SiteOne Q2 2023 Earnings Report
Key Takeaways
SiteOne Landscape Supply reported second quarter results with net sales increasing to $1.35 billion, driven by organic daily sales growth and acquisitions. Gross profit increased, but gross margin contracted. Net income was $124.0 million. The company completed two acquisitions during the quarter and one more in July.
Net sales increased to $1.35 billion, an 11% increase compared to the prior-year period.
Organic Daily Sales increased 4% compared to the prior-year period primarily due to volume growth on solid end market demand.
Gross margin contracted 170 basis points to 36.2%.
Adjusted EBITDA decreased 5% to $211.2 million, with adjusted EBITDA margin decreasing 260 basis points to 15.6%.
SiteOne
SiteOne
Forward Guidance
The company expects pricing to be down versus prior year in the second half due to commodity price deflation, resulting in approximately flat pricing for the full year 2023. Organic Daily Sales growth in the second half is expected to be slightly down with negative pricing offsetting volume. Gross margin is expected to be flat and adjusted EBITDA margin to be slightly lower in the second half of 2023 compared to the second half of 2022. Adjusted EBITDA for fiscal 2023 is expected to be in the range of $400 million to $425 million.
Positive Outlook
- Continued resilient end market demand
- Contributions from commercial initiatives
- Gross margin expected to be flat in the second half of 2023 compared to the second half of 2022
Challenges Ahead
- Pricing is expected to be down versus prior year in the second half due to commodity price deflation
- Organic Daily Sales growth in the second half is expected to be slightly down with negative pricing offsetting volume
- Adjusted EBITDA margin is expected to be slightly lower in the second half of 2023 compared to the second half of 2022