10-K: SiteOne Navigates Challenging Market with Growth & Acquisitions

Sentiment:

Annual Report 19 February 2026 6:01 AM

📋All filings for Siteone Landscape Supply, INC

SiteOne Landscape Supply reports a 4% increase in Net sales and 23% rise in Net income for fiscal year 2025, driven by acquisitions and strategic initiatives despite market headwinds.

Summary

Net sales for the 2025 fiscal year increased by 4% to $4,704.8 million, up from $4,540.6 million in 2024, primarily due to contributions from acquisitions.
Organic Daily Sales grew by 1% in 2025, with pricing having a negligible impact, a significant improvement from the 3% decline in 2024.
Gross profit increased by 5% to $1,635.2 million, and gross margin improved by 40 basis points to 34.8% in 2025, reflecting better price realization and commercial initiatives.
Net income attributable to SiteOne rose by 23% to $151.8 million in 2025, compared to $123.6 million in 2024.
The company completed 8 acquisitions in 2025, investing $38.5 million, and 15 acquisitions since the start of 2024, totaling $175.9 million.
Net cash provided by operating activities increased to $300.5 million in 2025 from $283.4 million in 2024, driven by higher Net income.
Total long-term consolidated indebtedness decreased to $389.4 million as of December 28, 2025, from $393.3 million in 2024.
Capital expenditures increased to $53.7 million in 2025, representing 1.1% of Net sales, up from $40.5 million in 2024.
The company repurchased 816,888 shares of common stock at an average price of $119.62 per share in 2025, with $214.3 million remaining under the authorization.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive report. Despite significant market headwinds and management's cautious outlook, the company demonstrated solid growth in Net sales and Net income, improved gross margins, and effectively managed operating expenses, indicating strong operational execution and resilience in a tough environment.

Positives

Net sales increased by 4% to $4,704.8 million in 2025, demonstrating continued growth.
Organic Daily Sales increased by 1% in 2025, indicating underlying business strength despite market challenges.
Gross margin improved by 40 basis points to 34.8% in 2025, driven by better price realization and commercial initiatives.
Net income attributable to SiteOne increased significantly by 23% to $151.8 million in 2025.
Net cash provided by operating activities rose to $300.5 million, reflecting strong operational cash generation.
The company successfully executed 8 acquisitions in 2025, expanding its product lines and geographic reach.
SG&A as a percentage of Net sales decreased by 40 basis points to 30.1%, indicating improved operating leverage and cost alignment.
Long-term consolidated indebtedness decreased to $389.4 million, improving the company's financial health.
The company continues to invest in strategic initiatives, including digital enhancements and supply chain efficiency, to drive future growth and profitability.
Settled the LESCO environmental liability for $0.5 million, releasing a previously recorded liability and related indemnification asset of $1.9 million in Other income.

Negatives

The company experienced a challenging end market environment with significant headwinds due to economic uncertainty, elevated interest rates, weakened consumer confidence, low existing home sales, inflation, and affordability concerns.
Softer demand was noted in the new residential construction and repair and upgrade end markets.
Deflationary impacts from commodity products like grass seed and PVC pipe continued to affect the business.
Interest and other non-operating expenses, net, increased by 10% to $35.0 million, primarily due to higher interest rates on borrowings and equipment leases.
The company anticipates continued pressure on Net sales growth and Net income for the foreseeable future due to current market conditions.
Impairment and other related charges of approximately $5.6 million were recorded in 2025 due to consolidating or closing certain branches and other locations.

Risks

Cyclicality in residential and commercial construction markets, including potential severe downturns, could result in lower Net sales and reduced cash flows and profitability.
General business, economic, and financial market conditions, such as interest rate fluctuations, inflation, unemployment, and geopolitical conflicts, could adversely affect financial position, results of operations, and cash flows.
Operations are substantially dependent on weather and climate conditions, including droughts, severe storms, wildfires, and excessive heat or cold, which can impact demand, product availability, and delivery timing.
Seasonality affects demand for products and services, causing results of operations to vary considerably from quarter to quarter, with typically lower sales and net losses in the first and fourth quarters.
Volatility in prices for purchased products and operating costs (e.g., fuel, labor, commodities) may not be fully or timely passed through to customers, reducing gross profit and net income.
Extensive federal, state, provincial, and local laws and regulations governing operations could increase costs, restrict product offerings, and expose the company to liabilities.
Exposure to risks associated with hazardous materials (fertilizers, herbicides, pesticides) and related activities, not all of which may be covered by insurance.
Highly competitive and fragmented industry, with potential for increased competition from regional distributors, new entrants, and manufacturers selling directly, which could reduce market share and adversely affect financial performance.
Supply chain delays or interruptions, product shortages, and loss of key suppliers could result in lost revenues, reduced margins, and damage to customer relationships.
Inventory management risks, including insufficient inventory leading to lost sales or delayed revenue, and excess inventory harming gross margins or requiring write-downs, especially for perishable goods.
Inability to successfully implement business strategies and achieve growth objectives, including those related to acquisitions and operational initiatives.
Acquisition and integration risks, such as acquired businesses not performing as expected, difficulties in integration, increased competition for targets, and potential for goodwill impairments.
Risks associated with the labor force, including high turnover rates, increased labor costs due to minimum wage increases or competition for talent, and potential unionization.
Public perceptions that products or services are not environmentally friendly or safe, or that practices are not sustainable, could reduce demand, increase regulation, and lead to litigation.
Dependence on a limited number of key personnel, with the loss of senior executives or key employees potentially adversely impacting the business.
Exposure to construction defect and product liability claims, as well as other legal proceedings, which could be costly and damage reputation.
An impairment of goodwill and/or other intangible assets could reduce Net income, particularly if market dynamics or economic events are adverse.
Inefficient or ineffective allocation of capital, including share repurchases, could adversely affect operating results and/or stockholder value by diminishing cash reserves.
The majority of Net sales are derived from credit sales, and failure to collect monies owed from customers could adversely affect working capital and financial condition.
Operations through highly dispersed locations across the U.S. and Canada may lead to inconsistent practices and varying operating results of individual branches.
Cybersecurity incidents, including sophisticated attacks, could lead to operational interruptions, substantial costs, legal/regulatory proceedings, or reputational damage, exacerbated by increased reliance on virtual environments and AI capabilities.
A large-scale malfunction or failure in computer and data processing systems could disrupt business, create liabilities, or limit operational control.
Failure to protect the security of personal information about customers could lead to business interruptions, private litigation, reputational damage, and costly penalties.
Inability to adequately protect intellectual property and other proprietary rights could materially adversely impact reputation and financial performance.
Unanticipated changes in tax provisions, including further changes to U.S. tax laws like the One Big Beautiful Bill Act, could impact tax expense and profitability.
Outstanding indebtedness and potential for substantial additional indebtedness could adversely affect financial health, ability to obtain future financing, and flexibility to react to business changes.
Significant or prolonged periods of higher interest rates would increase the cost of servicing variable-rate indebtedness and could reduce profitability and cash flows.
Agreements governing indebtedness contain restrictions and limitations that could significantly impact the ability to operate the business, with breaches potentially leading to default and acceleration of debt.

Future Outlook

The company anticipates continued pressure on Net sales growth and Net income for the foreseeable future due to economic uncertainty, elevated interest rates, weakened consumer confidence, and softer demand in new residential construction and repair/upgrade markets. However, management expects the long-term outlook for the landscape supply industry to remain strong, driven by favorable population trends, housing demand, and continued interest in outdoor living. Pricing impact on Organic Sales growth is expected to improve to 1% to 3% in the 2026 Fiscal Year, with commodity product headwinds lessening. Capital expenditures are projected to be between 0.8% and 1.3% of Net sales for 2026.

Management Comments

During the 2025 Fiscal Year, we 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.
While we benefitted from steady growth in the maintenance end market and we believe our commercial initiatives drove market share gains during the year, this environment continued to negatively affect consumer confidence and discretionary spending which resulted in softer demand in the new residential construction and repair and upgrade end markets.
Accordingly, we anticipate continued pressure on Net sales growth and Net income for the foreseeable future.
Looking forward, the trend of consumers spending more time at home and investing in their outdoor living spaces is expected to continue, although at lower levels compared to peak demand during the three-year COVID-19 pandemic.
In 2025, constraint on affordability continued with increasingly weaker new and existing home demand as a result of the current macroeconomic environment.
However, the long-term outlook for the landscape supply industry remains strong, driven by favorable population trends, housing demand, and continued interest in outdoor living.
We remain confident in the landscape supply industry growth opportunities and our ability to continue providing our customers, suppliers, and shareholders with exceptional value.
We are the only national full product line wholesale distributor of landscape supplies in the United States. We have a robust acquisition pipeline and a flexible business model.
We are committed to our 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 our scale, resources, and capabilities.
Looking ahead to the 2026 Fiscal Year, the impact of pricing on Organic Sales growth is expected to improve with positive pricing in most product categories, while commodity products like grass seed and PVC pipe are becoming less of a headwind.
As we continue to navigate through the current uncertainty presented by market and economic conditions, we are prepared to meet the challenges ahead due to our well-balanced business, strong financial condition, dedicated and experienced teams, and focused business strategy.
Our balance sheet and liquidity position provide the flexibility to operate effectively and execute our growth strategy, as well as complete share repurchases through the evolving market conditions.
We continue to monitor the impact on our business and the related risks and uncertainties 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.

Industry Context

StockSavvy.ai notes that SiteOne's performance in 2025 reflects a broader industry trend where the maintenance segment provides stability amidst softening new construction and repair/upgrade markets, which are sensitive to economic uncertainty and interest rates. The company's aggressive acquisition strategy in a fragmented market, coupled with its national footprint and broad product portfolio, positions it to consolidate market share. The focus on digital initiatives and supply chain efficiency aligns with industry efforts to enhance customer experience and operational resilience in a competitive landscape. The continued interest in outdoor living, despite lower growth rates post-pandemic, remains a fundamental driver for the landscape supply sector.

Comparison to Industry Standards

SiteOne is the largest and only national full product line wholesale distributor of landscape supplies in the United States, giving it a unique competitive advantage over smaller, regional competitors like Heritage Landscape Supply Group (a subsidiary of The Home Depot), Ewing, and Target Specialty Products.
The wholesale landscape supply industry is highly fragmented, with regional and local competitors comprising approximately 81% of the market based on 2025 Net sales, indicating significant opportunity for SiteOne's acquisition-led growth strategy.
The company's broad product portfolio of approximately 180,000 SKUs and network of over 670 branches in 45 U.S. states and five Canadian provinces surpasses the typical limited offerings and geographic footprint of most regional private businesses in the industry.
SiteOne's ability to offer a full product line in only 30% of U.S. metropolitan statistical areas where it has a branch suggests substantial untapped market penetration potential compared to its current reach.
The company's proprietary brands like LESCO, Pro-Trade, Solstice, and Portfolio provide differentiation and strong brand awareness, particularly LESCO in the golf and professional landscape contractor segments, which is a competitive edge against distributors relying solely on third-party brands.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Chairman, President, and Chief Executive Officer	NA	Doug Black	NA	NA
Executive Vice President, Chief Financial Officer and Assistant Secretary	NA	Eric J. Elema	NA	NA

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Board Declassification	The board of directors is in the process of declassifying, with each class of directors reverting to a single-year term upon expiration of their current term, until all directors are elected to single-year terms.	Ongoing process, terms revert upon expiration of current class terms	Reduces anti-takeover effects by making it easier for shareholders to change a majority of the board in a shorter timeframe, potentially increasing board accountability.
Director Removal Standard	Directors may be removed only for cause upon the affirmative vote of holders of at least a majority of the outstanding shares of common stock then entitled to vote.	NA	Maintains a level of board stability by making it difficult to remove directors without cause, which can be an anti-takeover measure.
Special Stockholder Meetings	A special meeting of stockholders may be called only by the Chairman of the board of directors or by a resolution adopted by a majority of the board of directors; stockholders are not permitted to call special meetings.	NA	Limits stockholder power to initiate extraordinary corporate actions, serving as an anti-takeover provision.
Stockholder Advance Notice Procedure	By-laws establish an advance notice procedure for stockholders to make nominations for directors or bring other business before an annual meeting, requiring written notice 90-120 days before the anniversary of the preceding year's annual meeting (with exceptions).	NA	Designed to preclude certain business if proper procedures are not followed and to discourage proxy solicitations or takeover attempts by potential acquirers.
No Stockholder Action by Written Consent	Charter provides that stockholder action may be taken only at an annual meeting or special meeting of stockholders.	NA	Prevents stockholders from taking action without a formal meeting, which can be an anti-takeover measure by slowing down activist campaigns.
Limitations on Liability and Indemnification	Charter contains provisions eliminating directors' or officers' personal liability for monetary damages for breach of fiduciary duty, except in specific circumstances (e.g., breach of loyalty, intentional misconduct, unlawful dividends, improper personal benefit).	NA	Protects directors and officers from certain liabilities, potentially encouraging qualified individuals to serve but may discourage lawsuits against them.
Delaware General Corporation Law Section 203	The company is subject to Section 203, an anti-takeover law prohibiting business combinations with interested stockholders (15% or more ownership) for three years unless approved in a prescribed manner.	NA	Acts as an anti-takeover measure, discouraging unsolicited bids that are not approved by the board.
Choice of Forum	Charter designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain internal corporate claims.	NA	Centralizes litigation related to internal corporate affairs in a specialized court, potentially leading to more consistent legal outcomes and reducing litigation costs.
Cybersecurity Oversight	The Board of Directors has ultimate oversight for information security, delegating primary responsibility to the Audit Committee for reviewing and discussing compliance with the information security program and monitoring material cybersecurity risks.	NA	Enhances oversight of cybersecurity risks, demonstrating a commitment to protecting company data and systems, which is crucial in the current digital environment.

Legal Proceedings

Not currently involved in any material litigation or arbitration.
Settled an environmental liability arising from the LESCO sale in September 2025, with the company's share of the lump-sum settlement payment being $0.5 million, resulting in the release of a previously recorded environmental liability and related indemnification asset of approximately $1.9 million in Other income.

Stakeholder Impact

Shareholders: The company's share repurchase program provides direct returns to shareholders, but the decision to retain future earnings for debt service, acquisitions, and growth means no dividends are expected in the foreseeable future. The declassification of the board could increase accountability, while anti-takeover provisions may limit unsolicited bids.
Employees (Associates): The company emphasizes being an 'Employer of Choice' through competitive benefits (paid military leave, parental leave, SiteOne CARES grant program, hourly bonus program), structured training, career path opportunities, and associate engagement surveys. A strong safety program is also in place.
Customers: Benefit from a broad product portfolio, convenient branch locations, a nationwide delivery fleet, value-added consultative services (e.g., SiteOne University, project services), and the 'Partners Program' loyalty rewards. The company's acquisition strategy aims to better serve existing and attract new customers.
Suppliers: Benefit from access to SiteOne's extensive customer base (over 440,000 firms), a single point of contact for improved production planning, and the ability to quickly launch new products nationally. Volume-based financial incentives are an important factor in supplier agreements.
Creditors: The company's ability to service its debt is a key focus, with a significant portion of cash flow dedicated to principal and interest payments. Compliance with debt covenants and managing variable interest rate exposure are critical for maintaining financial stability and access to future financing.

Next Steps

Continue pursuing strategic acquisitions to expand product lines, geographic reach, and market share.
Further advance procurement and supply chain management initiatives to reduce sourcing costs and improve efficiency.
Deliver additional enhancements to the digital offering, including the website and B2B e-Commerce platform.
Implement new inventory planning, stocking, and transportation management system functionalities.
Improve sales, delivery, and branch productivity through local branch initiatives.
Expand proprietary branded product lines, specifically Pro-Trade and Solstice, in the 2026 Fiscal Year.
Monitor the impact of interest rate changes, tariffs, labor market conditions, workforce availability, end market demand, commodity prices, and geopolitical conflicts.
Complete the transition of the Carlisle, Pennsylvania distribution center to a new location in South Middleton, Pennsylvania, with operations expected to commence in the second quarter of 2026.
Continue share repurchases under the existing $400.0 million authorization, subject to management's discretion and market conditions.

Key Dates

Date	Description
December 23, 2013	SiteOne Landscape Supply, Inc. acquired 100% of the ownership interest in Landscape Holding from Deere & Company, with Clayton, Dubilier & Rice, LLC (CD&R) purchasing a 60% interest.
May 17, 2016	Company completed its initial public offering of common stock.
July 26, 2017	Following a secondary offering, CD&R and Deere no longer held an ownership interest in the Company.
October 2022	Board of Directors approved a share repurchase authorization for up to $400.0 million of common stock.
March 27, 2023	Term loans were amended to implement a forward-looking interest rate based on SOFR in lieu of LIBOR.
July 12, 2023	Company entered into an Increase Supplement for an additional $120.0 million of New Term Loans.
January 1, 2024	Company adopted ASU 2023-02, allowing the use of the proportional amortization method for tax equity investments.
April 2024	Company acquired a 75% ownership interest in Devil Mountain Wholesale Nursery, LLC.
July 2, 2024	Second Amendment to the Second Amended and Restated Credit Agreement provided for approximately $392.7 million in Tranche B Term Loans.
November 2024	Company entered into agreements to become a limited partner in a tax-advantaged limited partnership investing in approved qualified renewable energy projects.
December 29, 2024	Fiscal year ended.
January 1, 2025	Effective date for amendments to equity award agreements, including the 'Rule of 65' for retirement-eligible associates.
January 19, 2025	Reinstatement of 100% bonus depreciation for assets placed in service after this date, as part of the One Big Beautiful Bill Act.
March 23, 2025	Interest rate swaps 7, 8, and 9 terminated upon maturity.
July 4, 2025	U.S. enacted the One Big Beautiful Bill Act, including tax law changes.
September 30, 2025	Lump-sum settlement payment made to resolve environmental liability from the LESCO sale.
October 2025	Company published its annual corporate responsibility report (IMPACT Update).
November 2025	Company-wide associate engagement survey was administered.
December 28, 2025	Fiscal year ended.
January 13, 2026	Company acquired the assets and assumed the liabilities of Bourget Flagstone Co. (subsequent event).
February 13, 2026	Number of common shares outstanding was 44,459,316.
February 19, 2026	Date of this Annual Report on Form 10-K.
January 1, 2026	Company adopted ASU 2025-05, revising guidance for credit losses on accounts receivable and contract assets.
Q2 2026	South Middleton, Pennsylvania distribution center is expected to commence operations.
2026 Fiscal Year	Expected pricing to contribute approximately 1% to 3% to Organic Sales growth. Plans to continue expanding Pro-Trade and Solstice product lines. Capital expenditures expected to be in a range of 0.8% to 1.3% of Net sales.
July 22, 2027	Maturity date of the ABL Facility.
April 30, 2029	Maturity date of the Devil Mountain ABL Facility.
March 22, 2030	Maturity date of the Tranche B Term Loans.
December 15, 2026 (after)	Effective date for ASU 2024-03 (Expense Disaggregation Disclosures) and ASU 2025-03 (Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity).
December 15, 2027 (after)	Effective date for ASU 2025-06 (Targeted Improvements to the Accounting for Internal-Use Software) and ASU 2025-11 (Interim Reporting: Narrow-Scope Improvements).

Recommendation

hold

SiteOne Landscape Supply demonstrates resilience and strategic execution in a challenging market, with increased Net sales, improved gross margins, and higher Net income. The company's robust acquisition pipeline and operational initiatives position it for long-term growth. However, management's cautious outlook on continued pressure from economic uncertainty, elevated interest rates, and softer demand in key construction sectors warrants a 'hold' recommendation. While the company is performing well relative to the difficult environment, significant external headwinds and increased interest expenses suggest that substantial upside may be constrained in the near term, balancing the positives with ongoing market risks.

Keywords

Landscape Supply, Wholesale Distribution, Hardscapes, Irrigation Supplies, Fertilizer, Control Products, Nursery Goods, Outdoor Lighting, SEC Filing, 10-K, Financial Performance, Acquisitions, Organic Growth, Market Share, Supply Chain, Operational Efficiency, Share Repurchase, Debt Management, Cybersecurity, Corporate Governance, Sustainability, Residential Construction, Commercial Construction, Economic Conditions, Interest Rates, Inflation, Proprietary Brands

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