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Paint Stores Fuel Sherwin-Williams’ Q1

Friday, April 17, 2015

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CLEVELAND, OH—Increased architectural paint sales has propelled Sherwin-Williams to a record first quarter, the company announced Thursday (April 16).

The Cleveland-based coatings maker reported consolidated net sales rose 3.5 percent, to $2.45 billion, in the first quarter of 2015 ended March 31.

However, unfavorable currency translation rate changes cut net sales by 3.1 percent in the quarter, according to Sherwin-Williams.

Sherwin Williams
Photos: The Sherwin-Williams Company

Sherwin-Williams' Paint Stores Group saw a 7.5 percent increase in net sales to $1.46 billion for the quarter.

Diluted net income per common share rose to $1.38 from $1.14 per share in 2014. The increase was driven by improved operating results of the company’s Paint Stores and Consumer Groups, according to the company.

Hits and Misses

“It is gratifying to report another quarter of record sales and earnings per share,” said Chairman and CEO Christopher M. Connor.

“Our Paint Stores Group posted another quarter of strong operating results with positive architectural volume growth across all end market segments and good productivity on our S, G & A [Selling, General, & Administrative expenses] investments.”

The Paint Stores segment led the company to ring up a record $11.13 billion in sales for 2014.

Connor said the company’s Consumer Group had improved its operating results for the quarter through enhanced operating efficiencies.

He also noted that the company's HGTV HOME paint program at Lowe's had begun shipping late in the quarter. The product is expected to arrive in all Lowe's stores by May 1.

As for the Global Finishes and Latin American Coatings groups, they are “managing through the negative effects of currency devaluation and weak end market demand in some geographies,” Connor reported.

Paint Stores Prosper

The Paint Stores Group saw a 7.5 percent increase in net sales to $1.46 billion for the quarter, the company said.

Net sales from stores open for more than 12 calendar months increased by 6.4 percent in the quarter over last year’s comparable period. Group segment profit increased by $30.3 million, to $176.6 million, in the quarter.


Chairman and CEO Christopher M. Connor says the Paint Stores Group delivered strong operating results.

The company opened seven net new locations in the quarter.

Sherwin-Williams is the largest specialty retailer of paint and painting supplies in the U.S.

Consumer Group Growth

Net sales in the Consumer Group rose 8.1 percent to $351.7 million in the first quarter, due in part to the first shipments of HGTV HOME to Lowe’s Home Improvement stores, the company said.

Consumer Group profit increased to $55.4 million in the quarter from $51.1 million last year, due to operating efficiencies.

Global Finishes, Latin American Coatings Take Hit

The company’s Global Finishes Group and its Latin American Coatings Group finished the quarter out of the growth spotlight.

Net sales for Global Finishes, which includes protective and marine coatings, decreased 5.6 percent to $469.6 million in the quarter. Unfavorable currency translations changes nipped net sales by 6.9 percent in the quarter.

Sherwin Williams

The company's Global Finishes Group is "managing" despite negative effects of currency devaluation and weak end market demand in some regions, according to Connor.

Segment profit dropped to $38.9 million from $46.5 million a year earlier.

In the Latin American Coatings Group, net sales dropped 8.9 percent to $166.2 million in the quarter, due primarily to unfavorable currency translation rate changes partially offset by selling price increases.

The currency changes decreased net sales by 13.9 percent in the quarter, according to the company. Segment profit dropped to $9.5 million from $10.0 million posted the same period last year.

Looking Ahead

For the second quarter, the company anticipates a net sales increase of 6 to 8 percent compared to 2014.

That estimation would put diluted net income per common share in the range of $3.70 to $3.90, compared to $2.94 per share earned in the second quarter of 2014.

“For the full year 2015, we expect consolidated net sales to increase a high single-digit-percentage compared to full year 2014,” Connor said.

“With annual sales at that level, we are reaffirming our guidance that diluted net income per common share for 2015 to be in the range of $10.90 to $11.10 per share compared to $8.78 per share earned in 2014.”

Founded in 1866 by Henry Sherwin and Edward Williams, The Sherwin-Williams Company is one of the largest producers of paints and coatings in the world.


Tagged categories: Business conditions; Business matters; Coatings manufacturers; Coatings Technology; Earnings reports; Finance; Sherwin-Williams

Comment from Catherine Brooks, (4/17/2015, 2:17 PM)

Wouldn't it be fitting if Sherwin-Williams used some of these profits to clean up the toxic lead paint and to pay for the special education and prison systems supporting children poisoned by the toxic lead paint they sold so well decades ago?

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