Hz info,July 22, 2025 -- The Sherwin-Williams Company (NYSE: SHW) announced its financial results for the second quarter ended June 30, 2025. All comparisons are to the second quarter of the prior year, unless otherwise noted.

SUMMARY

¡ñ Consolidated Net sales increased 0.7% to $6.31 billion in the quarter

¡ñ Net sales from stores in the Paint Stores Group open more than twelve calendar months increased 0.8% in the quarter

¡ñ Increased Selling, general and administrative expenses for broader restructuring initiative related to softer demand, sooner than anticipated building related costs and heightened growth investment related to incremental competitive opportunities

¡ñ Diluted net income per share decreased 14.3% to $3.00 per share in the quarter compared to $3.50 per share in the second quarter of 2024

¡ñ Adjusted diluted net income per share decreased 8.6% to $3.38 per share in the quarter compared to $3.70 per share in the second quarter of 2024

¡ñ Adjusting full year 2025 diluted net income per share guidance in the range of $10.11 to $10.41 per share, including acquisition-related amortization expense of $0.77 per share and severance and other restructuring expenses of $0.32 per share

¡ñ Adjusting full year 2025 adjusted diluted net income per share guidance in the range of $11.20 to $11.50 per share

CEO REMARKS

"Sherwin-Williams continued to execute on our consistent and disciplined strategy in a demand environment that remained choppy as we anticipated," said Chair, President and Chief Executive Officer, Heidi G. Petz. "Consolidated sales were within our guided range, and we delivered gross margin expansion for the 12th consecutive quarter. Given the demand softness in the quarter, which we expect will continue if not deteriorate in the second half of the year, we aggressively accelerated and increased our restructuring actions, resulting in pre-tax expenses of $59 million. Additionally, work on our new buildings project progressed faster than anticipated, resulting in approximately $40 million of pre-tax transition and related costs in the quarter, which we previously expected to begin occurring in our second half. Excluding restructuring costs, building costs, and acquisition-related amortization expense, SG&A costs increased by 3.8% in the quarter. This increase was driven primarily by continued deliberate, disciplined and targeted investments within the Paint Stores Group, where we have identified multiple heightened competitive opportunities. Non-operating costs were a headwind of approximately $75 million in the quarter, which we highlighted in our previous guidance. Solid cash generation enabled us to return $716 million to shareholders through dividends and share repurchases during the quarter.

"In Paint Stores Group, protective and marine sales grew by a high-single digit percentage for the fourth consecutive quarter. We also continued to see strength in residential repaint resulting from prior growth investments, as sales again increased by mid-single digits in a down market. Commercial, new residential and property maintenance remained under pressure as expected. Price realization is tracking better than expected. Consumer Brands Group sales decreased resulting from continued soft North American DIY demand and unfavorable foreign exchange in Latin America, partially offset by growth in Europe. In Performance Coatings Group, growth in Europe, Asia and Latin America was offset by a decrease in North America. Packaging remained the strongest performer as sales increased by a double digit percentage."

Consolidated Net sales increased primarily due to higher sales in the Paint Stores Group, partially offset by lower sales in the Consumer Brands Group.

Income before income taxes decreased primarily due to higher employee-related costs and costs related to the new global headquarters and R&D buildings which are recorded in the Administrative function, partially offset by higher Net sales.

Diluted net income per share included a charge of $0.20 per share for acquisition-related amortization expense in the second quarter of 2025 and 2024. In the second quarter of 2025, diluted net income per share also included a charge of $0.18 per share related to severance and other restructuring expenses.

Net sales in PSG increased primarily due to selling price increases, which impacted Net sales by a mid-single digit percentage, partially offset by a low-single digit decrease in sales volume. Net sales increased in certain professional customer end markets, led by a high-single digit percentage increase in protective and marine and a mid-single digit percentage increase in residential repaint. PSG Segment profit increased primarily due to growth in Net sales, partially offset by increased costs to support higher sales, including higher employee-related costs and marketing and advertising.

Net sales in CBG decreased primarily as a result of soft DIY demand in North America and an approximate 2% impact from unfavorable foreign currency translation driven by Latin America, partially offset by increased Net sales in Europe. CBG Segment profit decreased primarily due to lower Net sales and supply chain inefficiencies from lower production volumes. Acquisition-related amortization expense reduced Segment profit as a percent of Net sales by 190 basis points in both the second quarter of 2025 and 2024. Severance and other restructuring expenses reduced Segment profit as a percent of Net sales by 20 basis points in the second quarter of 2025.

Net sales in PCG were effectively flat as a result of incremental sales from acquisitions being offset by lower selling prices, primarily attributable to product mix. Performance was led by Packaging, which increased by a double digit percentage inclusive of an acquisition and Coil, offset by decreases in all other business units. PCG Segment profit decreased primarily due to increased costs to support sales, higher foreign currency transaction losses and a gain on sale or disposition of assets in the second quarter of 2024 which did not occur in the current period. Acquisition-related amortization expense reduced Segment profit as a percent of Net sales by 270 basis points in both the second quarter of 2025 and 2024. Severance and other restructuring expenses reduced Segment profit as a percent of Net sales by 50 basis points in the second quarter of 2025.

LIQUIDITY AND CASH FLOW

The Company generated $1.05 billion in Net operating cash and returned cash of $1.27 billion to our shareholders in the form of dividends and repurchases of 2.5 million shares of its common stock during the first six months of 2025. At June 30, 2025, the Company had remaining authorization to purchase 32.0 million shares of its common stock through open market purchases.

"Demand was softer than anticipated through June, and we do not see catalysts to change that trajectory at this time, causing us to adjust our full year guidance downward," said Ms. Petz. "We continue to respond to this softer for longer environment aggressively, including doubling our previously announced restructuring initiatives. We are pulling the levers available to us, though not at the cost of abandoning our strategy or hindering future growth prospects when markets recover. We are increasingly confident we are at a competitive inflection point in our industry. Our track record of success reflects our disciplined approach, and we continue to make investments which we are confident will deepen existing customer relationships, capture incremental share and reward our shareholders over the long term.

"We expect third quarter 2025 consolidated net sales to be up or down a low-single digit percentage compared to the third quarter of 2024. We are updating our guidance for the full year 2025, with consolidated net sales expected to be up or down a low-single digit percentage compared to full year 2024 and diluted net income per share in the range of $10.11 to $10.41 per share, including acquisition-related amortization expense of $0.77 per share and severance and other restructuring expenses of $0.32 per share, compared to $10.55 per share in 2024. Full year 2025 adjusted diluted net income per share is expected to be in the range of $11.20 to $11.50 per share compared to $11.33 per share in 2024, an increase of 0.2% at the mid-point."