SiteOne's Q1 2025 Earnings Call: Navigating Contradictions in Price Deflation, Inventory, and Supply Chain Challenges

Price deflation and market conditions, inventory management and market conditions, supply chain disruptions and market impact are the key contradictions discussed in SiteOne Landscape Supply's latest 2025Q1 earnings call.



Sales Growth and Market Position:
- SiteOne Landscape Supply reported 4% net sales growth for the first quarter of 2025, despite a challenging early spring season and later start to the landscaping season.
- The growth was driven by strong execution of commercial initiatives, cost control actions in 2024, and a moderation of price deflation from negative 3% in Q4 2024 to negative 1% in Q1 2025.

Acquisition Strategy and Market Share Expansion:
- SiteOne completed two acquisitions in 2025, adding $20 million in trailing 12-month net sales, contributing to 5% growth in the first quarter.
- The acquisitions strengthened the company's product line and geographic presence, particularly in the nursery and hardscape categories, and are part of a strategic effort to expand its market share in the fragmented $25 billion wholesale landscaping market.

Cost Management and Operational Efficiencies:
- SG&A as a percentage of net sales increased by 30 basis points to 36.5% due to the impact of acquisitions, though base business SG&A decreased by 3%.
- The decrease in base business SG&A reflects cost control actions taken in 2024 and improvements in focused branches and SG&A leverage expected throughout 2025.

Commodity Price Trends and Tariff Impact:
- Pricing for PVC pipe and grass seed decreased by approximately 21% and 10% respectively, with expectations for continued deflation in these commodities.
- SiteOne anticipates slight positive pricing support from supplier tariff-related increases, with current pricing expected to be flat to up 1% for the year.