Leslie's Stock Slips After Losing Spot In S&P SmallCap 600, Retail Sentiment Turns Bearish

Shares of Leslie's Inc. (LESL) dropped over 5% in after-hours trading Wednesday after news of its removal from the S&P SmallCap 600 index dampened retail sentiment.

SanDisk (SNDK) will replace Leslie's in the index before trading opens on Tuesday, Feb. 25. According to The Fly, Western Digital Corp. (WDC), an S&P 500 member, is spinning off SanDisk in a deal set to close on Feb. 24.

Western Digital will remain in the S&P 500 post-spin-off, while Leslie's market capitalization was deemed no longer "representative of the small-cap market space."

On Wednesday, Stifel analyst W. Andrew Carter reportedly cut Leslie's price target to $1.30 from $1.55, maintaining a 'Sell' rating. Carter noted that the company needs a significant second-half rebound but has "limited room for error."

On Tuesday, BofA double downgraded Leslie's to 'Underperform' from 'Buy,' slashing its price target to $1.40 from $2.65. The firm cited market share losses, weak FY25 guidance, and subdued free cash flow.

Leslie's reported mixed Q1 results this month, with a loss per share (EPS) of $0.22, slightly missing estimates of $0.21. Revenue rose 0.7% to $175.23 million, beating forecasts of $173.4 million. Adjusted net loss widened to $41.3 million from $36.8 million a year ago.

On Stocktwits, sentiment turned 'bearish' from 'neutral' just a day ago, with message volume remaining low.

Leslie’s is a direct-to-customer brand in the U.S. pool and spa care industry serving residential customers and pool professionals.

Leslie’s stock is down 0.45% year-to-date.

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