Stock Story -
What Happened: Shares of pool products retailer Leslie’s (NASDAQ:LESL) fell 14.4% in the morning session after the company reported third quarter results with its profitability taking a hit as its gross margin, adjusted EBITDA, and EPS missed Wall Street's expectations. Its full-year 2024 earnings forecast also underwhelmed. Management cited a challenging macro environment - commentary that is consistent with what we've observed in retailers that sell expensive goods whose purchases are non-recurring, like furniture.
On the other hand, Leslie's blew past analysts' revenue expectations this quarter, driven by better-than-expected (but still declining) same-store sales. Overall, the results could have been better.
Following the results, Goldman Sachs (NYSE:GS) analyst Kate McShane downgraded the stock's rating from Buy to Neutral.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Leslie's? Find out by reading the original article on StockStory.
What is the market telling us: Leslie's's shares are somewhat volatile and over the last year have had 30 moves greater than 5%. But moves this big are very rare even for Leslie's and that is indicating to us that this news had a significant impact on the market's perception of the business.
Leslie's is down 62.1% since the beginning of the year, and at $4.63 per share it is trading 72.3% below its 52-week high of $16.72 from February 2023. Investors who bought $1,000 worth of Leslie's's shares at the IPO in October 2020 would now be looking at an investment worth $213.82.
