SiteOne Landscape Supply — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales increased 3% year-over-year to $1,291.1 million for the third quarter of 2026, compared to $1,258.2 million in the prior year period.
• Organic Daily Sales decreased 1% year-over-year, driven by lower sales volume and delayed fall applications due to hot and dry weather, which offset higher price inflation.
• Gross profit increased 5% to $458.5 million, with gross margin expanding 80 basis points to 35.5%.
• Selling, general and administrative (SG&A) expenses rose to $368.7 million from $357.4 million, increasing SG&A as a percentage of net sales by 20 basis points to 28.6%.
• Net income attributable to SiteOne increased 8% to $63.9 million, compared to $59.1 million in the prior year period.
• Adjusted EBITDA increased 8% to $138.3 million, with Adjusted EBITDA margin improving 60 basis points to 10.7%.
• Cash provided by operating activities decreased $3.0 million to $125.6 million.
• Net debt increased to $522.6 million as of September 27, 2026, from $422.5 million as of September 28, 2025; net debt to Adjusted EBITDA for the trailing twelve months was 1.2 times, up from 1.0 times.
• Cash and cash equivalents were $88.4 million, with $478.0 million available capacity under the ABL Facility.
• The company repurchased $62.2 million of shares during the quarter.

Guidance and Future Outlook:

• Full-year 2026 Organic Daily Sales are expected to be flat to down 1%, impacted by ongoing end-market softness, high interest rates, inflation, and the negative effect of a 53rd week in December.
• Full-year 2026 Adjusted EBITDA is projected to be in the range of $425 million to $440 million.
• The company expects to expand gross margin through price realization and commercial initiatives, though SG&A as a percentage of net sales is expected to be up for the full year due to higher fuel and healthcare costs and lower sales volume.
• A workforce reduction and branch consolidation/closure program is planned for the fourth quarter, incurring an Adjusted EBITDA charge of approximately $6 million to $8 million.
• Despite the fourth-quarter charge and the 53rd week impact, the company expects to expand Adjusted EBITDA margin slightly in 2026.
• Pricing was up 4% in the third quarter and is expected to continue through the remainder of the year.
• The company is currently achieving positive Organic Daily Sales growth of approximately 2% in October.

Business Segments and Product Lines:

• Acquisitions contributed $39.7 million (3%) to net sales growth during the quarter.
• The company acquired Patterson Nursery Sales during the quarter and maintains an active pipeline of potential deals.
• End markets show declines in new residential construction and repair/upgrade, while maintenance and new commercial construction end markets remain more resilient.

Market and Competitive Landscape:

• The company faces continued softness in underlying market demand and a delayed fall season caused by hot and dry weather in key markets.
• Management remains focused on gaining market share, improving productivity, and strengthening competitive position through self-help opportunities and acquisition strategy.

Risks and Challenges:

• Challenges include cyclicality in residential and commercial construction markets, general economic conditions, high interest rates, and inflation.
• Specific risks include severe weather conditions, seasonality, supply chain disruptions, product or labor shortages, and acquisition/integration risks.
• The company faces risks related to its large labor force, environmental perceptions, and cybersecurity.

Management Commentary and Tone:

• Chairman and CEO Doug Black described the quarter as "solid" despite market headwinds, highlighting 8% growth in Adjusted EBITDA and margin expansion.
• Management expressed confidence in the long-term value creation, citing a strong balance sheet and cash flow generation.
• The tone reflects a focus on disciplined capital allocation, balancing share repurchases with investment in organic growth and acquisitions.

Other Key Points:

• Subsequent to the quarter, the Board of Directors authorized a $500.0 million increase to the share repurchase program, bringing the aggregate authorization to approximately $538.3 million.
• The updated share repurchase authorization has no expiration date.
• The 53rd week in fiscal 2026 is expected to reduce full-year Organic Daily Sales growth by approximately 80 basis points and Adjusted EBITDA by approximately $4 million to $5 million.
• The company is managing SG&A tightly and making necessary changes to optimize its cost structure.