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SiteOne Landscape Supply, Inc. (SITE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net sales rose 5% to $1.01B; Organic Daily Sales grew 1% despite ~3% price deflation; gross margin fell 50 bps to 33.3% and SG&A ratio rose 150 bps to 36.0%, producing a diluted EPS of -$0.48 and adjusted EBITDA down 20% to $31.8M .
  • Management introduced FY2025 adjusted EBITDA guidance of $400–$430M, expects pricing “flat to slightly down,” low-single-digit organic growth, and margin improvement driven by SG&A leverage and acquisitions .
  • Price deflation concentrated in PVC pipe (~21% down in Q4) and grass seed (~15% down), offset by price increases in non-commodity products beginning mid-February .
  • Stock reaction catalyst: narrative turning toward 2025 normalization (pricing stabilizes, SG&A leverage from focused branches and Pioneer integration, acquisition contributions); execution on these drivers is critical to estimate revisions and multiple support .

What Went Well and What Went Wrong

What Went Well

  • Achieved 1% Organic Daily Sales growth in Q4 against ~3% deflation; acquisitions added $43M (4%) to net sales, supporting total revenue growth to $1.01B .
  • Agronomic products Organic Daily Sales +6% in Q4 (fertilizer/control/equipment), with strong volume growth and share gains despite pricing headwinds .
  • Strategic progress: 7 acquisitions in 2024 (~$200M TTM net sales) plus Pacific Nurseries post quarter; management expects acquisitions and operational initiatives to lift margins in 2025 (“increase Adjusted EBITDA margin in 2025”) .
  • Quote: “We were pleased to finish a challenging year in 2024 on a more positive note…positions us well for positive sales growth, SG&A leverage, and EBITDA margin expansion in 2025.” — Doug Black, Chairman & CEO .

What Went Wrong

  • Adjusted EBITDA fell 20% to $31.8M; adjusted EBITDA margin contracted 100 bps to 3.1% on lower gross margin and elevated SG&A (branch consolidations/closures, acquisition impact) .
  • Net loss widened to -$21.7M vs -$3.4M YoY; SG&A ratio climbed to 36.0% (+150 bps), and gross margin fell 50 bps due to higher freight, customer discounts, and acquisition mix .
  • Commodity deflation persisted (PVC ~-21%, grass seed ~-15% in Q4); management flagged continued early-2025 deflation before modest improvement later in the year .
  • One-time Q4 branch consolidation/closure charge (~$4.5M) flowed through adjusted EBITDA; minor discrepancy noted: commentary references 7 Pioneer locations closed while later remarks say 6 consolidated .

Financial Results

Headline Metrics vs Prior Periods and Consensus

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Billions)$0.97 $1.21 $1.01
Diluted EPS ($)-$0.08 —-$0.48
Gross Margin (%)—34.0% 33.3%
SG&A as % of Net Sales—28.9% 36.0%
Adjusted EBITDA ($USD Millions)$39.9 $114.8 $31.8
Adjusted EBITDA Margin (%)—9.5% 3.1%
S&P Global Consensus (Revenue, EPS)UnavailableUnavailableUnavailable

Notes: S&P Global consensus estimates were unavailable due to data access limitations; comparisons to estimates could not be included.

KPIs and Operating Drivers

KPIQ4 2023Q3 2024Q4 2024
Organic Daily Sales Growth (%)—-1% +1%
Price Deflation (%)—~-3% ~-3%
PVC Pipe Price Change (%)—~-22% ~-21%
Grass Seed Price Change (%)—~-15% ~-15%
Acquisition Contribution to Net Sales ($USD Millions)—$77 $43
Selling Days (count)61 63 61
Cash from Operations ($USD Millions)—~$116 $119.4

Product Category Trends (Organic Daily Sales Growth)

Product CategoryQ2 2024Q3 2024Q4 2024
Agronomic (fertilizer, control, equipment)-1% +2% +6%
Landscaping (irrigation, nursery, hardscapes, lighting, accessories)-4% -2% -1%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($USD Millions)FY2025—$400–$430 Introduced
Pricing (company-wide)FY2025—Flat to slightly down (0% to ~-1%) Introduced
Organic Daily Sales GrowthFY2025—Low single-digit growth Introduced
Gross MarginFY2025—Higher than 2024 Introduced
SG&A / Adjusted EBITDA MarginFY2025—“Good operating leverage” and margin improvement Introduced
Effective Tax RateFY2025—25–26% (ex-discrete items) Introduced

Earnings Call Themes & Trends

TopicQ2 2024 (Prior-2)Q3 2024 (Prior-1)Q4 2024 (Current)Trend
Commodity deflation (PVC, grass seed)Persistent; H2 deflation ~2–3% expected ~-3% price; PVC ~-22%, grass ~-15% ~-3% price; PVC ~-21%, grass ~-15%; modest non-commodity price increases rolling mid-Feb Moderating deflation; offset by non-commodity price actions
SG&A leverage and branch actionsBase SG&A down ~3% adj.; focus branches highlighted Charge ~$5M in Q4 for 16 branch consolidations/closures ~$4.5M closure charge in Q4; SG&A leverage main margin driver for 2025 Near-term drag, medium-term leverage
Pioneer integrationIntentional slower integration to embed bulk PoS; expected dilution in 2024 Dilutive; systems merging; consolidations planned Fully integrated; staffing/trucking rightsized; 6–7 site consolidations; margin lift expected 2025–2027 Transition from drag to contributor
End-market mix and demandMaintenance positive volumes, R&R down HSD; resi/commercial flat Similar view; hurricanes impact in Southeast Maintenance steady; R&R flat to slightly down; resi/commercial resilient/flat Stabilizing; watch rates/home turnover
Digital/SMB/Private labelDouble online sales target; CRM/DispatchTrack adoption Digital up ~170% YTD; SMB & Hispanic marketing emphasized Digital sales up 180% in 2024; partners program +24K members; private label/category expansion Structural share gains
Tariffs/macroNot detailedNot detailedTariffs excluded from guidance; ~13% of sales with Mexico/China/Canada sourcing; pass-through expected Exogenous risk; manageable via pass-through

Management Commentary

  • “We expect commodity price deflation to continue moderating in 2025…Overall, we expect pricing to be flat to slightly down for the full year 2025.” — Doug Black .
  • “Most of the improvement in margin that you're seeing this year is going to be achieved by SG&A leverage…specifically the focus branches and Pioneer.” — John Guthrie .
  • “We grew our digital sales by 180% in 2024…customers who purchase online are growing their total business with SiteOne significantly faster than our company average.” — Doug Black .
  • “Given these trends, we expect our Adjusted EBITDA to be in the range of $400 million to $430 million.” — Doug Black .
  • “We consolidated or closed 22 locations in 2024…we expect to gain a meaningful adjusted EBITDA margin lift…as we improve the performance of these focused branches.” — Doug Black .

Q&A Highlights

  • SG&A leverage is the main 2025 margin driver; focused branches and Pioneer actions underpin most of the improvement, with gross margin up “slightly” and SG&A delivering the bigger lift .
  • Tariff sensitivity: ~13% of sales have Mexico/China/Canada sourcing; industry typically passes through quickly once suppliers move, with minimal lag except honoring existing orders .
  • California wildfires: minimal near-term impact due to mix skewed to new construction; facilities and operations largely unaffected; rebuild is longer-term .
  • One-time Q4 branch closure charge ~$4.5M will not recur in 2025; branch consolidations expected to retain majority of sales in those markets .
  • Pricing cadence: non-commodity price increases rolling mid-February; gross margin could see pressure in Q1 with improvement focused in Q2–Q3 .
  • Volume cadence: no large first/second-half split embedded; watch Q1 vs Q2 given prior year early spring pull-forward .

Estimates Context

  • S&P Global Wall Street consensus (EPS, revenue) for Q4 2024 was unavailable due to data access limitations; therefore, beat/miss analysis versus consensus could not be provided. Future revisions likely hinge on confirmation of price normalization, realized SG&A leverage from branch actions/Pioneer, and acquisition contributions .

Key Takeaways for Investors

  • Revenue resilience with Organic Daily Sales +1% in Q4 amid ~3% deflation highlights share gains; watch agronomic momentum (+6% ODS) to continue offsetting commodity pressure .
  • Margin path is SG&A-led in 2025: branch consolidations/closures and Pioneer integration are the primary drivers; gross margin up slightly, with non-commodity price increases now in motion .
  • Commodity risk easing but still present: PVC/grass seed deflation moderating; management expects pricing “flat to slightly down” in 2025, improving in second half .
  • Acquisitions provide both mix and growth: seven deals in 2024 (~$200M TTM) plus Pacific Nurseries post quarter; expect continued deal flow and contribution to margin and portfolio balance .
  • FY2025 guide ($400–$430M adjusted EBITDA) frames a normalization year; execution on SG&A leverage and the Pioneer turnaround is the pivot to double-digit adjusted EBITDA margins over the next 2–3 years per management confidence .
  • Tactical: near-term gross margin pressure possible in Q1; improvement expected mainly in Q2–Q3; tariff pass-through dynamics manageable but could add pricing variability .
  • Strategic: digital/SMB/private label initiatives are compounding structural share gains and productivity, supporting medium-term thesis even if macro remains “flat” .