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The Selloff In SiteOne Landscape Supply Is Overextended SiteOne Landscape Supply NYSE: SITE reported second-quarter 2026 net sales growth of 5% and adjusted EBITDA growth of 5%, as pricing, acquisitions and commercial initiatives helped offset softer demand in key end markets.
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Net sales rose to approximately $1.53 billion from $1.46 billion a year earlier. Organic daily sales increased 1%, reflecting a 3% pricing contribution that more than offset a roughly 2% decline in organic volume. Acquisitions completed in 2025 and 2026 added about $49 million, or 3%, to quarterly sales growth.
SiteOne Landscape Supply Company Breaks To New HighsNet income attributable to SiteOne increased 8% to $139.3 million, while adjusted EBITDA rose to $237.2 million from $226.7 million. Adjusted EBITDA margin was unchanged at 15.5%.
Soft Demand Weighs on Volumes Chairman and CEO Doug Black said the company delivered solid results despite difficult market conditions, citing weakness in new residential construction and repair and upgrade activity. SiteOne expects new residential landscaping demand, which represents 20% of sales, to decline by high single digits for the full year. Repair and upgrade demand, representing 30% of sales, is expected to fall by mid-single digits.
SiteOne Landscape Supply Grows To New High Black said new residential construction was particularly weak in Sun Belt markets including California, Arizona and Texas, while conditions were stronger in the Midwest. He also described repair and upgrade weakness as broad-based, with hardscapes and lighting serving as indicators of softer remodeling activity.
“We believe that the ongoing energy volatility, higher interest rates, weak consumer confidence, and increased macroeconomic uncertainty are collectively having a negative effect” on new residential construction and repair and upgrade markets, Black said.
Maintenance demand, which accounts for 36% of sales, has remained relatively steady, though the company said higher fertilizer prices temporarily reduced volumes among customers operating under fixed budgets. New commercial construction, representing 14% of sales, is expected to remain flat in 2026, according to management.
Margins Improve as Pricing and Private Brands Gain Gross profit increased 6% to approximately $565 million, and gross margin expanded 50 basis points to 36.9%. The company attributed the improvement to price realization, growth in private-brand products and sales gains among small customers.
Pro-Trade private-brand sales increased nearly 50% year over year during the quarter. Black said sales of the company’s Pro-Trade, Solstice and Portfolio private brands collectively grew 40%. SiteOne also reported that digital sales through siteone.com rose more than 50% year to date, while regular active users increased about 40%.
Organic daily sales of agronomic products increased 5%, supported by 4% pricing and 1% volume growth. Landscaping product sales were flat organically, with 3% pricing offset by weaker demand in residential construction and repair and upgrade categories.
Pricing was positive across most categories, though grass seed and PVC pipe prices declined 9% and 4%, respectively, during the quarter. Chief Financial Officer Eric Elema said grass seed price increases took effect in July and are expected to provide a low- to mid-single-digit pricing benefit in the second half. PVC price increases implemented in the second quarter are also expected to contribute in the back half.
Selling, general and administrative expenses rose to approximately $371 million. SG&A as a percentage of sales increased 30 basis points to 24.2%, driven by modest organic growth, healthcare costs and fuel inflation. Acquisitions accounted for about half of the year-over-year increase in SG&A, Elema said.
The company said fuel surcharges implemented near the end of the first quarter helped offset higher delivery costs. Black said increased fuel costs added approximately 15 basis points to SG&A as a percentage of sales, with an offsetting benefit to gross margin.
Capital Returns and Acquisition Activity SiteOne repurchased approximately 797,000 shares for about $94 million during the second quarter at an average price of $117.63 per share. After the quarter ended, it repurchased another 101,000 shares for approximately $10 million. Through July, year-to-date repurchases totaled 1.053 million shares for about $124 million.
The company ended the quarter with net debt of approximately $556 million and net debt to trailing 12-month adjusted EBITDA of 1.3 times. Available liquidity totaled roughly $530 million, including $87 million in cash and $443 million of borrowing capacity under its asset-based lending facility. During the quarter, SiteOne amended the facility and extended its maturity to April 2031.
SiteOne completed two acquisitions earlier this year representing approximately $110 million in trailing 12-month sales, including Reinders, a Midwest supplier of irrigation, agronomics and lighting products. The company did not close an acquisition during the second quarter but said its pipeline remains active and it expects additional deals during the remainder of 2026.
Management said Reinders’ integration is on track, with initial purchasing, product and system synergies underway. Full systems integration is expected in early 2027, while distribution, logistics and branch optimization opportunities are expected to create benefits over multiple years.
2026 Outlook Maintained SiteOne expects full-year organic daily sales growth to range from flat to up 1%, supported by anticipated pricing growth of about 3%. The company expects gross margin to exceed 2025 levels and SG&A as a percentage of sales to be approximately flat for the full year as cost actions and operational initiatives offset fuel and other inflation.
Management expects adjusted EBITDA margin expansion despite the softer volume environment. SiteOne reaffirmed its full-year adjusted EBITDA outlook of $425 million to $455 million, excluding contributions from unannounced acquisitions. The forecast includes an expected $4 million to $5 million negative impact from the extra week in fiscal 2026, which falls during the company’s seasonally slow December period.
Black said the company has opened six greenfield locations so far in 2026 and remains on pace to pursue roughly five to 10 annually, while being selective in weaker local markets. He also said SiteOne’s branch consolidation efforts have retained more than its targeted 80% of sales transferred to nearby locations.
About SiteOne Landscape Supply (NYSE:SITE)SiteOne Landscape Supply is a leading distributor of landscape supplies and irrigation equipment in North America. The company serves a broad range of customers, including independent landscapers, lawn and garden retailers, municipalities and other commercial landscape professionals. Its product portfolio spans irrigation and lighting controls, pipes and fittings, fertilizers and soils, lighting fixtures, hardscapes, outdoor lighting systems and related installation accessories.
In addition to core product lines, SiteOne offers agronomic services designed to optimize turf and plant health, as well as online tools and training resources to help customers plan, specify and manage projects more efficiently.
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