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SiteOne Landscape Supply, Inc. (SITE)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered resilient growth in soft end markets: net sales rose 4% to $1.258B, gross margin expanded 70 bps to 34.7%, and adjusted EBITDA grew 11% to $127.5M with margin up 60 bps to 10.1% .
  • EPS and revenue modestly exceeded Wall Street consensus; EPS beat by ~$0.15 on S&P “Primary EPS,” while revenue was essentially in-line; EBITDA (S&P definition) was below consensus but company-reported adjusted EBITDA was stronger [GetEstimates*].
  • FY25 adjusted EBITDA guidance narrowed to $405–$415M, including a $4–$6M Q4 branch consolidation charge; price contribution expected up 1–2% in Q4 and low-single-digit Organic Daily Sales growth .
  • Structural self-help continues to be the narrative catalyst: SG&A leverage, private label penetration, digital adoption (siteone.com), and delivery efficiency, alongside network optimization (15–20 branch closures) .

What Went Well and What Went Wrong

What Went Well

  • Gross margin expanded 70 bps to 34.7% on improved price realization and commercial initiatives; adjusted EBITDA margin rose 60 bps to 10.1% .
  • Management highlighted strong execution: “delivering double-digit year-over-year Adjusted EBITDA growth and meaningful operating leverage despite challenging end markets” (Doug Black) .
  • Market share gains and pricing inflection: pricing up ~1% in Q3, with nearly all regions and product lines contributing; organic daily sales +3% (volume +2%, price +1%) .

What Went Wrong

  • End markets remain soft: new residential and repair & upgrade down; maintenance steady, commercial flattish; Sun Belt (TX, FL, AZ, CA) weaker in Q3 .
  • EBITDA (S&P Global definition) below consensus despite company’s stronger adjusted EBITDA; highlights differences between adjusted vs standardized definitions [GetEstimates*] .
  • Q4 outlook more conservative on gross margin outperformance vs Q3; inclusion of a $4–$6M charge to adjusted EBITDA tied to branch consolidations .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Net Sales ($USD Millions)$939.4 $1,461.6 $1,258.2
Gross Profit ($USD Millions)$309.8 $531.4 $437.2
Gross Margin (%)33.0% 36.4% 34.7%
SG&A ($USD Millions)$343.2 $349.1 $357.4
SG&A / Net Sales (%)36.5% 23.9% 28.4%
Operating Income ($USD Millions)$(29.5) $187.4 $85.2
Diluted EPS ($USD)$(0.61) $2.86 $1.31
Adjusted EBITDA ($USD Millions)$22.4 $226.7 $127.5
Adjusted EBITDA Margin (%)2.4% 15.5% 10.1%
KPIQ1 2025Q2 2025Q3 2025
Organic Daily Sales Growth (%)(1%) 0% +3%
Price Contribution (%)(1%) ~0% +1%
Selling Days64 64 63
Acquisition Contribution to Net Sales ($USD Millions)$45.1 $40.9 $12.5
Sales Mix (Company View)Share of Sales
Maintenance35%
Repair & Upgrade30%
New Residential Construction21%
New Commercial Construction14%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($USD Millions)FY 2025$400–$430 $405–$415 (includes ~$4–$6M Q4 charge) Narrowed range; low end raised $5M, high end lowered $15M; includes consolidation charge
Price Contribution (%)Q4 2025Up 1%–2% Up 1%–2% Maintained
Organic Daily SalesQ4 2025Low single-digit remainder of year Low single-digit Maintained
Branch Consolidation ChargeQ4 2025NA~$4–$6M included in adjusted EBITDA New inclusion
Effective Tax Rate (%)FY 2025NA25%–26% excl. discrete items New disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Pricing trajectoryQ1: pricing down ~1%; FY flat to slightly up . Q2: Q3 flat; Q4 up 1–2% .Q3 realized +1% price; Q4 outlook +1–2% Improving; normalization into 2026
SG&A leverageQ1: base business SG&A down 3% (adjusted) . Q2: SG&A% down 40 bps .SG&A% down 50 bps; continued cost control and productivity Sustained self-help
End-market demandQ1/Q2: maintenance modest growth; repair & upgrade soft; commercial flat .New res/repair soft; maintenance steady; commercial flat Soft but stabilizing in repair/upgrade
Digital/productivityLimited Q1/Q2 disclosure in PRs.Digital sales +125% YTD; CRM-driven salesforce productivity; DispatchTrack delivery efficiency Accelerating adoption
Network optimization22 closures in 2024 (context) .Consolidate/close 15–20 branches in Q4; ~$4–$6M charge Ongoing optimization
M&A cadence2025 lighter year expectation .6 YTD acquisitions, ~$40M TTM sales; expect higher 2026 vs 2025 Pipeline intact; smaller deals near-term
Private labelNot quantified earlier.Key brands up ~50% in quarter; ~40% YTD growth Strong growth; margin accretive

Management Commentary

  • “We are pleased to report another quarter of strong operational performance, delivering double-digit year-over-year Adjusted EBITDA growth and meaningful operating leverage despite challenging end markets.” — Doug Black, Chairman & CEO .
  • “Pricing was up 1% in the third quarter… more than offset [commodity headwinds] and drove gross margin expansion through our strategic initiatives.” — Doug Black .
  • “We expect… modestly positive [sales] volume, yielding low single-digit Organic Daily Sales growth for the fourth quarter… and remain on track to expand our Adjusted EBITDA margin for the full year 2025.” — Doug Black .
  • CFO transition: John Guthrie retiring year-end; incoming CFO Eric Elema highlighted continuity and disciplined execution .

Q&A Highlights

  • Non-GAAP policy: Management is not excluding the branch consolidation charge from adjusted EBITDA guidance, consistent with long-standing policy; investors can adjust externally as needed .
  • Pricing details: Landscape products +1% price; agronomic roughly flat; Q4 price expected +1–2% with grass seed contribution smaller in Q4; 2026 pricing seen “more normal” at ~2% midpoint .
  • Demand and repair/upgrade stabilization: October organic growth positive; repair & upgrade showing signs of stabilization; Q4 comps and weather noted as variables .
  • SG&A/margins in Q4: Expect continued SG&A leverage; gross margin outperformance not as strong as Q3 in the guide .
  • Capital allocation: With leverage at the low end of 1–2x, company repurchased ~$20M post-quarter and could increase buybacks if M&A remains lighter .

Estimates Context

MetricQ1 2025 Consensus*Q1 2025 Actual*SurpriseQ2 2025 Consensus*Q2 2025 Actual*SurpriseQ3 2025 Consensus*Q3 2025 Actual*Surprise
Revenue ($USD Millions)933.9*939.4*+$5.5M1,468.1*1,461.6*−$6.5M1,257.4*1,258.2*+$0.8M
Primary EPS ($USD)(0.438)*(0.333)*+$0.1052.932*2.927*−$0.0051.287*1.434*+$0.147
EBITDA ($USD Millions)19.8*5.0*−$14.8M221.5*221.8*+$0.3M124.0*119.2*−$4.8M

Values retrieved from S&P Global.
Note: Company-reported adjusted EBITDA was $22.4M (Q1), $226.7M (Q2), $127.5M (Q3), which differs from S&P’s standardized EBITDA definition .

Key Takeaways for Investors

  • Mix resilience + self-help: Margin expansion resumed as pricing normalizes and private label, small customer initiatives, and delivery optimization drive structural improvements .
  • Guidance narrowed with explicit Q4 charge: FY25 adjusted EBITDA $405–$415M now includes ~$4–$6M branch consolidation cost; risk-managed stance into soft markets .
  • Consensus lens: Q3 EPS beat and revenue in-line should support near-term sentiment; be mindful of adjusted vs standardized EBITDA differences when benchmarking [GetEstimates*] .
  • Demand stabilization watch: Repair & upgrade shows nascent stabilization; maintenance steady; Sun Belt weakness persists—monitor weather and macro/interest rates into Q4 .
  • Capital deployment optionality: With leverage at ~1.0x TTM adjusted EBITDA and liquidity ample, SITE has room for opportunistic buybacks while maintaining M&A capacity .
  • 2026 setup: Pricing likely more normal (~2% midpoint) with continued SG&A leverage and focus branch improvements—set up for multi-year margin expansion if markets remain “soft-stable” .
  • Execution catalysts: Continued digital adoption (siteone.com +125% YTD sales), CRM productivity, and network optimization are key drivers to sustain outperformance .

Additional Relevant Press Releases (Q3 period)

  • Goodway Group selected as paid media strategy partner, supporting measurement-driven media and growth priorities across categories (marketing sophistication milestone) .
  • Third quarter earnings release date and call logistics announced (Oct 8) .

Appendix: Cross-References and Non-GAAP Notes

  • Organic Daily Sales reconciliations and adjusted EBITDA bridges provided in Q3 materials .
  • Adjusted EBITDA includes stock-based comp, acquisition-related items, and excludes pre-acquisition earnings; includes non-controlling interest .
  • End-market sales mix used for outlook framing (maintenance 35%, repair & upgrade 30%, new res 21%, new commercial 14%) .

(*) Values retrieved from S&P Global.