Elaine Ku

Elaine Ku questioned SiteOne Landscape Supply about the categories offering the most opportunity for private label expansion and the associated margin differentials. She also asked for an update on price increase announcements in early Q1 2026, current price realization trends, and any differences between finished goods and commodity pricing.

Answer

Chairman and CEO Doug Black identified LESCO (agronomics), Pro-Trade (lighting, landscape supplies), Solstice Stone (hardscapes), and Portfolio (nursery) as key private label brands, emphasizing that the margin differential is significant and materially impacts gross margin. He noted that early Q1 supplier signals for price increases are low single-digit, and while grass seed and PVC pipe were deflationary in Q4 2025, they are expected to bottom out, with over 90% of other categories in positive pricing territory.

Elaine Ku, on behalf of Matthew Bouley, asked about the specific categories offering the most opportunity for private label expansion and the associated margin differentials. She also inquired about early Q1 2026 price increase announcements and realization, distinguishing between finished goods and commodity pricing trends.

Answer

Chairman and CEO Doug Black identified key private label categories as Agronomics (LESCO), lighting and landscape supplies (Pro-Trade), hardscapes (Solstice Stone), and nursery (Portfolio), noting a significant margin differential that materially impacts gross margin. He stated that early Q1 price realization is tracking as exited, with one major supplier signaling low single-digit increases. CFO Eric Elema added that commodity prices like grass seed (down 12% in Q4) and PVC (down 10% in Q4) are expected to stabilize, with grass seed potentially bottoming out in H1 2026, while over 90% of the cost basket is in positive price territory.