SiteOne Q3 Profit Rises as Margin Gains Offset Softer Organic Sales

SiteOne Landscape Supply Inc. (NYSE: SITE) reported higher third-quarter fiscal 2026 profit and adjusted EBITDA as stronger pricing and commercial initiatives lifted gross margin, offsetting softer organic demand. The company expects full-year organic daily sales to be flat to down 1% and adjusted EBITDA of $425 million to $440 million.

Net sales for the quarter ended September 27 rose 3% year over year to $1.29 billion. Organic daily sales declined 1% as continued soft market demand and hot, dry weather that delayed fall applications more than offset higher price inflation. Acquired sales contributed $39.7 million, or about three percentage points, to revenue growth.

Gross profit increased 5% to $458.5 million, while gross margin expanded 80 basis points to 35.5%. SiteOne attributed the improvement to strong price realization, including fuel surcharges, and continued benefits from its commercial initiatives.

Selling, general and administrative expenses increased to 28.6% of net sales from 28.4% a year earlier. Even with lower sales volume and higher SG&A, net income attributable to SiteOne rose 8% to $63.9 million, supported by the gross-margin improvement.

Adjusted EBITDA, a non-GAAP measure, increased 8% to $138.3 million. Adjusted EBITDA margin improved 60 basis points to 10.7%.

Cash Flow, Leverage and Capital Allocation

Cash provided by operating activities declined by $3 million to $125.6 million, reflecting working-capital changes that were partly offset by higher net income. Working capital increased to $1.09 billion from $1.06 billion because of acquisitions and early inventory purchases ahead of price increases.

Capital expenditures rose to $17.3 million from $10.1 million as SiteOne increased investment in branch locations and equipment. Net debt reached $522.6 million, compared with $422.5 million in the prior-year period, and the net debt-to-adjusted EBITDA ratio increased to 1.2 times from 1.0 times. That remained within the company’s target leverage range of 1.0 to 2.0 times.

SiteOne ended the quarter with $566.4 million of liquidity, consisting of $88.4 million in cash and $478 million of available asset-based lending capacity. The company repurchased $62.2 million of shares during the quarter. After the quarter ended, its board authorized a $500 million increase to the share-repurchase program.

Acquisition Strategy

SiteOne completed its acquisition of Patterson Nursery Sales on August 4. Patterson operates a 200-acre location in Eagle Creek, Oregon, and grows and distributes western nursery products nationwide. SiteOne said the transaction supports its nursery operations across the country and expands its nursery product offering in the Pacific Northwest.

The company completed three acquisitions in fiscal 2026 through the third quarter, adding 14 branches and approximately $125 million in annualized net sales based on trailing 12-month revenue at the time of acquisition. Management said its acquisition pipeline remains robust and expects continued growth through M&A.

2026 Outlook

SiteOne expects end-market demand to decline for the full year. Management anticipates weakness in new residential construction and repair-and-upgrade activity will more than offset resilient maintenance and new commercial construction demand.

Full-year pricing is expected to increase approximately 4%. Organic daily sales are projected to be flat to down 1%, as lower end-market demand and the effect of a 53rd week are expected to outweigh benefits from commercial initiatives and price inflation.

The company expects gross margin to improve through continued price realization and commercial initiatives. SG&A as a percentage of net sales is expected to increase as lower sales volume, higher fuel and healthcare costs, and the additional week more than offset benefits from operational initiatives. Adjusted EBITDA margin is expected to increase slightly.

Full-year adjusted EBITDA is expected to range from $425 million to $440 million. That forecast includes a fourth-quarter charge of $6 million to $8 million and an estimated $4 million to $5 million negative impact from the 53rd week.

SiteOne’s outlook remains subject to construction-market cyclicality, weather and seasonal demand, inflation and product-cost volatility, tariffs and supply-chain disruptions. The company also identified acquisition integration, inventory management, labor availability, competitive pressure, cybersecurity, indebtedness and interest-rate exposure among its principal risks.