Americans have cut back on luxury spending, and that has impacted retailers that cater to discretionary spending.
As rising costs continue to weigh on Americans’ wallets, a Bankrate survey found that the majority of U.S. adults (54%) say they are planning to spend less on travel, dining, or live entertainment this year, compared with last year. In 2024, 49% planned to spend less than they did in 2023.
“The cumulative effects of inflation and high interest rates have been straining
households, contributing to record levels of credit card debt and causing consumer
sentiment to plummet,” explained Bankrate senior industry analyst Ted Rossman.
That has created a challenging operating environment for Leslie’s Pools, the largest direct-to-customer brand in the U.S. pool and spa care industry, serving residential customers and pool professionals nationwide.
The chain, which was founded in 1963, closed 80 underperforming stores during its first quarter, while implementing a new operating plan based on value.
Leslie’s Pools bets on value
A number of major chain CEOs have talked about value during their most recent earnings calls. Walmart, for example, said it was seeing more higher-income customers, while McDonald’s CEO Christopher Kempczinski talked about refocusing on value during his company’s first-quarter 2025 earnings call.
“We recognize that consumers’ value perceptions are most influenced by our core menu pricing. We’re working closely and collaboratively with our U.S. franchisees on this opportunity, and we’re developing ideas for how we might address this as an entire system,” he said.
Leslie’s Pools CEO Jason McDonell shared a similar message in his Q1 earnings release.
“As we move into the 2026 pool season, we are implementing a strategic pricing transformation, a fundamental shift to value pricing supported by our ‘New Low Prices, Same Great Quality’ campaign launching to coincide with pool season,” he shared.
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He stressed that despite the closures and the company’s recent struggles, he believed it could return to growth.
“Through renewed pricing and revitalized marketing, we are well-positioned to grow our active customer file by re-engaging lapsed consumers and attracting new customers,” he added.
Leslie’s Pools store closures at a glance
- Leslie’s announced the closure of approximately 80 underperforming stores as part of a cost-reduction and operational restructuring plan during Q1 fiscal 2026, according to its Q1 earnings release.
- The company also closed one distribution center (Illinois) to streamline its supply chain and reduce expenses, which it also included in its Q1 filings.
- Leslie’s recorded approximately $10.1 million in non-cash impairment charges related to store and asset closures, the company reported.
- For Q1 fiscal 2026, Leslie’s reported a net loss of about $83 million and sales down roughly 16% year over year, citing weak demand and margin pressure, it shared in SEC filings.
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Leslie’s Pools has struggled financially
Leslie’s Pools has faced recent financial challenges with its stock listing.
“The company’s stock performance has been under pressure throughout 2025, culminating in its removal from the S&P SmallCap 600 index earlier this year,” Pool Magazine, a leading publication covering the pool industry, shared.
This change indicates the company has been struggling.
“Being part of the S&P SmallCap 600 gives a company visibility, provides passive fund support, and signals investor confidence. Losing that standing means Leslie’s no longer met benchmarks for market cap and liquidity — a clear sign the stock has struggled to maintain momentum,” the magazine added.
S&P Global Ratings has downgraded the issuer credit rating of U.S. specialty pool supply retailer, Leslie’s Poolmart Inc., from ’B’ to ’B-’ due to weaker than expected business prospects for fiscal 2025, according to Investing.com.
Related: Costco shares bold expansion and growth plans
The pool industry has slowed
After a boom period during the Covid pandemic, the pool industry has been in decline.
“The predominant trend of 2024 reflects a period of transition as the pool industry moves beyond the pandemic-induced surge of 2020 to 2022. While pool permit registrations continued their decline from peak levels, the pace of reduction slowed significantly compared to the previous year, suggesting a stabilization in demand,” Pool and Spa Marketing shared.
Similar trends impacted the at-home exercise market as well as the furniture and home improvement industries.
The pool industry, however, does have one major hedge against a total market collapse.
“Pool service continues to benefit from a rare advantage in home services: maintenance isn’t optional. Once a homeowner owns a pool, recurring care becomes necessary, creating a dependable base of ongoing demand,” according to Skimmer’s 2026 State of Pool Service report.
The report clearly shows the opportunity: There are roughly 10.7 million pools in the U.S., including 10.4 million residential pools, and residential pool owners spend an average of about $1,700 per year on maintenance.
“And interest is rising, not fading. Total annual search volume across major pool categories is up 22% from 2022 to 2025 (29.7 million to 36.3 million), signaling that pool care demand is holding strong well beyond the post-pandemic surge,” it added.
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