SiteOne(US:SITE)2025-10-29 10:01Financial Performance - Net sales grew by 4% for the three and nine months ended September 28, 2025, driven by sales initiatives and improved pricing[129] - Organic Daily Sales increased by 3% and 1% for the three and nine months ended September 28, 2025, respectively[129] - Net sales for the three months ended September 28, 2025 increased by 4% to $1,258.2 million compared to $1,208.8 million for the same period in 2024, and for the nine months ended September 28, 2025, net sales increased by 4% to $3,659.2 million compared to $3,527.5 million in 2024[154] - Acquisitions contributed $12.5 million, or 1%, to net sales growth for the third quarter of 2025 and $98.5 million, or 3%, for the nine months ended September 28, 2025[154] - The company anticipates continued pressure on net sales growth and net income due to ongoing economic uncertainty and weakened consumer confidence[129] Profitability - Gross margin increased by 70 basis points in the third quarter and by 20 basis points for the nine-month period ended September 28, 2025[129] - Net income attributable to SiteOne increased to $59.1 million and $160.8 million for the three and nine months ended September 28, 2025, respectively[129] - Gross profit increased by 6% to $437.2 million for the three months ended September 28, 2025, compared to $411.0 million for the same period in 2024, and increased by 5% to $1,278.4 million for the nine months ended September 28, 2025, compared to $1,222.5 million in 2024[157] - Adjusted EBITDA for Q3 2025 was $127.5 million, representing a significant measure of operating performance[168] - The increase in net income attributable to non-controlling interest was $0.2 million to $0.4 million for Q3 2025 compared to Q3 2024, driven by higher net income from the Devil Mountain business[163] Expenses - Selling, general and administrative expenses (SG&A) as a percentage of net sales decreased by 50 basis points to 28.4% for the three months ended September 28, 2025[129] - Selling, general and administrative (SG&A) expenses increased 2% to $357.4 million for Q3 2025 compared to $349.1 million for Q3 2024, and increased 3% to $1,049.7 million for the nine months ended September 28, 2025 compared to $1,020.6 million for the same period in 2024[158] - SG&A as a percentage of net sales decreased by 50 basis points to 28.4% for Q3 2025 compared to 28.9% for Q3 2024, and decreased by 20 basis points to 28.7% for the nine months ended September 28, 2025 compared to 28.9% for the same period in 2024[158] Cash Flow and Working Capital - Net cash provided by operating activities decreased to $135.7 million for the nine months ended September 28, 2025, compared to $164.0 million for the same period last year[129] - Working capital increased to $1,059.0 million as of September 28, 2025, up by $150.2 million from $908.8 million as of December 29, 2024[181] - Cash provided by operating activities was $135.7 million for the nine months ended September 28, 2025, down from $164.0 million for the same period in 2024[183] - Cash used in investing activities was $53.4 million for the nine months ended September 28, 2025, significantly lower than $140.3 million in the same period of 2024[184] Debt and Financing - Total gross long-term debt was $392.8 million as of September 28, 2025, comparable to $393.3 million as of December 29, 2024[181] - Interest on long-term debt decreased to $109.0 million as of September 28, 2025, down from $131.2 million as of December 29, 2024[181] - The company repurchased 656,095 shares for approximately $77.7 million at an average price of $118.46 during the 2025 Fiscal Year[179] - The borrowing base capacity under the ABL Facility was $577.8 million as of September 28, 2025[180] - The ABL Facility has a commitment of up to $600.0 million, with a maturity date of July 22, 2027, and is secured by a first lien on inventory and receivables[192] Strategic Initiatives - The company has a large acquisition pipeline and remains committed to driving growth organically and through acquisitions[130] - The company is focused on strategic initiatives to improve profitability, enhance supply chain efficiency, and invest in information technology systems and data analytics[148] - The company continues to implement new inventory planning and transportation management system functionalities to reduce costs and improve service reliability[148] Market Outlook - The long-term outlook for the landscape supply industry remains strong, driven by favorable population trends and continued interest in outdoor living[130] - The negative pricing trend that began in the second half of the 2023 Fiscal Year has moderated, with pricing projected to increase by approximately 1% to 2% for the fourth quarter of 2025[129] Tax and Accounting - Income tax expense was $15.5 million for Q3 2025 compared to $15.8 million for Q3 2024, with an effective tax rate of 20.4% for Q3 2025 compared to 26.2% for Q3 2024[161] - The company recognized excess tax benefits of $4.0 million for Q3 2025 compared to $0.1 million for Q3 2024, contributing to the decrease in the effective tax rate[161] - The company has critical accounting estimates related to inventory valuation, acquisitions, and goodwill, with no material changes reported[210]