SiteOne Landscape Supply Announces Third Quarter 2016 Earnings

SiteOne Landscape Supply, Inc. (the "Company" or "SiteOne") (NYSE:SITE) announced earnings for its third quarter ended October 2, 2016 of the fiscal year ending January 1, 2017.

"Despite softer markets than anticipated, we delivered strong year-over-year growth in Net Sales, Gross Profit, Net Income and Adjusted EBITDA," said Doug Black, SiteOne's Chief Executive Officer. "We continued to expand our Adjusted EBITDA margin through excellent execution of our operational initiatives. Our organic sales growth initiatives are still in the very early innings and we expect them to contribute more meaningfully in 2017 and beyond. Our acquisitions performed well and we are accelerating our M&A activity with two acquisitions during the third quarter, the purchase of Loma Vista Nursery in November and additional acquisitions that we expect to complete during the winter. We are encouraged by the momentum from our commercial and operational initiatives and our deep acquisition pipeline as we head into 2017."

Third Quarter 2016 Results

Net sales for the third quarter of 2016 increased to $444.5 million, or 10%, compared to $404.5 million for the prior-year period. Organic sales growth increased 2% for the third quarter. Third quarter organic sales were negatively impacted by softness in the summer months driven by hot and dry conditions that resulted in a slower start to the fall seed and nursery planting seasons. Importantly, agronomics recovered as the quarter progressed. Recent acquisitions contributed good sales growth in the quarter.

Gross profit increased to $138.4 million, or 17%, compared to $118.4 million for the prior-year period. Gross margin expanded to 31.1% for the third quarter 2016, which was a 180 basis point increase compared to 29.3% in the third quarter 2015. Gross margin expansion was driven by ongoing improvements in pricing and category management.

Selling, general and administrative expenses ("SG&A") in the third quarter increased to $107.7 million from $98.2 million in the same period last year, reflecting the impact from acquisitions and investments in personnel to support our sales growth and strategic initiatives. SG&A as a percent of net sales was 24.2%, flat year-over-year.

If you liked this article you might like

3 Marijuana Stocks That Could Triple From Legalized Pot

Is Tractor Supply Hiding Behind the Bad Weather?

Is Tractor Supply Hiding Behind the Bad Weather?

SiteOne Landscape Supply Has a Terrific Business Model

SiteOne Landscape Supply Has a Terrific Business Model

Jim Cramer's 'Mad Money' Recap: Here's This Week's Game Plan

Jim Cramer's Top Takeaways: American Water Works, Aqua America, SiteOne, Dominion Resources