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SiteOne Landscape Supply (SITE) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Jul 29, 2026

Source: earnings call transcript

Executive summary

SiteOne Landscape Supply Q2 FY26 — Solid Performance Despite Softer End Markets

SiteOne Landscape Supply delivered solid Q2 FY26 results, achieving 5% growth in net sales and adjusted EBITDA, and 8% net income growth, despite softer end markets. The company maintained its adjusted EBITDA margin and significantly increased share repurchases. Strategic initiatives and acquisitions continue to drive performance, with management confident in long-term growth and margin expansion as market conditions normalize.

Highlights

5

  • Net sales increased 5% to approximately $1.53 billion during the quarter.

  • Adjusted EBITDA increased 5% to $237.2 million, with adjusted EBITDA margin maintained at 15.5%.

  • Net income attributable to SiteOne increased 8% to $139.3 million.

  • Gross profit increased 6% to approximately $565 million, and gross margin improved 50 basis points to 36.9%.

  • Returned over $100 million to shareholders through share repurchases, including 797,000 shares for $94 million in Q2.

Concerns

5

  • Organic volume declined approximately 2% during the quarter due to weakness in new residential construction and repair and upgrade end markets.

  • New residential landscaping demand is expected to be down high single digits for the full year 2026.

  • Repair and upgrade market demand is expected to be down approximately mid-single digits in 2026.

  • SG&A as a percentage of net sales increased 30 basis points to 24.2%, driven by modest organic daily sales growth, higher fuel costs, and increased healthcare expenses.

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

Guidance & targets

CategoryTargetConfidence
Full-year adjusted EBITDA
$425 million to $455 million
high materiality
High
Full-year organic daily sales growth
flat to up 1%
high materiality
High
Full-year pricing contribution to net sales growth
approximately 3%
medium materiality
High
Full-year gross margin
higher than 2025
medium materiality
High
Full-year SG&A as a percent of net sales
approximately flat
medium materiality
High
Full-year new residential construction demand
down high single digits
high materiality
High
Full-year new commercial construction demand
remain flat
medium materiality
High
Full-year repair and upgrade market demand
down approximately mid-single digits
high materiality
High
Full-year maintenance end market growth
grow modestly
medium materiality
High
Full-year effective tax rate
between 25% and 26%
low materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Central region
Achieved double-digit organic growth for the second quarter, following the same result for the first quarter, making it the strongest performing region.
—double-digit organic growth——
Sunbelt (California, Arizona, Texas)
Organic sales were down due to weaker demand in the new residential construction and repair and upgrade end markets. Texas also experienced a meaningful amount of rain.
—down——
Agronomic products
Organic daily sales increased 5% due to price inflation from rising product costs. Volume growth was 1% against a difficult prior-year comparison. Higher prices for certain products like fertilizer reduced short-term volume.
Volume growth: 1%
—5% organic daily sales growth——
Landscaping products
Organic daily sales were flat, reflecting weakness in new residential construction and softer repair and upgrade activity. Pricing contributed 3%.
Price: 3%
—flat organic daily sales growth——

SITE operating KPIs by quarter

SITE operating KPIs stated on its earnings calls, by fiscal quarter
KPI Mar 2026 Q1 FY26This call 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 Acquisition of a strong market leader in the Midwest for irrigation, agronomics, and lighting products.

Reinders is located in Wisconsin, Michigan, Ohio, and Illinois, where the market is currently strong. The integration is going well, with initial purchasing synergies and system integration expected by early next year. Branch optimization opportunities are expected in year 2.

Double Mountain wholesale nursery Acquisition of the remaining 25% interest.

SiteOne now owns 100% of the business.

Risks & headwinds

Softer end markets FY26

Organic volume declined 2% in Q2. New residential construction demand expected down high single digits for FY26. Repair and upgrade demand expected down mid-single digits for FY26.

Mitigation:Execution of commercial and operational initiatives to outperform the market and gain market share.

Macroeconomic uncertainty FY26

Contributing to weakness in new residential and repair/upgrade markets.

Mitigation:Focus on strengthening the business and continuously improving areas within control; leveraging resilient end market mix.

Higher interest rates FY26

Negative effect on new residential construction and repair/upgrade end markets.

Mitigation:Maintaining financial strength and flexibility, strong balance sheet (net debt to TTM adjusted EBITDA 1.3x).

Energy volatility and higher fuel costs FY26

Increased SG&A by 30 bps. Negatively impacted maintenance product volume due to fixed customer budgets. Fuel cost impact adds 15 bps to SG&A.

Mitigation:Implemented fuel surcharges to mitigate freight out costs (net neutral to cost, dilutive to SG&A). Managing freight in costs through supply chain and price adjustments. Expect to reduce net delivery expense in 2026 and beyond.

General cost inflation and increased healthcare expenses FY26

Contributed to 30 bps increase in SG&A as % of net sales.

Mitigation:Taking additional actions to reduce SG&A and improve productivity to achieve approximately flat SG&A as a percent of net sales for the full year.

Impact of 53rd week in fiscal 2026 FY26

Expected to reduce full-year adjusted EBITDA by $4 million to $5 million.

Mitigation:Factored into full-year adjusted EBITDA guidance.

What to watch in Q3 FY26

Organic daily sales growth

Next quarter (Q3 FY26)
Current 1% (Q2 FY26)
Target Flat to up 1% (FY26 guide)

Why it matters

This metric indicates the company's ability to outperform the market and achieve its full-year guidance despite ongoing end-market headwinds.

Overall, with the benefit of our commercial initiatives, we expect organic daily sales growth for the year to be flat to up 1%.

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

Q&A highlights

What specific negative growth are you seeing in Sunbelt for new residential, and which product categories are most impacted in the broad-based R&R market weakness?

New residential completions are down high single digits, with worse performance in Sunbelt states like California, Arizona, and Texas, while the Midwest is better. The R&R market weakness is broad-based across the country, particularly affecting hardscapes and lighting, driven by macroeconomic uncertainty and energy volatility.

“new residential, yes, we've seen some increased weakness. If you look at last year, starts were down significantly, completions were a little better than starts. And I think what we've seen this year is that starts are down mid-single digits, but completions are down high single digits.”

asked by Ryan Merkel · answered by Doug Black

2 min read 5 chapters

Detailed narrative

Market Conditions and Performance

SiteOne navigated challenging end markets in Q2 FY26, with net sales growing 5% to $1.53 billion and adjusted EBITDA up 5% to $237.2 million. Organic daily sales increased 1%, driven by 3% price inflation, but organic volume declined 2% due to weakness in new residential construction (down high single digits for FY26) and repair and upgrade (down mid-single digits for FY26). The Central region showed double-digit organic growth, while Sunbelt markets like California, Arizona, and Texas were challenged.

Strategic Initiatives and Digital Growth

The company continues to execute commercial and operational initiatives to outperform the market. Digital sales on siteone.com increased over 50% year-to-date, with active users up 40%, indicating market share gains among digitally engaged customers. Private brand products (Pro Trade, Solstice) grew 40% collectively during the quarter, contributing to both sales growth and gross margin expansion. The percentage of branches with bilingual capability is nearly 70%.

Gross Margin Expansion and SG&A Management

Gross profit increased 6% to $565 million, with gross margin improving 50 basis points to 36.9%, driven by price realization and commercial initiatives. SG&A as a percentage of net sales increased 30 basis points to 24.2% due to modest organic daily sales growth, higher fuel costs, and healthcare expenses. Management is taking additional actions to achieve approximately flat SG&A as a percentage of net sales for the full year, focusing on productivity improvement and adjusting to lower volumes.

Acquisition Strategy and Pipeline

SiteOne completed two acquisitions year-to-date, adding approximately $110 million in trailing 12-month sales, including Reinders, a market leader in the Midwest. The company maintains an active pipeline of high-quality targets and expects more acquisitions in 2026, aiming to add over $2 billion in acquired TTM revenue over the next decade. The integration of Reinders is progressing well, with initial purchasing synergies and planned system integration by early next year.

Capital Allocation and Share Repurchases

The company repurchased 797,000 shares for $94 million in Q2 at an average price of $117.63, bringing year-to-date repurchases to 1.053 million shares for $124 million. Net debt to trailing 12-month adjusted EBITDA remained at 1.3x, within the target range of 1x to 2x, with $530 million in available liquidity. The ABL facility was amended to extend its maturity to April 2031, further strengthening financial flexibility.

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