SiteOne Landscape Supply, Inc. - 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended June 28, 2026 (Q2 2026) and the six months ended June 28, 2026. SiteOne is the largest national full product line wholesale distributor of landscape supplies in the United States, serving residential and commercial landscape professionals. As of the period end, the Company operated over 680 branches across 45 U.S. states and five Canadian provinces.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Net Sales | $1,530.7 million | $1,461.6 million | $2,470.8 million | $2,401.0 million |
| Gross Profit | $564.5 million | $531.4 million | $883.3 million | $841.2 million |
| Gross Margin | 36.9% | 36.4% | 35.7% | 35.0% |
| Operating Income | $197.6 million | $187.4 million | $171.7 million | $157.9 million |
| Net Income Attributable to SiteOne | $139.3 million | $129.0 million | $112.7 million | $101.7 million |
| Diluted EPS | $3.14 | $2.86 | $2.53 | $2.25 |
| Operating Cash Flow (YTD) | $31.1 million (vs. $7.1 million YTD 2025) | |||
| Total Debt (Gross) | $510.9 million (as of June 28, 2026) | |||
| Cash & Equivalents | $87.4 million (as of June 28, 2026) | |||
| ABL Availability | $443.0 million (as of June 28, 2026) |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 5% in Q2 and 3% YTD, driven primarily by acquisitions ($49.2 million contribution in Q2). Organic Daily Sales increased 1% in Q2 due to a ~3% price increase, partially offset by softer end-market demand in new residential construction.
- Margin Expansion: Gross margin improved by 50 basis points in Q2 to 36.9%, attributed to price realization and commercial initiatives. This was partially offset by higher freight/distribution costs due to fuel inflation and the addition of a fifth distribution center.
- Acquisitions: The Company completed acquisitions totaling $76.1 million in the first six months of 2026, including Reinders, Inc. (March 2026) and Bourget Flagstone Co. (January 2026).
- Debt Structure: Gross long-term debt increased by $121.5 million since year-end 2025, primarily to fund seasonal working capital, acquisitions, and share repurchases. The Company amended its ABL Facility in April 2026 to extend maturity to 2031 and increase the letter of credit sublimit.
- Non-Controlling Interest: On June 1, 2026, the Company acquired the remaining 25% interest in Devil Mountain Wholesale Nursery, LLC for $26.5 million via a stock issuance, eliminating the redeemable non-controlling interest.
Guidance, Outlook, and Risks
- Outlook: Management anticipates sustained pressure on Net sales growth and Net income due to economic uncertainty, weak consumer sentiment, geopolitical conflicts, and rising interest rates. However, the long-term outlook remains strong driven by population trends and the "outdoor living" trend.
- Pricing: Overall prices are projected to increase approximately 3% for the 2026 Fiscal Year.
- Capital Allocation: The Company continues to repurchase shares under a $400 million authorization. As of July 29, 2026, $90.5 million remained available. The Company also maintains a robust acquisition pipeline.
- Risks: Key risks include cyclicality in construction markets, supply chain disruptions, inflationary pressures on fuel and commodities, labor market disruptions, and the impact of geopolitical conflicts (specifically Russia-Ukraine and Middle East tensions).
Investor Verification Checklist
- Organic Growth Sustainability: Verify if the 1% Organic Daily Sales growth can be maintained given the explicit mention of "softer end market demand" in new residential construction.
- Freight Cost Inflation: Monitor the impact of fuel costs on Gross Margin, as the Company noted higher freight expenses offsetting price realization benefits.
- Debt Servicing: Review the impact of variable interest rates on the $510.9 million debt load, noting that interest rate swaps matured in March 2025 and are no longer in place.
- Acquisition Integration: Assess the integration progress of recent acquisitions (e.g., Reinders, Bourget Flagstone) to ensure they contribute to margin expansion as projected.
- Seasonality: Confirm that Q2 results align with historical seasonality patterns, as Q1 typically incurs losses while Q2/Q3 are peak periods.