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SiteOne Landscape Supply, Inc. (SITE)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 delivered modest top-line growth but stronger profitability: net sales +3% YoY to $1.462B, gross margin +30 bps to 36.4%, and Adjusted EBITDA +8% to $226.7M with margin +60 bps to 15.5% . EPS (GAAP diluted) was $2.86 vs $2.63 last year .
  • Results were essentially in line with S&P Global consensus: revenue slight miss ($1.462B vs $1.468B estimate*) and EPS essentially in-line ($2.93* Primary EPS vs $2.93* actual on S&P basis; GAAP diluted $2.86 reported) . Values retrieved from S&P Global.
  • Management maintained FY25 Adjusted EBITDA guidance of $400–$430M and signaled continued margin expansion on SG&A leverage, private label, delivery efficiency, and focus-branch improvements; pricing expected flat in Q3 and +1–2% in Q4, with grass seed deflation the primary dampener .
  • Mix trends: maintenance remains solid; new residential and repair/upgrade weaker; commercial flat; agronomic products +7% organic daily sales; landscaping products −1% .
  • Capital allocation supportive: $54.3M of buybacks in Q2; ~ $250M remains on authorization per Q&A; liquidity ~$578M; leverage 1.3x TTM Adjusted EBITDA .

What Went Well and What Went Wrong

  • What Went Well

    • SG&A leverage and margin expansion despite flat organic daily sales; Adjusted EBITDA margin +60 bps to 15.5% on improved gross margin and cost discipline . “We are executing our initiatives well, achieving excellent SG&A leverage, good gross margin improvement, and continuing to gain market share” .
    • Strategic initiatives delivering: private label growth, digital acceleration (+130% 1H digital sales), delivery efficiency (−40 bps net delivery expense on delivered sales), and focus-branch improvement (+200 bps margin in 1H) .
    • Accretive footprint expansion: Green Trade closed in Q2; Grove Nursery and Nashville Nursery closed post-quarter, strengthening nursery leadership in key markets .

  • What Went Wrong

    • Top-line softness in key end-markets (new residential, repair/upgrade) and weather headwinds (rain across Sun Belt/East Coast) pressured landscaping product volume (−1% organic daily sales) .
    • Commodity deflation persisted (PVC −15% YoY, seed −9% YoY in Q2) and expected further seed deflation in Q3; pricing only flat in Q2 and Q3 .
    • Working capital and inventory positioned ahead of tariffs weighed on operating cash flow YoY (Q2 CFO ~$137M vs ~$147M prior year) .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$1,413.9 $939.4 $1,461.6
Gross Profit ($USD Millions)$510.3 $309.8 $531.4
Gross Margin %—33.0% 36.4%
SG&A ($USD Millions)$343.8 $343.2 $349.1
SG&A % of Sales24.3% 36.5% 23.9%
Net Income Attributable ($USD Millions)$120.2 $(27.3) $129.0
Diluted EPS (GAAP)$2.63 $(0.61) $2.86
Adjusted EBITDA ($USD Millions)$210.5 $22.4 $226.7
Adjusted EBITDA Margin %—2.4% 15.5%

Consensus vs Actual (S&P Global; Primary EPS basis, EBITDA on S&P basis; not directly comparable to Company Adjusted EBITDA)

MetricQ2 2025 Estimate*Q2 2025 Actual*
Revenue ($USD Millions)1,468.1*1,461.6*
Primary EPS ($)2.9319*2.9270*
EBITDA ($USD Millions)221.5*221.8*

Values retrieved from S&P Global.

Segment/Product and Mix

CategoryQ2 2025
Organic Daily Sales – Agronomic products+7%
Organic Daily Sales – Landscaping products−1%
End-market mix (Company view)New Residential 21%; Repair & Upgrade 30%; Maintenance 35%; New Commercial 14%

KPIs and Balance Sheet

KPIQ2 2025
Organic Daily Sales (YoY)Flat
Selling Days64
Pricing (YoY)Flat in Q2; expected flat in Q3, +1–2% in Q4
Acquisition contribution to sales$40.9M
Cash from Operations (quarter)~$136.7M
Share Repurchases$54.3M
Net Debt$531.6M; Leverage 1.3x TTM Adj. EBITDA
Liquidity~$578M (cash ~$79M; ABL availability ~$499M)
Working Capital~$1.06B (period end)

Guidance Changes

MetricPeriodPrevious Guidance (Q1’25)Current Guidance (Q2’25)Change
Adjusted EBITDAFY 2025$400–$430M $400–$430M Maintained
Pricing2H 2025Flat to slightly up full-year commentary Q3 flat; Q4 +1–2% (seed deflation offset) Updated cadence
Gross MarginRemainder of 2025Slightly higher vs 2024 (full-year) Slightly improved vs 2H’24 (remainder of year) Slightly higher tone
Organic Daily Sales2H 2025Low single-digit for full year (volume positive) Low single-digit in 2H (volume modestly positive) Reinforced
Effective Tax RateFY 202525–26% (ex-discrete) 25–26% (ex-discrete) Maintained
End-Market Outlook2H 2025Maintenance steady; R&U flat to slightly down; New Res roughly flat; Commercial steady Maintenance modest growth; R&U down; New Res down; Commercial flat Weaker New Res / R&U view

Earnings Call Themes & Trends

TopicQ4 2024 (Prior-2)Q1 2025 (Prior-1)Q2 2025 (Current)Trend
Pricing/CommoditiesDeflation a headwind (PVC −21%, seed −15% in Q4) Price −1% in Q1; full-year flat to −1% expected Q2 pricing flat; Q3 flat; Q4 +1–2%; PVC −15%, seed −9% in Q2; seed further down in Q3 Improving trajectory into Q4
TariffsNot in FY25 guide; pass-through expected; 10–15% sales exposure —Manufacturers began passing through tariff costs; mid-single-digit increases in lighting/irrigation Pass-through underway
SG&A Leverage/Focus Branches22 closures; Pioneer integration to aid 2025 SG&A leverage —Focus branches +200 bps margin 1H; Pioneer fully integrated, SG&A reduced Multi-year lift progressing
Digital & Delivery EfficiencyDigital +180% in 2024; DispatchTrack roll-out —Digital +130% in 1H; delivery net expense −40 bps on delivered sales Structural benefits compounding
End-MarketsR&U stabilizing; maintenance strong New Res roughly flat; Commercial steady New Res down; R&U down; Commercial flat; Maintenance steady Mixed; maintenance resilient
M&A cadenceRobust pipeline; added 7 in 2024 Closed Pacific Nurseries JV 4 acquisitions YTD; 2 post-quarter; 2025 lighter on acquired revenue Smaller deal mix near-term

Management Commentary

  • “We are executing our initiatives well, achieving excellent SG&A leverage, good gross margin improvement, and continuing to gain market share.” — Doug Black, CEO .
  • “Adjusted EBITDA margin improved 60 basis points to 15.5% due to higher net sales, improved gross margin, and increased SG&A leverage.” — Prepared remarks .
  • “We expect pricing to be flat in the third quarter and up 1% to 2% in the fourth quarter, dampened primarily by grass seed deflation.” — Doug Black .
  • “Pioneer is fully integrated… we’ve taken a lot of SG&A out of Pioneer… we feel very confident we can sustain our gains.” — Doug Black (Q&A) .
  • “We repurchased approximately 466,000 shares for $54.3 million in the second quarter… largest share repurchase quarter since we initiated the plan.” — John Guthrie, CFO .

Q&A Highlights

  • SG&A leverage durability and Pioneer: Management emphasized Pioneer is “fully integrated” with material SG&A takeout and that focus branches (140–150) improved >200 bps; leverage to continue into 2H and beyond .
  • Capital returns: ~ $250M remains on repurchase authorization; buybacks are a flexible use of cash when M&A slows .
  • Pricing/tariffs: Tariff-exposed products 10–15% of sales; suppliers passing through mid-single-digit increases in lighting/irrigation; PVC −15% YoY, seed −9% YoY in Q2 with further seed deflation in Q3 .
  • End-market outlook: New residential down (especially TX/FL/AZ/CA); commercial steady but with smaller backlogs; maintenance steady and gaining share .
  • Delivery and productivity: DispatchTrack-led optimization lowered net delivery expense ~40 bps on delivered sales; outside sales covering ~10% more revenue with no headcount adds .

Estimates Context

  • Revenue: Slight miss vs S&P Global consensus ($1,461.6M actual vs $1,468.1M estimate*) . Values retrieved from S&P Global.
  • EPS: Essentially in-line on S&P “Primary EPS” basis (2.927* actual vs 2.9319* estimate); reported GAAP diluted EPS $2.86 differs from S&P’s Primary EPS definition . Values retrieved from S&P Global.
  • EBITDA: On S&P EBITDA basis, actual 221.8* vs estimate 221.5*; company reports Adjusted EBITDA $226.7M (non-GAAP) . Values retrieved from S&P Global.
  • Implications for models: Mix softness (landscaping products, New Res/R&U) offsets stronger SG&A leverage and gross margin; FY guide maintained suggests limited need for FY EBITDA estimate cuts, with potential 2H EPS modestly supported by improving price cadence and operating leverage .

Key Takeaways for Investors

  • Margin story intact: SG&A leverage, delivery efficiency, and focus-branch remediation are driving resumed Adjusted EBITDA margin expansion despite muted organic growth .
  • Pricing normalization a 2H catalyst: Q3 flat, Q4 +1–2% pricing should aid gross margin; seed deflation remains a near-term headwind but fades after peak season .
  • Mix remains defensive: Maintenance strength offsets New Res/R&U softness; commercial steady but watch backlogs and ABI .
  • Capital allocation supportive: $54M buybacks in Q2; ~1.3x leverage and ~$578M liquidity provide flexibility for balanced M&A/repurchases .
  • Watch list: Tariff pass-through pacing, PVC/seed price trajectories, Sun Belt demand, and delivery cost savings capture (DispatchTrack) .
  • M&A cadence likely lighter in 2025 but pipeline robust; recent nursery deals extend leadership in targeted markets .
  • Leadership transition (post-quarter): CFO retirement at end-2025 with named successor may be neutral to positive given internal continuity plan .