SiteOne Landscape Supply, Inc. Q3 FY2025 earnings call

• Doug Black mentioned the company achieved solid results with 4% net sales growth, 3% organic daily sales growth, and 11% adjusted EBITDA growth despite soft end markets. Teams executed initiatives well, with SG&A leverage, gross margin improvement, and market share gains. Added three companies in the quarter and one in October, expanding product line capabilities.
• Strategy involves leveraging scale, resources, and functional talent to support local teams, with an acquisition strategy to fill product portfolio, enter new markets, and add talent. Strong track record of performance and growth over 8 years, with adjusted EBITDA margin transitioning from deflation to improvement.
• Third quarter highlights include 4% net sales growth, 3% organic daily sales growth, 1% pricing growth, gross profit increase, SG&A leverage, and adjusted EBITDA growth. Initiatives include customer excellence, organic growth, gross margin expansion, and acquisition strategy with six acquisitions year-to-date adding ~$40M in trailing 12-month sales.

In the third quarter, SiteOne achieved 4% net sales growth, including 3% organic daily sales growth and 11% growth in adjusted EBITDA. Gross profit increased 6% to approximately $437 million, with gross margin expanding 70 basis points to 34.7%. SG&A expenses increased 2% but decreased as a percentage of net sales by 50 basis points to 28.4%. Organic daily sales for agronomic products grew 3% and for landscaping products grew 3% in the third quarter. Acquisition sales contributed approximately $13 million or 1% to net sales growth.

• Expect to exit 2025 with pricing up 1% to 2%, setting up for normal inflation in 2026. Full year adjusted EBITDA expected to be in the range of $405 million to $415 million, including a $4 million to $6 million charge for branch closures in the fourth quarter. Plan to consolidate or close 15 to 20 branches in 2026 to optimize footprint and cost structure.
• Confident in driving continued performance and growth into 2026 with strong teams, winning strategy, and execution of commercial and operational initiatives.

None specifically detailed in the transcript beyond general mention of risks associated with forward-looking statements in the opening remarks.

Q: Why not exclude the branch closure charge from adjusted EBITDA guidance?

A: John Guthrie said it's consistent with their strict guidelines on adjusted EBITDA, and they provide information so investors can make their own adjustments.

Q: Talk about price realization in agronomics vs landscape products and fourth quarter outlook?

A: John Guthrie said landscape products were up 1% and agronomic products were flat (slightly down). Expect price in fourth quarter to be between 1% and 2%, with grass seed being a smaller component, and 2026 likely to be a normal pricing year around 2%.

Q: Thoughts on competitor behavior in soft demand environment?

A: Doug Black said competitive behavior is typical in softer markets, especially around larger customers and commercial side, but SiteOne's teams and initiatives (siteone.com, delivery capabilities, private label) allow them to combat competition and gain market share.

Q: Cadence of branch closures in 2026 and margin contribution?

A: Doug Black said focus branches' adjusted EBITDA margin improved over 200 basis points in 2025, and they expect continued improvement in 2026, with branch closures/consolidations part of optimizing for margin improvement next year.