SiteOne's Q2 2025 Earnings Call: Key Contradictions in SG&A, Margins, and Market Demand

SG&A leverage expectations, gross margin outlook, new residential market demand, Pioneer acquisition integration, and digital sales and growth strategy are the key contradictions discussed in SiteOne Landscape Supply's latest 2025Q2 earnings call.



Sales Performance and Market Dynamics:
- SiteOne Landscape Supply reported 3% net sales growth in the second quarter, despite a broader end market softness and flat organic daily sales.
- The growth was driven by a 3% contribution from acquisitions and 7% organic daily sales growth in the maintenance end market, although new residential construction and repair and upgrade markets remained soft.

Gross Margin Improvement and SG&A Leverage:
- Gross profit increased by 4% to $531 million, and gross margin improved by 30 basis points to 36.4% due to better price realization, gross margin initiatives, and higher margins from acquisitions.
- SG&A as a percentage of net sales decreased by 40 basis points to 23.9%, reflecting disciplined expense management and improved operating leverage.

Acquisition Strategy and Market Share Gains:
- SiteOne added four companies in YTD 2025, contributing approximately $30 million in trailing 12-month sales, reinforcing its position in nursery, hardscapes, and landscape supplies.
- The company continued to gain market share through strategic acquisitions and initiatives such as digital engagement, customer excellence, and private label brands, despite facing a challenging market environment.

Adjusted EBITDA and Financial Outlook:
- Adjusted EBITDA increased by 8% to $226.7 million, and adjusted EBITDA margin improved by 60 basis points to 15.5%, aided by higher sales, improved gross margins, and SG&A leverage.
- The company expects full-year adjusted EBITDA for fiscal 2025 to be in the range of $400 million to $430 million, reflecting continued market uncertainty and smaller acquired revenue for the year.