What Happened?
Shares of pool products retailer Leslie’s (NASDAQ:LESL) fell 31.1% in the morning session after the company reported weak preliminary third-quarter financial results and withdrew its full-year 2025 guidance. The pool supplies retailer announced its net sales for the quarter declined approximately 12% to around $500 million, a figure that fell significantly short of analysts' expectations. Leslie's attributed the poor performance to unusually wet and cool weather across its key markets, which disrupted the peak pool season. Adding to investor concerns, the company also pulled its financial forecast for the full fiscal year, citing challenging market conditions and its performance so far. The weak preliminary results and guidance withdrawal prompted several analyst firms, including Telsey Advisory Group and Loop Capital, to lower their price targets on the stock.
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? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Leslie’s shares are extremely volatile and have had 91 moves greater than 5% over the last year. But moves this big are rare even for Leslie's and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 11.9% as the stock continued a strong rally amid signs of a potential short squeeze. The stock had already been on a multi-day winning streak, and reports indicated that as of July 25, 2025, it had a high short sale ratio of 32.11%. A short squeeze is a market event that can occur when a heavily shorted stock's price rises, forcing short sellers to buy shares to cover their positions. This buying pressure, in turn, pushed the price even higher. The move on Monday extended a significant run for the stock, which had risen more than 51% since a pivot point on July 17, 2025. This rally also coincided with reports of a broader trend where other highly shorted consumer stocks experienced strong gains.
Leslie's is down 81.4% since the beginning of the year, and at $0.42 per share, it is trading 88% below its 52-week high of $3.51 from November 2024. Investors who bought $1,000 worth of Leslie’s shares at the IPO in October 2020 would now be looking at an investment worth $19.41.
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