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    SITE
    Earnings call· Mar 2026(Q1 FY26)

    SiteOne Landscape Supply Q1 FY26 earnings call SITE

    Apr 29, 2026 Source

    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

    21
    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

    4
    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——

    Operational metrics

    39
    Net sales
    $940 millionessentially flat year-over-year
    Q1 FY26

    up modestly from the $939 million for the first quarter of last year.

    Organic daily sales growth
    -1%decreased 1%
    Q1 FY26

    As a result of a 4% decline in volume, partially offset by a 3% increase in pricing.

    Selling days
    64same as the prior year period
    Q1 FY26
    Grass seed price decline
    10%down 10%
    Q1 FY26

    While we continue to see deflation in grass seed and PVC pipe, which were down 10% and 8%, respectively, in the quarter.

    PVC pipe price decline
    8%down 8%
    Q1 FY26

    While we continue to see deflation in grass seed and PVC pipe, which were down 10% and 8%, respectively, in the quarter.

    Acquisition sales contribution
    $12 million1% to net sales growth
    Q1 FY26

    Acquisition sales, which include sales attributable to acquisitions completed in 2025 and 2026, contributed approximately $12 million or 1% to net sales growth.

    Gross profit
    $319 millionincreased 3%
    Q1 FY26
    SG&A expenses
    $350 millionincreased from $343 million
    Q1 FY26
    SG&A as percentage of net sales
    37.2%increased approximately 70 basis points
    Q1 FY26

    driven primarily by the decline in organic daily sales during the quarter.

    Base business SG&A (adjusted)
    flatflat versus prior year
    Q1 FY26

    SG&A in the base business, on an adjusted basis, was flat for the first quarter compared to the prior year period.

    Effective tax rate
    28.9%compared to 25.5% for the prior year period
    Q1 FY26

    primarily due to an increase in excess tax benefits from stock-based compensation year-over-year.

    Net loss attributable to SiteOne
    $26.6 millioncompared to $27.3 million for the prior year period
    Q1 FY26

    primarily reflecting higher gross profit, partially offset by our SG&A.

    Weighted average diluted share count
    44.6 millioncompared to approximately $45.1 million for the prior year period
    Q1 FY26
    Shares repurchased
    155,000
    Q1 FY26
    Shares repurchased
    6,000
    Post Q1 FY26
    Adjusted EBITDA
    $25.5 millionincreased 14%
    Q1 FY26
    Adjusted EBITDA attributable to noncontrolling interest
    $700,000
    Q1 FY26
    Working capital
    $1.1 billioncompared to $1.0 billion at the end of the same quarter last year
    Q1 FY26
    Cash used in operating activities
    $122 milliondecreased approximately $8 million
    Q1 FY26

    due primarily to a modestly lower net loss and the effect of working capital changes.

    Cash investments
    $102 millioncompared to approximately $21 million for the same period last year
    Q1 FY26

    The increase primarily reflects the acquisition of Reinders as well as higher capital expenditures.

    Capital expenditures
    $23 millioncompared to $15 million for the same period last year
    Q1 FY26

    due to increased investments in our branch locations.

    Net debt
    $585 million
    Q1 FY26
    Net debt to trailing 12-month adjusted EBITDA
    1.4xlower than the 1.5x at the end of the first quarter of last year
    Q1 FY26

    which is within our targeted range of 1 to 2x.

    Available liquidity
    $502 million
    Q1 FY26
    Acquisitions completed
    108
    Since 2014

    We have now completed 108 acquisitions across all product lines since the start of 2014, adding approximately $2.2 billion in trailing 12-month sales to SiteOne.

    Private label sales growth (high-growth lines)
    over 40%
    Q1 FY26

    For gross margin improvement, we achieved positive organic daily sales growth with small customers and grew our private label product sales by over 40% during the quarter.

    Private label sales growth (total)
    10%
    Q1 FY26

    If you add in LESCO and our total private label, it grew at 10% in the quarter.

    Private label sales as percentage of total sales
    15%
    Current

    we're approximately 15% private label

    Bilingual branches percentage
    68%from 67% of branches
    Q1 FY26

    we increased our percentage of bilingual branches from 67% of branches to 68% of branches during the quarter.

    Digital sales growth
    over 60%versus the prior year period
    Q1 FY26

    We increased our digital sales on siteone.com by over 60% in the first quarter versus the prior year period.

    Regular active users growth (digital)
    approximately 60%
    Q1 FY26

    while also increasing regular active users by approximately 60%.

    Focus branches adjusted EBITDA margin improvement
    over 200 basis points
    FY25

    As a reminder, we achieved an over 200 basis point improvement in adjusted EBITDA margin of our focused branches in 2025.

    Acquisitions completed (Scott Salmon's tenure)
    over 70
    2014-2021

    Over that period, we added over 70 companies with over $1.3 billion in trailing 12-month sales to SiteOne.

    End market mix - Maintenance
    36%
    Current

    the maintenance end market, which represents 36% of our sales

    End market mix - New residential construction
    20%
    Current

    new residential construction demand, which comprises 20% of our sales

    End market mix - New commercial construction
    14%
    Current

    New commercial construction demand, which represents 14% of our sales

    End market mix - Repair and upgrade
    30%
    Current

    the repair and upgrade market, which represents 30% of our sales

    Fertilizer price increase
    5%
    Current

    the nature of the increase around 5% for fertilizer is not to the magnitude that we feel like it will create any kind of demand degradation.

    Inventory costs in COGS
    dipped around 3%YoY
    Q1 FY26

    It looks like inventory costs in the COGS line dipped around 3% in the quarter despite the total sales being relatively flat.

    Industry KPIs

    3
    MetricValueDetails
    Daily sales rate-1%%
    End market growth mixMaintenance: 36%; New residential construction: 20%; New commercial construction: 14%; Repair and upgrade: 30%%
    Digital vending managed inventory penetrationover 60%%

    Deals & partnerships

    2
    ReindersLeading 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 CompanyWholesale 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

    8
    Delayed spring selling seasonQ1 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 ratesFY26

    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 productsQ1 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 costsQ1 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 2026FY26 (fiscal December)

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

    Mitigation: None stated, factored into guidance.

    Weakness in new residential construction demandFY26

    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 marketFY26

    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 challengeQ1 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

    5

    Organic daily sales volume improvement

    Q2 FY26
    Currentvolumes have improved in April but aren't positive
    TargetPositive 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.

    Q&A highlights

    6

    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 read6 chapters

    Detailed Narrative

    01

    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🌐.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.