SiteOne Landscape Supply, Inc.

SiteOne Landscape Supply, Inc. is the largest and only national full product line wholesale distributor of landscape supplies in the United States with an established presence in Canada. The wholesale landscape supply industry is highly fragmented, consisting primarily of regional private businesses with small geographic footprints and limited product offerings. Based on management's estimates, the addressable market in North America for the wholesale distribution of landscape supplies represented approximately $25 billion in revenue in the 2025 Fiscal Year. Growth in the industry is driven by consumer spending, housing starts, existing home sales, home prices, mortgage interest rates, commercial, recreational, and residential construction, repair and remodeling spending, and demographic trends. Within the industry, nursery products represent the largest product category with sales accounting for more than one-third of industry sales, followed by landscape accessories with approximately one-fifth of industry sales, and each of hardscapes, irrigation supplies and outdoor lighting, control products, and fertilizer and other products accounting for approximately one-tenth of industry sales.

The company's primary competitors include Heritage Landscape Supply Group (a subsidiary of The Home Depot), Ewing, Target Specialty Products, Harrell's, Horizon Distributors (a subsidiary of Pool Corporation), BWI, Outdoor Living Supply, Central Pro Supply, and W.S. Connelly. Regional and local competitors comprise approximately 81% of the landscape supply industry based on 2025 Net sales. The principal competitive factors include location, availability of materials and supplies, technical product knowledge and expertise, advisory or other service capabilities, delivery capabilities, pricing of products, and availability of credit. The company believes its competitive advantages include being the only national wholesale distributor to carry a full product line of landscape supplies, its expansive North American network of over 670 branch locations, a nationwide fleet of over 2,600 delivery vehicles, and relationships with approximately 6,000 suppliers.

The company generates revenue primarily through the sale of landscape supplies to residential and commercial landscape professionals who specialize in the design, installation, and maintenance of lawns, gardens, golf courses, and other outdoor spaces. Net sales include billings for freight and handling charges and commissions on the sale of control products sold as an agent, presented net of discounts, returns, customer rebates, and sales or other revenue-based taxes. The customer base consists of more than 440,000 firms and individuals, with the top 10 customers collectively accounting for less than 4% of 2025 Fiscal Year Net sales and no single customer accounting for more than 2% of Net sales. Small customers with annual purchases of up to $25,000 made up 23% of 2025 Fiscal Year Net sales, medium customers with annual purchases from $25,000 up to $150,000 made up 29%, and large customers with annual purchases over $150,000 made up 48%. The company offers a loyalty rewards program, the Partners Program, which had approximately 62,000 enrolled customers as of December 28, 2025 and accounted for approximately 62% of Net sales for the 2025 Fiscal Year.

The company's product portfolio consists of approximately 180,000 SKUs sourced from approximately 6,000 suppliers. Landscaping products include hardscapes (pavers, natural stone, blocks), irrigation supplies (sprinkler heads, irrigation pipe and tubing, controllers, valves, fittings, micro-irrigation or drip products), landscape accessories (mulches, soil amendments, drainage pipe, tools, sod), nursery goods (deciduous and evergreen shrubs, ornamental, shade, and evergreen trees, roses, perennials, annuals, bulbs), and outdoor lighting (lighting fixtures, LED lamps, wire, transformers, accessories). Agronomic and other products include fertilizer, control products (herbicides, fungicides, rodenticides, other pesticides), ice melt, equipment, and other products. For the 2025 Fiscal Year, Net sales of landscaping products were $3,619.7 million ¹ and Net sales of agronomic and other products were $1,085.1 million ². Approximately 60% of 2025 Fiscal Year Net sales were derived from the residential construction sector, 32% from the commercial construction (including institutional) sector, and 8% from the recreational and other construction sector. By end market, approximately 36% of Net sales related to maintenance of existing properties, approximately 34% related to new construction, and approximately 30% related to repair and upgrade of existing landscapes.

The company offers products under proprietary brands, with sales of proprietary branded products accounting for approximately 15% of 2025 Fiscal Year Net sales, the large majority of which is attributable to LESCO. LESCO is a premium brand offering formulations of fertilizer, combination products, control products, specialty chemicals, turf seed, application equipment, paint, and maintenance products. The Pro-Trade brand offers professional-grade landscape lighting, synthetic turf, irrigation and landscape supplies. The Solstice brand, launched in 2024, offers premium imported natural stone including three collections of products for hardscape, pool deck, and vertical masonry projects. The SiteOne Green Tech brand offers pre-packaged landscape and irrigation management solutions including central irrigation control systems, solar assemblies, fertilizer injection systems, irrigation pumps, and hand-held remote control equipment. The Portfolio brand offers a line of premium plant varieties with over 250 unique items including shrubs, trees, perennials, annuals, and bulbs. Approximately 7% of 2025 Fiscal Year Net sales were from direct distribution, which provides point-to-point logistics for bulk quantities of landscape products between suppliers and customers.

During the 2025 Fiscal Year, the company completed eight acquisitions. In January 2025, the majority-owned subsidiary Devil Mountain Wholesale Nursery acquired Pacific Nurseries, LLC with one location in Colma, California. In March 2025, the company acquired Green Trade of Georgia, LLC with one location in Jasper, Georgia. In July 2025, the company acquired Nashville Nursery and Landscape Supply, Inc. with one location in Nashville, Tennessee and Grove Nursery Center, Inc. and Nature's Grove, LLC with one location in northwest Minneapolis, Minnesota. In September 2025, the company acquired Autumn Ridge Stone and Landscape Supply, Inc. with one location in Holland, Michigan. In October 2025, the company acquired Red's Home and Garden, LP and Red's Home and Garden GP, Inc. with one location in Wilkesboro, North Carolina. In November 2025, the company acquired French Broad Stone Yards, LLC with two locations in Arden and Brevard, North Carolina and CC Landscaping Warehouse Plus, Inc. with one location in Bradenton, Florida. As of December 28, 2025, the company had invested $175.9 million ³ in 15 acquisitions since the start of the 2024 Fiscal Year. During the 2025 Fiscal Year, the company repurchased 816,888 ⁴ shares of common stock at an average price per share of $119.62 ⁵. As of December 28, 2025, the dollar value of shares that may yet be purchased under the share repurchase authorization was $214.3 million ⁶. In the fourth quarter of 2025, the company consolidated or closed certain branches and other locations and recorded impairment and other related charges of approximately $11.4 million ⁷.

Net sales for the 2025 Fiscal Year increased 4% to $4,704.8 million ⁸ compared to $4,540.6 million ⁹ for the 2024 Fiscal Year. Organic Daily Sales increased 1% in the 2025 Fiscal Year with pricing having a negligible impact. Gross margin increased 40 basis points to 34.8% ¹⁰ for the 2025 Fiscal Year compared to 34.4% ¹¹ for the 2024 Fiscal Year. Selling, general and administrative expenses as a percentage of Net sales decreased 40 basis points to 30.1% ¹² for the 2025 Fiscal Year compared to 30.5% ¹³ for the 2024 Fiscal Year. Net income attributable to SiteOne increased 23% to $151.8 million ¹⁴ for the 2025 Fiscal Year compared to $123.6 million ¹⁵ for the 2024 Fiscal Year. Net cash provided by operating activities increased to $300.5 million ¹⁶ for the 2025 Fiscal Year compared to $283.4 million ¹⁷ for the 2024 Fiscal Year.

The company expects the impact of pricing to contribute approximately 1% to 3% to Organic Sales growth in the 2026 Fiscal Year. Capital expenditures are expected to be in a range of 0.8% to 1.3% as a percentage of Net sales for the 2026 Fiscal Year.

The company plans to continue expanding its Pro-Trade line of products in the 2026 Fiscal Year, including adding weed barrier fabrics and accessories, holiday lighting, and expanded product offerings in irrigation, tools, and other landscape accessories. The company also plans to continue expanding its Solstice line of premium imported natural stone products in the 2026 Fiscal Year. Additionally, the company plans to continue expanding its Portfolio line of premium plant varieties in the 2026 Fiscal Year. The company is focused on advancing procurement and supply chain management initiatives, enhancing its website and B2B e-Commerce platform, and implementing new inventory planning, stocking, and transportation management system functionalities.

The company expects the negative pricing trend to improve with positive pricing in most product categories, while commodity products like grass seed and PVC pipe are becoming less of a headwind. Gross margin increased 40 basis points for the 2025 Fiscal Year primarily due to improved price realization, benefits from commercial initiatives, and a positive contribution from acquisitions, partially offset by higher freight and logistics costs supporting growth. SG&A as a percentage of Net sales decreased 40 basis points to 30.1% for the 2025 Fiscal Year compared to 30.5% for the 2024 Fiscal Year, primarily driven by improved operating leverage from productivity initiatives and better cost alignment with market demand.

The company was in the process of completing the transition of its Carlisle, Pennsylvania distribution center to a new location in South Middleton, Pennsylvania as of December 28, 2025. The South Middleton, Pennsylvania distribution center is approximately 306,000 square feet and is expected to commence operations in the second quarter of 2026. As of December 28, 2025, the company operated five distribution centers in Kenosha, Wisconsin (417,000 square feet, commenced operations fourth quarter 2025), Goodyear, Arizona (392,000 square feet, commenced operations second quarter 2023), Hutchins, Texas (338,000 square feet, commenced operations fourth quarter 2021), Palmetto, Georgia (335,000 square feet, commenced operations fourth quarter 2021), and Carlisle, Pennsylvania (201,000 square feet, commenced operations first quarter 2018). The company employs approximately 8,200 associates, with approximately 93% employed on a full-time, year-round basis and approximately 450 seasonal associates.

Capital expenditures of $53.7 million ¹⁸ for the 2025 Fiscal Year were 1.1% of Net sales. Capital expenditures have averaged $42.1 million ¹⁹ annually from the 2023 Fiscal Year to the 2025 Fiscal Year representing an average of 0.9% of Net sales over this time period. In October 2022, the Board of Directors approved a share repurchase authorization for up to $400.0 million ²⁰ of common stock. As of December 28, 2025, the dollar value of shares that may yet be purchased under the share repurchase authorization was $214.3 million ²¹. The company does not expect to declare or pay dividends on its common stock for the foreseeable future.

The company experienced a challenging end market environment with significant headwinds as a result of economic uncertainty, elevated interest rates, weakened consumer confidence, low existing home sales, inflation and affordability concerns, as well as deflationary impacts from commodity products like grass seed and PVC pipe. The company anticipates continued pressure on Net sales growth and Net income for the foreseeable future. The company has experienced continued and persistent softening of the residential construction sector, including in high growth markets across the Sunbelt, as a result of home price inflation and higher mortgage rates during the past several fiscal years.

The company faces risks from supply chain disruptions including as a result of U.S. tariff policies, product or labor shortages, and the loss of key suppliers. Trade policies and related government actions, including the imposition, increase, or extension of tariffs on goods imported into the United States, can further amplify price volatility and result in supplier price increases. During the 2025 Fiscal Year, the company took actions to mitigate inventory management risks based on the impact of tariffs and other changes in trade policy, including making early purchases of inventory most likely to be affected by such tariffs. The company continues to monitor the impact of interest rate changes, tariffs, labor market conditions, and workforce availability, as well as end market demand, commodity prices, and the potential effects of uncertain political conditions and geopolitical conflicts.

The company faces significant cyclicality risk as approximately 60% of Net sales are derived from the residential construction sector and 32% from commercial construction, both of which have experienced cyclical downturns. The company has experienced continued and persistent softening of the residential construction sector due to home price inflation and higher mortgage rates. Supply chain disruptions from U.S. tariff policies pose a material risk, and during the 2025 Fiscal Year the company made early purchases of inventory most likely to be affected by tariffs, increasing working capital requirements. The company has $389.4 million ²² of total gross long-term debt outstanding, and an increase of one percentage point in interest rates would increase projected interest payments by approximately $3.9 million ²³ for the 2026 Fiscal Year based on amounts outstanding under the Credit Facilities. The company's operations are substantially dependent on weather and climate conditions, with droughts potentially causing water supply shortages and governments implementing water usage limitations that could negatively impact demand. The company faces inventory management risks as nursery goods, sod, and grass seed are perishable with limited shelf life, and during the 2025 Fiscal Year the company took actions to mitigate inventory management risks based on tariff impacts.

Management's message emphasizes that the company is the largest and only national full product line wholesale distributor of landscape supplies in the United States with a robust acquisition pipeline and a flexible business model. Management states that the long-term outlook for the landscape supply industry remains strong, driven by favorable population trends, housing demand, and continued interest in outdoor living. The company is committed to strategic and operational initiatives and will continue to focus on driving growth organically and through acquisitions while gaining market share and delivering margin expansion by leveraging scale, resources, and capabilities. Looking ahead to the 2026 Fiscal Year, management expects the impact of pricing on Organic Sales growth to improve with positive pricing in most product categories, while commodity products like grass seed and PVC pipe are becoming less of a headwind. Management notes that the balanced end market mix, broad product portfolio, geographic coverage, and commercial and operational initiatives provide multiple opportunities to achieve growth and position the company to be resilient in softer markets.