Street Calls of the Week
Introduction & Market Context
SiteOne Landscape Supply (NYSE:SITE), the largest national wholesale distributor of landscape supplies in North America, reported its second quarter 2025 results on July 30, 2025, demonstrating resilience in a challenging market environment. The company, which operates in a highly fragmented $25 billion market where it holds approximately 18% share, continues to leverage its scale and strategic initiatives to drive growth despite softness in certain end markets.
With more than 680 branches across 45 U.S. states and six Canadian provinces, SiteOne has built a diversified business serving residential and commercial landscape professionals. The company’s revenue is well-balanced across maintenance (35%), new construction (35%), and repair and upgrade (30%) end markets, providing some insulation against weakness in any single segment.
As shown in the following company overview, SiteOne offers a comprehensive product portfolio that includes irrigation, hardscapes, fertilizer, landscape accessories, nursery products, outdoor control products, and lighting:
Quarterly Performance Highlights
SiteOne delivered solid financial results for Q2 2025, with net sales increasing 3% year-over-year to $1,461.6 million. While Organic Daily Sales remained flat, reflecting mixed performance across end markets, the company achieved notable improvements in profitability metrics. Gross profit rose 4% to $531.4 million, with gross margin expanding 30 basis points to 36.4%. SG&A as a percentage of net sales decreased 40 basis points to 23.9%, demonstrating improved operational efficiency.
The combination of higher gross margins and SG&A leverage resulted in an 8% increase in Adjusted EBITDA to $226.7 million, with Adjusted EBITDA margin improving 60 basis points to 15.5%. Net income attributable to SiteOne increased 7% to $129.0 million compared to the prior year period.
The following chart details SiteOne’s Q2 2025 financial performance:
These results reflect solid growth in the maintenance end market, offset by softer demand in new residential construction and repair and upgrade segments. Acquired sales contributed $40.9 million, accounting for 3% of the overall growth rate. The company’s focus on commercial and operational initiatives, including improved price realization and efficiency measures, helped drive margin expansion despite the challenging market environment.
Following the earnings announcement, SiteOne’s stock price increased 3.33% in aftermarket trading to close at $120.05, reflecting investor confidence in the company’s performance and strategy.
Acquisition Strategy and Recent Developments
SiteOne continues to execute its acquisition-driven growth strategy, completing the purchase of Green Trade Nursery during Q2 2025 and subsequently acquiring Grove Nursery and Nashville Nursery in July. These acquisitions strengthen SiteOne’s presence in key markets and expand its nursery product offerings, creating opportunities for purchasing and cross-selling synergies.
The company’s track record of successful acquisitions is impressive, with 102 companies acquired between 2014 and 2025, adding approximately $2,015 million in annualized net sales and 421 branches to its network. This strategic approach has been a key driver of SiteOne’s growth trajectory, as illustrated in the following summary:
SiteOne’s position as the leading industry consolidator provides significant opportunities for continued expansion. With only 18% market share in a highly fragmented industry, the company has substantial runway for growth through both organic initiatives and strategic acquisitions.
The company’s robust acquisition pipeline is supported by its 80+ leaders who scout for new opportunities and an experienced M&A team that drives the integration process. This approach has enabled SiteOne to more than triple its size since 2016, as shown in the following chart:
Balance Sheet and Cash Flow
SiteOne maintains a solid financial position to support its growth initiatives. As of June 29, 2025, the company reported working capital of $1,061.7 million, with cash provided by operating activities of $136.7 million for the quarter. The slight decrease in operating cash flow compared to the prior year period ($147.4 million) was primarily attributed to early inventory purchases ahead of tariffs.
The company’s net debt stood at $531.6 million, representing a leverage ratio of 1.3x Adjusted EBITDA, well within its target range of 1.0x to 2.0x. SiteOne maintained strong liquidity of $577.9 million, consisting of $78.6 million in cash and $499.3 million in available ABL borrowing capacity.
During the quarter, SiteOne repurchased $54.3 million of shares under its share repurchase authorization, up from $19.8 million in the comparable period, demonstrating confidence in its long-term prospects and commitment to returning value to shareholders.
Outlook and Guidance
Looking ahead to the remainder of 2025, SiteOne expects end market demand to be down slightly, with solid maintenance growth more than offset by softness in new residential construction and repair and upgrade segments. Pricing is anticipated to be flat in Q3 and increase 1% to 2% in Q4, with ongoing grass seed and PVC pipe deflation offset by other product price increases.
Despite these challenges, the company expects its commercial and operational initiatives to support market share gains and low single-digit Organic Daily Sales growth. Management remains focused on tight SG&A management and branch improvement to drive continued margin expansion.
The company’s outlook for the remainder of 2025 is summarized in the following slide:
For the full year, SiteOne expects Adjusted EBITDA to range between $400 million and $430 million, reflecting confidence in its ability to navigate market challenges while continuing to execute its strategic initiatives.
Competitive Position and Investment Highlights
SiteOne’s unique market position as the only national full-product-line distributor of landscape supplies provides significant competitive advantages. The company’s scale enables it to leverage purchasing power, operational efficiencies, and best practices across its network, while its local market presence allows for customized service and relationships with landscape professionals.
The company’s growth strategy focuses on three key value creation levers: organic growth, margin expansion, and acquisition growth. By balancing these initiatives, SiteOne aims to deliver sustainable long-term value for shareholders.
The following slide summarizes SiteOne’s key investment highlights:
With its proven management team, clear market leadership, and compelling growth strategy, SiteOne is well-positioned to continue expanding its market share in the attractive landscape supply industry. The company’s track record of successful acquisitions, combined with its focus on operational and commercial excellence, provides multiple pathways for growth despite near-term market challenges.
As SiteOne executes its strategy of balancing the strengths of both a large national company and local market expertise, it remains focused on delivering superior value to customers and suppliers while driving long-term shareholder returns.
Full presentation:
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