0001650729-26-000011
SEC filingA challenging quarter defined by weak demand in residential end markets, where pricing power and margin discipline partially offset volume declines and acquisition-driven cost growth.
SiteOne navigated a difficult demand environment in the first quarter of 2026, with Organic Daily Sales declining due to unfavorable weather and soft demand in the new residential construction and repair end markets. Despite these volume headwinds, total revenue remained relatively flat at $940.1M compared to $939.4M in the prior year period. This resilience was largely attributable to positive pricing execution, which offset the decline in organic sales volume. The company's ability to maintain revenue levels amidst cyclical downturns in residential end markets highlights the effectiveness of its pricing strategies and product mix management.
Gross profit increased to $318.8M from $309.8M, driving gross margin expansion to 33.9%. This improvement was a primary driver in reducing the net loss to $24.1M from $27.3M year-over-year. The decrease in net loss was primarily due to the increase in gross profit resulting from margin improvements. However, profitability gains were partially offset by higher SG&A expenses, including compensation and facility costs, which management attributed to the impact of acquisitions with higher operating costs. Consequently, operating income improved to a loss of $25.9M from a loss of $29.5M in the prior year.
The company continued to execute its growth strategy through acquisitions and capital investments. Capital expenditures rose to $23.0M from $14.8M, reflecting investments in supply chain initiatives and the expansion of the distribution network footprint. Free cash flow was -$145.1M, compared to an outflow of -$144.4M in the prior year (operating cash flow of -$122.1M less capital expenditures). This cash usage aligned with management's commentary that higher borrowings under the ABL Facility were intended to fund acquisition investments and capital expenditures. Management remains focused on advancing procurement and supply chain management initiatives to better serve customers and reduce sourcing costs, positioning the company for improved operational leverage as demand conditions normalize.