SITE - Earnings call transcript Q4 2024 | SiteOne Landscape Supply, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the SiteOne Landscape Supply, Inc. Fourth Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, John Guthrie, Executive Vice President and Chief Financial Officer. sir. you, Thank

begin. You may

John Guthrie

Relations and quarter good this issued you, the everyone. and investors.siteone.com. website morning, full year fourth Investor to and presentation release a our of XXXX our posted at Thank slide We portion earnings morning press

by our joined Scott Chief and Chairman Executive today I'm Executive Development. Vice and Officer; Salmon, President, Doug Black, Strategy and

earnings statements slide this like that These Before uncertainties and remind with filings Securities everyone risks Act forward-looking release, I and call from uncertainties press during made would in our Reform and to the results the presentation. and the begin, statements Exchange could of risks the to statements and differ set materially we today's The release cause actual Litigation factors to meaning Private include within include that are our Such projections. Securities subject the XXXX. Commission. of expectations in forth

believe measures call, today's these be during Additionally, earnings A found reconciliation the presentation. in our release measures we we useful of can slide our discuss non-GAAP in evaluating in performance. and which can will be

now like Black. the call to over to Doug turn would I

Doug Black

you morning, Good us Thanks, John. for joining and thank today.

challenging a the momentum daily sales finish price headwind. fourth X% to deflation in achieved growth quarter pleased X% are XXXX with positive in year we We as organic against a

sales X% daily improved negative the from organic seen consistently third XXXX. the in negative have quarter quarter We and X% in of second

took a second of integrated, our consolidations volume growth, to operating coupled and and organic entered cost Pioneer As XX sales that positive reduction daily strong position commercial and operational growth sales in solid XXXX half we with moderates increasing with price and the deflation in drive fully include leverage. closures and good we initiatives XXXX as the drive actions

January. acquisition with in in in and revenue X our also added first SiteOne added to companies of $XXX recently We XXXX million excellent XXXX XX-month trailing

have in talented to companies relationships, these growth we their of expect strong to and customer respective XXXX and in teams All and and contribute beyond performance them our markets.

into labor increases deflation as move We're seeing XXXX, number other that end price products price are by in we due our As steady are to demand uncertain seeing line. supply. environment like a our macro though continue factors to PVC decreases offset also markets, product interest the include in normalize we pipe tariffs of rates, and in remains price potential overall

potential Taken our robust more teams, a momentum with all initiatives network, branch and pipeline a acquisitions. cost-effective of stronger together, and operational with commercial

and acquisition then solid for from in feel our position. walk back on in shareholders. market more results to and discuss in deliver taking a We brief questions. for I strong to will to detail your ability building address our John long-term achieve year highlights by followed XXXX. our strategy, our and Salmon liquidity confident XXXX some you our today's start and will value We Scott outlook then call position update XXXX with will through our fourth performance continue to review an guidance balance Guthrie financial sheet of quarter our strategy, I and come unique growth and our will provide and full SiteOne before

and distribution shown U.S. more than As on of branches states footprint a XXX Slide XX we X of centers X across provinces. strong Canadian earnings X presentation, the have and

landscaping we we products industry estimate and our XX that the market. clear leader billion over only combined. Yet than an distribution competitor size larger fragmented the XX% share are $XX about a have X We of through of very Xx nearest wholesale

gain and significant. opportunity to share long-term remain grow our Accordingly, market

and recreational construction balanced repair have and on residential XX% new upgrade, maintenance, and new on We focused construction. focused commercial a with XX% business XX% mix of on

national the our across as in product line product as lines distributor full market, well As also geographically. an we only balance excellent the wholesale have

in strategy the time. mix geographic Canada, to strengthens market our across coverage softer and broad markets. our our product Our offer value end Overall, fill providing suppliers resiliency multiple further portfolio product balance U.S. while and lines important to avenues this and over for through both acquisition customers and and in create organically us grow

Turning to Slide X.

we work of but conditions growth, company. develop have new our and come to Current faster intentional executing require us company world-class capabilities improving in even and technologies is as a organic in truly and adopt functional to and largest a aspects each into Our our more talent to be value support strategy and resources, market building our industry local we the way in strategy to driving deliver in superior unique teams processes entrepreneurial long our we as and productivity to and SiteOne to lines. suppliers. leverage of have We've the talented, that our experienced more mastering all do product the consistently scale, our customers challenging of

to us Accordingly, for we to fills stakeholders. adds remain but terrific overcome our our are complemented initiatives strategy, These build all new near-term importantly, and our initiatives our operational markets headwinds, in the long-term acquisition SiteOne. and new a by to on focused portfolio, highly into which more talent product commercial competitive geographic moves advantage

products and growth. in years margin X during acquisition consistent rapid From realization EBITDA from for value and and last of we record growth, over together, an growth superior performance and through the expansion. perspective, acquisition adjusted margin strong benefited organic creates X, XXXX. all inflation EBITDA our our price organic track to see XXXX can extraordinary growth you strategy On with our shareholders Taking commodity due Slide

a In great our headwinds. market headwinds a those XXXX, have the as dilution In commodity as experienced XXXX, Pioneer, we turnaround XXXX acquisition of from large and prices opportunity and other down. fit EBITDA of focused come we experienced with also strategic adjusted further from the significant result post-COVID branches and

of deflation XXXX, price modest increases in commodity which our will less in with offset experience to expect products. be We most price

We and and consistently integrated achieve we of fully local new sales in to branches, management we in we have leverage and Pioneer growth XXXX. XXXX. sales in increase performance believe to that with progress our operating under restructured the opportunities our with and improvement drive on gross operational to And focused Furthermore, market significant outperformed improve terms growth our commercial and organic margin through XXXX ample have our volume initiatives. continue expect

XXXX. adjusted with all acquisitions product from forward summary, We In be post recover our going our lines steady earnings we drive we of objectives. since the margin as expect expansion forward, headwinds across completed growth COVID and the XX longer-term enhanced have now EBITDA start

robust, and we XXXX continue to integrating and growth. SiteOne and expect support new These our talent Our strengthen more in adding excellent companies ideas pipeline remains with growth. performance of potential for and to deals companies

the Given market for come. many modest the the primarily years shows nature aim landscape long X through to which acquisition, in acquisition categories. filling especially our to have supplies and of share, we significant a we industry through portfolio, in growing do we have product fragmented and Slide opportunity our ahead runway nursery continue our to in hardscapes

some best XXXX these continue next net X% X. to growth offset We and Slide highlights I companies organic now XXXX by on sales the of our discuss X% achieved X%, full systematically our are in as due markets with industry in decade. in We shown year well over acquisitions. growth filling an decline daily expect with performance will of to connected the sales

with quarters volume sales trend X% by with in year and the double-digit declined teams execution We share and growth X%, to grass declines market this and softer our driven third with primarily of X% while prices achieved Sales prior during volume the continued grew throughout other X% year. the respectively. Organic remained market quarter, reflects products volume most market, believe the that of XXXX, year upgrade a gain during second commercial of fourth in as improved PVC our positive and initiatives. conditions. and seed, XXXX the quarter stabilizing our repair of X% along pipe flat improved

our as XX creating the margin down environment. to price gains rate improvement acquisitions a more to increases our expect offset deflation XXXX. profit in balance and pricing products, stable more margin with than commodity driven modest XX Gross by by was X% XX.X%. moderate Base of margin points gross realization most approximately points initiatives. price price gross basis in our increased We decreased basis other lower from business gross And

acquisitions, Our operate operate also nursery and primarily hardscape higher with at businesses which margin gross were a but SG&A. higher

acquisitions. continue to to Our percent increased XXXX sales business closely of SG&A in due to compared for basis expenses volume. and sales our SG&A manage to base the was points our to we as labor relation as a flat XX.X% XXX net

quarter fourth reduction SG&A completed Pioneer staffing. during an we In the optimized of integration terms significant acquisitions, the represents XXXX of opportunity system as and ongoing

$XX.X leverage We due in negative our effect in year realization to dilutive margin and and in decreased acquisitions. to contribute Pioneer year-over-year for organic points basis to SG&A XXXX. the EBITDA of the by Adjusted expect the XXX to growth X.X% adjusted million, price to XXXX EBITDA absence declined improvement the overall X% of

approximately third the well addition this year. margin. our Pioneer EBITDA margin below acquisitions past sales, typically from with our the adjusted in $XXX experienced after at adjusted similar mentioned, the a EBITDA dilution But with EBITDA as quarter, I As of business. We operating base meaningful perform margin million adjusted annual acquisitions

the of coming Pioneer improve to We years. are confident over match in the to our average profitability SiteOne ability the

terms average, gross initiatives, label margin in growth contribute to to gross mitigate costs sales our than of with private expanding margin and drive inbound in improve These decline we to In system. management experienced in that company freight we to the increase our faster small future. and transportation continue XXXX the initiatives our our customers helped brands through

from percentage XX% this Hispanic executing awareness bilingual XX% our increase create marketing XXXX of to are important programs continue focused to customer and segment. branches among in We to

as our We establish productivity XXX outside habits among are associates. great over more disciplined and our progress in sales force sales our making revenue-generating leverage also CRM we

and our Pro better Mobile of service us customer brand of allows productivity delivery the fleet. dispatch increasing adoption and Continued staff to while track offer

efficient and to both in to share helping of increase growth point-of-sale allowed businesses. encouraging our while The sales thousands leverage more true with further win-win. and while of productive, more users grew Pioneer digital with We helping we acquisition us of the customers, market functionality material connectivity our develop new associates our our in them making in cultivating be which it digital regular The is system, plan increases by has XXXX, a us siteone.com. existing XXX% to in new our as sales delivery

purchase faster our online growing company to outperformance SiteOne than average, total their of the business are thereby our who market. contributing significantly with Customers

practices best that have to ensure right are SiteOne bring teams, branches performance branches focused or earnings average. and we last are executing they we During our intensely the our that or right the call, to mentioned underperforming above our managing the their to up support

As aggressive our a as part meaningful coming cost. to reduced closed of lift of XX operations XXXX, in adjusted at gain customers better these improve performance consolidated years SiteOne our or focused and strengthen branches. locations a efforts, a these for margin we serve the to expect the we EBITDA Overall, and in we

Taken to operating all are commercial beyond. in improve in our increase to our achieve capabilities operational XXXX and made and gross continuing and and we initiatives together, good growth, progress XXXX leverage through organic margin drive

in high-performing growth front, consistently On West. we to exciting the include reputation, with These XXXX. profitability nursery sales Devil exceptional XX-month acquisition XXXX relationships not and for team, balance large companies which in nursery I remain well for we companies acquisition the pleased based broad in many X our Mountain, With a $XXX with certainly the and over grow added in SiteOne. years. platform with through excellent sheet family million new experienced positioned distributor additions we in as In strong provides while to summary, an acquisition added trailing deep California, mentioned, to an an best our are

managing as Our leveraging good teams we of move creating opportunities momentum many headwinds, into a XXXX. and our job strong did the improvement for

the suppliers customers, about superior we continue to future shareholders create excited for term. our our and long value We for are develop and our as company

the in Now John? year quarter full will through detail. and you walk John more

John Guthrie

Thanks, fiscal We XXXX. quarter Doug. year There increase days X% with of sales XX begin I'll from and selling Slide the for increase a of both our some of results. XXXX. in the the highlights net were $X.XX fourth on sales fourth prior fiscal were billion quarter full year from year Net to for XXX year and XX in reported The X% period. same as billion quarter selling fourth X days $X.XX XXXX. the and

days, X% the selling the with again volume, year to we X% selling fiscal have XXXX. the I in In daily by days driven offset fiscal increased by each deflation. prior Organic X% price fourth quarter will same year as sales XXXX, quarter in compared XXX the partially growth year

sales offset the deflation, by decreased to growth. For X% price partially full year, Organic due volume daily X% X%

pipe, deflation the approximately continues like be PVC Price down which grass fourth was quarter which to and in commodity was XX%. products approximately driven down XX% seed, by

call, our right As quarter but in third GRC. price additional than PVC we reductions for communicated we the due and on direction stickier forecast is deflation originally primarily to price pipe trending

in be incorporate not XXXX, be but for prices. market that to PVC modest the of price business. the form not to by in offset of reflects passed which grass the outlook impact would through experienced in expect current tariffs, that for does pipe X% outlook Our the XXXX the rest continued increases flat down the prices seat, to higher is we by in magnitude and deflation we of This

products, offset we as from solid the despite sales ice lower and products, prices gains, control quarter the growth due deflation market strong for demand the price continued and headwind market includes full Organic and end well the for pause like solid resulting daily volume to fertilizer, we presence. our as which growth quarter, increased for In sales agronomic fourth products than share X% and continue year fourth more for the where expand equipment, which control to X% for melt pricing achieved

products, nursery, hardscapes, X% accessories due irrigation, quarter to which the decreased commodity lining landscaping includes price outdoor Organic fourth for deflation. landscape daily and sales for

organic For in dilly year, market. decreased demand full landscaping price due the and upgrade the sales products weaker to for end deflation X% repair and

the sales. Acquisition X% daily the reflect solid Geographically, in to out or our and achieved X comps completed growth experienced fourth in tough impact sales of in quarter. to and Southeast sales markets achieved decline deflation, hurricanes, other approximately contributed positive agronomic the Helene acquisitions We with in XXXX, of due million sales and price to attributable We sales, X sales net regions which growth XXXX growth. organic strong markets $XX

for sales approximately sales $XXX growth. provide fourth the year XXXX, later will fiscal quarter X% our $XXX the contributed profit For or Scott acquisition to Gross for from year X% the more million was prior acquisition million, regarding strategy net an details in was XX contracted on which costs, higher due to of a the discounts increase XX.X% compared to fourth acquisitions. quarter period. Gross freight points and basis margin customer call. impact negative

impact The and and closure X consolidation the negative acquisition the primarily locations. Pioneer of driven by was Pioneer integration

profit by gross points and decreased margin realization XX.X%. fiscal lower basis For X% reflects from XX impact gross in positive to offset year XXXX, partially margin gross The the decrease price increased acquisitions.

to in the of closures. Selling, in SG&A percentage primarily to basis fourth both as net general increased acquisitions the SG&A consolidations and million and SG&A, sales administrative percentage of quarter net XX% SG&A XXX sales quarter. expenses, points a for The reflects impact XX%. the of increased and as or approximately $XXX increase a

total closed locations in and We with or fourth EBITDA business $XX of million which The $X.X the approximately the locations consolidated XX during XX million adjusted SG&A included in is in base approximately impact of results. total, our quarter. closures in

service to branches to customers sales. the expect the cases, in majority expect market the As in and therefore, same from a consolidations we closures, most with of and reminder, other retain

SG&A and during quarter, the closures. X% of excluding Our grew base business the impact approximately consolidations

sales approximately reflects SG&A XX.X%. points percentage acquisitions SG&A sales and year, sales higher with The percentage increased net the resulting impact billion deleveraging as SG&A to our a as higher a $X.X primarily full SG&A of from the of XXX increased to the and For net basis of decline. XX% organic

compared the and base to year, SG&A for flat of prior the excluding year, branch For consolidations the full business impact the closures. was

were The fiscal fiscal compensation. tax excess increase tax XX.X% decrease stock-based XXXX XXXX year due benefits year fiscal benefits a to the for $X.X recognized for fiscal in Excess compared reported year. for from rate XXXX tax XXXX. to $X.X was tax of effective as Our rate was year the to XX.X% million compared million primarily in the for

XX% We benefits. rate as excluding between excess will expect the be XXXX discrete fiscal year and such tax tax effective items XX%,

year higher price recorded due SiteOne XXXX attributable income reduced of negative of We for impact fiscal year quarter decreased to the Cyclone $XX.X fourth a SG&A the prior fiscal to compared realization. for to to a loss and million loss deflation of net lower attributable year $XXX.X gross the XXXX net The attributable loss Net million period. from for margin. million and to of million $XXX.X our XXXX in to was net $X.X

was the weighted share fourth year. fiscal We compared XXXX XXX,XXX $XX.X for average the Our XX.X $XX approximately XXXX shares million XXXX million repurchased count diluted fiscal in fiscal share diluted and the count for quarter the were to year XX.X of million. XXX,XXX for year shares million

for XX% the EBITDA basis million prior to fourth XXX X.X%. $XX.X decreased for EBITDA Adjusted the million quarter to compared to points period. Adjusted contracted margin year $XX.X

For decreased the to XXXX compared X.X% million EBITDA the Adjusted X% basis the $XXX.X margin $XXX.X adjusted year. fiscal for fiscal year, XXXX full to for decreased points to XXX year. EBITDA million

by XX% the interest rest includes million attributable of and adjusted a year, fourth and to quarter interest noncontrolling EBITDA The Adjusted million reflects its respectively. retained Double the in EBITDA of equity President. $X.X full for share $X.X the noncontrolling Mountain

Cash to increase approximately compared flow balance due on end statement $XXX working Slide XXXX improved end brief Working prior The primarily the is provide reflects additional million fiscal fourth operations increased acquisition. the We shown the primarily working to would increase approximately capital million year flow year capital at sheet I quarter cash year. our million of period. in capital flow compared $XXX was The $XXX operations XX. $XXX the million Now capital from the to the to approximately working of the from in at prior update to on a as in like from in and cash management.

from Cash $XXX period million cash working flow from approximately offset approximately investments $XX year. decrease compared reflects was approximately cash approximately income, the the capital operations prior the net for for compared by same of full in management. improved $XX The primarily quarter XXXX. We million million for the partially fourth to flow million made in to in in the year decrease $XXX operations

The reflects XXXX. increase fourth in investment quarter greater acquisition the of

XXXX, made For compared year fiscal of million acquisition were quarter the million for XXXX for we XXXX. $X investment year to compared The prior expenditures $XXX in fiscal $XX cash year decrease year in reflects to investments $XXX year million approximately less fiscal to million fiscal period. compared the Capital XXXX.

XXXX. Capital expenditures to XXXX $XX fiscal were for increase million The improvements fiscal year technology. $XX compared million in reflects for year increased investment in XXXX information fiscal year capital expenditures branch approximately and

debt fiscal prior the the EBITDA the at the year of million $XXX compared at approximately X.Xx prior months adjusted to XXXX X.Xx Net year. $XXX increased XX the to of end year. to with approximately Leverage million at the compared of end trailing our end

to adjusted a Xx. debt target As year-end our is reminder, EBITDA to net X leverage

our had approximately available ABL facility. to balanced the $XXX At and million $XXX under hand we approach available On liquidity approximately of on capacity million, which allocation. million consisted in capital year, Slide cash highlight of we XX, our approximately end the $XXX of

the primary business, goal allocation regarding of our including to invest Our acquisition strategy. in capital is our execution

$XXX net our and complete by we XXXX allocation million capital investments these repurchases made share extent provides achieving to acquisition committed sheet are mechanism to authorization in excess EBITDA. return the We debt This million. capital ratio. CapEx the to target X.Xx maintain year leverage after adjusted conservatively to repurchase have a Fiscal share demonstrated objectives, approximately To balance of also strategy, shareholders. as we us our executed and our us the $XX to allowed conservative leverage maintaining our capital at

strategy. I on to update the our acquisition turn call for will over now Scott an

Scott Salmon

John. Thanks,

bringing on XX, acquired our combined to shown Slide $XXX for trailing fourth companies sales we XX-month for in X approximately XXXX. X quarter, of total year the As net the million a in

year end acquired we company to the X subsequent fiscal of XXXX. Additionally,

added billion have with we acquired XXXX, sales Since XX approximately XX-month trailing companies to in $X SiteOne. net

leading to a On XX, Turning find December Dallas, most products in wholesale will provider in Wholesale makes Worth we addition through Texas. on Slides distributor fast-growing the Nursery, acquired market. acquisitions. The of of the nursery you wholesale XX, information XX OakStreet Dallas/Fort single-location OakStreet our nursery recent us

December X, Austin Worth. across of Stone Custom a extends Texas. to leading a On Francisco locations Colma, nursery Custom majority-owned X California. products joint Nurseries, hardscape January the wholesale our in and And our wholesale acquired wholesale Stone, Houston, Mountain, Bay capability The presence of extends in on SiteOne's products our distributor acquisition XX, venture we leading Dallas-Fort finally, acquired our Pacific addition customers hardscape with Area location in single California. of serve improves distributor and San in This presence nursery Devil

acquisition first XXXX, and joined to the is April strong going more we This forces opportunities this anticipate wholesale expand we forward. platform nursery Mountain in Devil since for

our full and products significant line all and adding services our markets. continues Summarizing on a us providing Canadian Slide of customers acquisition U.S. forward by toward in create value and landscape of major to excellent talent for goal SiteOne to XX, moving our strategy

companies strong a ability SiteOne lines acquired I outstanding to we their on sheet business balance continue team commitment thank newly entire and the joined welcoming site when family. they and the to for the and a come. for a to work for pipeline SiteOne years across place great to making teams SiteOne geographies, to passion and all our adding in of to robust With confident want are

back turn Doug. I call now the to will

Doug Black

wrap XX. Scott. I'll on up Thanks, Slide

like moderating seed, increases and across rates, supply declines grass mitigated tariffs we by products. move with . price Against affect backdrop, our this other uncertainty that labor into our potential pipe and to markets. XXXX macro continue we in deflation could products As much expect in commodity PVC XXXX, interest with there's price

full expect prices year the X% be flat XXXX. for to to down we Overall,

In sales terms to roughly we of comprises end of construction, XX% be expect new our XXXX. in markets, residential which flat

home values constraining inventory build interest high demand, are to home rates and being low, builders are new with but loans. Continued new continuing elevated

expect products landscaping end demand we this stable for Accordingly, market. in

solid New believe will XXXX, to steady our positive which XX% activity of good is the we demand. year, commercial compared as which construction, it in XXXX. remain project was sales, continues of to in represents indicator be teams our Seeding continued prior from services a

remain and this Our weakest we market single-digit declines. will which with upgrade customer flat backlogs solid, believe sales that XXXX with market, the commercial repair XX% be in our end The represents and of high end volume our year. market

quarters, believe and past this stabilize, we seen will have the Over repair and XXXX. in be end to upgrade market slightly flat that down few we

sales. maintenance represents sales which in the growth Lastly, XXXX of We achieved in volume profitable market, market our our end XX% share. teams good as gain

of backdrop This to the with to XXXX. XXXX. the expect low in expect steadily benefit more price daily volume growing initiatives, the commercial continue offset maintenance organic yielding sales single-digit end market and for our year growth sales full than deflation, We we

achieve actions expect be branches, XXXX, in solid acquisitions. by in good to expect our margin. improvement to Pioneer operating contribution focus leverage We and yielding in gross and in our to XXXX address taken margin reduce from than higher we SG&A, integrate the driven XXXX adjusted initiatives EBITDA our XXXX Strong

have year. to during more to we family factors companies of we mentioned, high-quality targets, to contribution $XXX good these our we range the All does mind, year Scott be of SiteOne full the pipeline adjusted excellent acquisitions. as in add the acquisitions, of EBITDA remainder a in and terms million. of from expect This for the not in million factor fiscal range expect to any XXXX unannounced $XXX In

to continue I passion, me amaze teamwork closing, like and SiteOne to associates our would with In sincerely selfless all their thank service. commitment, who

We partner. is for joined to them tremendous I us our and supporting a to it for us a suppliers all for stakeholders. allowing value increasing thank also customers like would be be with strongly to team, have and as our deliver their we our so honor true

for questions. line the open please Operator,

Operator

[Operator Instructions] Our Baird. David Manthey comes with question first from

David Manthey

acquisitions I'm a is most any And branches if of impact pioneer way demand and and those Guys, can are vacuum? focused X cost efforts regardless there pricing initiatives on the market XXXX? docket wondering you the and of in the so, and everything, dimensionalize for the impactful

Doug Black

broadly, a in company, good are to big Yes. job SG&A that we will and the managing of XXXX. say I across branches the doing difference. and would do make Pioneer while David, continue a we focused

foundation place we've work lot of a done of branches. to little saw lot mostly those but We As a that, put them perform. from financial a XXXX on bit benefit in of in there cause to

we're for certainly, And looking of leverage. that SG&A that. terms in good results out So of solid up shows

numbers... So have the John, I don't

John Guthrie

specifically to from our perspective. from of gross a Pioneer getting leverage we're and be margins guidance achieved SG&A that too most SG&A initiatives, you're on most those is is say, of branches to numbers, reflection being by without what's the Yes, specific the the seeing slightly, this that leverage the do focus and the on up would year in that I just -- margin going expect while in in general, be we of embedded improvement the X

David Manthey

intensifying -- second, be your Are hearing And still a of from risk a Okay. about then your seed it labor customers. factors like already the sounds then couple is would factor customers you issues. labor of anything grass and supply

what look I don't of you we seed know have into until type then And on get or the grass the some starting preview Will season? not Or both. signs? you those are market. those peaks like initial know we factors But either Clarence a see if to

Doug Black

it. lot take heat. Obviously, there's a impact. a grass John labor we and haven't seen the No, I'll any take talk can yet of about

I concerned, they have but of impacts yet. think are heard not our seen significant some customers we've

year. Now in it's early the

we'll I So in spring. the think see

be big quickly, we'll a So see issue. it's I fairly going to believe,

issues been I and And just issue labor cetera. around the in seem and at of we would time, help an them agile those et products, with course, constraints say that that. SiteOne for a them for has long the -- our can serve working landscapers that we customers pretty that with be way and to

will So see customers through. to we're But going before John, it to you seed. address if yet. that we're with our see get together -- I do to working in the think later impact spring -- impact we want impact, grass meaningful haven't seen be any

John Guthrie

to first second time the which to XX% roll really be perspective half probably for know just of the the past get frame, we're in the a certain May going year. in going won't the over to just have half until this deflation, regards April, quarter. We year, it's existing With on of was where

I really could so demand general down and think less the spring see have our supply where than season. year, is upon we'll based it to but thought this flows selling slightly, be

Operator

question next UBS. Damian from Karas Our with comes

Damian Karas

be tariffs coming You guidance. to your how would sense factored not And your in mentioned quickly? there into are that versus industry us give a of of be likely prices Would do inventory terms you pass also you lag Mexico. Or just your product that said able for some China out is your much cost? sales Could to expect through potentially raising that this of price. you and relatively could

John Guthrie

be perspective. just But relatively when will quickly pass-through will price outstanding We quickly. perspective. from suppliers not has that market, prices like generally honor I announced that gets through certain there relatively the increases that orders from would our from it SiteOne pass this it's historically, the mean

-- was directly XX% of of But Mexico buying have think expect that XX%, you not the We we're Mexico, of long to Canada component to let's not we that, that's midpoint kind probably sourcing that have of say, China term, -- say pass-through, there a sales tariff of if let's all is where if pass then estimate ballpark but our and would a go and kind all use of But China. was with that. you suppliers it say, majority through. XX% number if would considered and being XX%

Damian Karas

business? if as seeing That's been wondering just state business you something out I on is helpful. And you're your California obviously, your there. wildfires implications your And to the devastating that and an date? impact important potential there's longer-term for near-term as was thoughts well any an that for on

Doug Black

we're devastating of of all to business, business new sad terms is has that But in our lives. California, see largely going California a Well, fires lot our construction. Yes. impacted obviously, in the in

of maintenance much but a most . the smaller component, country. have than it's We

will as And rebuilding so in Obviously, would over time, communities. impacts more of have marginal, of on a those been with are And the major. say, the rebuilt, that's short in, long-term term, participate we'll benefit. But I go say. our landscape but headwind, homes business the nothing obviously, minor I'd

we of terms none In luckily, were facilities, our had that affected.

impacted. were business we're in had we've hurt not nobody our who not were some But and of that of associates care the We the disrupted and luckily, kind facilities was term. was -- taking short disrupted

Damian Karas

along. hear insight. We're it Thanks your glad We'll pass to . that. for

Operator

comes question Truist from Keith with next Hughes Our Securities.

Keith Hughes

You earlier the brands had rationalization. of talked about some

just affected that $X.X it in quarter And doesn't I think that was assume reoccur EBITDA. sure want something fourth XXXX. that's correct. million I make to that's I

John Guthrie

we closure would those of The correct. $X.X in charge branches, That's for that and repeat right to the That's million XXXX. expect not the a onetime is number.

Keith Hughes

and give you Okay. us now? ballpark sort percentage to so have pipe the a down what of of And of troublesome grass products number deflation, sales, PVC been are if a those can

John Guthrie

mean then is the I PVC grass And came I XXs. from, think, in to at down pipe XX%. down

quarters. in So reductions, to and year. but for XX-plus still potential potentially And is a this guidance additional say, there those reductions magnitude we we of continue PVC think now, pipe, expect would We that be pressure. think couple should the the percent right we're to pricing not that more then I could embedded seeing our

really We there, think a a negative X%, there's number X% and in do to that's the don't the a have call. that on marketplace. announced referenced in risk embedded But we on of the kind finalized X% or

Keith Hughes

of sales, are to. a percentage though, product what what As -- these your they have

my answered You next already. question

thank So that. for you

John Guthrie

We of is do sales. X% pipe . PVC roughly million $XXX seed grass our sales and in roughly

Operator

Jefferies. question comes Stephen from next Our with Volkmann

Stephen Volkmann

to locations the that's more up takes? to with obvious. of Curious the you're do stores But you corporate if that stores get how the little in long can sort provide of do you a bit think what margins doing appreciate you relative closing detail to also Pioneer do focused those what average? certainly the And rest and

Doug Black

first. I'll Yes. take Pioneer

of a we a strategic. Pioneer bit turnaround highly before, mentioned As opportunity, was

integrated. business was fully get first to system, which order so now And is the on it integrated of our

copy, were Pioneer our wanted fact, the In things to did with we we systems that able frankly. upgrade to that quite some of

now with we successfully. were leader opportunities quite And Pioneer significant run management local then staffing, is downsize. that a there our board that's staffing in to under new have on Arizona bulk business

And freight next be, where that many trucking, been that's rightsized. if will. was The of trucks not was the the so and been And it too all and restructured, staffing cost needed to been you has team kind rightsized. has

out on the on side lot So side. the SG&A delivery of a cost cost out

of we mentioned, to consolidated X efficient. the we As branches the network make

locked so kind like look you will, of of XX% And 'XX frankly. perform. the to quite loaded, the is you of leadership, really into at When of branches and broadly, kind a this go if again, is lot we branches and it -- focused our we're and feel bottom

been done. And so has that heavy lifting

bit have rightsizing. a and resolved. service to And then issues of that there's be there's mix, There's sales product

set 'XX, as got It been and the in lifting for significant so broad XXXX, we We marshal come of And heavy a for to -- has won't 'XX, financial a frankly, through go focused into of benefit benefit bit little expect the those of all done. but But Pioneer, 'XX. branches multiyear. in we right? it's quite a again, lot in

up 'XX, perform. expect 'XX a be and of to say, let's get Pioneer where But expect by good we amount in we to branches them 'XX. performing We'll those and benefit

some So us profit it growth. if extra gives you terms use, in will, of

the but mentioned, those leverage. not or in on with through, over we SG&A EBITDA it expect this move come a adjusted to year And EBITDA John see year, significantly year. of obviously, year just in front, -- the improvement over next next the You'll as margin and our lot this

Stephen Volkmann

Great.

Okay. I stocks is? there That's you stock bought range. think, in $XX its of the at more kind helpful. sort it given in gears, chance you on trading I the your of recent any price of end million quarter back, Is switching the that guess, low kind And versus the where of, of bit M&A focus and buybacks stock little then and sort a

John Guthrie

think the is part M&A business of the is our business our growing focus on and in investing #X I growth and strategy.

opportunities think So on to to say back That's going good investments #X opportunity there business. -- be and to the great we're just but making repurchase and to won't a I QX don't not business growing our in repurchase shares did M&A, shares. is M&A like we

Doug Black

still to mode we're that, the Yes. add And in building in just -- we're growth SiteOne. building to

existing the in acquisitions but investing investing also us. is strategic for both in so business, And

agreement. And so SiteOne, is can business, to if ready a sell and an to with get seller we're if obviously their to if going it we it's acquire

And so that's #X.

the excess in And the so cash we tend at those building growing then invest have cash shareholders. to strong business, opportunity if business, the let's to flow. back it, is the okay, give next to look and we but flow we And the funds business, shares we're purchase have

the it that's So clear in. see order we

our And how comes XXXX business. after purchasing shares and so we'll investment but building always of see and growing goes

Operator

Perron-Piché with comes from Goldman Sachs. Charles question next Our

Charles Perron-Piché

program, and initiatives share gains do in year the XXXX. that to are further between see the that biggest and are share label And drive market gains commercial others? opportunity unpack further great beyond? expected see First, supporting you where you coming this it's maybe partners private Can initiatives and through to for

Doug Black

Yes.

a lot that front the with go -- end. of our share into start So things our there's gain. I'll

our of XX,XXX with to very Evidence the small a small XX,XXX opportunity now. partners We new customer of significant members up that had program that's grow our is We have to efforts. customers. we mentioned

Most small of those are customers.

so and we're And -- small with -- really underweight customers general. in we're

our market with would we below with smaller large share, at significantly and the look that above you If be the that XX% customers significantly customers.

driving margin part there, helps are our growth. very a customers, way of that's improvement. long marketing go customers It a So program. our gross and have drive we A small also and of that Hispanic targeted some there's to Hispanic

an our with percentage from to points that XX% our are We want up year. bilingual branches We to drive mentioned gained last continue to XX%. base, awareness Hispanic customer X up. We unaided

we're excited about So that.

So marketing our working. is

terrific grow. to are so those And initiatives ways

are product types to grow higher hardscapes, fittings categories, to tools, And across products. lighting, are just parts those for into growing of lighting, product then super a label control, areas also erosion grow competitively lines really those Pro high-growth right? We turf, spans SiteOne private in priced we categories. our margin that's And market. of other Trade with in a continue our but and fragmented Our the products, synthetic

lines. and the lines able ability, drive our our sales mean, growth those product to far by I We're largest, our portfolio, product with in product we're

offshoot we're driving of maintenance, we're growth a an is For maintenance, of pest which good and in control, growing of there. kind lot

helping on they're general, X It's in we force, say, sales with get about installed going I'd our more much really Salesforce sales then after. force and becoming CRM And that years focused mainstay ago. specific our opportunities today, it's year The We purchasers up We that's X it final year. was before. enabler is big the ramping online, now up for digital. Digital have what XXX% digital. were a this us. double has been regular We're and

pay digital about pricing that et check to have and their use cetera. to We XX,XXX over bills, customers

leader in customers space, a cause them efficient. for It makes in more those makes to business their them, move we're doing digital business because the so it And of things easier more us. to

the to see impact digital excited has. we're so And that

our about arrows will ramp over if So years. in last think a you quiver, to pushing couple all, of continue had lot success we're the that them excited XXXX. we've the and and We will, different up in we're of

Charles Perron-Piché

a think good all Got the margins driving a EBITDA color, adjusted the just deflation -- high ahead. macro it. recognize we outlook the limited visibility over on bit looking and a maybe Doug. And XXXX of little in more That's was at level. year challenging when X%. And more I Obviously, terms

today. at So improve place. in encouraging initiative ongoing to let's the it's next business, the I look adjusted when XXXX double-digit the confident in how relatively what the demand guess to similar return with SATX to conditions Should that, X over hear that say, against a can they you're years, EBITDA that you margin? to are are expecting margin remain But you

gains the gross And in see and the do effort? initiatives in of improvement. you other drive improvement margin, maybe SG&A And volume cost the leverage, words, terms opportunity both reduction organic the how for but most where -- much particularly could

Doug Black

of here path to get business, a stated XX% to We've see that. objectives the or Yes. of order to And as I it clear as years. and double mean couple the get back you is from there back of XX%. objective know, you we digits. confident of But more next our digits, And we're long-term very double same. over first to are be mentioned, the to above will

more productive continuing enhance Our making our organic growth improve and it. drives initiatives course, in, acquisitions and come to our they designed they are when business margin. around that And gross our of

where and many of When inside have regions areas large have improvement. So look that that SiteOne, up we we long-term are you years objective is.

objective. that efforts see sends And bring clearly whole need branch going the to of big we a in so getting organization bottom we where And again, that us the up to be there. as are toward focused matter It's that we be. well, branches longer-term as just our right, then

double very digits. So confident to back get to

term. a path where we know be can to see company should at but we point, the steady there, continuing You of profitability not improve the stopping that longer

Operator

Matthew comes with Barclays. from question next Bouley Our

Matthew Bouley

increases would about increases the increases timing to all price some flow wanted goods kind of or started noncommodity the that. have begin typically finished of mentioned the ask goods on any and of to yet kind SiteOne? I to those price guess now around here I these through mid-February, I for when you the in through on guess, of pass finished you price

John Guthrie

those now. and by It's across will XXXX our but be new our pricing in in We're going putting rollout, is right a mid-February. the -- country

Matthew Bouley

Perfect.

QX of Obviously, on you then I touch from the a year. think the back little year. that about of I exited side, bit prior margin And just a cadence to Okay. improvement bit. little down slight still on secondly, wanted for kind the gross the just talked

you're down margins year? that and terms it evenly slight see bit everything in Or be we a the would at the is seeing, looking inflation of improvement? else all you flat more that still later spread then and in the cadence half Given or of and improvement in kind of little gross first

John Guthrie

Yes.

to of could early running last will expect be majority from for QX should the it think QX and would general, benefited all in that that almost I knowing could make a a be I little from an be most say, be year, of really, full spring weaker where little in that's in cylinders QX. pressure perspective. year. we QX, our business numbers the the But full QX, improvements we

Operator

Mike Markets. next with comes Capital Our question RBC from Dahl

Unknown Analyst

This is Chris on for Mike.

to down in X% Just going quarter, price. a back you guys the pricing saw this

maybe in guys I if improving look to of the first So we give the and the second? you year? course Should the more expect similar was hoping on half for color you pricing magnitude what like expect in decline

break And down flat slightly to then non-commodity. pass through out assuming and commodity within expecting guide, you your on what you're specifically could to you're what for inflation

John Guthrie

and of overall half QX X% positive second and the then up in out year. it the be negative in in be to QX then but kind to moving negative expect of there, split deflation around would slightly X% we Well, price

Michael Dahl

about That's of maybe on up half thinking When of you end terms you volume your are helpful. volumes. in And market blend how second then expectations, first kind growth? half, similarly

John Guthrie

don't there We I have beta. measurable a talked think second about half. market. and economic half recovery. Doug resilient strong guidance is in our the first think a difference don't we We don't into built

going is our it's hitting of -- year in we're to so through recovery of it's on market for And at the numbers our where business. kind not planning the initiatives. we're remainder a not and the huge expecting The be

because on this the between I QX sales that a spring the is volume growth last with could from do one, guess call QX it last mentioned will I in we into the early and the we be there and year, QX QX swing was I pulled and X% believe that just we -- only thing saw year.

Operator

Our next with Stevenson Capital comes Loop Markets. from question Jeffrey

Jeffrey Stevenson

demand more sequential flat So improvement year I provide during upgrade the and that fourth wondered be repair bidding or and how demand it could end like and sounds activity you nice next year? any quarter. on this has just you confidence demand gives a you will what trended if in details saw market

Doug Black

Yes.

are tied quarter sequential nice second that products and fourth our at look quarter. hardscapes from a to saw we the say, like to remodel lighting, the third improvement, we the when quarter So to

And seems kind it has stabilized. so as though market of

year the the than first it but mean certainly I half in was weak was it last sure, half. for it second in weaker was

see flat down. to that of I was into as could And to be it -- down continuing be year, year us. it don't we our called think this we is we it as feel talking could customers, but that year, will next it think so down next slightly behind work think the we slightly we kind be think and it We much then

Jeffrey Stevenson

expectations then Understood. year sounds another you strong progress No, through things largely in acquisitions. as the that's remain after helpful, status of Have pipeline Doug. significant M&A last quo industry. And year pretty robust seller you seen any changes in if the

Scott Salmon

be No new demand. expect and I would forward. status still we year this pipeline, companies you Yes. to to say kind going strong continue terms pretty close . in would as be for while and add it's and significant We boring, of quo. expectations it have a very able mentioned, changes market in of to

Operator

our Black We Doug now for I turn of floor the have back to question-and-answer would session. comments. closing over like reached end the to

Doug Black

Again, in Thank you the with suppliers, you quarter. SiteOne, in Okay. for building sport, all honored next great we it's big to you care. our a interest them look again company. our to end certainly thank team we forward customers and a to the to . are be at your Take today, appreciate of speaking us and and our associates joined and much joining very

Operator

concludes today's Thank you participation. your for conference. This

disconnect lines may your You at time. this

SiteOne Landscape Supply (SITE) 12 Feb 252024 Q4 Earnings call transcript