Leslie's, Inc. Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Impairments, Store Closing, and Other Costs

Impairments, Store Closing, and Other Costs

6 Months Ended

Apr. 04, 2026

Impairments, Store Closing, and Other Costs

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 $(0.5) million in charges during the three months ended April 4, 2026 and $18.0 million in the six months ended April 4, 2026. These charges are included in our consolidated statements of operations and are comprised of the following components (in thousands):


		Three Months Ended					Six Months Ended
Financial Statement Line Item	Charge	April 4, 2026			March 29, 2025		April 4, 2026		March 29, 2025
Cost of merchandise and services sold	Non-cash inventory impairment (1)	$	(859	)	$	—	$	5,512	$	—
Selling, general and administrative expense	Wind down and other costs (2)		1,558			—		3,533		—
Impairment	Non-cash property and equipment impairments		—			—		5,353		—
Impairment	Non-cash lease impairments (3)		(1,174	)		—		3,621		—
Total		$	(475	)	$	—	$	18,019	$	—

(1)

The three months ended April 4, 2026 includes inventory reserve adjustments of $(0.9) million. For the six months ended April 4, 2026 the total inventory impairment was $5.5 million.

(2)

The three months ended April 4, 2026 includes $1.1 million of construction and other costs related to store closures, $0.1 million in severance costs, and $0.4 million in ongoing occupancy costs. For the six months ended April 4, 2026 includes $2.3 million of construction and other costs related to store closures, $0.6 million in severance costs, and $0.6 million in ongoing occupancy costs.

(3)

The three months ended April 4, 2026 includes $(1.2) million of non-cash gains due to lease terminations on stores that were closed and impaired during the first quarter of 2026. The six months ended April 4, 2026 includes a $4.8 million right-of-use asset impairment and $(1.2) million non-cash lease gains all relating to the store and distribution center closures that occurred during the first quarter of 2026.

No costs related to store closures were recognized during the three and six months ended March 29, 2025. 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.