Agriculture products company SiteOne Landscape Supply (NYSE:SITE) reported Q1 CY2025 results beating Wall Street’s revenue expectations , with sales up 3.8% year on year to $939.4 million. Its GAAP loss of $0.61 per share was 9.6% below analysts’ consensus estimates.
Revenue: $939.4 million vs analyst estimates of $932.7 million (3.8% year-on-year growth, 0.7% beat)
EPS (GAAP): -$0.61 vs analyst expectations of -$0.56 (9.6% miss)
Adjusted EBITDA: $22.4 million vs analyst estimates of $19.84 million (2.4% margin, 12.9% beat)
EBITDA guidance for the full year is $415 million at the midpoint, in line with analyst expectations
Operating Margin: -3.1%, in line with the same quarter last year
Free Cash Flow was -$144.4 million compared to -$108.2 million in the same quarter last year
Organic Revenue fell 1% year on year (0.6% in the same quarter last year)
Market Capitalization: $5.13 billion
“We are pleased to report a solid start to 2025, with total sales growth of 4% and Adjusted EBITDA growth of 6%. We were particularly pleased to achieve good SG&A leverage in our base business on an adjusted basis despite the Organic Daily Sales decline,” said Doug Black, SiteOne’s Chairman and CEO.
Company Overview
Known for distributing John Deere tractors and LESCO turf care products, SiteOne Landscape Supply (NYSE:SITE) provides landscaping products and services to professionals, including irrigation, lighting, and nursery supplies.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, SiteOne’s sales grew at an exceptional 13.8% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.
SiteOne Quarterly Revenue
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. SiteOne’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 6.3% over the last two years was well below its five-year trend.
SiteOne Year-On-Year Revenue Growth
SiteOne also reports organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, SiteOne’s organic revenue was flat. Because this number is lower than its normal revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results.
SiteOne Organic Revenue Growth
This quarter, SiteOne reported modest year-on-year revenue growth of 3.8% but beat Wall Street’s estimates by 0.7%.
Looking ahead, sell-side analysts expect revenue to grow 4.7% over the next 12 months, a slight deceleration versus the last two years. This projection is underwhelming and implies its products and services will face some demand challenges.
SiteOne was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.5% was weak for an industrials business. This result is surprising given its high gross margin as a starting point.
Looking at the trend in its profitability, SiteOne’s operating margin decreased by 3.3 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. SiteOne’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.
SiteOne Trailing 12-Month Operating Margin (GAAP)
In Q1, SiteOne generated an operating profit margin of negative 3.1%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
SiteOne’s EPS grew at an unimpressive 5% compounded annual growth rate over the last five years, lower than its 13.8% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.
SiteOne Trailing 12-Month EPS (GAAP)
We can take a deeper look into SiteOne’s earnings to better understand the drivers of its performance. As we mentioned earlier, SiteOne’s operating margin was flat this quarter but declined by 3.3 percentage points over the last five years. Its share count also grew by 7.9%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.
SiteOne Diluted Shares Outstanding
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For SiteOne, its two-year annual EPS declines of 25.8% show it’s continued to underperform. These results were bad no matter how you slice the data.
In Q1, SiteOne reported EPS at negative $0.61, down from negative $0.43 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects SiteOne’s full-year EPS of $2.51 to grow 44.9%.
Key Takeaways from SiteOne’s Q1 Results
We were impressed by how significantly SiteOne blew past analysts’ EBITDA expectations this quarter. We were also happy its organic revenue narrowly outperformed Wall Street’s estimates. Overall, this quarter had some key positives. The stock remained flat at $114 immediately after reporting.
