Agriculture products company SiteOne Landscape Supply (NYSE: SITE) met Wall Streets revenue expectations in Q3 CY2025, with sales up 4.1% year on year to $1.26 billion. Its GAAP profit of $1.31 per share was 6% above analysts’ consensus estimates.

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“We are pleased to report another quarter of strong operational performance, delivering double-digit year-over-year Adjusted EBITDA growth and meaningful operating leverage despite challenging end markets,” said Doug Black, SiteOne’s Chairman and CEO.

Company Overview

Known for distributing John Deere tractors and LESCO turf care products, SiteOne Landscape Supply (NYSE: SITE) provides landscaping products and services to professionals, including irrigation, lighting, and nursery supplies.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, SiteOne’s sales grew at an excellent 12.7% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. SiteOne’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 5.1% over the last two years was well below its five-year trend.

We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, SiteOne’s organic revenue was flat. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results.

This quarter, SiteOne grew its revenue by 4.1% year on year, and its $1.26 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 3.9% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and suggests its products and services will face some demand challenges.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

SiteOne was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.6% was weak for an industrials business. This result is surprising given its high gross margin as a starting point.

Looking at the trend in its profitability, SiteOne’s operating margin decreased by 4.3 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. SiteOne’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q3, SiteOne generated an operating margin profit margin of 6.8%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

SiteOne’s EPS grew at a weak 3.8% compounded annual growth rate over the last five years, lower than its 12.7% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Diving into the nuances of SiteOne’s earnings can give us a better understanding of its performance. As we mentioned earlier, SiteOne’s operating margin was flat this quarter but declined by 4.3 percentage points over the last five years. Its share count also grew by 1.1%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For SiteOne, its two-year annual EPS declines of 10.5% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q3, SiteOne reported EPS of $1.31, up from $0.97 in the same quarter last year. This print beat analysts’ estimates by 6%. Over the next 12 months, Wall Street expects SiteOne’s full-year EPS of $3.08 to grow 30.9%.

Key Takeaways from SiteOne’s Q3 Results

We enjoyed seeing SiteOne beat analysts’ organic revenue expectations this quarter. We were also happy its EBITDA outperformed Wall Street’s estimates. On the other hand, its full-year EBITDA guidance slightly missed. Overall, this print was mixed. The stock remained flat at $123.99 immediately following the results.

SiteOne may have had a good quarter, but does that mean you should invest right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.