Leslie's, Inc. (LESL): Business Model Canvas [Dec-2025 Updated]

You're looking at a major retailer, Leslie's, Inc., right in the middle of a tough pivot, and honestly, understanding the mechanics of that change is key to seeing where the stock goes next. We've mapped out their entire Business Model Canvas using the latest Fiscal 2025 numbers, which show $1,242.0 million in sales but also a massive strategic effort to rationalize assets-think closing 80 to 90 underperforming stores-while pushing hard on the Pro-Pool segment. It's a classic case of trimming the fat while trying to feed the growth engine. This canvas breaks down exactly how Leslie's, Inc. plans to turn that expert advice and massive store footprint into consistent profit. Dive in below to see the nine blocks driving this transformation.

Leslie's, Inc. (LESL) - Canvas Business Model: Key Partnerships

The Key Partnerships block for Leslie's, Inc. centers on expanding convenience, securing product flow, and executing structural cost improvements through external support and agreements as of late 2025.

Uber for same-day delivery expansion

Leslie's, Inc. is accelerating its omnichannel transformation by expanding same-day delivery through its partnership with Uber. In the Phoenix test market, this integration successfully cut ship-to-home fulfillment times from days to hours, and often minutes. The company is scaling this model across Arizona and plans continued expansion across the United States through 2026.

Major chemical and equipment vendors for product supply

Vendor relationships are critical, especially as Leslie's, Inc. plans deeper training supported by vendor partners ahead of the next pool season. The company signaled intent to renegotiate all major contracts with vendors and suppliers in the first half of 2026. The success of vendor management is partially reflected in the Q4 2025 gross margin, which rose to 38.6% from 36% in the previous year, driven in part by favorable vendor rebates.

Vendor compliance is governed by a Code of Conduct requiring adherence to ethical standards and laws, including those related to the Federal Insecticide, Fungicide, and Rodenticide Act and the California Safe Drinking Water and Toxic Enforcement Act of 1986.

New partner contracts to grow Pro-Pool sales segment

The new market leadership structure is designed to support improved PRO fulfillment. Leslie's, Inc. is broadening engagement with professional customers by utilizing its entire network, which comprised over 1,000 physical locations at the end of fiscal 2025. This includes offering customized product assortments tailored to the specific needs of pool professionals.

External resources supporting cost structure optimization

To accelerate the path to financial recovery, Leslie's, Inc. engaged external resources to support the strategic and operational review of the business. Major structural changes involve closing 80 to 90 underperforming stores and one distribution center, which is expected to yield immediate EBITDA improvement for FY26. The store closures alone are projected to impact annual sales by $25 million to $35 million. Furthermore, the company is exiting over 2,000 underperforming SKUs and targeting $4 million to $5 million in annualized EBITDA improvement from these rationalization steps.

The following table summarizes key financial and operational impacts related to structural optimization and partnership leverage as of the fiscal year 2025 close:

Logistics partners for distribution center operations

Logistics optimization is a key component of the cost structure review. Leslie's, Inc. closed its Denver warehouse in the third quarter of 2025. An additional distribution center closure, located in Illinois, is expected to be completed in January 2026. The company is working to optimize its DC network to maximize coverage and efficiency, which supports better inventory management.

• DC Closures announced: 1 in Q4 2025, plus 1 warehouse in Denver (Q3 2025).
• Illinois DC closure expected completion: January 2026.
• Inventory rationalization target for FY 2026: Another $20 million to $40 million.
• FY 2026 Adjusted EBITDA Guidance (Partially supported by cost savings): $55 million to $75 million.

Leslie's, Inc. (LESL) - Canvas Business Model: Key Activities

You're looking at the core actions Leslie's, Inc. is taking right now to reshape its business, especially after a challenging fiscal year. These aren't just vague goals; they are concrete operational mandates driving near-term financial performance.

The primary activity remains the Retail and e-commerce sales of pool and spa supplies across its integrated network of over 1,000 physical locations and a digital platform. For the fiscal year 2025, Leslie's, Inc. reported total Sales of $1,242.0 million, which was a decrease of 6.6% compared to the prior year. The fourth quarter ended October 4, 2025, specifically saw sales of $389.2 million, with comparable sales decreasing by (6.5)% for the quarter. The residential market segment accounted for 68.5% of total sales, while the Commercial/Professional segment represented 31.5% of total sales, though Pro partner contracts rose 12% in the first three quarters of the year.

A key service activity supporting the value proposition is Performing free 10-point in-store water testing. This service directly impacts conversion; management noted more than 550 basis points improvement in conversion rate after in-store water tests using AccuBlue technology during Q3 2025.

The company is heavily engaged in Executing strategic transformation and cost optimization. This involves streamlining operations to improve financial recovery. The CEO projected direct cost reductions between $7 million and $12 million as a result of the restructuring initiatives. Streamlining operations is also targeting a $4M to $5M improvement in annualized EBITDA.

Inventory management is a critical, quantified activity. Leslie's, Inc. is focused on Managing inventory, aiming for a 10% year-over-year reduction. For fiscal year 2025, inventories totaled $208.0 million as of October 4, 2025, representing a decrease of $26.3 million compared to the $234.3 million reported as of September 28, 2024. This aligns with the Q3 update where inventory was reduced by 9.6% year-over-year.

Asset rationalization is a major component of the transformation. This includes Rationalizing assets, closing 80 to 90 underperforming stores and closing one distribution center. The impairment charge related to asset write offs for underperforming stores in Q4 2025 was $3.1 million.

Here are the key financial metrics tied to these activities for the fourth quarter and fiscal year 2025:

You can see the operational focus clearly in the balance sheet changes as well.

• Inventory as of October 4, 2025: $208.0 million.
• Cash and cash equivalents as of October 4, 2025: $64.3 million.
• Capital expenditures for the year ended October 4, 2025: $25.5 million.
• Impairment charge for FY2025: $183.8 million.

Finance: draft 13-week cash view by Friday.

Leslie's, Inc. (LESL) - Canvas Business Model: Key Resources

The physical footprint remains a core asset for Leslie's, Inc. The company operates an integrated ecosystem that, as of the end of fiscal 2025, included 1,000 physical store locations. This network is currently undergoing optimization, with a plan announced to close between 80 to 90 underperforming U.S. stores by the end of the first fiscal quarter of 2026.

Proprietary technical expertise is anchored by the AccuBlue water test experience, which is offered for free in-store. This service provides a comprehensive diagnostic by analyzing 10 distinct aspects of water chemistry, including pH, total alkalinity, and sanitizer levels. This technology is powered by proprietary software that utilizes a database built from more than 50 million water tests performed over six decades.

Financial resources tied to inventory management show a specific balance sheet figure as of the fiscal year end. Inventories totaled $208.0 million as of October 4, 2025. This figure represented a year-over-year reduction of $26.3 million or 11.2% compared to the prior year's inventory level.

The Leslie's brand itself is positioned as the largest and most trusted direct-to-customer brand in the U.S. pool and spa care industry. This brand is supported by a robust digital platform that enables consumer engagement across its ecosystem.

Operational infrastructure includes strategic investments in logistics. Leslie's implemented Local Fulfillment Centers (LFCs) with a rollout that included 26 LFCs intended to be operational ahead of the pool season. This network optimization is occurring alongside the planned closure of one distribution center as part of the strategic transformation.

Key operational and financial metrics supporting the Key Resources structure include:

The company also maintains specialized human capital, described as a dedicated team of associates, pool and spa care experts, and experienced service technicians.

The direct-to-customer platform is supported by the following digital and service elements:

• Proprietary software for water analysis.
• AccuBlue Home membership service.
• Leslie's app for tracking test history and rewards.

Finance: draft 13-week cash view by Friday.

Leslie's, Inc. (LESL) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Leslie's, Inc. over the competition as of late 2025. It's about blending that specialized knowledge with modern convenience, even as the company navigates some tough market conditions.

Here's a quick look at some of the numbers supporting the current state of the business, particularly around inventory and service improvements:

Trusted, expert advice through personalized water treatment plans

Leslie's, Inc. leans heavily on its in-store expertise to drive value. The core offering here is the diagnostic service that leads to a specific chemical recommendation.

• The 10-point water test provides a personalized treatment plan tailored to the pool environment.
• In-store water tests using AccuBlue technology resulted in a more than 550 basis points improvement in conversion rate in Q3.
• Store teams focus on increasing units per transaction, which, aided by technical expertise, led to mid-single-digit growth in basket size for the quarter.

Convenience via omnichannel shopping and same-day delivery

The company is actively working to bridge the gap between its physical footprint and digital expectations. They know convenience is key to winning back traffic, especially after residential traffic declined by 8.6% in 2025.

• Leslie's expanded its same-day delivery service through a partnership with Uber.
• The goal is to scale this convenience service across the United States to enhance service delivery.

Extensive and largely exclusive assortment of essential pool products

The assortment is a key differentiator, especially in the retail segment where Leslie's held a 20.05% market share in the 12 months ending Q1 2025. This assortment is what helps support the higher gross margin.

To streamline operations, management is actively pruning the product catalog. They are exiting underperforming SKUs, reducing the count by more than 2,000 items. This inventory rationalization is part of a broader strategy to simplify go-to-market solutions.

High in-stock levels on critical 'Never Out' SKUs

Inventory management became a major focus in 2025, with a goal to ensure the right product is available when the customer needs it most. This focus is paying off in key areas.

For the fourth quarter of fiscal 2025, Leslie's, Inc. reported that in-stock levels for its top-selling never out SKUs improved by over 400 basis points compared to 2024. Furthermore, Local Fulfillment Centers (LFCs) drove in-stock rates of over 99% for these top-selling SKUs during Q3. This operational discipline helped reduce inventory by $26.3 million, or 11.2%, year-over-year as of October 4, 2025.

Value proposition improvement through price optimization on key items

Management recognized that pricing was a major factor in market share loss, citing that pricing on key items was 'out of step with our competitors'. Addressing this is a top priority to win back the net loss of over 160,000 residential customers experienced in 2025.

The strategy involves reinvesting cost savings directly into the price-value equation. Leslie's is targeting direct cost reductions of $7-$12 million to fund these price investments. To be fair, this investment will compress margins; the company expects a 100 to 150 basis point reduction in product gross margins in 2026 due to these pricing adjustments. Finance: draft 13-week cash view by Friday.

Leslie's, Inc. (LESL) - Canvas Business Model: Customer Relationships

You're looking at how Leslie's, Inc. is trying to lock in its pool-owning customers and win back the ones that slipped away in 2025. The strategy hinges on data from the loyalty program and boots-on-the-ground expertise.

Pool Perks loyalty program for retention and personalization

The refreshed Pool Perks Rewards Program, launched in May 2025, is central to retention efforts. It uses a tiered structure to reward spending, capturing critical zero-party data on over 85% of transactions. This data fuels targeted communications. Here's how the earning structure breaks down:

Also, free shipping is available for orders over $75 for Perks and Perks Elite members. It's defintely a system designed to increase purchase frequency.

High-touch, expert-driven in-store service post-water test

The in-store experience is being sharpened to drive basket size and conversion. Store teams are focusing on technical expertise tied to water testing. This effort showed results in the fourth quarter of fiscal 2025. Here are the key metrics from that period:

• Basket size saw mid-single-digit growth in Q4 FY2025.
• Conversion rates increased by 500 basis points following water tests.

This focus on expertise helps move customers from just buying chemicals to investing in equipment and services.

Targeted marketing to recapture over 160,000 lost residential customers

Management cited a significant challenge: a net loss of over 160,000 residential customers in 2025. This loss was attributed in part to a price-value challenge, which also saw an 8.6% decline in residential traffic. The plan to reverse this relies heavily on the loyalty data captured across 85% of transactions to execute precise, targeted marketing campaigns aimed at bringing those lapsed customers back into the fold.

Dedicated Pro-Pool sales teams for professional accounts

The professional segment shows relative resilience compared to the residential side. Looking at the second half of fiscal 2024, the pro pool consumer group experienced only a low single digit sales decline. This contrasts with the total company sales decline of just over 7% during that same peak season. The company sees more opportunity here going forward.

New market leadership structure to integrate local service offerings

To better serve all customer types locally, Leslie's, Inc. is restructuring its field teams. This new market leadership model integrates previously siloed functions-stores, service, commercial, and trade-at the local level. This change gives local managers clear ownership of their markets and zip codes. The goal is to enable full-service delivery in every store. This includes services like BOPIS, service appointments, and equipment repair.

Finance: draft 13-week cash view by Friday.

Leslie's, Inc. (LESL) - Canvas Business Model: Channels

You're looking at how Leslie's, Inc. gets its products and services to the customer as of late 2025. It's a mix of physical presence and digital speed, all centered on convenience.

The core physical channel remains the retail store network. Leslie's operated 1,000 locations in the second quarter of fiscal 2025. However, the company is actively optimizing this footprint, announcing plans to close 80 to 90 underperforming locations as part of its transformation. These closures are expected to impact annual sales by approximately $25-$35 million.

Leslie's, Inc. is the largest direct-to-customer brand in the U.S. pool and spa care industry, serving customers through this integrated ecosystem.

The digital platform is a critical component, supporting direct-to-customer sales. As of the end of fiscal 2024, the e-commerce segment was growing and nearing 20% of total sales. The comparable sales metric management uses includes sales through its e-commerce websites and third-party marketplaces.

To bridge the gap between digital and physical, Leslie's is accelerating its omnichannel transformation with a strategic partnership for same-day delivery.

• Use Uber partnership to expand same-day delivery services.
• Phoenix test markets showed fulfillment cut from days to hours and often minutes.
• The model is scaling across Arizona and continuing expansion across the United States through 2026.

The professional sales channel is being strengthened by leveraging the entire physical footprint. Leslie's is broadening engagement with pool service companies by utilizing its entire network of over 950 stores, moving beyond just designated pro locations. This professional segment showed resilience in fiscal 2024, with sales dropping only 1%. The new market leadership structure integrates store, service, commercial, and trade functions to better serve these customers.

Supporting faster delivery and better inventory management are the Local Fulfillment Centers (LFCs). Leslie's is rolling out 26 new LFCs, aiming for readiness before the 2025 pool season. These LFCs are key to the 'Never Out' SKU initiative, designed to improve in-stock levels by over 300 basis points. They also allow smaller locations to stock larger pro items, like 50-pound buckets of chlorine tabs. The company is also streamlining its distribution, planning a transition to an optimized 5DC network in 2026.

Here's a quick look at the channel structure:

Finance: draft 13-week cash view by Friday.

Leslie's, Inc. (LESL) - Canvas Business Model: Customer Segments

You're looking at the customer base of Leslie's, Inc. (LESL) as of late 2025, and the data shows a clear strategic pivot underway, driven by market pressures on the core base. The company serves a diverse set of pool and spa owners across the United States, operating through its 1,000 physical locations as of the end of the third fiscal quarter of 2025.

The primary customer groups are:

• Residential DIY pool and spa owners
• Pool service professionals (Pro-Pool segment)
• Commercial pool operators (e.g., hotels, community pools)

The performance across these segments in fiscal year 2025 highlights where the stress points and growth opportunities lie. The overall trailing twelve months (TTM) revenue for Leslie's, Inc. stood at approximately $1.25 billion as of the end of the third fiscal quarter of 2025.

Here is a breakdown of the segments with the latest available statistical and financial context:

The pressure on the core residential base is significant, evidenced by the Q2 2025 residential pool sales decline of 9% year-over-year. To counter this, Leslie's, Inc. is focusing on the Pro-Pool segment, which saw strong growth of 9% in Q1 2025, though it softened to a 2% decline in Q2 2025.

The company's overall fiscal 2025 sales reached approximately $1,242.0 million. The strategy involves aggressive price adjustments to win back value-focused customers, even if it means accepting a lower gross margin rate, which was 39.6% in Q3 2025.

The customer groups served include:

• Residential Pool Owners: The largest group, currently experiencing traffic declines of 8.6% in Q3 2025.
• Pool Professionals: A segment management is actively trying to grow, despite a recent 2% sales dip in Q2 2025.
• Commercial Operators: While served, specific revenue contribution data for this segment is not explicitly broken out in the latest reports.

Finance: draft 13-week cash view by Friday.

Leslie's, Inc. (LESL) - Canvas Business Model: Cost Structure

You're looking at the hard numbers that drive the operational costs for Leslie's, Inc. as of late 2025. This is where the rubber meets the road on their strategy.

The primary cost drivers for Leslie's, Inc. for the full fiscal year 2025 are laid out below, focusing on the figures reported in their latest financial disclosures.

The SG&A expenses of $425.7 million for the full year reflect the ongoing overhead of running the business, which the company is actively working to optimize. They are making structural adjustments to their cost base.

Store operating expenses are a significant part of that SG&A figure, and you can see the focus on rightsizing the cost base in their recent actions. Honestly, managing these fixed and semi-fixed costs is crucial when sales are under pressure.

• Payroll: Management has taken actions like reducing labor hours to better align with softer demand.
• Rent: The company is undertaking a comprehensive expense reduction initiative, including the renegotiation of all major contracts with landlords.
• Utilities: These costs are part of the general operating structure being reviewed for efficiency.

The non-cash impairment charges of $183.8 million in FY2025 are a stark indicator of asset value reassessment, specifically related to goodwill and underperforming stores. This is a direct result of the strategic review to optimize the store network, which includes the announced closure of 80 to 90 underperforming locations.

The interest expense on net long-term debt settled at $62.9 million for the year. This is a reduction from the prior year's $70.4 million, showing some deleveraging or refinancing benefit, though the company is still focused on strengthening its balance sheet.

The Cost of Goods Sold, which resulted in the 35.4% gross margin, is being addressed through efforts to gain further efficiency with suppliers and distribution channels, alongside structural pricing adjustments planned for fiscal year 2026.

Finance: draft 13-week cash view by Friday.

Leslie's, Inc. (LESL) - Canvas Business Model: Revenue Streams

You're looking at how Leslie's, Inc. brings in money, which is heavily tied to the seasonal nature of pool ownership. Honestly, the top-line number for the most recently completed fiscal year tells a clear story about the current environment.

Full-year Fiscal 2025 Sales totaled $1,242.0 million. This figure represents a decrease of (6.6)% compared to the $1,330.1 million achieved in the prior fiscal year. The fourth quarter of Fiscal 2025 itself brought in sales of $389.2 million, which was a decrease of (2.2)% year-over-year.

The revenue streams are fundamentally built around the aftermarket needs of pool and spa owners, split between do-it-yourself residential customers and professional service providers. The company operates an integrated ecosystem of over 1,000 physical locations and a digital platform to facilitate these sales.

Here's a look at the reported sales performance across the fiscal year:

The core product categories driving this revenue include the sale of pool and spa chemicals, such as chlorine and algaecides, and the sale of pool equipment and parts, like pumps and filters. While specific revenue percentages for these product lines aren't explicitly broken out in the latest reports, the business model relies on selling this essential assortment of products.

The company is actively focusing on its professional customer base. Leslie's, Inc. is continuing to focus on strengthening its Pro segment. Revenue from pool maintenance and repair services is an implied component of serving the professional segment, though explicit service revenue figures are not detailed separately from product sales in the summary results. The company is working to deliver direct cost reductions of $7-$12 million which they plan to invest back into their customer price value proposition.

You can see the quarterly revenue fluctuations clearly:

• Sales of $175 million in Q1 2025 showed a slight increase of 0.7%.
• Q2 2025 sales were $177.1 million, reflecting a 6% year-over-year decline.
• Non-comparable sales from new stores contributed $3.2 million for the full fiscal year 2025.

Finance: draft 13-week cash view by Friday.