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    SITE
    Earnings call· Jun 2026(Q2 FY26)

    SiteOne Landscape Supply Q2 FY26 earnings call SITE

    Jul 29, 2026 Source

    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

    10
    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

    4
    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——

    Operational metrics

    35
    Net sales
    $1.53B+5% YoY
    Q2 FY26

    Compared to approximately $1.46 billion for the prior year period.

    Organic daily sales growth
    1%
    Q2 FY26

    Driven by price inflation in response to rising costs and commercial initiatives, partially offset by softer end markets.

    Acquisition sales contribution
    $49M+3% to net sales growth
    Q2 FY26

    Includes sales attributable to acquisitions completed in 2025 and 2026.

    Organic volume
    -2%
    Q2 FY26

    Due to weakness in the new residential construction and repair and upgrade end markets.

    Pricing contribution
    3%
    Q2 FY26

    Generally in line with expectations, reflecting supply dynamics and higher transportation costs, and benefit from 2025 tariff-related price increases.

    Gross profit
    $565M+6% YoY
    Q2 FY26

    Compared to approximately $533 million in the prior year period.

    Gross margin
    36.9%+50 bps YoY
    Q2 FY26

    Improvement driven by price realization and execution of commercial initiatives, partially offset by dilutive effect of freight and distribution costs and commodity deflation.

    SG&A
    $371M+$22M YoY
    Q2 FY26

    Increased from $349 million for the same period last year.

    SG&A as % of net sales
    24.2%+30 bps YoY
    Q2 FY26

    Driven primarily by modest organic daily sales growth, higher health care expenses, and fuel cost inflation. Acquisitions accounted for approximately half of the total year-over-year increase in SG&A.

    Base business SG&A growth (adjusted)
    3.5%
    Q2 FY26

    Increase due primarily to higher health care expenses and fuel cost inflation.

    Effective tax rate
    25.7%+0.3% YoY
    Q2 FY26

    Compared to 25.4% for the prior year period, primarily due to higher state income tax expense.

    Net income attributable to SiteOne
    $139.3M+8% YoY
    Q2 FY26

    Compared to $129.0 million in the prior year period. Improvement reflects gross margin expansion, partially offset by higher SG&A and volume pressure.

    Weighted average diluted share count
    44.4M-0.7M YoY
    Q2 FY26

    Compared to approximately 45.1 million for the same period last year.

    Adjusted EBITDA
    $237.2M+5% YoY
    Q2 FY26

    Compared to $226.7 million in the prior year period. Includes $1.3 million attributable to noncontrolling interest.

    Adjusted EBITDA margin
    15.5%consistent YoY
    Q2 FY26

    Consistent with the prior year period.

    Working capital
    $1.10B+$40M YoY
    Q2 FY26 end

    Compared to $1.06 billion at the end of the same period last year.

    Cash provided by operating activities
    $153M+$17M YoY
    Q2 FY26

    Due primarily to higher net income and a positive contribution from working capital changes.

    Cash investments
    $15M-$2M YoY
    Q2 FY26

    Compared to approximately $17 million for the same period last year.

    Capital expenditures
    $18M+$4M YoY
    Q2 FY26

    Compared to approximately $14 million for the same period last year due to increased investments in branch locations and equipment.

    Net debt
    $556M+$24M YoY
    Q2 FY26 end

    Compared to approximately $532 million for the prior year period.

    Net debt to TTM adjusted EBITDA
    1.3xunchanged YoY
    Q2 FY26 end

    Within the target range of 1 to 2x and unchanged compared to the same time last year.

    Available liquidity
    $530M
    Q2 FY26 end

    Consisting of $87 million of cash on hand and approximately $443 million of available borrowing capacity under ABL facility.

    Cash on hand
    $87M
    Q2 FY26 end

    Part of available liquidity.

    Available borrowing capacity under ABL facility
    $443M
    Q2 FY26 end

    Part of available liquidity. ABL facility maturity extended to April 2031.

    Shares repurchased
    797,000
    Q2 FY26

    Largest share repurchase quarter since plan initiation in October 2022.

    Shares repurchased (YTD)
    1.053M
    YTD through July

    Includes post-quarter end repurchases of 101,000 shares for $10 million.

    Pro Trade Private brand sales growth
    50%YoY
    Q2 FY26

    Pro Trade Solstice and portfolio of private brand products collectively grew by 40% during the quarter. Pro Trade specifically up over 50% for the year.

    Digital sales on siteone.com growth
    50%vs prior year period
    YTD

    Achieved strong positive total sales growth with digitally engaged customers.

    Regular active users growth (siteone.com)
    40%
    YTD

    Increased year-to-date versus the prior year period.

    Percentage of branches with bilingual capability
    nearly 70%
    Q2 FY26

    Despite adding 12 Reinders branches without this capability.

    Greenfields opened
    6
    YTD

    Across the country, with a target pace of 5 to 10 per year.

    Grass seed price change
    -9%YoY
    Q2 FY26

    Deflationary impact on overall pricing.

    PVC pipe price change
    -4%YoY
    Q2 FY26

    Deflationary impact on overall pricing.

    Fuel cost impact on SG&A
    15 bps
    Q2 FY26

    The fuel increase adds about 15 basis points to SG&A with an offsetting benefit to gross margin, representing a transfer between the two.

    Targeted sales retention from branch consolidation
    80%
    ongoing

    The company has always targeted at least to retain 80% of sales through consolidation with nearby branches and is tracking ahead of this threshold in the first half.

    Industry KPIs

    2
    MetricValueDetails
    Daily sales rate1%%
    Digital vending managed inventory penetration50%%

    Deals & partnerships

    2
    ReindersAcquisition 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 nurseryAcquisition of the remaining 25% interest.

    SiteOne now owns 100% of the business.

    Risks & headwinds

    6
    Softer end marketsFY26

    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 uncertaintyFY26

    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 ratesFY26

    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 costsFY26

    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 expensesFY26

    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 2026FY26

    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

    5

    Organic daily sales growth

    Next quarter (Q3 FY26)
    Current1% (Q2 FY26)
    TargetFlat 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%.

    Q&A highlights

    6

    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 read5 chapters

    Detailed Narrative

    01

    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.

    02

    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%.

    03

    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.

    04

    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.

    05

    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.

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