SiteOne Landscape Supply, Inc. (NYSE:SITE) Q3 2023 Earnings Call Transcript
SiteOne Landscape Supply, Inc. (NYSE:SITE) Q3 2023 Earnings Call Transcript November 1, 2023
SiteOne Landscape Supply, Inc. misses on earnings expectations. Reported EPS is $1.25 EPS, expectations were $1.48.
Operator: Greetings. Welcome to the SiteOne Landscape Supply Third Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to John Guthrie, Executive Vice President, and Chief Financial Officer. Thank you. You may begin.
John Guthrie: Thank you, and good morning, everyone. We issued our third quarter 2023 earnings press release this morning, and posted a Slide presentation to the Investor Relations portion of our website at investors.siteone.com. I'm joined today by Doug Black, our Chairman and Chief Executive Officer, and Scott Salmon, Executive Vice President, Strategy and Development. Before we begin, I would like to remind everyone that today's press release, Slide presentation, and the statements made during this call, include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections.
A farmer standing in a field with a modern irrigation system in the background.
Such risks and uncertainties include the factors set forth in the earnings release and in our filings with the Securities and Exchange Commission. Additionally, during today's call, we will discuss non-GAAP measures which we believe can be useful in evaluating our performance. A reconciliation of these measures can be found in our earnings release and in the Slide presentation. I would now like to turn the call over to Doug Black.
Doug Black: Thanks, John. Good morning and thank you all for joining us today. We were pleased to see end market demand remain resilient in the third quarter, which allowed us to achieve positive sales volume growth. That said, deflation in select commodity products like PVC pipe, grass seed, and fertilizer, was stronger than we expected, which had a negative impact on organic daily sales and on both gross margin and adjusted EBITDA margin during the quarter. We expect these negative deflationary effects to continue during the fourth quarter, but moderate in 2024 as commodity prices stabilize. In the current challenging environment, our teams executed well by gaining market share, driving positive organic sales volume growth, and managing through the price deflation.
Acquisitions also contributed 6% net sales growth during the quarter. We were very pleased to add six new high performing companies that represent approximately $230 million in trailing 12-month sales to SiteOne during the quarter. Through the execution of our commercial and operational initiatives and our acquisition strategy, we continue to build SiteOne as a world-class market leader for the long term while managing through the near-term market challenges. We remain confident that our well-balanced business, strong balance sheet, exceptional teams, improved capabilities, and robust acquisition pipeline, position us well to achieve strong performance and growth over the coming years. I'll start today's call with a brief overview of our unique market position and our strategy, followed by some highlights from the quarter.
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