Leslie’s Weighs Chapter 11 as Debt Hits 12.5x EBITDA

Leslie’s Inc. (NASDAQ: LESL) disclosed on July 22, 2026 that it is in confidential talks with creditors and weighing a range of options, including a possible Chapter 11 filing, to address its debt load.

Why it matters: Suppliers extending terms to Leslie’s should reassess credit limits now, before any filing locks in exposure.

Debt load hits 12.5x EBITDA

Leslie’s balance sheet shows the strain behind the reported talks.

• The pool and spa retailer carries $757 million in debt against $61 million in adjusted EBITDA for fiscal 2025, a leverage ratio near 12.5x.
• S&P Global Ratings downgraded Leslie’s Poolmart Inc. to ‘B-‘ from ‘B’, citing weaker business prospects for fiscal 2025.
• Shares fell 47% in after-hours trading on the July 22 report, extending a decline of more than 75% over the past year.

80 stores and a distribution center already closed

The reported restructuring talks follow more than a year of operational retrenchment, not a sudden shock.

• Leslie’s closed approximately 80 underperforming stores and one distribution center during the first quarter of fiscal 2026.
• The company recorded a net loss of about $83 million in Q1 fiscal 2026 on sales down 16% year over year, alongside $10.1 million in non-cash impairment charges.
• Leslie’s executed a 1-for-20 reverse stock split in fall 2025 to maintain its Nasdaq listing after falling out of the S&P SmallCap 600.

Cash position sits near $64 million

Two figures separate a company under pressure from one at real bankruptcy risk, and Leslie’s now shows both.

• The National Law Review ranked Leslie’s third on its 2026 retail bankruptcy watch list, citing a cash position of about $64 million.
• Second quarter fiscal 2026 results showed adjusted EBITDA improving to negative $26.8 million from negative $36.1 million a year earlier, alongside a net loss of $52.5 million.
• Leslie’s operates more than 1,000 locations across 39 states, meaning any filing would draw a large, geographically dispersed creditor base.

What to do now

Suppliers with open receivables to Leslie’s should act on the following now, regardless of how the talks resolve.

1. Pull current aging reports on Leslie’s receivables and flag any invoices approaching terms.
2. Review credit limits and consider tightening terms on new purchase orders pending a formal announcement.
3. Confirm your trade credit policy’s notification requirements and claim filing deadlines apply to this exposure.
4. Contact Securitas Global Risk Solutions to review your coverage while notification options are still open.

Disclaimer:
This blog post is meant to be informative and provide helpful tips and insights into credit insurance policies. It is not meant to supersede any policy requirements. Please consult your credit insurance policy for all requirements including claim filing deadlines and required documentation.

Since 2004, Securitas Global Risk Solutions, LLC has helped clients develop trade credit and political risk transfer solutions. As an independent brokerage, Securitas is focused on developing comprehensive solutions that meet client needs, ensuring a complete understanding of policy wording and delivering excellent responsive service. If you want to understand how trade credit insurance can protect your business, contact Securitas Global Risk Solutions to speak with a specialist.