SiteOne Q2 sales slightly miss estimates on soft demand

Overview

• US landscape supply distributor's Q2 sales rose 5% but slightly missed analyst expectations

• Adjusted EBITDA for Q2 grew 5% but missed analyst estimates

• Company repurchased nearly $104 mln in shares during and after the quarter

Outlook

• SiteOne expects full-year Organic Daily Sales growth to be flat to up 1%

• Company sees full-year Adjusted EBITDA between $425 mln and $455 mln, including extra week impact

• SiteOne expects pricing to remain up 3% for the remainder of the year

Result Drivers

• SOFT DEMAND - Co said organic sales growth was limited by weaker demand in new residential construction and repair and upgrade markets

• ACQUISITIONS - Acquisitions contributed 3% to net sales growth in the quarter

• PRICE REALIZATION - Gross margin improvement was driven by higher price realization and commercial initiatives, partly offset by higher freight and distribution costs and commodity deflation

Company press release: ID:nBw9DVTSna

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the diversified industrial goods wholesale peer group is "buy"

• Wall Street's median 12-month price target for SiteOne Landscape Supply Inc is $154.00, about 48.8% above its July 28 closing price of $103.47

• The stock recently traded at 22 times the next 12-month earnings vs. a P/E of 29 three months ago

Reuters Recommended Reads

• July 28 - Pentair falls as pool equipment destocking hits sales; to buy Taco Group for $1.4 billion

• July 28 - Sherwin-Williams raises profit forecast, expects higher prices to drive growth

• July 28 - Armstrong World Q2 revenue beats on volume and pricing gains

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)