Inventory correction at Leslie’s driving Q4 weakness, says Loop Capital

Loop Capital analyst Garik Shmois keeps a Hold rating and $6.00 price target on Leslie’s after its Q4 results and below-consensus FY24 guide. The earnings miss was driven by weaker gross margin as items related to coninued inventory reductions more than offset better than expected sales, the analyst tells investors in a research note. The guide could end up being conservative as Leslie’s is offering relatively prudent forecasts across many segment categories, and its comps are generally easy after “many things went wrong” this past year, but the firm prefers to wait for better visibility to get more positive, especially after the disappointing last several quarters, Loop added.