SiteOne, the largest national wholesale distributor of landscape supplies, recently announced its financial performance at the William Blair Growth Stock Conference in June 2024. The company reported a 32.8% growth in net sales from 2016 to 2023, with net sales reaching $4.301 billion in 2023, representing a 35.4% increase from 2022. Adjusted EBITDA also saw substantial growth, reaching $410.7 million in 2023, a 34.9% increase from 2022.
The company's gross margin percentage also experienced positive momentum, increasing by 340 basis points from 2016 to 2023. Additionally, the adjusted EBITDA margin percentage saw a 140 basis point increase during the same period.
In terms of acquisitions, SiteOne's growth strategy has been evident. The company completed several high-performing acquisitions, with acquisitions' contribution to net sales growing by 206% from 2016 to 2023.
Looking at the market position, SiteOne holds a significant share, with its market share estimated at approximately 17% in a highly fragmented $25 billion market. The company's product offering is diverse, including irrigation, lighting, agronomics, nursery, hardscapes, and landscape accessories.
Despite reporting a 1% increase in organic daily sales and a 5% increase in volume in the first quarter of 2024, the company faced challenges in the second quarter, experiencing a 4-5% decrease in organic daily sales and a 1% decrease in volume. There was also a persistent commodity price deflation, resulting in a 4% decrease in price.
To address these market headwinds, SiteOne outlined several actions, including driving organic growth, margin expansion initiatives, reducing SG&A, executing integration and turnaround plans for acquisitions, and improving cash flow through strong inventory management.
As a result of these announcements, the company's shares have moved -8.7% on the market, and are now trading at a price of $138.91. For the full picture, make sure to review SiteOne Landscape Supply's 8-K report.
