Sherwin-Williams Company (NYSE:SHW) shares fell Tuesday after the company reported first-quarter results that topped Wall Street expectations but issued a cautious outlook for the year.
Sherwin-Williams Quarterly Report
The paint and coatings maker reported adjusted earnings of $2.35 per share, exceeding the analyst consensus estimate of $2.26. Quarterly sales rose to $5.67 billion, ahead of the Street view of $5.56 billion.
Segment Performance Shows Broad Growth
Net sales in the Paint Stores Group increased 3.7% year over year to $3.05 billion. Consumer Brands Group sales jumped 19.2% to $908.3 million, while Performance Coatings Group sales climbed 6.5% to $1.706 billion.
Gross profit rose to $2.78 billion from $2.56 billion a year earlier, and gross margin expanded to 49.1% from 48.2%. The company ended the quarter with $216.9 million in cash and equivalents.
Chair, President and CEO Heidi G. Petz said selling, general and administrative expenses increased by a mid-single-digit percentage, excluding headwinds related to Suvinil, non-annualized operating costs, depreciation tied to new facilities and foreign currency translation.
Outlook Signals Caution
Looking ahead, Sherwin-Williams expects fiscal 2026 adjusted earnings in the range of $11.50 to $11.90 per share, compared with the consensus estimate of $11.74. The company forecasts net sales growth in the low- to mid-single-digit percentage range for the year.
For the second quarter, Sherwin-Williams projects net sales growth in the mid-single-digit percentage range compared with the prior-year period.
Macro Headwinds Weigh on Demand Outlook
Petz said the company expects little to no recovery in most end markets this year, citing current customer sentiment and leading indicators.
She added that geopolitical events are contributing to demand uncertainty, along with potential inflation in raw materials, energy, logistics, and packaging.
The company said it is implementing targeted price increases across end markets and geographies and expects full-year price and mix to trend toward the high end of its prior low-single-digit guidance range.
It also plans to offset cost pressures through aggressive cost reduction measures, while remaining prepared to enact additional pricing actions if volatility in raw materials persists.
Sherwin-Williams Stock Price Action
SHW Price Action: Sherwin-Williams shares were down 2.66% at $327.14 at the time of publication on Tuesday, according to Benzinga Pro data.
Photo via Shutterstock
Recent Comments