PHILADELPHIA, Feb. 14, 2024 (GLOBE NEWSWIRE) -- Kaskela Law LLC announces that it has commenced an investigation into Leslie’s, Inc. (NASDAQ: LESL) on behalf of the company’s long-term investors.
Recently a securities fraud complaint was filed against Leslie’s on behalf of certain investors who purchased shares of the company’s stock between February 5, 2021 and July 13, 2023 (the “Class Period”).
According to the complaint, “Leslie’s became a publicly traded company on October 29, 2020. At the time, the pool maintenance industry was experiencing a boom brought about by the COVID-19 pandemic and increased consumer demand for at-home activities including swimming pools and spas. Soon thereafter, the market price of Trichlor—a chlorine-based chemical necessary for pool maintenance—skyrocketed as supply chain issues arising from the pandemic, as well as a fire at one of the leading chlorine producing plants in the United States in the summer of 2020, severely limited the availability of essential pool chemicals.
Undisclosed to investors, throughout the Class Period, Leslie’s customers were purchasing more chemicals than necessary, at significantly inflated prices, to stockpile the pool chemicals in case of a chlorine shortage. Rather than disclose that its impressive sales growth was based on artificial demand and excess panic buying, the Company claimed its growth initiatives were responsible for the impressive financial results and produced ‘healthy ongoing consumer demand’ that was ‘durable’ and ‘showed no signs of slowing.’”
The complaint further details how the company’s investors “only learned the truth about the reasons for Leslie’s impressive but unsustainable results after the financial markets closed on July 13, 2023, when the Company pre-released preliminary results for the third quarter of 2023. Specifically, Leslie’s revealed that sales in the third quarter of 2023 had declined by a staggering 12%, the Company’s earnings per share for the quarter was 42% below analysts’ estimates, and adjusted earnings before interest, taxes, depreciation, and amortization (‘EBITDA’) was now between $124 to $128 million, well below the prior forecast of $197 million. Additionally, after reaffirming its fiscal 2023 guidance the previous two quarters, Leslie’s abruptly slashed its financial outlook by up to a staggering 60% for the remainder of the year. As an explanation, the Company revealed that ‘consumers entered the pool season with a greater than normal amount of chemicals leftover from last year,’ resulting in reduced purchasing. In addition, as part of this pre-release and the sudden drop in guidance, Leslie’s announced that its Chief Financial Officer (“CFO”) Steven M. Weddell would be stepping down from his post effective August 7, 2023.”
Following this news, shares of the company’s stock fell $2.82 per share, or approximately 30% in value, to close on July 14, 2023 at $6.70 per share, on unusually heavy trading volume.
The investigation seeks to determine whether Leslie’s officers and directors violated the securities laws and/or breached their fiduciary duties in connection with the above alleged misconduct.
Leslie’s shareholders who purchased or acquired their shares prior to February 5, 2021 are encouraged to contact Kaskela Law LLC (D. Seamus Kaskela, Esq. or Adrienne Bell, Esq.) at (484) 229 – 0750, or by email (skaskela@kaskelalaw.com / abell@kaskelalaw.com) or online at https://kaskelalaw.com/cases/leslies/ , for additional information about this investigation and their legal rights and options.
Kaskela Law LLC exclusively represents investors in securities fraud, corporate governance, and merger & acquisition litigation. For additional information about Kaskela Law LLC please visit www.kaskelalaw.com.
CONTACT:
KASKELA LAW LLC
D. Seamus Kaskela, Esq.
Adrienne Bell, Esq.
18 Campus Blvd., Suite 100
Newtown Square, PA 19073
(888) 715 – 1740
(484) 229 – 0750
www.kaskelalaw.com
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