Sherwin-Williams reports first quarter 2024 financial results

The Sherwin-Williams Company announced financial results for the first quarter ended March 31, 2024.

• Consolidated net sales fell 1.4% to $5.37 billion in the quarter

• Net sales at Paint Stores Group stores open more than 12 calendar months were essentially flat for the quarter

• Diluted net income per share increased 7.1% in the quarter to $1.97 per share, compared with $1.84 per share in the first quarter of 2023

• Adjusted diluted net income per share increased 6.4% to $2.17 per share in the quarter compared to $2.04 per share in the first quarter of 2023

• Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 2% in the quarter to $896.2 million, accounting for 16.7% of net sales

• Reaffirmed full-year 2024 diluted net income per share guidance of $10.05 to $10.55 per share, including acquisition-related amortization of $0.80 per share

• Reaffirmed full-year 2024 adjusted diluted net income per share guidance range of $10.85 to $11.35 per share

Heidi G. Petz, President and Chief Executive Officer of Shersherville, said, "In the seasonally smaller first quarter, Shersherville delivered consolidated sales, gross margin growth, diluted earnings per share and EBITDA growth within our guidance as demand continued to fluctuate in several end markets. We also continued to execute on our capital allocation strategy, investing $546 million in share repurchases and increasing our dividend by 18.2% during the quarter."

Petz added, "Paint Stores Group sales were up slightly on a strong double-digit comparison due to the modest contribution of our February 1 price increase, which will be realized even more in the second quarter. Our recent growth investments have helped drive market growth in residential repainting. Commercial and conservation and Marine sales also grew."

"New home sales fell as expected, even as we saw momentum among homebuilder customers. Delayed capital expenditure projects impacted property maintenance sales. In the Consumer Brands Group, demand for DIY coatings in North America remained weak, partially offset by international growth. Segment margins improved primarily due to higher absorption of fixed costs in manufacturing and distribution, lower raw material costs and improved performance in Latin America and Europe.

"Sales in the Performance Coatings Group were in line with expectations as demand varied by business and region. Industrial wood and coil sales have also increased." "Sales in the automotive refinish business were flat compared to sales of around 15%, and sales in the packaging business were down, as expected. General industrial demand was weak across all regions. Segment margins increased year-over-year for the fifth consecutive quarter. Across all areas, we will continue to execute on our priorities, which we expect to drive growth momentum over time."

The decline in consolidated net sales was primarily due to lower volumes in the Consumer Brands Group, including the impact of the divestment of the China construction business and the North American High Performance Coatings Group last year. Paint Store Group net sales were essentially flat in the quarter.

Paint Store Group (PSG) net sales were $2.873 billion, with the increase primarily due to the modest impact of recently announced price increases, and sales were roughly flat compared to the same period last year.

Consumer Brands Group (CBG) net sales were $811 million, with the decline primarily due to a single-digit decline in sales percentage and a 2.6% impact from divestitures in 2023. The increase in CBG segment profit was primarily due to higher fixed cost absorption in this segment's manufacturing and distribution operations, moderating raw material costs, and improved performance in Latin America and Europe, partially offset by lower volumes in North America.

Net sales in the Performance Coatings Group (PCG) were $1.681 billion, primarily due to lower sales in North America and Latin America, partially offset by higher sales in Europe (including the impact of acquisitions) and Asia. Results were driven by the Industrial wood and coil business, offset by declines in the general industrial and packaging businesses.

Profit in the PCG segment increased 18.8%, primarily due to moderating raw material costs, partially offset by lower volumes in North America.

"We remain confident in our customer-focused strategy and are in a very good position as the paint season begins," Petz said, "While uncertainty in the macroeconomic environment remains, we see increasing opportunities and we are encouraged by the demand and sentiment for professional construction in April." Our team is motivated, determined and focused on the right priorities. We expect equity gains and returns to become more pronounced over time. We continue to have high expectations and are committed to meeting or exceeding our goals."