseful Life (in Years)		GrossCarryingValue		AccumulatedAmortization			NetCarryingAmount
Trade name and trademarks (finite life)		97.29	$	22,100	$	(45,~~861~~848	)	$	1716,~~239~~252
Trade name and trademarks (indefinite life)	Indefinite			9,350		—			9,350
Non-compete agreements		43.64		2,260		(1,~~317~~420	)		~~943~~840
Consumer relationships		65.87		15,400		(78,~~685~~391	)		7,~~715~~009
Other intangibles		4.3.1		4,000		(3,~~904~~930	)		9670
Total			$	53,110	$	(1719,~~767~~589	)	$	3533,~~343~~521

Amortization expense was $0.9 million and $0.9 million for the three months ended June 28, 2025 and June 29, 2024. Amortization expense was $2.7 million and $2.8 million for the nine months ended June 28, 2025 and June 29, 2024. No impairment of goodwill or other intangible assets was recorded during the three and nine months ended June 28, 2025 and June 29, 2024.

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~~The~~Amortization ~~following~~expense ~~table~~was ~~summarizes~~$0.9 million for the ~~estimated~~three ~~future~~months ~~amortization~~ended ~~expense~~January ~~related~~3, to2026 ~~finite-lived~~and December 28, 2024, respectively. No impairment of intangible assets onwas ~~our~~recorded ~~condensed~~during ~~consolidated~~the ~~balance~~three ~~sheet~~months asended ofJanuary ~~June~~3, 2026 and December 28, ~~2025~~2024. ~~(in thousands):~~

	Amount
Remainder of fiscal 2025	$	980
2026		3,382
2027		3,262
2028		3,150
2029		2,899
Thereafter		8,686
Total	$	22,359

The following table summarizes the estimated future amortization expense related to finite-lived intangible assets on our consolidated balance sheet as of January 3, 2026 (in thousands):

Note 4—Accounts and Other Receivables, Net


	Amount
Remainder of fiscal 2026	$	2,518
2027		3,262
2028		3,157
2029		2,899
2030		2,689
Thereafter		5,996
Total	$	20,521

Note 4—Impairments, Store Closing, and Other Costs

On November 25, 2025, management committed to a strategic plan to improve operational efficiency by closing 80 underperforming stores and one distribution center (the “Plan”). The process of closing these locations began in early December 2025 and was substantially completed as of the end of the first fiscal quarter of 2026.

As a result of this Plan, the Company recognized $18.5 million in charges during the three months ended January 3, 2026. These charges are included in our consolidated statements of operations and are comprised of the following components (in thousands):


Financial Statement Line Item	Charge	Amount
Cost of merchandise and services sold	Non-cash inventory impairment	$	6,371
Selling, general and administrative expense	Wind down and other costs (1)		1,975
Impairment	Non-cash property and equipment impairments		5,353
Impairment	Non-cash right-of-use asset impairment		4,795
Total		$	18,494

(1)

Includes $1.3 million of construction and other costs related to store closures, $0.5 million in severance costs, and $0.2 million in ongoing occupancy costs.

No costs related to store closures were recognized during the three months ended December 28, 2024. Management will continue to monitor the progress of the store closures and evaluate the impact on the Company’s financial results. Any future expenses associated with these ongoing exit activities will be disclosed upon recognition.

Note 5—Accounts and Other Receivables, Net

Accounts and other receivables, net consisted of the following (in thousands):

June 28, 2025

September 28, 2024

June 29, 2024

January 3, 2026

October 4, 2025

December 28, 2024

Vendor and other rebates receivable

133,~~527~~613

244,~~713~~463

208,~~393~~840

Customer receivables

2012,~~287~~313

1816,~~262~~273

2115,~~592~~545

Other receivables

32,~~210~~019

4,~~723~~707

67,~~031~~860

Allowance for credit losses

(2,~~230~~090

)

(2,~~231~~226

)

(2,~~199~~442

)

Total

3415,~~794~~855

4523,~~467~~217

4529,~~817~~803

Note 56—Inventories, Net

Inventories, net consisted of the following (in thousands):

June 28, 2025

September 28, 2024

June 29, 2024

January 3, 2026

October 4, 2025

December 28, 2024

Raw materials

32,~~038~~384

32,~~381~~022

4,~~787~~143

Finished goods

~~270~~207,~~154~~622

~~230~~205,~~902~~961

~~297~~266,~~422~~944

Total

~~273~~210,~~192~~006

~~234~~207,~~283~~983

~~302~~271,~~209~~087

Note 6—Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	June 28, 2025		September 28, 2024		June 29, 2024
Prepaid insurance	$	3,164	$	1,120	$	3,449
Prepaid occupancy costs		2,280		2,132		2,173
Prepaid sales tax		6,734		3,719		6,788
Prepaid maintenance		5,140		4,388		5,038
Prepaid other		4,209		13,380		5,626
Other current assets		12,933		9,440		11,471
Total	$	34,460	$	34,179	$	34,545

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Note 7—~~Accrued~~Prepaid Expenses and Other Current ~~Liabilities~~Assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	January 3, 2026		October 4, 2025		December 28, 2024
Prepaid insurance	$	7,119	$	962	$	6,139
Prepaid occupancy costs		2,124		2,222		2,123
Prepaid sales tax		1,955		3,450		1,789
Prepaid maintenance		4,472		4,644		5,016
Prepaid other		9,069		7,736		4,415
Income tax receivable		2,626		3,302		—
Other current assets		10,183		10,933		9,635
Total	$	37,548	$	33,249	$	29,117

Note 8—Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

June 28, 2025

September 28, 2024

June 29, 2024

January 3, 2026

October 4, 2025

December 28, 2024

Accrued payroll and employee benefits

1816,~~780~~913

20,~~813~~025

1216,~~484~~628

Customer deposits

56,~~807~~027

56,~~289~~406

53,~~428~~942

Interest

~~4,888~~759

~~5,545~~998

~~555~~5,073

Inventory related accruals

135,~~001~~913

138,~~586~~318

146,~~323~~779

Loyalty and deferred revenue

78,~~919~~512

67,~~269~~204

67,~~685~~308

Sales tax

133,~~916~~650

89,~~282~~097

153,~~442~~840

Self-insurance reserves

1112,~~666~~385

910,~~287~~096

1110,~~228~~580

Other accrued liabilities

2814,~~652~~793

3720,~~642~~303

4117,~~063~~378

Total

~~104~~68,~~629~~952

~~106~~82,~~713~~447

~~107~~71,~~208~~528

As of ~~June~~January 283, ~~2025~~2026, ~~September~~October 284, ~~2024~~2025, and ~~June~~December 2928, 2024, capital expenditures included in other accrued liabilities were $0.63 million, $1.04 million, and $2.0.3 million.

11Note 9—Long-Term Debt, Net

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Note 8—Long-Term Debt, Net

Our long-term debt, net consisted of the following (in thousands, except interest rates):

	EffectiveInterest Rate (1)				~~June~~January 283, ~~2025~~2026			~~September~~October 284, ~~2024~~2025			~~June~~December 2928, 2024
Term Loan		76.1958	%	(2)	$	756,650		$	~~783~~756,~~675~~650		$	~~783~~756,~~675~~650
Revolving Credit Facility		65.0234	%	(3)		2025,000			—			—40,000
Total long-term debt						~~776~~781,650			~~783~~756,~~675~~650			~~783~~796,~~675~~650
Less: current portion of long-term debt						—			(8,100	)		(8,100	)
Less: noncurrent Revolving Credit Facility						(25,000	)		—			(40,000	)
Less: noncurrent Revolving Credit Facility						(20,000	)		—			—
Less: unamortized discount						(1,165	)		(1,297	)		(1,690	)
Less: unamortized discount						(1,436	)		(1,818	)		(1,944	)
Less: deferred financing charges						(3,096	)		(3,298	)		(4,350	)
Less: deferred financing charges						(3,667	)		(4,692	)		(5,033	)
Total long-term debt, net					$	752,389		$	752,055		$	750,610
Total long-term debt, net					$	751,547		$	769,065		$	768,598

(1)

Effective interest rates as of ~~June~~January 283, ~~2025~~2026.

(2)

Carries interest at a specified margin over the Term Secured Overnight Financing Rate (“SOFR”) between 2.50% and 2.75% with a minimum SOFR of 0.50% plus a SOFR adjustment.

(3)

Carries interest at a specific margin between 0.25% and 0.75% with respect to base rate loans and between 1.25% and 1.75% with respect to Term SOFR loans, with a SOFR adjustment.

Term Loan

In June 2023, we entered into Amendment No. 1 (“Term Loan Amendment”) to our Amended and Restated Term Loan Credit Agreement (“Term Loan”). The Term Loan Amendment (i) replaced the existing LIBOR-based interest rate benchmark with a Term SOFR-based benchmark and (ii) amended certain other related terms and provisions, including the addition of a SOFR adjustment of (a) 0.11448% per annum for one-month, (b) 0.26161% per annum for three months, and (c) 0.42826% per annum for six months. The other material terms of the Term Loan remained substantially unchanged.

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The Term Loan provides for an $810.0 million secured term loan facility with a maturity date of March 9, 2028. Borrowings under the Term Loan have an initial applicable rate, at our option, of (i) 2.75% for loans that are Term SOFR loans and (ii) 1.75% for loans that are (the “Applicable Rate”) ABR loans. The Applicable Rate of the Term Loan is based on our first lien leverage ratio as follows: (a) if the first lien leverage ratio is greater than 2.75 to 1.00, the applicable rate will be 2.75% for Term SOFR loans and 1.75% for ABR loans and (b) if the first lien leverage ratio is less than or equal to 2.75 to 1.00, the applicable rate will be 2.50% for Term SOFR loans and 1.50% for ABR loans. For Term SOFR loans, the loans will bear interest at the Term SOFR-based benchmark rate plus the Applicable Rate and the SOFR adjustment, as defined above.

During the ~~quarter~~three months ended January 3, 2026, no principal payments were made. During the three months ended December 28, 2024, we made our normal principal payment of $2.0 million and a $25.0 million pre-payment on our Term Loan. This pre-payment was applied to our scheduled principal payments in fiscal years 2025, 2026 and 2027.

Revolving Credit Facility

In March 2023, we entered into Amendment No. 6 to our $200.0 million credit facility (“Revolving Credit Facility”) maturing on August 13, 2025 (the “Amendment”). The Amendment (i) increased the revolving credit commitments under the Revolving Credit Facility in the amount of $50.0 million, such that the aggregate commitments are $250.0 million and (ii) replaced the existing LIBOR-based rate with a Term SOFR-based rate, as an interest rate benchmark. The Revolving Credit Facility has (i) an applicable margin on base rate loans with a range of 0.25% to 0.75%, (ii) an applicable margin on Term SOFR loans with a range of 1.25% and 1.75%, (iii) a SOFR adjustment of 0.10% for all borrowing periods, (iv) a floor of 0% per annum, and (v) a commitment fee rate of 0.25% per annum. The other material terms of the Revolving Credit Facility prior to the Amendment remained substantially unchanged.

On April 3, 2024, we entered into Amendment No. 7 to our Revolving Credit Facility (the “2024 Amendment”). The 2024 Amendment (i) extended the maturity date to April 3, 2029 and (ii) revised the applicable margin on Term SOFR and base rate loans. The other material terms of the Revolving Credit Facility prior to the 2024 Amendment remained substantially unchanged.

As of ~~June~~January 283, ~~2025~~2026, we had $2025.0 million outstanding on our Revolving Credit Facility. The amount available under our Revolving Credit Facility was reduced by $11.81 million, $1011.47 million, and $1011.9 million of existing standby letters of credit as of ~~June~~January 283, ~~2025~~2026, ~~September~~October 284, ~~2024~~2025, and ~~June~~December 2928, 2024.

Subsequent to quarter end we paid off the remaining $20.0 million outstanding on our Revolving Credit Facility

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Fair Value

The fair value of our Term Loan due in 2028 was determined to be $~~534~~350.48 million as of ~~June~~January 283, ~~2025~~2026, $~~758~~208.26 million as of ~~September~~October 284, ~~2024~~2025, and $~~775~~722.96 million as of ~~June~~December 2928, 2024. These fair value estimates, determined to be Level 2, are subjective in nature and involve uncertainties and matters of judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

Representations and Covenants

Substantially all of our assets are pledged as collateral to secure our indebtedness. The Term Loan does not require us to comply with any financial covenants. The Term Loan and the Revolving Credit Facility contain customary representations and warranties, covenants, and conditions to borrowing. No ~~event~~events of default occurred as of ~~June~~January 283, ~~2025~~2026, ~~September~~October 284, ~~2024~~2025, and ~~June~~December 2928, 2024.

Future Debt Maturities

The following table summarizes the debt maturities and scheduled principal repayments of our indebtedness as of ~~June~~January 283, ~~2025~~2026 (in thousands):

	Amount
Remainder of fiscal 2025	$	20,000
Remainder of fiscal 2026	$	25,000
2026		—
2027		—
2028		756,650
2029		—
2030		—
Thereafter		—
Total	$	~~776~~781,650

Note 910—Income Taxes

Our effective income tax rate was (100.48)% for the ~~nine~~three months ended ~~June~~January 283, ~~2025~~2026, compared to ~~a benefit of 40~~19.7% for the ~~nine~~three months ended ~~June~~December 2928, 2024. ~~The~~For ~~differences~~the ~~between~~three ~~the~~months ~~statutory~~ended ~~rate~~January ~~and~~3, ~~our~~2026, ~~effective~~the ~~rate~~Company’s provision for ~~the~~income ~~nine~~taxes ~~months~~is ~~ended~~based ~~June~~upon ~~28,~~an ~~2025~~estimated ~~were~~annual ~~primarily~~effective ~~attributable~~tax torate ~~state~~for ~~taxes~~the ~~and~~year ~~change~~applied into ~~valuation~~ordinary ~~allowance~~income. The ~~difference~~differences between the statutory rate and our effective rate for the ~~nine~~three months ended ~~June~~January 293, ~~2024~~2026 ~~was~~were primarily attributable to state taxes and ~~tax~~change ~~expenses~~in ~~due~~valuation ~~to equity-based compensation awards~~allowance. ~~Our~~The ~~effective~~difference ~~income tax rate can fluctuate due to factors including valuation allowances, changes in tax laws, federal and state audits, and the impact of other discrete items.~~

For the nine months ended June 28, 2025, we utilized the discrete effective tax rate method, as allowed by Accounting Standards Codification (“ASC”) 740- 270-30-18, “Income Taxes—Interim Reporting,” to calculate our interim income tax provision. The discrete method treats the year-to-date period as if it was the annual period and determines the income tax expense or benefit on that basis. The Company believes that the use of this discrete method is more appropriate than the annual effective tax rate method due to the sensitivity of tax adjustments to marginal pre-tax book profitability anticipated for the year.12

On July 4, 2025, the One Big Beautiful Bill Act ( the “OBBBA”) was signed into law, which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key provisions of the Tax Cuts & Jobs Act of 2017. The Company is currently assessing the potential impacts of the OBBBA, if any, on its financials results, and currently does not expect it to have a material impact on its 2025 financial results.

Note 10—Commitments & Contingencies

Contingencies

On September 8, 2023, a class action complaint for violation of federal securities laws was filed by West Palm Beach Police Pension Fund in the U.S. District Court for the District of Arizona against us, our former Chief Executive Officer and our former Chief Financial Officer. On December 1, 2023, the court appointed the lead plaintiff, and on February 20, 2024, the lead plaintiff filed an amended and consolidated complaint. The amended and consolidated complaint alleges that we violated federal securities laws by issuing materially false and misleading statements that failed to disclose adverse facts about our financial guidance, business operations and prospects, and seeks class certification, damages, interest, attorneys’ fees, and other relief. On April 22, 2024, we filed a motion to

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~~dismiss~~between the ~~amended~~statutory rate and ~~consolidated~~our ~~complaint.~~effective ~~That~~rate ~~court~~for ~~granted that motion and dismissed~~ the ~~claims~~three onmonths ~~July~~ended 14December 28, ~~2025. The~~2024 ~~court~~was ~~will~~primarily ~~allow~~attributable ~~the plaintiff~~ to ~~file~~state ataxes ~~second~~and ~~amended~~change ~~complaint,~~in ~~which~~valuation isallowance ~~due~~related onto orour ~~before~~interest ~~August~~expense ~~13, 2025~~limitation. ~~Due~~Our toeffective ~~the~~income ~~early~~tax ~~stage~~rate ofcan ~~this~~fluctuate ~~proceeding,~~due weto ~~cannot~~factors ~~reasonably~~including ~~estimate~~valuation ~~the~~allowances, ~~potential~~changes ~~range~~in oftax ~~loss~~laws, iffederal ~~any.~~and Westate ~~dispute~~audits, and the ~~allegations~~impact of ~~wrongdoing~~other ~~and~~discrete ~~intend to defend ourselves vigorously in this matter~~items.

OnFor ~~March~~the ~~13,~~three ~~2024~~months ~~and~~ended ~~March 14, 2024, and~~ December 1728, 2024, ~~three~~we ~~derivative~~utilized ~~actions were separately filed in~~ the ~~U.S.~~discrete ~~District~~effective ~~Courts~~tax ~~for~~rate ~~the~~method, ~~Districts~~as ofallowed ~~Arizona and Delaware~~ by ~~John~~Accounting ~~Clemens,~~Standards ~~Sally~~Codification ~~Flynn,~~740- ~~and Ian Mednick~~270-30-18, on“Income ~~behalf~~Taxes—Interim ~~of the Company~~Reporting,” ~~against~~to calculate our ~~officers~~interim ~~and~~income ~~directors~~tax provision. ~~Each~~The ofdiscrete ~~the~~method ~~three~~treats ~~complaints include substantially~~ the ~~same~~year-to-date ~~allegations~~period as ~~those~~if init ~~the~~was ~~securities class action, and allege that~~ the ~~defendant~~annual ~~directors~~period and ~~officers~~determines ~~harmed~~ the ~~Company~~income bytax ~~either~~expense ~~making false~~ or ~~misleading~~benefit ~~statements,~~on orthat ~~allowing false or misleading statements to be made~~basis. The ~~complaints~~Company ~~seek~~believed ~~the~~that ~~award of damages, costs, attorney’s fees, and other declaratory relief. The two derivative actions pending in~~ the ~~U.S.~~use ~~District Court for the District~~ of ~~Arizona~~this ~~have~~discrete ~~been~~method ~~consolidated~~was ~~into~~more aappropriate ~~single~~than ~~proceeding. All of~~ the ~~derivative~~annual ~~actions~~effective ~~are~~tax ~~stayed~~rate ~~pending~~method adue ~~decision on the motion~~ to ~~dismiss in~~ the ~~securities~~sensitivity ~~class~~of ~~action.~~tax ~~These~~adjustments ~~matters will continue~~ to bemarginal ~~stayed~~pre-tax ~~pending~~book aprofitability ~~decision~~anticipated onfor ~~a motion to dismiss a second amended complaint in~~ the ~~securities class action~~year. Due to the early stage of these proceedings, we cannot reasonably estimate the potential range of loss, if any. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters.

WeNote ~~are~~11—Commitments ~~also~~& ~~defendants~~Contingencies in lawsuits or potential claims encountered in the normal course of business. When the potential liability from a matter can be estimated and the loss is considered probable, we record the estimated loss. Due to uncertainties related to the resolution of lawsuits, investigations and claims, the ultimate outcome may differ from the estimates. We do not expect that the resolutions of any of these matters will have a material effect on our condensed consolidated financial position or results of operations. We did not record any material loss contingencies for the periods presented.

InContingencies August 2024, the Company entered into an amended agreement with one of its vendors in which the Company provided a guarantee of certain existing and future warranty obligations of the vendor’s products. In exchange for providing the guarantee, the Company was provided additional rebates on past and future purchases from the vendor. The amended agreement was retroactive to January 1, 2024 with a term of four years.

~~Under~~On ~~the~~September ~~terms~~8, of2023, ~~the~~a ~~guarantee,~~class ~~the~~action ~~Company~~complaint for violation of federal securities laws was ~~required~~filed toby ~~reimburse~~West Palm Beach Police Pension Fund in the ~~vendor~~U.S. District Court for ~~parts~~the ~~used~~District ~~for~~of ~~warranty~~Arizona ~~work~~against ~~performed~~us, our former Chief Executive Officer and our former Chief Financial Officer. The ~~guarantee~~complaint ~~had~~alleges nothat ~~limitation~~the ondefendants ~~the~~violated ~~maximum~~federal ~~potential~~securities ~~future~~laws ~~payment~~by ofissuing ~~warranty~~materially ~~costs~~false ~~under~~and ~~the~~misleading ~~agreement.~~statements ~~The~~that ~~Company~~failed ~~recognized~~to adisclose ~~liability~~adverse infacts ~~accrued~~about ~~expenses~~our ~~associated~~financial ~~with~~guidance, ~~this~~business ~~guarantee~~operations atand anprospects, ~~estimated~~and ~~fair~~seeks ~~value~~class ofcertification, ~~approximately~~damages, ~~$10.7~~interest, ~~million~~attorneys’ fees, and other relief. ~~The~~On ~~corresponding~~April ~~asset~~22, ~~related~~2024, the defendants filed a motion to dismiss the ~~expected~~complaint. ~~discounts~~That oncourt ~~future~~granted ~~purchases~~that ismotion ~~recorded~~and indismissed ~~prepaid~~the ~~expenses~~claims ~~and~~on ~~other~~July ~~current~~14, ~~assets~~2025. The ~~amortization~~court ofallowed ~~this~~the ~~balance~~plaintiff ~~would~~to ~~have~~file ~~been~~a ~~recorded~~second asamended ~~cost~~complaint. ofOn ~~goods~~August ~~sold~~13, ~~during~~2025, the ~~term~~plaintiff offiled the second amended ~~agreement~~complaint. On ~~As of~~ September 2812, ~~2024~~2025, the ~~liability~~defendants ~~related~~filed a motion to dismiss the ~~guarantee~~second ~~was~~amended $9complaint.5 ~~million~~That motion is fully briefed and pending before the court. Due to the early stage of this proceeding, we cannot reasonably estimate the potential range of loss, if any. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.

InOn ~~November~~March 13, 2024, ~~the~~March ~~Company~~14, 2024, and December 17, 2024, three derivative actions were separately filed in the ~~vendor~~U.S. ~~amended~~District Courts for the ~~agreement~~Districts ~~effective~~of ~~September~~Arizona 29and Delaware by John Clemens, ~~2024~~Sally toFlynn, ~~eliminate~~and Ian Mednick, respectively, on behalf of the ~~guarantee~~Company, and ~~reduce~~against ~~rebates~~its oncurrent ~~future~~and ~~purchases~~former officers and directors. As aEach ~~result,~~of the ~~Company~~three ~~derecognized~~complaints include allegations similar to those in the ~~warranty~~securities ~~guarantee~~class ~~liability~~action, and allege that the ~~other~~defendant ~~current~~directors ~~asset~~and ~~balance~~officers inharmed the ~~first~~Company ~~quarter~~by ofeither ~~fiscal~~making ~~2025~~false or misleading statements, or allowing false or misleading statements to be made. ~~Additionally~~The complaints seek the award of damages, costs, attorneys’ fees, and other declaratory relief. The two derivative actions pending in the ~~Company~~U.S. ~~received~~District ~~credit~~Court for ~~$1.8~~the ~~million~~District of ~~previous~~Arizona ~~warranty-related~~have ~~expense~~been ~~which~~consolidated ~~was~~into ~~recorded~~a assingle proceeding. All of the derivative actions are stayed pending a ~~reduction~~decision on the motion to ~~cost~~dismiss in the securities class action. Due to the early stage of ~~goods~~these ~~sold~~proceedings, we cannot reasonably estimate the potential range of loss, if any. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters.

~~Our~~We ~~workers’~~are ~~compensation~~subject ~~insurance~~to ~~program~~other litigation, ~~general liability insurance program~~claims, and ~~employee~~other ~~group~~proceedings ~~medical~~that ~~plan~~arise ~~have~~from ~~self~~time-~~insurance~~to-time ~~retention~~in ~~features~~the ordinary course of upbusiness. We believe these actions are routine and incidental to $0the business.4 ~~million~~As ~~per~~of ~~event.~~January We3, 2026, we had ~~standby~~established ~~letters~~reserves offor ~~credit~~claims ~~outstanding~~that inare probable and estimable and such reserves were not significant. While we cannot feasibly predict the ~~amount~~outcome of ~~$11.8~~these ~~million~~matters ~~and~~with ~~$10.7~~certainty, ~~million~~we asbelieve, based on examination of ~~June~~these 28matters, ~~2025~~experience to date and ~~June~~discussions 29with counsel, ~~2024~~that the ultimate liability, ~~for~~individually or in the ~~purpose~~aggregate, ofwill ~~securing~~not ~~such~~have ~~obligations~~a ~~under~~material adverse effect on our ~~workers’~~business, ~~compensation~~financial ~~self-insurance~~position, ~~programs~~results of operations, or cash flows.

~~Note~~Our workers’ compensation insurance program, general liability insurance program, and employee group medical plan have self-insurance retention features of up to $0.4 million per event. We had standby letters of credit outstanding in the amount of $11~~—Share~~.1 ~~Repurchase~~million, ~~Program~~$11.7 million and $11.9 million as of January 3, 2026, October 4, 2025 and December 28, 2024, respectively, for the purpose of securing such obligations under our workers’ compensation self-insurance programs.

On December 3, 2021, the board of directors authorized a share repurchase program for up to an aggregate of $300 million of the Company’s outstanding shares of common stock over a period of three years, which expired on December 31, 2024. The amount, price, manner, and timing of repurchases were determined by the Company in its discretion and depended on a number of factors, including legal requirements, price, economic and market conditions, the Company’s financial condition, capital requirements, cash flows, results of operations, business prospects, and other factors management deemed relevant. Shares were authorized to be repurchased from time-to-time using a variety of methods, including on the open market and/or in privately negotiated transactions, including under plans complying with Rule 10b5-1 under the Exchange Act, as part of accelerated share repurchases, and other methods.

On December 16, 2021, the Company repurchased and retired 7.5 million shares of common stock at a price per share of $20.25 under the program. The Company paid $151.9 million ($152.1 million including offering costs) to fund the share repurchase using existing cash on hand. The Company accounted for the share repurchase and retirement of shares under the cost method by deducting its par value from common stock, reducing additional paid-in-capital by $127.5 million (using the share price when the shares were originally issued), and increasing retained deficit by the remaining excess cost of $24.4 million.

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During the three and nine month periods ended June 28, 2025 and June 29, 2024, no shares were repurchased.

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Note 12—Equity-Based Compensation

Equity-Based Compensation

2020 Omnibus Incentive Plan

In October 2020, we adopted the ~~Leslie’s, Inc. 2020 Omnibus~~ Incentive Plan ~~(the “Plan”)~~, which was amended and restated by our shareholders at our 2024 Annual Meeting of Shareholders. The Incentive Plan provides for various types of awards, including non-qualified stock options to purchase Leslie’s common stock (each, a “Stock Option”), restricted stock units (“RSUs”) and performance stock units (“PSUs”) which may settle in Leslie’s, Inc. common stock to our directors, executives, and eligible employees of the Company. As of ~~June~~January 283, ~~2025~~2026, we had 120.34 million shares of common stock available for future grants under the Incentive Plan.

As of ~~June~~January 283, ~~2025~~2026, the aggregate unamortized value of all outstanding equity-based compensation awards was $~~10.~~6.4 million, which is expected to be recognized over a weighted average period of 2 1.29 years.

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Stock Options

Stock Options granted under the Incentive Plan generally expire ten years from the date of grant and consist of Stock Options that vest upon ~~the~~ satisfaction of time-based requirements. The following tables summarize our Stock Option activity under the Incentive Plan ~~during the nine months ended June 28, 2025~~ (in thousands, except per share amounts):

	Number of Options			Weighted Average Exercise Price
Outstanding, Beginning		~~1,878~~40		$	18394.4635
Granted		—118			—1.65
Exercised		—			—
Forfeited/Expired		(~~1,074~~17	)		17464.5195
Balance, Ending		~~804~~141		$	1958.7226
Vested and exercisable as of June 28, 2025		804		$	19.72
Vested and exercisable as of January 3, 2026		23		$	343.41

	As of June 28, 2025
	As of January 3, 2026
Aggregate intrinsic value of options outstanding	$	—
Aggregate intrinsic value of stock options outstanding	$	9
Unamortized value of unvested stock options	$	—56
Weighted average years that expense is expected to be recognized		—2.0
Weighted average remaining contractual years outstanding		59.51

Restricted Stock Units and Performance Units

RSUs represent grants that vest ratably upon the satisfaction of time-based requirements. PSUs represent grants potentially issuable in the future based upon the Company’s achievement of certain performance conditions. The fair value of our RSUs and PSUs are calculated based on the Company’s stock price on the date of the grant.

The following table summarizes our RSU and PSU activity under the Incentive Plan during the ~~nine~~three months ended ~~June~~January 283, ~~2025~~2026 (in thousands, except per share amounts):

	Number of RSUs/PSUs			Weighted Average Grant Date Fair Value
Outstanding, Beginning		~~3,047~~254		$	650.7921
Granted		~~4,440~~139			12.7816
Vested		(~~650~~26	)		980.1310
Forfeited		(~~1,132~~13	)		547.6840
Balance, Ending		~~5,705~~354		$	229.8515

In December 2024, ~~0.9~~45,000 ~~million~~ PSUs were granted subject to the Company achieving certain adjusted sales and adjusted EBITDA performance targets on a cumulative basis during fiscal years 2025, 2026, and 2027. The criteria are based on a range of performance targets in which participants may earn between 0% to 200% of the base number of awards granted. The weighted average grant date fair value of the PSUs was $248.4480. The Company assesses the attainment of target payout rates each reporting period. Equity-based compensation expense is recognized for awards deemed probable of vesting.

16In December 2023, 20,000 PSUs were granted subject to the Company achieving certain adjusted net income and sales performance targets on a cumulative basis during fiscal years 2024 and 2025. The criteria are based on a range of these performance targets in which participants may earn between 0% to 200% of the base number of awards granted. The weighted average grant date fair value of the PSUs was $108.60. The Company assesses the attainment of target payout rates each reporting period. Equity-based compensation expense is recognized for awards deemed probable of vesting.


	As of January 3, 2026
Unamortized value of unvested RSUs/PSUs (in thousands)	$	6,343
Weighted average period (years) expense is expected to be recognized		1.9

During the three months ended January 3, 2026 and December 28, 2024, equity-based compensation expense was $1.1 million and $1.7 million. Equity-based compensation expense is reported in selling, general, & administrative expenses (“SG&A”) in our consolidated statements of operations.

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InNote ~~December~~13—Loss ~~2023,~~Per the Company granted 0.4 million PSUs subject to the Company achieving certain adjusted net income and sales performance targets on a cumulative basis during fiscal years 2024 and 2025. The criteria are based on a range of these performance targets in which participants may earn between 0% to 200% of the base number of awards granted. The weighted average grant date fair value of the PSUs was $5.43. As of June 28, 2025, the performance targets had not been met for the PSUs to vest, and no PSUs had vested as of such date. Share

	As of June 28, 2025
Unamortized value of unvested RSUs/PSUs (in thousands)	$	10,602
Weighted average period (years) expense is expected to be recognized		2.2

During the three months ended June 28, 2025 and June 29, 2024, equity-based compensation expense was $1.6 million and $2.2 million. During the nine months ended June 28, 2025 and June 29, 2024, equity-based compensation expense was $5.2 million and $7.6 million. Equity-based compensation expense is reported in selling, general, & administrative expenses (“SG&A”) in our condensed consolidated statements of operations.

Note 13—Earnings (Loss) Per Share

The following is a reconciliation of basic weighted average common shares outstanding to diluted weighted average common shares outstanding (in thousands, except per share amounts).

	Three Months Ended						~~Nine Months Ended~~
	June 28, 2025			June 29, 2024			June 28, 2025			June 29, 2024
	January 3, 2026			December 28, 2024
Numerator:
Net income (loss)	$	21,730		$	60,650		$	(74,154	)	$	(13,456	)
Net loss	$	(82,971	)	$	(44,564	)
Denominator:
Weighted average shares outstanding - basic		~~185~~9,~~490~~297			~~184~~9,~~834~~251			~~185,256~~			~~184,614~~
Effect of dilutive securities:
Stock Options		—			—			—			—
RSUs		—			27—			—			—
Weighted average shares outstanding - diluted		~~185~~9,~~490~~297			~~184~~9,~~861~~251			~~185,256~~			~~184,614~~
Basic earnings (loss) per share	$	0.12		$	0.33		$	(0.40	)	$	(0.07	)
Basic loss per share	$	(8.92	)	$	(4.82	)
Diluted earnings (loss) per share	$	0.12		$	0.33		$	(0.40	)	$	(0.07	)
Diluted loss per share	$	(8.92	)	$	(4.82	)

The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted ~~earnings (~~loss) per share because the effect of including such shares would have been antidilutive (in thousands):

Three Months Ended

~~Nine Months Ended~~

June 28, 2025

June 29, 2024

June 28, 2025

June 29, 2024

January 3, 2026

December 28, 2024

Stock Options

~~818~~31

~~2,253~~75

~~1,112~~

~~2,780~~

RSUs

~~4,756~~233

~~2,351~~121

~~3,552~~

~~1,459~~

Total

~~5,574~~264

~~4,604~~196

~~4,664~~

~~4,239~~

17Note 14—Segment Reporting

We manage our business activities on a consolidated basis and operate as a single operating segment. We derive our revenue in the United States by providing pool related goods and services to our customers through a variety of channels. The accounting policies of our operating segment are the same as those that are described in Note 2—Summary of Significant Accounting Policies.

Our chief operating decision maker (“CODM”) is our chief executive officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated net income to assess financial performance and allocate resources. The CODM does not review assets in evaluating the results of our operating segment, and therefore such information is not presented.

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The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM (in thousands):


	Three Month Ended
	January 3, 2026			December 28, 2024
Sales	$	147,128		$	175,228
Less:
Cost of merchandise and services sold (1)		120,059			127,511
Store labor and fringe		25,916			27,018
Merchant fees		5,243			6,603
Direct store expense		7,931			8,484
Marketing		4,112			3,257
Information technology		7,878			7,123
Other segment expense (2)		34,589			34,932
Impairment		10,148			—
Interest expense		13,536			15,763
Income tax expense (benefit)		687			(10,899	)
Segment net loss	$	(82,971	)	$	(44,564	)

(1)

Included within cost of merchandise and services sold and other segment expenses is depreciation and amortization expense of $4.7 million and $4.9 million for the three months ended January 3, 2026 and December 28, 2024, as described in Note 2—Summary of Significant Accounting Policies. Additionally, included in cost of merchandise and services sold is $6.4 million of inventory impairment for the three months ended January 3, 2026. There was no impairment as of December 28, 2024.

(2)

Included within other segment expense are items related to corporate payroll and bonus expense and general and regional administrative expenses.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read together with our ~~condensed~~ consolidated financial statements and related notes, which are included elsewhere in this Quarterly Report on Form 10-Q. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Actual results or outcomes may differ materially from those anticipated in these forward-looking statements, which are subject to risks, uncertainties, and other factors, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended ~~September~~October 284, ~~2024, in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q from the quarter ended March 29,~~ 2025, ~~and~~ elsewhere in this Quarterly Report on Form 10-Q, and in our other filings with the SEC.

We operate on a fiscal calendar that results in a fiscal year consisting of a 52- or 53-week period ending on the Saturday closest to September 30th. In a 52-week fiscal year, each quarter contains 13 weeks of operations; in a 53-week fiscal year, each of the first, second and third quarters includes 13 weeks of operations and the fourth quarter includes 14 weeks of operations. References to the three months ended ~~June~~January 283, ~~2025~~2026 and ~~June~~December 2928, 2024 refer to the 13 weeks ended ~~June~~January 283, ~~2025~~2026 and ~~June~~December ~~29, 2024. References to the nine months ended June~~ 28, ~~2025 and June 29,~~ 2024 ~~refer to the 39 weeks ended June 28, 2025 and June 29, 2024~~.

Our Company

WeFounded ~~are~~in 1963 by Phil Leslie Jr. in Southern California, the ~~largest~~Company ~~and~~today ~~most~~known ~~trusted~~simply ~~direct-to-consumer~~as ~~brand~~“Leslie’s” has over six decades of disruptive retail innovation in the $15 billion ~~United~~U.S. ~~States~~ pool and spa care industry. Today, ~~serving~~we ~~residential~~are ~~customers~~the largest and ~~pool~~most ~~professionals~~trusted ~~nationwide.~~direct-to-consumer ~~Founded~~brand in ~~1963~~our segment, weserving ~~are~~residential ~~the~~consumers ~~only~~and ~~direct-to-consumer~~ pool professionals, and ~~spa~~many ~~care~~of ~~brand~~the ~~with~~largest ~~national~~commercial ~~scale,~~property ~~operating~~operators in the country. With approximately 950 retail locations, an integrated, ~~marketing~~digitally ~~and~~forward ~~distribution~~omnichannel ~~ecosystem~~strategy, ~~powered~~and by a ~~physical~~horizontally ~~network~~integrated, ofnationwide ~~over~~ecosystem ~~1,000~~under ~~branded~~the ~~locations~~Leslie’s and aIn ~~robust~~the ~~digital~~Swim® ~~and~~brands, ~~e-commerce~~among ~~platform.~~others, Wewe have built a market-leading share of ~~approximately 15% of~~ residential aftermarket product spend, asbased ofon ~~2023~~2024 industry analyst reports, ~~our~~and a physical network is larger than the sum of our 20 largest competitors~~, and our digital sales are estimated to be greater than five times as large as that of our largest digital competitor~~. We offer an extensive assortment of professional-grade products, the majority of which are exclusive to Leslie’s, asmanufacturer ~~well as~~ certified installation and repair services, ~~all~~and ofin ~~which~~some ~~are~~markets, ~~essential~~weekly topool ~~the ongoing~~ maintenance ~~of pools and spas~~services. Our dedicated, knowledgeable team of associates, pool and spa care experts, and experienced service technicians, are passionate about empowering ~~our~~every ~~consumers~~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, ~~which~~a ~~is one of the most~~ fundamentally attractive ~~consumer~~category ~~categories~~in retail, given its scale, historical predictability, and growth outlook. More than 8085% of our product assortment is comprised of non-discretionary products essential to the care of residential and commercial pools and spas. ~~Our~~This ~~assortment~~ includes chemicals, ~~equipment~~new and replacement parts, cleaning and maintenance equipment, ~~and~~ safety, recreational, and fitness-related products. We also offer important essential services, such as equipment installation and repair for residential ~~consumers~~ and ~~professional~~commercial ~~pool operators~~customers. We ~~offer~~have ~~complimentary,~~relationships ~~commercial-grade~~with ~~in-store~~professional ~~water~~pool ~~testing~~operators ~~and~~from ~~analysis~~major ~~via~~hotel ~~our~~and ~~proprietary~~apartment ~~AccuBlue®~~owners ~~system~~to municipal, ~~which~~county ~~increases~~and ~~consumer~~state ~~engagement~~governments, ~~conversion,~~all ~~basket~~the ~~size,~~way ~~and~~to ~~loyalty,~~sole ~~resulting~~proprietors. inIn ~~higher~~addition ~~lifetime~~to ~~value.~~a ~~Our~~strong ~~water~~consumer ~~treatment~~and ~~expertise~~commercial isretail ~~powered~~and byservice ~~data~~presence, we operate a wholesale specialty pool and ~~intelligence~~spa ~~accumulated~~parts ~~from~~distribution ~~the~~business, ~~millions~~giving ofus ~~water~~unique ~~tests~~access weto ~~have~~hard-to-find ~~performed~~specialty ~~over~~parts; ~~the~~an ~~years~~integrated manufacturing plant, ~~positioning~~giving us asvertical ~~the~~scale ~~most~~and ~~trusted~~competitive ~~water~~cost ~~treatment~~on ~~service~~parts ~~provider~~of inour chemical assortment; and a regionally located, hub-and-spoke distribution system throughout the ~~industry.~~continental United States.

We ~~have~~offer acomplimentary, ~~legacy~~commercial-grade ofin-store ~~leadership~~water testing and ~~disruptive~~analysis ~~innovation.~~via ~~Since~~ our ~~founding~~proprietary inAccuBlue® ~~1963~~system, weleading ~~have~~to ~~been~~increased ~~the~~consumer ~~leading~~engagement, ~~innovator~~conversion, inbasket ~~our~~size, ~~category~~ and ~~have~~loyalty, ~~provided~~resulting ~~our~~in ~~consumers~~higher ~~with~~lifetime ~~the most advanced pool and spa care available~~value. AsOur wewater ~~have~~treatment ~~scaled,~~expertise weis ~~have~~powered ~~leveraged~~by ~~our~~data ~~competitive~~and ~~advantages~~intelligence toaccumulated ~~strategically~~from ~~reinvest~~the inmillions ~~our~~of ~~business~~water ~~and~~tests ~~intellectual~~we ~~property~~have toperformed ~~develop~~over ~~new~~the ~~value-adding~~years, ~~capabilities.~~positioning ~~Over~~us as the ~~course~~most oftrusted ~~our~~water ~~history,~~treatment weservice ~~have~~provider ~~pioneered complimentary~~ in~~-store~~ ~~water~~the ~~testing,~~recreational ~~offered~~pool ~~complimentary~~and ~~in-store~~spa ~~equipment~~industry. ~~repair~~We ~~services,~~then ~~introduced~~brought ~~the~~AccuBlue® ~~industry’s~~direct ~~first~~to ~~loyalty~~pool ~~program,~~owners’ ~~and~~backyards ~~developed~~with anAccuBlue ~~expansive~~Home®, ~~platform~~a ofpioneering ~~owned~~app-enabled ~~and~~water ~~exclusive~~testing ~~brands~~device. These differentiated capabilities allow us to meet the needs of any pool and spa owner, whether they care for their pool or spa themselves or rely on a professional, whenever, wherever, and however they choose to engage with us.

Key Factors and Measures We Use to Evaluate Our Business

We consider a variety of financial and operating measures in assessing the performance of our business. The key measures we use under United States generally accepted accounting principles (“GAAP”) are sales, gross profit and gross margin, selling, general and administrative expenses (“SG&A”), and operating ~~income (~~loss). The key non-GAAP measures and other operating measures we use are comparable sales, comparable sales growth, Adjusted EBITDA, Adjusted net ~~income (~~loss), and Adjusted diluted ~~earnings (~~loss) per share.

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Sales

We offer a broad range of products that consists of regularly purchased, non-discretionary pool and spa maintenance items such as chemicals, equipment, cleaning accessories and parts, as well as installation and repair services for pool and spa equipment. Our offering of proprietary, owned, and third-party brands across diverse product categories drives sales growth by attracting new consumers and encouraging repeat visits from our existing consumers. Revenue from merchandise sales at retail locations is recognized at the point of sale, revenue from services is recognized when the services are rendered, and revenue from e-commerce merchandise sales is generally recognized upon shipment of the merchandise. Revenue is recorded net of related discounts and sales tax. Payment from retail customers is generally at the point of sale and payment terms for professional pool operator customers are based on our credit requirements and generally have terms of less than 60 days. When we receive payment from a consumer before the consumer has taken possession of the merchandise or the service has been performed, the amount received is recorded as deferred revenue or as a customer deposit until the sale or service is complete. Sales are impacted by weather, seasonality, product mix and availability, promotional and competitive activities, the spending habits of our consumers, as well as inflation and interest rates. Growth of our sales is primarily driven by comparable sales growth and expansion of our locations in existing and new markets.

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credit requirements and generally have terms of less than 60 days. When we receive payment from a consumer before the consumer has taken possession of the merchandise or the service has been performed, the amount received is recorded as deferred revenue or as a customer deposit until the sale or service is complete. Sales are impacted by weather, seasonality, product mix and availability, promotional and competitive activities, and the spending habits of our consumers, as well as inflation and interest rates. Growth of our sales is primarily driven by comparable sales growth and expansion of our locations in existing and new markets.

Comparable Sales and Comparable Sales Growth

We measure comparable sales growth as the increase or decrease in sales recorded by the comparable base in any reporting period, compared to sales recorded by the comparable base in the prior reporting period. The comparable base includes sales through our locations and through our e-commerce websites and third-party marketplaces. Comparable sales growth is a key measure used by management and our board of directors to assess our financial performance.

We consider a new or acquired location comparable in the first full month after it has completed one year of sales. Closed locations become non-comparable during their last partial month of operation. Locations that are relocated are considered comparable at the time the relocation is complete. Comparable sales is not calculated in the same manner by all companies, and accordingly, is not necessarily comparable to similarly titled measures of other companies and may not be an appropriate measure for performance relative to other companies.

The number of new locations reflects the number of locations opened during a particular reporting period. New locations require an initial capital investment in location buildouts, fixtures, and equipment, which we amortize over time as well as cash required for inventory.

As of ~~June~~January 283, ~~2025~~2026, we operated ~~over~~approximately ~~1,000~~950 locations in 3938 states across the United States. We owned 27 locations and leased the remainder of our locations. Our initial lease terms are typically five years with options to renew for multiple successive five-year periods. We evaluate new opportunities in new and existing markets based on the number of pools and spas in the market, competition, our existing locations, availability and cost of real estate, and distribution and operating costs of our locations. We review the performance of our locations on a regular basis and evaluate opportunities to strategically close locations to improve our profitability. Our limited investment costs in individual locations and our ability to transfer sales to our extensive network of remaining locations and e-commerce websites allows us to improve profitability as a result of any strategic closures.

Gross Profit and Gross Margin

Gross profit is equal to our sales less our cost of merchandise and services sold. Cost of merchandise and services sold reflects the direct cost of purchased merchandise, costs to package certain chemical products, including direct materials and labor, costs to provide services, including labor and materials, as well as distribution and occupancy costs. The direct cost of purchased merchandise includes vendor rebates. We recognize vendor rebates based on an estimated recognition pattern using historical data. Distribution costs include warehousing and transportation expenses, including costs associated with third-party fulfillment centers used to ship merchandise to our e-commerce consumers. Occupancy costs include the rent, common area maintenance, real estate taxes, and depreciation and amortization costs of all retail locations. These costs are significant and are expected to continue to increase proportionate to our growth.

Gross margin is gross profit as a percentage of our sales. Gross margin is impacted by merchandise costs, pricing and promotions, product mix and availability, inflation, and service costs, which can vary. Our proprietary brands, custom-formulated products, and vertical integration provide us with cost savings, as well as greater control over product availability and quality as compared to other companies in the industry. Gross margin is also impacted by the costs of distribution and occupancy costs, which can vary.

Our gross profit is variable in nature and generally follows changes in sales. The components of our cost of merchandise and services sold may not be comparable to the components of cost of sales or similar measures of other companies. As a result, our gross profit and gross margin may not be comparable to similar data made available by other companies.

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Selling, General, and Administrative Expenses

Our SG&A includes selling and operating expenses across our retail locations and digital platform, and our corporate-level general and administrative expenses. Selling and operating expenses at retail locations include payroll, bonus and benefit costs for personnel, supplies, and credit and debit card processing costs. Corporate expenses include payroll, bonus, and benefit costs for our corporate and field support functions, equity-based compensation, marketing and advertising, insurance, utilities, occupancy costs related to our corporate office facilities, professional services, and depreciation and amortization for all assets, except those related to our retail locations and distribution operations, which are included in cost of merchandise and services sold. Selling and operating expenses generally vary proportionately with sales and the change in the number of locations. In contrast, general and administrative expenses are generally not directly proportional to sales and the change in the number of locations but may increase over time to support our growth and public company obligations. The components of our SG&A may not be comparable to the components of similar measures of other companies.

~~Operating Income (Loss)~~18

~~Operating~~Table income (loss) is gross profit less SG&A. Operating income (loss) excludes interest expense, loss on debt extinguishment, income tax expense (benefit), and other (income) expenses, net. We use operating income (loss) as an indicator of ~~the productivity of our business and our ability to manage expenses.~~Contents

Impairment

Impairment is non-cash charges resulting from a decline in our operating results and store performance. These charges were due to the carrying value of our store assets being greater than the fair value in the case of asset impairment.

Operating Loss

Operating loss is gross profit less SG&A. Operating loss excludes interest expense and income tax expense (benefit). We use operating loss as an indicator of the productivity of our business and our ability to manage expenses.

Adjusted EBITDA

Adjusted EBITDA is defined as earnings before interest (including amortization of debt issuance costs), taxes, depreciation and amortization, equity-based compensation expense, executive transition costs, severance, strategic project costs, merger and acquisition costs, and other non-recurring, non-cash, or discrete items. Adjusted EBITDA is a key measure used by management and our board of directors to assess our financial performance. Adjusted EBITDA is also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures. We use Adjusted EBITDA to supplement GAAP measures of performance to evaluate the effectiveness of our business strategies, to make budgeting decisions, and to compare our performance against that of other companies using similar measures.

Adjusted EBITDA is not a recognized measure of financial performance under GAAP but is used by some investors to determine a company’s ability to service or incur indebtedness. Adjusted EBITDA is not calculated in the same manner by all companies, and accordingly, is not necessarily comparable to similarly titled measures of other companies and may not be an appropriate measure for performance relative to other companies. Adjusted EBITDA should not be construed as an indicator of a company’s operating performance in isolation from, or as a substitute for, net income (loss), cash flows from operations or cash flow data, all of which are prepared in accordance with GAAP. We have presented Adjusted EBITDA solely as supplemental disclosure because we believe it allows for a more complete analysis of results of operations. Adjusted EBITDA is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of operating performance as determined in accordance with GAAP. In the future, we may incur expenses or charges such as those added back to calculate Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these items.

Adjusted Net ~~Income (~~Loss) and Adjusted Diluted ~~Earnings (~~Loss) per Share

Adjusted net ~~income (~~loss) and Adjusted diluted ~~earnings (~~loss) per share are additional key measures used by management and our board of directors to assess our financial performance. Adjusted net ~~income (~~loss) and Adjusted diluted ~~earnings (~~loss) per share are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures.

Adjusted net ~~income (~~loss) is defined as net ~~income (~~loss) adjusted to exclude equity-based compensation expense, executive transition costs, severance, strategic project costs, merger and acquisition costs, change in valuation allowance for deferred taxes, and other non-recurring, non-cash, or discrete items. Adjusted diluted ~~earnings (~~loss) per share is defined as Adjusted net ~~income (~~loss) divided by the diluted weighted average number of common shares outstanding.

Factors Affecting the Comparability of our Results of Operations

Our reported results have been affected by, among other events, the following events, which must be understood in order to assess the comparability of our period-to-period financial performance and condition.

Impact of Macroeconomic Events and Uncertainties

Our financial performance and condition may be impacted to varying extents from period to period by macroeconomic and geopolitical developments, including ~~tariffs,~~ public health crises, escalating global conflicts, tariffs, supply chain disruptions, labor market constraints, high rates of inflation, high interest rates, general economic slowdown, and potential failures among financial institutions. New or increased tariffs and other barriers to trade, especially in light of comments and executive orders made by the U.S. presidential administration, could further impact or exacerbate these conditions. The United States has announced tariffs on imports from most countries, including significant tariffs on imports from Canada, Mexico and China. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. There is substantial uncertainty about the duration of existing tariffs and whether additional tariffs may be imposed, modified or suspended, and the impacts of such actions on the Company’s business. Significant disruption to our supply chain for products we sell, as a result of geopolitical conflict, tariffs or trade policies or otherwise, can also have a material impact on our sales and earnings and cause unpredictable changes in results. In addition, we believe adverse macroeconomic trends and uncertainties including inflation, tariffs, and varying interest rates also increase consumers’ sensitivity to price and result in cost-conscious behavior inclusive of high ticket items, which can result in corresponding declines in sales and/or gross profit.

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Additional uncertainties that can impact our results of operations are consumer purchasing patterns and consumer cost-consciousness. In the past, we believe some customers stockpiled chemicals, resulting in unexpected changes in demand. As a result of such behavior, our revenue may be higher than normal during the periods of stockpiling and may be lower than normal during the periods after stockpiling has occurred.

Reverse Stock Split

On September 10, 2025, our shareholders approved a series of amendments to our Seventh Amended and Restated Certificate of Incorporation (the “Certificate of Amendment”). On September 26, 2025, we filed a Certificate of Amendment with the Secretary of State of the State of Delaware to effect a reverse stock split of our comment stock at a ratio of 1-for-20 (the “Reverse Stock Split”) and proportionately decrease the number of authorized shares of the Company’s common stock, which became effective upon filing (the “Effective Time”). The Company’s common stock began trading on a Reverse Stock Split-adjusted basis on Nasdaq as of the open of trading on September 29, 2025 under the existing ticker symbol “LESL”. The Company’s common stock is now represented by a new CUSIP number, 527064 208.

All share and per share amounts presented herein have been retroactively adjusted to reflect the Reverse Stock Split for all periods.

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higher rates of inflation, higher interest rates, general economic slowdown, and potential failures among financial institutions. The direct and indirect impact COVID-19 has had on our financial and operating performance since 2020 has made period-to-period analysis and accurate forecasting difficult. Due to the non-discretionary nature of a majority of our products and services, our business delivered strong growth and profitability throughout the pandemic, in spite of restrictions on the operation of our locations and distribution facilities. New or increased tariffs and other barriers to trade, especially in light of comments and executive orders made by the U.S. presidential administration, could further impact or exacerbate these conditions. The United States has announced tariffs on imports from most countries, including significant tariffs on imports from Canada, Mexico and China. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. There is substantial uncertainty about the duration of existing tariffs and whether additional tariffs may be imposed, modified or suspended, and the impacts of such actions on the Company’s business. Significant disruption to our supply chain for products we sell, as a result of geopolitical conflict, tariffs or trade policies or otherwise, can also have a material impact on our sales and earnings and cause unpredictable changes in results. In addition, we believe adverse macroeconomic trends and uncertainties including inflation and varying interest rates also increase consumers’ sensitivity to price and result in cost-conscious behavior inclusive of high ticket items, which can result in corresponding declines in sales and/or gross profit.

An additional uncertainty that can impact our results of operations is consumer purchasing patterns. Due to the highly unstable supply of granular chlorine compounds over the last three years, we believe some customers stockpiled chemicals, resulting in unexpected changes in demand. As a result of such behavior, our revenue may be higher than normal during the periods of stockpiling and may be lower than normal during the periods after stockpiling has occurred.

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Results of Operations

We derived our ~~condensed~~ consolidated statements of operations for the three ~~and nine~~ months ended ~~June~~January 283, ~~2025~~2026 and ~~June~~December 2928, 2024 from our ~~condensed~~ consolidated financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future. The following table summarizes key components of our results of operations for the periods indicated, both in dollars and as a percentage of our sales (in thousands, except per share amounts and percentages):

	Three Months Ended						~~Nine Months Ended~~
Statements of Operations Data:	~~June~~January 283, ~~2025~~2026			~~June~~December 2928, 2024			~~June 28, 2025~~			~~June 29, 2024~~
Sales	$	~~500~~147,~~347~~128		$	~~569~~175,~~638~~228		$	~~852,709~~		$	~~932,262~~
Cost of merchandise and services sold		~~302~~120,~~457~~059			~~340~~127,~~798~~511			~~563,156~~			~~598,686~~
Gross profit		~~197~~27,~~890~~069			~~228~~47,~~840~~717			~~289,553~~			~~333,576~~
Selling, general and administrative expenses		~~129~~85,~~572~~669			~~131~~87,~~145~~417			~~309,313~~			~~302,879~~
Operating income (loss)		68,318			97,695			(19,760	)		30,697
Impairment		10,148			—
Interest expense		15,764			18,156			47,425			53,380
Operating loss		(68,748	)		(39,700	)
Income (loss) before taxes		52,554			79,539			(67,185	)		(22,683	)
Interest expense		13,536			15,763
Income tax expense (benefit)		30,824			18,889			6,969			(9,227	)
Loss before taxes		(82,284	)		(55,463	)
Net income (loss)	$	21,730		$	60,650		$	(74,154	)	$	(13,456	)
Income tax expense (benefit)		687			(10,899	)
Earnings (loss) per share
Net loss	$	(82,971	)	$	(44,564	)
Basic	$	0.12		$	0.33		$	(0.40	)	$	(0.07	)
Loss per share
Diluted	$	0.12		$	0.33		$	(0.40	)	$	(0.07	)
Basic	$	(8.92	)	$	(4.82	)
Weighted average shares outstanding
Diluted	$	(8.92	)	$	(4.82	)
Basic		185,490			184,834			185,256			184,614
Weighted average shares outstanding
Diluted		185,490			184,861			185,256			184,614
Basic		9,297			9,251
Percentage of Sales(1)	(%)			(%)			(%)			(%)
Diluted		9,297			9,251
Sales		100.0			100.0			100.0			100.0
Percentage of Sales (1)	(%)			(%)
Cost of merchandise and services sold		60.4			59.8			66.0			64.2
Sales		100.0			100.0
Gross margin		39.6			40.2			34.0			35.8
Cost of merchandise and services sold		81.6			72.8
Selling, general and administrative expenses		25.9			23.0			36.3			32.5
Gross margin		18.4			27.2
Operating income (loss)		13.7			17.2			(2.3	)		3.3
Selling, general and administrative expenses		58.2			49.9
Interest expense		3.2			3.2			5.6			5.7
Impairment		6.9			—
Income (loss) before taxes		10.5			14.0			(7.9	)		(2.4	)
Operating loss		(46.7	)		(22.7	)
Income tax expense (benefit)		6.2			3.3			0.8			(1.0	)
Interest expense		9.2			9.0
Net income (loss)		4.3			10.6			(8.7	)		(1.4	)
Loss before taxes		(55.9	)		(31.7	)
Other Financial and Operations Data:
Income tax expense (benefit)		0.5			(6.2	)
Number of new and acquired locations, net		3			10			3			13
Net loss		(56.4	)		(25.4	)
Number of locations open at end of period		1,023			1,020			1,023			1,020
Other Financial and Operations Data:
Comparable sales growth(2)		(12.4	)%		(4.0	)%		(8.8	)%		(4.1	)%
Number of new and acquired locations, net		(74	)		—
Adjusted EBITDA(3)	$	81,570		$	109,469		$	16,193		$	65,771
Number of locations open at end of period		948			1,021
Adjusted EBITDA as a percentage of sales(3)		16.3	%		19.2	%		1.9	%		7.1	%
Comparable sales growth (2)		(15.5	)%		0.2	%
Adjusted net income (loss)(3)	$	37,937		$	63,297		$	(49,877	)	$	(5,465	)
Adjusted EBITDA (3)	$	(40,286	)	$	(29,319	)
Adjusted diluted earnings (loss) per share	$	0.20		$	0.34		$	(0.27	)	$	(0.03	)
Adjusted EBITDA as a percentage of sales (3)		(27.4	)%		(16.7	)%
Adjusted net loss (3)	$	(48,699	)	$	(40,737	)
Adjusted diluted loss earnings per share	$	5.24		$	4.40

(1)

Components may not add to totals due to rounding.

(2)

See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors and Measures We Use to Evaluate Our Business.”

(3)

The tables below provide a reconciliation from our net ~~income (~~loss) to Adjusted EBITDA and net ~~income (~~loss) to Adjusted net ~~income (~~loss) for the three ~~and nine~~ months ended ~~June~~January 283, ~~2025~~2026 and ~~June~~December 2928, 2024 (in thousands). Adjusted net loss reported for the three months ended December 28, 2024 reflects a correction of an immaterial error in the “tax effects of these adjustments” amount reported in the first quarter of 2025.

2221

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	Three Months Ended						~~Nine Months Ended~~
	June 28, 2025			June 29, 2024			June 28, 2025			June 29, 2024
	January 3, 2026			December 28, 2024
Net income (loss)	$	21,730		$	60,650		$	(74,154	)	$	(13,456	)
Net loss	$	(82,971	)	$	(44,564	)
Interest expense		1513,~~764~~536			1815,~~156~~763			~~47,425~~			~~53,380~~
Income tax expense (benefit)		~~30,824~~687			18(10,~~889~~899	)		~~6,969~~			~~(9,227~~	)
Depreciation and amortization expense(1)		8,572			8,246			25,080			24,419
Impairment (1)		16,519			—
Equity-based compensation expense(2)		1,581			2,246			5,242			7,683
Depreciation and amortization expense (2)		7,840			8,237
Strategic project costs(3)		1,056			395			1,836			1,058
Equity-based compensation expense (3)		1,119			1,741
Executive transition costs and other(4)		2,043			887			3,795			1,914
Strategic project costs (4)		2,775			172
Adjusted EBITDA	$	81,570		$	109,469		$	16,193		$	65,771
Executive transition costs and other (5)		209			231
Adjusted EBITDA	$	(40,286	)	$	(29,319	)

	Three Months Ended						~~Nine Months Ended~~
	June 28, 2025			June 29, 2024			June 28, 2025			June 29, 2024
	January 3, 2026			December 28, 2024
Net income (loss)	$	21,730		$	60,650		$	(74,154	)	$	(13,456	)
Net loss	$	(82,971	)	$	(44,564	)
Equity-based compensation expense(2)		1,581			2,246			5,242			7,683
Impairment (1)		16,519			—
Strategic project costs(3)		1,056			395			1,836			1,058
Equity-based compensation expense (3)		1,119			1,741
Executive transition costs and other(4)		2,043			887			3,795			1,914
Strategic project costs (4)		2,775			172
Change in valuation allowance(5)		16,930			—			21,496			—
Executive transition costs and other (5)		209			231
Tax effects of these adjustments(6)		(5,403	)		(881	)		(8,092	)		(2,664	)
Change in valuation allowance (6)		18,806			2,219
Adjusted net income (loss)	$	37,937		$	63,297		$	(49,877	)	$	(5,465	)
Tax effects of these adjustments (7)		(5,156	)		(536	)
Adjusted net loss (8)	$	(48,699	)	$	(40,737	)

(1)

~~Includes~~Represents ~~depreciation~~non-cash charges related toasset ~~our~~write ~~distribution~~offs ~~centers~~for ~~and~~certain ~~store~~underperforming ~~locations,~~stores ~~which~~and iscertain ~~reported~~inventory inrelated ~~cost~~to ofthe ~~merchandise~~store and ~~services~~distribution ~~sold~~center ~~and SG&A in our condensed consolidated statements of operations~~closings.

(2)

~~Represents~~Includes ~~charges~~depreciation related to ~~equity-based compensation and~~ our ~~related~~distribution ~~payroll~~centers ~~tax~~and ~~expense~~store locations, which ~~are~~is reported in cost of merchandise and services sold and SG&A in our ~~condensed~~ consolidated statements of operations.

(3)

Represents ~~non-recurring~~charges ~~costs, such as third-party consulting costs~~ related to ~~first~~equity-~~generation~~based ~~technology~~compensation ~~initiatives,~~and ~~replacements of systems that are no longer supported by~~ our ~~vendors,~~related ~~investment~~payroll intax ~~and development of new products outside of the course of continuing operations~~expense, orwhich ~~other discrete strategic projects that~~ are ~~infrequent or unusual in nature and potentially distortive to continuing operations. These items are~~ reported in SG&A in our ~~condensed~~ consolidated statements of operations.

(4)

~~Includes~~Represents ~~certain~~non-recurring ~~senior~~costs, ~~executive~~such ~~transition~~as third-party consulting costs ~~and~~related ~~severance~~to ~~associated~~first-generation ~~with~~technology ~~completed~~initiatives, ~~corporate~~replacements ~~restructuring~~of ~~activities~~systems ~~across~~that ~~the~~are ~~organization~~no longer supported by our vendors, ~~losses~~investment onin ~~asset~~and ~~dispositions~~development of new products outside of the course of continuing operations, ~~merger~~or other discrete strategic projects that are infrequent or unusual in nature and ~~acquisition~~potentially distortive to continuing operations. Also included are costs, related to the closure of the 80 stores and ~~other~~one ~~non-recurring,~~distribution ~~non-cash~~center announced, orand ~~discrete~~substantially ~~items~~completed, asin ~~determined~~the byfirst ~~management~~quarter of 2026. ~~Amounts~~These items are reported in SG&A in our ~~condensed~~ consolidated statements of operations.

(5)

~~Represents~~Includes certain senior executive transition costs and severance associated with completed corporate restructuring activities across the organization, losses on asset dispositions, merger and acquisition costs, and other non-recurring, non-cash, ~~change~~or indiscrete ~~valuation~~items ~~allowance~~as ~~for~~determined ~~deferred~~by ~~taxes~~management. ~~This~~Amounts ~~item~~are is reported in ~~income~~SG&A ~~tax (expense) benefit~~ in our ~~condensed~~ consolidated statements of operations.

(6)

Represents ~~the~~a ~~tax~~non-cash ~~effect~~change ofin ~~the~~valuation ~~total~~allowance ~~adjustments~~for ~~based~~deferred ~~on our combined U~~taxes.S. ~~federal~~This ~~and~~item ~~state~~is ~~statutory tax rates. Amounts are~~ reported in income tax expense (benefit) in our ~~condensed~~ consolidated statements of operations.

(7)

Represents the tax effect of the total adjustments based on our combined U.S. federal and state statutory tax rates. Amounts are reported in income tax expense in our consolidated statements of operations. The prior period amount has been corrected for an immaterial error reported for the period ended December 28, 2024.

(8)

Amount reported for the three months ended December 28, 2024 reflects a correction of an immaterial error in the “tax effects of these adjustments” amount reported in the first quarter of 2025.

Selected Financial Information

Sales

Sales were $~~500~~147.31 million for the three months ended ~~June~~January 283, ~~2025~~2026 compared to $~~569~~175.62 million in the prior year period, a decrease of $6928.31 million, or 1216.20%. The change was ~~primarily~~ driven by ~~lower~~a ~~transaction~~combination ~~volume~~of ~~and~~factors, ~~mix~~including ofestimated ~~products~~one ~~sold~~time impacts of: $10.0 ~~Comparable~~million ~~sales~~associated ~~were~~with ~~lower~~a by1-week shift in the fiscal calendar during a seasonally slower week; $704.50 million ~~relative~~from tohurricane related sales in the prior year period; and $1.0 ~~Non-comparable~~million due to fewer sales, ~~including~~from ~~acquisitions~~the ~~and~~closure ~~new~~of underperforming stores,. ~~contributed~~The remainder of the impact was largely due to lower demand. Comparable sales on a fiscal basis decreased $126.29 million inor 15.5% compared to the ~~current~~prior year period.

Sales were $852.7 million for the nine months ended June 28, 2025, compared to $932.3 million in the prior year period, a decrease of $79.6 million, or 8.5%. The change was primarily driven by lower transaction volume as well as average order value and mix of products sold. Comparable sales were lower by $82.5 million relative to the prior year period. Non-comparable sales, including acquisitions and new stores, contributed $2.9 million in the current year period.22

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Gross Profit and Gross Margin

Gross profit for the three months ended ~~June~~January 283, ~~2025~~2026 was $~~197~~27.91 million compared to $~~228~~47.87 million in the prior year period, representing a decrease of $3120.06 million, or 1343.53%. Gross margin decreased to 3918.64% compared to 4027.2% in the prior year period, a decrease of 880 basis points. ~~The~~A ~~decline~~negative inimpact ~~rate~~of ~~was~~approximately ~~mainly~~430 basis points was due to ~~occupancy~~an inventory impairment charge of $6.4 million relating to store and ~~distribution~~DC ~~center~~closures ~~costs~~during ~~(30~~the period. The remaining approximately 450 basis points) ~~and~~decline ~~decrease~~was due to a decline in overall margins on our core chemicals, which had an outsized negative impact on our gross profit margin during the first quarter due to the low sales volume. ofThese ~~products~~declines ~~sold~~were ~~and~~partially ~~mix~~offset ~~(30~~by ~~basis~~our ~~points)~~cost reduction strategies implemented during the quarter.

Gross profit for the nine months ended June 28, 2025 was $289.6 million compared to $333.6 million in the prior year period, a decrease of $44.0 million, or 13.2%. Gross margin decreased to 34.0% compared to 35.8% in the prior year period. The decline in rate was mainly due to occupancy costs and distribution center costs (100 basis points) and decrease in volume of products sold and mix (80 basis points).

Selling, General and Administrative Expenses

SG&A for the three months ended ~~June~~January 283, ~~2025~~2026 was $~~129~~85.67 million compared to $~~131~~87.14 million in the prior year period, a decrease of $1.67 million, or 1.2.0%. The decrease in SG&A was primarily related to ~~decreased~~decreases of merchant fees ofin $21.94 million, $1.51 million ~~for~~of labor and fringe costs, $0.6 million in direct store expenses, and $0.63 million ~~for~~in ~~marketing~~other ~~fees,~~operating ~~partially~~expenses. ~~offset~~Partially byoffsetting the decrease is $3.0.9 million of ~~increased~~marketing ~~other~~fees ~~operating~~and ~~expenses~~$0.8 million in technology costs.

SG&A for the nine months ended June 28, 2025 was $309.3 million compared to $302.9 million in the prior year period, an increase of $6.4 million, or 2.1%. The increase in SG&A was primarily driven by $6.7 million of increased compensation expenses, $2.9 million of professional fees and consulting expenses, partially off set by $3.2 million in decreased marketing fees.Impairment

Non-cash impairment for the three months ended January 3, 2026 was $10.1 million, comprised of $5.4 million of property and equipment impairment and $4.8 million right-of-use asset impairment relating to the store and distribution center closures. There was no impairment in the prior year period.

Interest Expense

Interest expense for the three months ended ~~June~~January 283, ~~2025~~2026 was $1513.85 million compared to $1815.28 million in the prior year period, a decrease of $2.43 million. ~~Interest~~The ~~expense~~decrease ~~for the nine months ended June 28, 2025~~ was ~~$47.4~~driven ~~million~~by ~~compared~~lower tointerest ~~$53.4~~rates ~~million~~on inour ~~the~~Term ~~prior year period, a decrease of $6~~Loan.~~0 million.~~

These decreases for the three and nine months ended June 28, 2025 were due to lower interest rates and lower balances on our term loan.

Income Tax

Income tax expense increased to $300.87 million for the three months ended ~~June~~January 283, ~~2025~~2026 compared to a benefit of $1810.9 million in the prior year period, an increase of $11.96 million. ~~Income~~The ~~tax~~increases ~~expense~~were ~~increased~~primarily attributable to ~~$7.0 million for~~ the ~~nine~~change ~~months~~in ~~ended~~valuation ~~June~~allowance ~~28,~~and ~~2025~~use ~~compared~~of tothe adiscrete ~~benefit~~effective oftax ~~$9.2~~rate ~~million~~method in the prior year period~~, an increase of $16~~.~~2 million. The increases were primarily attributable to the change in valuation allowance.~~

The effective income tax rate was ~~58.7% and~~ (100.48)% for the three ~~and nine~~ months ended ~~June~~January 283, ~~2025~~2026, ~~respectively,~~ and included net income tax expenses attributable to ~~equity-based~~state ~~compensation~~taxes ~~awards~~ and the change in valuation allowance. The effective income tax rate was 2319.~~8% and a benefit of 40.~~7% for the three ~~and nine~~ months ended ~~June~~December 2928, 2024, and included net income tax expenses attributable to equity-based compensation awards and the change in valuation allowance related to our interest expense limitation.

Net ~~Income (~~Loss) and Diluted ~~Earnings (~~Loss) per Share

Net ~~income~~loss for the three months ended ~~June~~January 283, ~~2025~~2026 was $2183.70 million compared to $6044.76 million in the prior year period, a decrease of $38.94 million. The changes in net ~~income~~loss during the three months ended ~~June~~January 283, ~~2025~~2026, ~~was~~were primarily due to decreases in gross profit due to lower sales., ~~Net~~impairment ~~loss~~charges ~~for~~in the ~~nine~~current ~~months ended June 28~~year, ~~2025~~and ~~was~~a ~~$(74.2)~~tax ~~million~~benefit ~~compared to $(13.5) million~~ in the prior year ~~period,~~that anwas ~~increase~~not ofrepeated ~~$60.7 million. The changes~~ in ~~net loss during~~ the ~~nine~~current ~~months~~year ~~ended June 28, 2025 was primarily~~ due to ~~decreases~~the invaluation ~~gross profit due to lower sales combined with increases in SG&A~~allowance.

Diluted ~~earnings~~loss per share was $08.1292 for the three months ended ~~June~~January 283, ~~2025~~2026 compared to $04.3382 in the prior year period. ~~Diluted loss per share was $(0.40) for the nine months ended June 28, 2025 compared to $(0.07) in the prior year period.~~

Adjusted net ~~income~~loss for the three months ended ~~June~~January 283, ~~2025~~2026 was $3748.97 million compared to $6340.37 million in the prior year period, a decrease of $258.40 million. Adjusted ~~net~~diluted loss ~~for the nine months ended June 28, 2025 was $(49.9) million compared to $(5.5) million in the prior year period, an increase of $44.4 million. Adjusted diluted earnings~~ per share was $05.2024 for the three months ended ~~June~~January 283, ~~2025~~2026 compared to $04.3440 in the prior year period. ~~Adjusted diluted loss per share was $(0.27) for the nine months ended June 28, 2025 compared to $(0.03) in the prior year period.~~

Adjusted EBITDA

Adjusted EBITDA for the three months ended ~~June~~January 283, ~~2025~~2026 was $81(40.63) million compared to $~~109~~(29.53) million in the prior year period, a decrease of $2711.90 million. The changes in Adjusted EBITDA during the three months ended ~~June~~January 283, ~~2025~~2026, were primarily due to decreases in gross profit ~~due~~driven toby ~~lower~~unfavorable sales. ~~Adjusted~~mix ~~EBITDA~~compared ~~for~~to the ~~nine~~prior ~~months~~year ~~ended~~and ~~June~~lower ~~28,~~product ~~2025~~margins ~~was~~on ~~$16.2~~our ~~million~~core ~~compared~~chemical products.

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to $65.8 million in the prior year period, a decrease of $49.6 million. The decrease in Adjusted EBITDA during the nine months ended June 28, 2025 was primarily due to decreases in gross profit combined with increases in SG&A.

Seasonality and Quarterly Fluctuations

Our business is highly seasonal. Sales and earnings are highest during the third and fourth fiscal quarters, which include April through September, and represent the peak months of swimming pool use. Sales are substantially lower during our first and second fiscal quarters when we typically generate net losses and we realize negative operating cash ~~flow~~flows. We have a long track record of investing in our business throughout the year, including in operating expenses, working capital, and capital expenditures related to new locations and other growth initiatives. While these investments drive performance during the primary selling season in our third and fourth fiscal quarters, they have a negative impact on our earnings and cash flow during our first and second fiscal quarters.

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We typically experience a build-up of inventory and accounts payable during the first and second fiscal quarters in anticipation of the peak swimming pool supply selling season. We negotiate extended payment terms with certain of our primary suppliers as we receive merchandise in December through March, and we pay for merchandise in April through July.

The principal external factor affecting our business is weather. Hot weather can increase purchases of chemicals and other non-discretionary products as well as purchases of discretionary products and can drive increased purchases of installation and repair services. Unseasonably cool weather or significant amounts of rainfall during the peak pool sales season can reduce chemical consumption in pools and spas and decrease consumer purchases of our products and services. In addition, unseasonably early or late warming trends can increase or decrease the length of the pool season and impact timing around pool openings and closings, and, therefore, our total sales and timing of our sales. Further, we generally close locations after our peak selling season ends.

We generally open new locations before our peak selling season begins and we generally close locations after our peak selling season ends. We expect that our quarterly results of operations will fluctuate depending on the timing and amount of sales contributed by new locations.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are net cash provided by operating activities and borrowing availability under our Revolving Credit Facility. Historically, we have funded working capital requirements, capital expenditures, payments related to acquisitions, and debt service requirements with internally generated cash on hand and through our Revolving Credit Facility.

Cash and cash equivalents consist primarily of cash on deposit with banks. Cash and cash equivalents totaled $423.76 million as of ~~June~~January 283, ~~2025,~~ 2026 and $7411.46 million as of ~~June~~December 2928, 2024,. ~~and~~Outstanding ~~$108.5~~borrowings ~~million~~on asour ofRevolving ~~September~~Credit ~~28,~~Facility ~~2024~~were $25.0 Asmillion as of ~~June~~January 283, ~~2025,~~2026 weand ~~had~~ $2040.0 million ~~outstanding~~as onof ~~our~~December ~~Revolving~~28, ~~Credit Facility~~2024. We had no amounts outstanding on our Revolving Credit Facility as of ~~June~~October 294, ~~2024 and September 28, 2024~~2025.

Our primary working capital requirements are for the purchase of inventory, payroll, rent, other facility costs, distribution costs, and general and administrative costs. Our working capital requirements fluctuate during the year, driven primarily by seasonality and the timing of inventory purchases.

Our capital expenditures are primarily related to infrastructure-related investments, including investments related to upgrading and maintaining our information technology systems, ongoing location improvements, expenditures related to our distribution centers, and new location openings. We expect to fund capital expenditures from net cash provided by operating activities.

Based on our growth plans and strategic initiatives, we believe our cash and cash equivalents position, net cash provided by operating activities and borrowing availability under our Revolving Credit Facility will be adequate to finance our working capital requirements, planned capital expenditures, strategic initiatives and acquisitions, and debt service over the next 12 months and thereafter. If cash provided by operating activities and borrowings under our Revolving Credit Facility are not sufficient or available to meet our capital requirements, then we may need to obtain additional equity or debt financing. There can be no assurance that equity or debt financing will be available to us if we need it or, if available, whether the terms will be satisfactory to us.

As of ~~June~~January 283, ~~2025~~2026, outstanding standby letters of credit totaled $11.81 million, and, after considering borrowing base restrictions, we had $~~218~~128.23 million of available borrowing capacity under the terms of the Revolving Credit Facility. As of ~~June~~January 283, ~~2025~~2026, we were in compliance with the covenants under the Revolving Credit Facility and our Term Loan.

During the quarter ended ~~March~~January 293, ~~2025,~~2026 the Company received downgraded credit ~~ratings~~rating from ~~both~~ Standard and Poor’s (“S&P”) Global Ratings (BCCC from BCCC+) ~~and Moody’s (Caa1 from B2)~~.

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Summary of Cash Flows

A summary of our cash flows from operating, investing, and financing activities is presented in the following table (in thousands):

	Nine Months Ended
	Three Months Ended
	June 28, 2025			June 29, 2024
	January 3, 2026			December 28, 2024
Net cash (used in) provided by operating activities	$	(39,398	)	$	60,410
Net cash used in operating activities	$	(81,134	)	$	(105,078	)
Net cash used in investing activities		(184,~~947~~327	)		(344,~~247~~648	)
Net cash used in financing activities		(7,476	)		(7,145	)
Net cash provided by financing activities		24,743			12,836
Net (decrease) increase in cash and cash equivalents	$	(65,821	)	$	19,018
Net decrease in cash and cash equivalents	$	(60,718	)	$	(96,890	)

Cash (Used in) ~~Provided by~~ Operating Activities

Net cash used in operating activities was $~~(39~~81.4)1 million for the ~~nine~~three months ended ~~June~~January 283, ~~2025~~2026 compared to ~~net cash provided by operating activities of~~ $60105.41 million in the prior year period, a decrease of $9924.80 million. The decrease was primarily driven by ~~changes~~a instrategic ~~working~~decrease ~~capital~~in ~~related~~inventory ~~to increased product inventories~~ of $4828.54 million ~~combined with reduced accrued expenses of $15~~.~~5 million, partially offset by increased accounts payable of $24.0 million.~~

Cash Used in Investing Activities

Net cash used in investing activities was $184.93 million for the ~~nine~~three months ended ~~June~~January 283, ~~2025~~2026 compared to $344.26 million in the prior year period, a decrease of $150.3 million. This decrease was ~~primarily~~ driven by lower investments in purchases of property and equipment ~~of $15~~.~~3 million.~~

~~Cash Used in Financing Activities~~ 24

~~Net~~Table ~~cash used in financing activities for the nine months ended June 28, 2025 was $7.5 million compared to $7.1 million in the prior year period, an increase~~ of $0.4 million. This increase was primarily driven by higher repayments of long-term debt, partially offset by higher borrowings on the Revolving Credit Facility, which had not been repaid in full as of June 28, 2025.Contents

~~Share~~Cash ~~Repurchase~~Provided ~~Program~~by Financing Activities

OnNet ~~December~~cash 3,provided ~~2021,~~by ~~the~~financing ~~board~~activities offor ~~directors~~the ~~authorized~~three amonths ~~share~~ended ~~repurchase~~January ~~program~~3, ~~for~~2026 upwas to$24.7 anmillion ~~aggregate~~compared ofto $~~300~~12.8 million ofin the ~~Company’s~~prior ~~outstanding~~year ~~shares~~period, an increase of ~~common~~$11.9 ~~stock~~million. ~~over~~This increase was due to a ~~period~~$27.0 ofmillion ~~three~~principal ~~years,~~payment ~~which~~made ~~expired~~during onthe three months ended December 3128, 2024~~. (see~~, ~~Note~~partially ~~11—Share~~offset ~~Repurchase~~by ~~Program~~$15.0 tomillion ~~our~~of ~~condensed~~decreased ~~consolidated~~borrowings ~~financial~~on ~~statements~~the ~~included~~revolving ~~elsewhere~~credit facility in ~~this~~the ~~Quarterly~~current ~~Report on Form 10-Q)~~period.

Contractual Obligations and Other Commitments

There have been no material changes to our contractual obligations and other commitments during the ~~nine~~three months ended ~~June~~January 283, ~~2025~~2026 from those disclosed in our Annual Report on Form 10-K for the fiscal year ended ~~September~~October 284, ~~2024~~2025.

Critical Accounting Estimates

The preparation of our ~~condensed~~ consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and expenses during the reported periods. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgments. Based on this definition, we have identified the critical accounting policies and judgments, which are disclosed in our Annual Report on Form 10-K for the fiscal year ended ~~September~~October 284, ~~2024~~2025. We base these estimates on historical results and various other assumptions we believe to be reasonable, all of which form the basis for making estimates concerning the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates.

~~Except~~There ~~as indicated below, there~~ have been no material changes to our critical accounting estimates during the ~~nine~~three months ended ~~June~~January 283, ~~2025~~2026 from those disclosed in our Annual Report on Form 10-K for the fiscal year ended ~~September~~October 284, ~~2024~~2025.

Goodwill and Other Intangibles, Net

Goodwill and intangible assets are recorded at their estimated fair values at the date of acquisition. We review goodwill and indefinite-lived intangible assets for impairment annually (in the fourth quarter) or more frequently if impairment indicators arise. Goodwill can be evaluated for impairment, at our option, by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, that the fair value of the reporting unit may be more likely than not

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less than the carrying amount, a quantitative goodwill impairment test would be required. Additionally, we can elect to forgo a qualitative assessment and perform a quantitative test. The quantitative test is to identify if a potential impairment exists by comparing the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds the fair value, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of goodwill.

If a quantitative test is performed, we would estimate the value considering the use of various valuation techniques which may use significant unobservable inputs, or Level 3 inputs, as defined by the fair value hierarchy. We include assumptions about sales growth, operating margins, discount rates and valuations multiples which consider our budgets, business plans, economic projections and marketplace data, and are believed to reflect market participant views which would exist in an exit transaction. Some of the inherent estimates and assumptions used in this analysis are outside the control of management, including cost of capital, tax rates and market EBITDA comparable financial metrics.

For our indefinite life intangible assets, a qualitative assessment can also be performed to determine whether the existence of events and circumstances indicates it is more likely than not the intangible asset is impaired. Similar to goodwill, we can also elect to forgo a qualitative test for indefinite life intangible assets and perform a quantitative test. Upon performing the quantitative test, if the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. We evaluate whether certain trade names continue to have an indefinite life annually.

We performed a quantitative assessment of goodwill and indefinite life intangible assets during the third quarter of 2025 and noted no impairment. See Note 3 - Goodwill and Other Intangibles, Net elsewhere in this Quarterly Report on Form 10-Q for further discussion.

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements, see Note 2—Summary of Significant Accounting Policies to our ~~condensed~~ consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

There have been no material changes in our primary risk exposures or management of market risks from those disclosed in our Annual Report on Form 10-K for the fiscal year ended ~~September~~October 284, ~~2024~~2025.

Impact of Inflation and Deflation

There have been no material changes in our exposure to inflation or deflation from those disclosed in our Annual Report on Form 10-K for the fiscal year ended ~~September~~October 284, ~~2024~~2025.

Item 4. Controls and Procedures.

Management’s Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the appropriate time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and ~~Interim~~ Chief Financial Officer and Treasurer, as appropriate, to allow timely discussions regarding required disclosure. We, under the supervision of and with the participation of our management, including our Chief Executive Officer and ~~Interim~~ Chief Financial Officer and Treasurer, have evaluated the effectiveness of our disclosure controls and procedures as of ~~June~~January 283, ~~2025~~2026. Based on that evaluation, our Chief Executive Officer (Principal Executive Officer) and ~~Interim~~ Chief Financial Officer and Treasurer and (Principal Financial Officer) have concluded that ~~the design and operation of~~ our disclosure controls and procedures were ~~ineffective~~not effective as the material weaknesses in our internal control over financial reporting disclosed in our Annual Report on Form 10-K for the fiscal year ended ~~September~~October 284, ~~2024~~2025 were not yet remediated as of ~~June~~January 283, ~~2025~~2026.

~~Changes in Internal Control over Financial Reporting~~25

There were no changes in our internal control over financial reporting during the quarter ended June 28, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except as described below.

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Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended January 3, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except as described below.

Ongoing Remediation Efforts

As previously disclosed in Part II, Item 9A, “Controls and Procedures” of our Annual Report on Form 10-K for the fiscal ~~year~~years ended October 4, 2025, September 28, 2024, and September 30, 2023, we are in the process of implementing a plan to address these material weaknesses in internal control over financial reporting. We ~~that~~have ~~were~~devoted ~~initially~~and ~~disclosed~~intend into ~~our~~continue ~~Annual~~to ~~Report~~devote onsignificant ~~Form~~time ~~10-K~~and ~~for~~resources to enhance the ~~fiscal~~design ~~year~~and ~~ended~~implementation ~~September~~of ~~30,~~our ~~2023.~~existing controls and procedures and to create new complementary and compensating controls as needed.

We are enhancing the execution of existing inventory controls as follows:

•

backfilling open roles with individuals who have the requisite accounting and internal controls knowledge and experience to complement the existing accounting team;

assessing the specific training needs for newly hired and existing personnel and developing and delivering training programs designed to uphold our internal control standards; and

examining and enhancing the procedures regarding the completeness and accuracy of data utilized in computing inventory reserves.

We are enhancing the design and execution of existing controls and creating new controls as needed regarding vendor rebates as follows:

enhancing controls to detect potential material misstatements in the data utilized to calculate vendor rebates earned and the timing of vendor rebate income recognition;

implementing and enhancing controls related to technical accounting reviews of top vendor rebate agreements prior to contract execution;

backfilling open roles with individuals who have the requisite accounting and internal controls knowledge and experience to complement the existing accounting team; and

assessing the specific training needs for newly hired and existing personnel and developing and delivering training programs designed to uphold our internal control standards.

~~The~~With ~~Company~~respect ~~completed~~to ~~hiring~~asset ~~for~~impairments, ~~all~~no ~~open~~goodwill ~~accounting~~remained ~~roles~~on ~~during~~ the ~~quarter~~Company’s ~~ended~~books ~~June~~as 28of October 4, 2025., ~~Positions~~and ~~were~~as ~~filled~~a ~~with experienced personnel~~result, ~~both~~the ~~permanent~~extent ~~employees~~to ~~and~~which ~~contractors with~~ the ~~requisite~~goodwill ~~accounting~~portion ~~and~~of ~~internal~~the ~~controls~~deficiency ~~knowledge~~currently ~~and~~could ~~experience~~lead to ~~complement~~a ~~the~~material ~~existing~~misstatement ~~accounting~~in ~~organization~~our ~~and~~financial tostatements ~~assist~~is ~~with~~not ~~on-going remediation efforts~~present.

~~The~~We ~~actions we~~ are ~~taking~~further ~~are~~enhancing ~~subject to continued senior management review as well as audit committee oversight. We intend to remediate these material weaknesses as soon as possible, and we believe~~ the ~~measures~~design ~~described above will help remediate the material weakness~~ and ~~strengthen~~execution ~~our~~of ~~internal~~existing ~~control over financial reporting. The material weaknesses will not be considered remediated until the applicable~~ controls ~~operate for a sufficient period of time~~ and ~~management~~creating ~~has~~new ~~concluded, through testing, that these~~ controls ~~are operating effectively. We anticipate that our remediation activities will be completed during fiscal year 2025. We are committed to continuing to improve our internal control processes, and,~~ as weneeded ~~continue~~regarding toasset ~~evaluate~~impairments ~~and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify certain of our remediation measures~~ as ~~described above or as described in our Annual Report on Form 10-K for the fiscal year ended September 28, 2024.~~follows:

•

28enhancing management review controls to adequately document management’s review of the completeness and accuracy of the key financial and non-financial data utilized in the assessment and recognition of asset impairments;

•

implementing and enhancing controls, policies and procedures related to the key financial data used in the management reviews when evaluating assets for impairment under the applicable accounting literature; and

•

assessing the specific training needs for newly hired and existing personnel and developing and delivering training programs designed to uphold our internal control standards.

The actions we are taking are subject to continued senior management review as well as audit committee oversight. We intend to remediate these material weaknesses as soon as possible, and we believe the measures described above will help remediate the material weakness and strengthen our internal control over financial reporting. The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We anticipate that our remediation activities will be completed during fiscal year 2026. We are committed to continuing to improve our internal control processes, and, as we continue to evaluate and work to improve our internal control over financial reporting, we may take additional measures to address control deficiencies, or we may modify certain of our remediation measures as described above or as described in our Annual Report on Form 10-K for the fiscal year ended October 4, 2025.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are subject to litigation, claims, and other proceedings that arise from time-to-time in the ordinary course of business. We believe these actions are routine and incidental to the business. As of ~~June~~January 283, ~~2025~~2026, we had established reserves for claims that were probable and estimable and such reserves were not significant. While we cannot feasibly predict the outcome of these matters with certainty, we believe, based on examination of these matters, experience to date and discussions with counsel, that the ultimate liability, individually or in the aggregate, will not have a material adverse effect on our business, financial position, results of operations, or cash flows.

Except as set forth in Note ~~10 -~~ 11—Commitments & Contingencies to our ~~condensed~~ consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there have been no material changes to the legal proceedings described in Part I, Item 3 “Legal Proceedings” of our Annual Report on Form 10-K for the fiscal year ended ~~September~~October 284, ~~2024~~2025.

Item 1A. Risk Factors.

~~Except~~There ~~as disclosed in our Quarterly Report on Form 10-Q for the quarter ended March 29, 2025, there~~ have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the year ended ~~September~~October 284, ~~2024~~2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

None.

Sales of Unregistered Securities

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

(a) Information Required to be Disclosed on Form 8-K

~~None~~The following disclosure is responsive to Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard of Form 8-K. On February 11, 2026, the Company received a notification (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company was not in compliance with Nasdaq Listing Rule 5450(b)(3)(C) because, for a period of 30 consecutive business days, the Company failed to maintain a minimum market value of publicly held shares of its common stock (“MVPHS”) of $15,000,000 (as calculated pursuant to Nasdaq Listing Rules).

The Notice has no immediate impact on the Company’s listing on The Nasdaq Global Select Market. In accordance with Nasdaq Listing Rule 5810(c)(3)(D), the Company has a period of 180 calendar days from the date of the Notice, or until August 10, 2026 (the “Compliance Date”), to regain compliance with the MVPHS requirement.

The Notice also states that if, at any time before the Compliance Date, the Company’s MVPHS closes at $15,000,000 or more for a minimum of 10 consecutive business days, Nasdaq will provide written notification to the Company that it has regained compliance, and the matter will be closed.

In the event the Company does not regain compliance by the Compliance Date, the Company will receive written notification from Nasdaq that the Company’s common stock is subject to delisting. At that time, the Company may appeal the delisting determination to a Nasdaq hearings panel.

The Company intends to actively monitor its MVPHS and may, if appropriate, consider available options to regain compliance. However, there can be no assurance that the Company will be able to regain compliance with the MVPHS requirement, that the Company will be able to maintain the listing of its common stock on the Nasdaq Global Select Market or that the Company will be able to transfer the listing of its common stock to, or, if transferred, maintain the listing of its common stock on, the Nasdaq Capital Market. The delisting of the Company’s common stock from a national exchange could impair the liquidity and market price of the Company’s common stock, which could adversely affect the Company’s ability to raise capital on terms acceptable to the Company, or at all. See Item 1A, Risk Factors in the Company’s Annual Report on Form 10-K for the year ended October 4, 2025.

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(b) Changes to Procedures for Recommending Director Nominees

Not applicable.

During the quarter ended ~~June~~January 283, ~~2025~~2026, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).

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Item 6. Exhibits.


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	Exhibit	Filing Date/ Period End Date
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934
32.1+	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350
32.2+	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350
101.INS*	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*	Inline XBRL Taxonomy Schema Document With Embedded Linkbase Documents
104*	Cover Page Interactive Data File (embedded within the Inline XBRL document).

* Filed herewith.

+ Furnished herewith and not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LESLIE’S, INC.
Date: August 7, 2025	By:	/s/ Anthony Iskander
Date: February 18, 2026	By:	/s/ Jeff White
		Anthony Iskander
		Jeff White
		Interim Chief Financial Officer and Treasurer
		Chief Financial Officer and Treasurer
		(Principal Financial Officer and Principal Accounting Officer)

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