Propelled by a strong showing by its sprawling Paint Stores Group, The Sherwin-Williams Company reported a 9.3% gain in second-quarter sales from the same period of 2011, to a total of $2.57 billion.
Net income also surged, zooming to $227.8 million from $179.1 million in the second quarter of 2011.
|Christopher M. Connor|
Sherwin-Williams chairman and CEO
The company’s results for the quarter and first half represent record highs for sales and earnings per share, said Christopher M. Connor, chairman and CEO. He attributed the performance to “continued positive sales volume and strong operating results of our Paint Stores, Consumer and Global Finishes Groups,” and said selling-price increases implemented across all segments in the previous 12 months are “gaining traction against the higher raw-material costs.”
Connor said Paint Stores Group volume growth was strong across all end-market segments, while the Consumer Group improved operating results through “disciplined cost control” and selling-price increases.
The Global Finishes Group “improved paint sales volume and operating results in an increasingly difficult global environment,” Connor said. “The Latin America Coatings Group is managing to minimize the unfavorable effects of currency and the softening demand in their end markets.”
For the first half, the company reported sales of $4.99 billion, up 11.9% from the same period a year earlier. Net income for the half was $328 million, up sharply from $247.4 million a year earlier.
Paint Stores Group sales for the second quarter rose 14.6% to $1.49 billion, and increased 17.2% to $2.61 billion for the first half, due primarily to higher paint sales volume across all end-market segments and selling-price increases.
Net sales from stores open for more than 12 calendar months rose 13.9% for the quarter and 16.6% for the first half compared to 2011.
Paint Stores Group profit rose to $267.0 million in the quarter from $206.6 million a year earlier, and increased to $379.7 million from $275.5 for the half.
Consumer Group sales for the second quarter rose 5.9% to $397.7 million, and increased 7.1% to $718.1 million for the first half, due in part to higher volume sales to most of the group’s retail customers.
Consumer Group profit was $80.8 million for the quarter compared to $61.4 million a year earlier, and rose to $136.1 million for the half from $102.5 million in 2011.
Global Finishes Group sales for the quarter rose 3.3% to $498.7 million, and increased 6.9% to $981.8 million in the six-month period due primarily to selling price increases, acquisitions and higher paint sales volume.
Global Finishes Group profit was $48.0 million for the quarter, up from $30.2 million in 2011, and for rthe first half rose to $76.7 million from $49.7 million a year earlier.
Latin America Coatings Group sales for the quarter fell 4.5% to $187.3 million, due primarily to unfavorable currency translation rate changes that were partially offset by selling-price increases and higher paint sales volume. For the first half, sales rose 1.2% to $395.9 million.
Latin American Coatings Group profit for the quarter fell to $9.3 million from $15.8 million in 2011, and for the first half declined to $29.2 million from $33.2 million a year earlier.
Paint Stores Expansion Trajectory
Connor said the Paint Stores Group opened 20 net new locations in the first half, and for the year is projecting the opening of 60 to 65 new stores.
In other highlights, he said the company in June completed the acquisition of Geocel Corp., a manufacturer of sealants and adhesives.
Connor said the company is anticipating a “mid-single-digit” percentage gain in sales for the third quarter compared to the same period a year earlier, with net income per share estimated to be in the range of $2.05 to $2.20 per share compared to $1.71 per share in the third quarter of 2011.
For the full year, the company is projecting sales growth in the “high single digit-to-low-teens” percentage range. The company raised its forecast for 2012 net income per share to a the range of $6.20 to $6.40 per share compared to $4.14 per share in 2011.