Inve US ▾
SISITE

SiteOne Landscape Supply (SITE) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Industrials· Apr 29, 2026

Source: earnings call transcript

Executive summary

SiteOne Landscape Supply Q1 FY26 — Strong EBITDA Growth Despite Soft Market

SiteOne Landscape Supply navigated a challenging Q1 FY26 marked by delayed spring weather and macroeconomic headwinds, delivering 14% adjusted EBITDA growth and 90 basis points of gross margin expansion. The company's strategic initiatives, including private label growth and digital sales, drove performance, while acquisitions like Reinders strengthened its market position. Management anticipates continued market softness but remains confident in its ability to gain market share and expand EBITDA margins through disciplined execution and a robust acquisition pipeline.

Highlights

5

  • Adjusted EBITDA increased 14% to $25.5 million compared to the prior year period.

  • Gross margin improved by 90 basis points to 33.9%, driven by effective price realization and commercial initiatives.

  • Organic daily sales pricing contributed 3% growth, offsetting volume declines.

  • Digital sales on siteone.com increased by over 60% in Q1, with regular active users also up approximately 60%.

  • Net debt to trailing 12-month adjusted EBITDA improved to 1.4x, within the targeted range of 1 to 2x.

Concerns

5

  • Organic daily sales decreased 1% year-over-year, driven by a 4% decline in volume due to delayed spring and macroeconomic uncertainty.

  • SG&A as a percentage of net sales increased 70 basis points to 37.2% due to the organic sales decline.

  • The extra week in fiscal December 2026 is expected to reduce adjusted EBITDA by $4 million to $5 million.

  • New residential construction end market is expected to be down mid- to high single digits for FY26.

  • Repair and upgrade market demand is expected to be down slightly in FY26 due to increased macroeconomic uncertainty.

Guidance & targets

CategoryTargetConfidence
Full-year adjusted EBITDA
$425 million to $455 million
high materiality
High
Pricing contribution to sales growth
2% to 3%
medium materiality
High
Organic daily sales growth
low single-digit growth
high materiality
High
Effective tax rate
between 25%, 26%
low materiality
High
Gross margin
higher than 2025
high materiality
High
Adjusted EBITDA margin
solid improvement
high materiality
High
Adjusted EBITDA impact from 53rd week
reduce our adjusted EBITDA by $4 million to $5 million
medium materiality
High
New residential construction market demand
down mid- to high single digits
high materiality
High
New commercial construction market demand
remain flat
medium materiality
High
Repair and upgrade market demand
down slightly
medium materiality
Medium
Maintenance end market growth
continue growing steadily
medium materiality
High
End market demand
down modestly
high materiality
Medium
Sales volume
flat
high materiality
High
Private label sales percentage increase
100 basis points a year
medium materiality
High
Ultimate private label sales percentage
25%, 30%
medium materiality
High
SG&A leverage timing
Q2 and Q3
medium materiality
High
SG&A leverage in Q4
not expect to get SG&A leverage
medium materiality
High
Gross margin in Q2
expect to expand gross margin
medium materiality
High
Gross margin in Q3
probably a little better than we thought
medium materiality
Medium
Gross margin in Q4
unknown
medium materiality
Low
Fertilizer price increase
around 5%
low materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Agronomic products
Due to improved pricing, partially offset by later start to spring selling season.
Organic daily sales: increased 2%
—increased 2%——
Landscaping products
Due to adverse weather and soft demand in new residential construction and repair and upgrade end markets.
Organic daily sales: decreased 3%
—decreased 3%——
Eastern regions
More affected by weather, where persistent storms materially disrupted early season customer activity.
—down——
Central region
Achieved double-digit organic sales growth with solid demand and less disruption from winter storms.
Organic sales growth: double-digit
—double-digit——

SITE operating KPIs by quarter

SITE operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Distribution centers
5 As shown on Slide 4 of the earnings presentation, we have a strong footprint of more than 680 branches and 5 distribution centers across 45 US states and 5 Canadian provinces. Source: earnings call transcript
5 As shown on Slide 4 of the earnings presentation, we have a strong footprint of more than 680 branches and 5 distribution centers across 45 US states and 5 Canadian provinces. Source: earnings call transcript
0%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Reinders Leading fifth-generation, family-owned distributor of irrigation, agronomics, holiday and landscape lighting and landscape supplies.

12 locations across the Midwest. Significantly expands presence and capabilities in irrigation and agronomics. Leadership team will remain. Acquired on March 16.

Bourget Flagstone Company Wholesale distributor of hardscape products.

1 location in Santa Monica, California. Establishes presence in Santa Monica and expands hardscapes offering in Southern California. Acquired on January 13.

Risks & headwinds

Delayed spring selling season Q1 FY26

organic daily sales down 1% (due to 4% volume decline), February and most of March, were particularly slow from a sales perspective

Mitigation:volumes improve in April

Macroeconomic uncertainty and higher interest rates FY26

end markets could continue to be soft this year, negatively affecting an already soft new residential construction market and the more resilient repair and upgrade market.

Mitigation:Focus on commercial and operational initiatives, market share gains.

Deflation in certain commodity products Q1 FY26

grass seed and PVC pipe, which were down 10% and 8%, respectively, in the quarter

Mitigation:Moderated magnitude, offset by price increases in other product lines.

Higher freight and distribution costs Q1 FY26 and ongoing

partially offset by higher freight and distribution costs (on gross margin), rising cost of diesel, international freight, fifth DC in the cost there

Mitigation:continued to lower our net delivery expenses during the first quarter, driven by delivery associate and equipment efficiency gains along with improved pricing, pass through fuel surcharges.

Extra week (53rd week) in fiscal 2026 FY26 (fiscal December)

reduce our adjusted EBITDA by $4 million to $5 million

Mitigation:None stated, factored into guidance.

Weakness in new residential construction demand FY26

expected this market to be down mid- to high single digits for the full year 2026

Mitigation:Focus on other end markets, commercial initiatives.

Softness in repair and upgrade market FY26

demand will be down slightly this year due to the increase in macroeconomic uncertainty

Mitigation:Long-term fundamentals are strong, commercial initiatives.

SG&A leverage challenge Q1 FY26, ongoing

SG&A as a percentage of net sales increased approximately 70 basis points to 37.2%, driven primarily by the decline in organic daily sales

Mitigation:tightly manage costs and drive productivity across the business, SG&A in the base business, on an adjusted basis, was flat.

What to watch in Q2 FY26

Organic daily sales volume improvement

Q2 FY26
Current volumes have improved in April but aren't positive
Target Positive organic daily sales volume

Why it matters

Indicates recovery from delayed spring and macro headwinds, crucial for full-year guidance.

As Doug mentioned, sales volume has improved in April compared to the first quarter.

Find out whether SITE delivers this. Inve re-checks your case every morning.

Q&A highlights

Asked about the long-term EBITDA margin potential (3-5 years) from commercial/operational initiatives and the top 2-3 initiatives for 2026.

Doug Black stated a long-term target of 13% EBITDA margin, driven by private label growth, small customer penetration, focus branch improvements, and delivery efficiency. For 2026, private label, small customers, and focus branches are key.

“Longer term, we have a -- we have our path to 13%, and that's been our target for a while, and we feel good that we can get there with the combination of our commercial initiatives driving organic growth, gross margin expansion and then SG&A efficiency levered.”

asked by David Manthey · answered by Doug Black

2 min read 6 chapters

Detailed narrative

Q1 Performance Overview

SiteOne reported net sales of $940 million, flat year-over-year, with organic daily sales down 1% due to a 4% volume decline, partially offset by 3% pricing growth. Adjusted EBITDA increased 14% to $25.5 million, and adjusted EBITDA margin expanded 30 basis points to 2.7%, driven by a 90 basis point gross margin improvement to 33.9%. The company attributed volume softness to delayed spring weather and increased macroeconomic uncertainty.

Strategic Initiatives Driving Performance

The company's commercial and operational initiatives were key to Q1 results. Private label product sales grew over 40% (for high-growth lines) and 10% overall, contributing to gross margin expansion. Digital sales on siteone.com increased over 60%, with active users also up 60%, indicating market share gains with digitally engaged customers. Efforts to improve delivery efficiency and profitability of underperforming 'focus branches' also contributed.

Acquisition Strategy and Pipeline

SiteOne completed two acquisitions in Q1 2026, adding approximately $110 million in trailing 12-month net sales. Notable among these was Reinders, a fifth-generation market leader in the Midwest, significantly expanding presence and capabilities in irrigation and agronomics. The company maintains a robust acquisition pipeline and expects to continue growing through M&A, leveraging its strong balance sheet and integration model.

Market Outlook and End-Market Dynamics

Management expects end market demand to be modestly down for FY26. New residential construction (20% of sales) is projected to decline mid- to high single digits. New commercial construction (14% of sales) is expected to remain flat. The repair and upgrade market (30% of sales) is anticipated to be down slightly, while the maintenance market (36% of sales) is expected to grow steadily. Pricing is now expected to contribute 2-3% to sales growth for the year.

Balance Sheet and Liquidity

SiteOne ended Q1 with net debt of $585 million, resulting in a net debt to trailing 12-month adjusted EBITDA ratio of 1.4x, well within its target range of 1 to 2x. Available liquidity stood at $502 million, including $84 million cash on hand and $418 million in ABL capacity. The ABL facility maturity was extended to April 2031, reinforcing financial flexibility for growth.

Leadership Transition

Scott Salmon, who led strategy and acquisitions for seven years, retired, having overseen over 70 acquisitions totaling $1.3 billion in TTM sales. Daniel Laughlin, a critical member of the acquisition team since 2014, has stepped into the role, ensuring continuity and leveraging his deep industry knowledge.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.